Federal Circuit: Blanket Purchase Agreements Are Not Binding Contracts | Practical Law

Federal Circuit: Blanket Purchase Agreements Are Not Binding Contracts | Practical Law

In Crewzers Fire Transport Crew, Inc. v. US, the US Court of Appeals for the Federal Circuit held that government contractors cannot invoke the Tucker Act to challenge the government's termination of a blanket purchase agreement (BPA) because BPAs are not binding contracts.

Federal Circuit: Blanket Purchase Agreements Are Not Binding Contracts

Practical Law Legal Update 8-557-1934 (Approx. 3 pages)

Federal Circuit: Blanket Purchase Agreements Are Not Binding Contracts

by Practical Law Commercial
Published on 10 Feb 2014USA (National/Federal)
In Crewzers Fire Transport Crew, Inc. v. US, the US Court of Appeals for the Federal Circuit held that government contractors cannot invoke the Tucker Act to challenge the government's termination of a blanket purchase agreement (BPA) because BPAs are not binding contracts.
On February 6, 2014, the US Court of Appeals for the Federal Circuit held in Crewzers Fire Transport Crew, Inc. v. US that government contractors cannot invoke Tucker Act jurisdiction to challenge the government's actions with respect to a blanket purchase agreement (BPA) in the Court of Federal Claims (CFC) because BPAs are not binding contracts (No. 2013-5104, ).
Crewzers Fire Crew Transport, Inc., under two separate BPAs, agreed to provide the US Forest Service (Forest Service) with:
  • Heavy duty crew carrier busses.
  • Flame retardant tents.
The mechanism for ordering the equipment was substantially the same for both BPAs, allowing the Forest Service to submit orders that could be fulfilled by Crewzers in the event of a wildfire or other disaster, if Crewzers was willing and able to provide the equipment for the order price. The Forest Service cancelled both arrangements with Crewzers within the same year of entering the BPAs. Crewzers filed two separate lawsuits against the Forest Service in the CFC by invoking that Court's Tucker Act jurisdiction (28 USC §1491(a)). The lawsuits challenged the termination of the BPAs, alleging that the Forest Service had acted in bad faith. The Court of Appeals heard the consolidated appeals of both actions.
Claims made to the CFC under Tucker Act jurisdiction require claimants to have a binding contract with the government. The Court of Appeals deemed the BPAs to be mere frameworks for future agreements, not binding contracts, because neither the contractor nor the government incurred a binding obligation under either BPA. The Court of Appeals ruled that the CFC did not have jurisdiction under the Tucker Act because there was no binding contract between Crewzers and the Forest Service.
Before this case, government contractors routinely treated BPAs as binding contracts. Government contractors should note this ruling when:
  • Entering government contracts.
  • Challenging government contract terminations.
Specifically, if a contractor wishes to be a government supplier it should avoid BPAs and other agreements that include "willing and able" language. Instead, those contractors should seek to enter multiple award or scheduled contracts that impose definite obligations on both the contractor and the government.