Daydanyon Corp. v. Department of Defense ( 2015 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
DAYDANYON CORPORATION,
Appellant,
v.
DEPARTMENT OF DEFENSE,
Appellee.
______________________
2014-1507
______________________
Appeal from the Armed Services Board of Contract
Appeals in Nos. 57611, 57681, 57717, Administrative
Judge David W. James Jr.
______________________
Decided: January 9, 2015
______________________
JOSEPH A. CAMARDO, JR., Camardo Law Firm, PC, of
Auburn, New York, for appellant.
A. BONDURANT ELEY, Trial Attorney, Commercial Lit-
igation Branch, Civil Division, United States Department
of Justice, of Washington, DC, for appellee. With her on
the brief were JOYCE F. BRANDA, Acting Assistant Attor-
2 DAYDANYON CORPORATION v. DEFENSE
ney General, ROBERT E. KIRSCHMAN, JR., Director, and
MARTIN F. HOCKEY, JR., Assistant Director.
______________________
Before DYK, REYNA, and WALLACH, Circuit Judges.
DYK, Circuit Judge.
DayDanyon Corporation (“DayDanyon”) appeals a de-
cision of the Armed Services Board of Contract Appeals
(the “Board”) granting summary judgment to the govern-
ment on DayDanyon’s claim that the ordering deadline of
the contract at issue was December 24, 2010, and that the
government breached the contract by failing to order the
guaranteed minimum quantity of Collapsible Joint Modu-
lar Intermodal Containers (“JMICs” or the “containers”)
by that date. Because the Board correctly interpreted the
contract ordering period as ending on April 23, 2011, we
affirm.
BACKGROUND
On April 23, 2009, the Defense Supply Center Phila-
delphia (“DSCP”), now known as Defense Logistics Agen-
cy Troop Support (“DLATS”), awarded Contract No.
SPMSED-09-D-0001 (the “contract”) to DayDanyon for
JMICs for use by the Naval Sea Systems Command. The
contract provides, in relevant part:
This is a[n] Indefinite Quantity Contract. Orders
may be issued on this contract for a period of
TWO YEARS.
...
After First Article Test approval, the required de-
livery for production quantities under this con-
tract is 120 days after the date of the resulting
delivery orders.
DAYDANYON CORPORATION v. DEFENSE 3
The Guaranteed Minimum is a total of 500 con-
tainers, whether placed for a single CLIN, or com-
bination of CLINS that collectively total 500
containers. The guaranteed minimum is 500 con-
tainers per year. Since this is a two year base
contract the minimum quantity is multiplied by 2.
J.A. 196. The contract also incorporated several Federal
Acquisition Regulation (“FAR”) provisions, including FAR
52.216-22 INDEFINITE QUANTITY (OCT 1995), which
provides, in relevant part:
(d) Any order issued during the effective period of
this contract and not completed within that period
shall be completed by the Contractor within the
time specified in the order. The contract shall
govern the Contractor’s and Government’s rights
and obligations with respect to that order to the
same extent as if the order were completed during
the contract’s effective period; provided, that the
Contractor shall not be required to make any de-
liveries under this contract after Two Years[.]
J.A. 211; see also 48 C.F.R. § 52.216-22. 1
1The contract also incorporated FAR 52.216-18,
ORDERING (OCT 1995), which provides, in relevant part:
(a) Any supplies and services to be furnished un-
der this contract shall be ordered by issuance of
delivery orders or task orders by the individuals
or activities designated in the Schedule. Such or-
ders may be issued—
FROM: DATE OF CONTRACT AWARD
THROUGH: TWO (2) YEARS
4 DAYDANYON CORPORATION v. DEFENSE
On April 29, 2010, DSCP approved DayDanyon’s First
Article Test sample, and authorized DayDanyon to begin
production of the JMICs. On May 3, 2010, DSCP issued
two delivery orders for a total of 500 units under the
contract, each with a delivery date of August 31, 2010,
120 days following receipt of the order. As of November
23, 2010, the contracting officer had extended the delivery
date of the orders to two dates in March 2011. DayDan-
yon did not deliver any JMICs to DSCP by the March
2011 delivery dates.
