Cooper/Ports America, LLC v. Secretary of Defense, No. 19-1692 (Fed. Cir. 2020)Annotate this Case
In 2015, CPA’s predecessor was awarded Defense contracts to provide stevedoring and terminal services along the Eastern Seaboard, including Charleston. The contracts incorporated a Federal Acquisition Regulation provision that gave the government options to extend the term of the agreement for up to four one-year periods by giving “preliminary written notice of its intent to extend at least 60 days before the contract expire[d].” Such notice did not obligate the government to exercise the option. After the preliminary notice, the government was required to exercise the option itself within 15 days of the expiration date. On June 15, 2016, the government exercised the first-year option.
During the extension period, CPA purchased its predecessor and began seeking revised pricings, asserting that it might default because the contracts were not profitable. On January 31, 2017, the government’s contracting officer sent an email to CPA, stating: The Government intends to exercise options at awarded rates … expects [CPA] to continue performing per the terms. A May 3, 2017, formal letter to CPA, stated the government's intent to extend the contract through 30 June 2018. CPA responded that the notice was untimely. The government pointed to the January 31 email as the preliminary written notice. In July 2017, CPA sought a declaration that the contract had expired and additional money for its performance under protest. A contracting officer denied the claims. The Board of Contracts Appeals and the Federal Circuit affirmed. The government satisfied the preliminary notice requirement; the email unambiguously provided preliminary written notice of the government’s intent to extend at least 60 days before the contract expired on May 1, 2017.