In TranBen, Ltd. v. Department of Transportation, CBCA 5448 (Jan. 26, 2017), the Civilian Board of Contract Appeals (“Board”) recently applied a restrictive view of the implied duty of good faith and fair dealing under an indefinite delivery/indefinite quantity (“IDIQ”) contract. In its appeal seeking almost $14 million, TranBen, Ltd. (“TranBen”) alleged that the Department of Transportation (“DOT” or “Government”) breached the implied duty by misleading the Internal Revenue Service (“IRS”) about the availability of paper vouchers in order to receive IRS guidance allowing DOT to issue transit subsidies on debit cards, instead of vouchers, without rendering them taxable. The Board dismissed the appeal for failure to state a claim in a troubling decision that calls into question the viability of the implied duty under an IDIQ contract where the Government satisfies its minimum ordering obligation. At the very least, the Board’s decision indicates contractors should be even more vigilant, at the early stages of IDIQ contract formation, to ensure that their legitimate expectations are protected through express contract language. I. Factual and Procedural BackgroundUnder an IDIQ contract awarded in 2009, TranBen supplied paper vouchers through which DOT distributed tax-free mass transit subsidies to federal employees in the D.C. area. The… Read full this story
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Civilian Board of Contract Appeals Narrows Scope of Implied Duty of Good Faith and Fair Dealing in IDIQ Contracts have 281 words, post on www.natlawreview.com at February 8, 2017. This is cached page on Law Breaking News. If you want remove this page, please contact us.