On April 6, 2011, DayDanyon sent the contracting of-
ficer a certified claim for $720,700.00, alleging that DSCP
breached the contract by failing to order the guaranteed
minimum of 1,000 JMICs by December 24, 2010. Accord-
ing to DayDanyon’s claim, although the contract had “a
J.A. 210; see also 48 C.F.R. § 52.216-18. And FAR 52.216-
9007, CONTRACT AND DELIVERY ORDER
LIMITATIONS (JUL 2006), which provides, in relevant
part:
(a) Delivery orders will specify delivery no less
than 120 days from the date of the order.
...
(c) Guaranteed Minimum
(1) The Government guarantees that it will order
under this contract . . . the following minimum, as
applicable:
...
(ii) Base period of two or more years.
500 EA TOTAL (Quantity) multiplied by two[.]
J.A. 211; see also 48 C.F.R. § 52.216-9007.
DAYDANYON CORPORATION v. DEFENSE 5
two year base period running through April 23, 2011,”
DSCP was required to order the 1,000 JMICs by Decem-
ber 24, 2010, 120 days prior to the conclusion of the base
period, because the contract provided that “delivery
orders will specify delivery no less than 120 days from the
date of the order,” and because DayDanyon “shall not be
required to make any deliveries under this contract after
[t]wo [y]ears.” J.A. 522 (quoting J.A. 211). The contract-
ing officer responded that DayDanyon’s claim was “prem-
ature” because “[t]he two year base period for [the
contract] expires on April 23rd, 2011.” J.A. 526. On April
20, 2011, the contracting officer terminated the contract
for default, leading to a default termination claim submit-
ted by DayDanyon on July 11, 2011. On May 18, 2011,
DayDanyon filed another claim, which was materially
identical to the April 6, 2011, claim. On July 15, 2011,
the contracting officer denied the May 18, 2011, claim,
explaining that because the contract was terminated on
April 20, 2011, prior to the April 23, 2011, expiration of
the base period, the government was not required to order
the remainder of the guaranteed minimum quantity of
JMICs.
DayDanyon appealed to the Board, which consolidat-
ed DayDanyon’s appeals of three separate claims: (1) the
default termination claim, No. 57681; (2) the April 6, 2011
claim, No. 57611; and (3) the May 18, 2011, claim, No.
57717. The Board dismissed the May 18, 2011, claim as
duplicative of the April 6, 2011, claim. On the default
termination claim, the Board denied the government’s
motion for summary judgment. 2 On DayDanyon’s breach
2 The government did not appeal the denial of
summary judgment in DayDanyon’s default termination
claim, and proceedings with respect to that claim remain
ongoing before the Board. We need not and do not decide
6 DAYDANYON CORPORATION v. DEFENSE
claim, relating to the government’s failure to order the
requisite number of JMICs, the Board granted the gov-
ernment’s motion for summary judgment because it
rejected DayDanyon’s interpretation of the contract to
require the government to order 1,000 JMICs by Decem-
ber 24, 2010, as opposed to April 23, 2011.
DayDanyon appeals. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(10). 3 We review the Board’s legal
determinations, including interpretations of contracts, de
whether the government properly terminated the contract
for default.
3 Our jurisdictional statute provides jurisdiction to
this court over “an appeal from a final order or final
decision” of the Board. 28 U.S.C. § 1295(a)(10). In this
case, despite the ongoing Board proceedings over the
default termination claim, we have jurisdiction to review
the separate breach of contract claims. See Dewey Elecs.
Corp. v. United States, 803 F.2d 650, 653–54 (Fed. Cir.
1986) (“In this case, multiple claims are involved and,
while there might be a question as to whether the re-
manded claims meet the finality requirement, the claims
involved in this appeal were decided with finality.” (cita-
tions omitted)); see also Brownlee v. Dyncorp, 349 F.3d
1343, 1347 (Fed. Cir. 2003) (“Although [28 U.S.C.
§ 1295(a)(10)] requires that the Board’s decision be ‘final,’
we have held that the concept of finality in this context is
more flexible than, for example, the ‘rigid district court
concept of finality’ required by 28 U.S.C. § 1291.”) (quot-
ing Dewey, 803 F.2d at 655)); Elkins v. Gober, 229 F.3d
1369, 1373–74 (Fed. Cir. 2000) (“This court has held,
when reviewing decisions of agency boards of contract
appeals, that a litigant’s individual claims for relief may,
in certain circumstances, be separable for purposes of
appellate review.” (citations omitted)).
DAYDANYON CORPORATION v. DEFENSE 7
novo. Rockies Express Pipeline LLC v. Salazar, 730 F.3d
1330, 1335–36 (Fed. Cir. 2013) (citations omitted).
DISCUSSION
The parties do not dispute that the contract required
the government to order 1,000 JMICs prior to the termi-
nation of the contract, and that the government only
ordered 500 JMICs before December 24, 2010. Instead,
the dispute is over the date by which the government was
required to order the additional 500 JMICs. DayDanyon
contends that the applicable deadline was December 24,
2010, 120 days prior to the end of the two-year ordering
period provided in the contract. The government re-
sponds that the deadline was April 23, 2011, the end of
the two-year ordering period.
DayDanyon’s contention is refuted by the plain lan-
guage of the contract, which clearly provides for a two-
year ordering period. See Bell/Heery v. United States,
739 F.3d 1324, 1331 (Fed. Cir. 2014) (“When interpreting
a contract, if the provisions are clear and unambiguous,
they must be given their plain and ordinary meaning.”
(citations and quotation marks omitted)). The contract
unambiguously provides that “[o]rders may be issued on
this contract for a period of TWO YEARS.” J.A. 196. This
language is repeated in the contract’s incorporation of
FAR 52.216-18, which provides that “orders may be
issued” from the “DATE OF CONTRACT AWARD [April
23, 2009]” through “TWO (2) YEARS.” J.A. 210; see also
J.A. 211 (checking the box adjacent to “Base period of two
or more years.”).
The contract is ambiguous, however, as to orders
placed by the government within 120 days of the conclu-
sion of the two-year ordering period. This is because FAR
52.216-22(d) is subject to two plausible interpretations.
On the one hand, the first sentence of FAR 52.216-22(d)
provides that orders placed during the effective period of
8 DAYDANYON CORPORATION v. DEFENSE
the contract but not completed during the effective period
“shall be completed by the Contractor within the time
specified in the order,” i.e., within 120 days. J.A. 211.
Under this reading, the proviso that the “Contractor shall
not be required to make any deliveries under this contract
after Two Years,” id., simply emphasizes that the contrac-
tor need not deliver orders that are placed by the govern-
ment after April 23, 2011, the end of the two-year
ordering period. On the other hand, as the government
argues, the proviso could also be read to suggest that
although the government may place orders at any time
during the two-year ordering period, DayDanyon “shall
not be required,” id., to make any deliveries placed within
120 days of April 23, 2011. We need not resolve this
ambiguity as to whether the contractor is obligated to
deliver orders placed within 120 days of the end of the
two-year period, because regardless of which of the above
interpretations is correct, the contract cannot mean what
DayDanyon says it means—that the contract prohibits
orders placed after December 24, 2010, 120 days prior to
the conclusion of the two-year period.
As the Board found, DayDanyon’s interpretation,
which reduces the effective ordering period of the contract
from two years to twenty months, would render the
contract’s incorporation of FAR 52.216-22(d) meaningless.
See Bell/Heery, 739 F.3d at 1331 (“A contract must also
be construed as a whole and in a manner that gives
meaning to all of its provisions and makes sense.” (cita-
tions and quotation marks omitted)).
Thus, under the plain language of the contract, the
government had until April 23, 2011, two years from the
date of the contract award, to order the guaranteed mini-
mum number of JMICs from DayDanyon whether or not
DayDanyon was obligated to deliver beyond the two-year
period. And as the Board found, because the government
was not required to order the guaranteed minimum
DAYDANYON CORPORATION v. DEFENSE 9
amount of containers by December 24, 2010, the contrac-
tor’s claim was properly rejected.
AFFIRMED