Contract Didn’t Incorporate FAR’s Requirements Clause. Why Did the Federal Circuit Hold the Contract Was a Requirements Contract?

The contractor claimed it had a requirements contract. The CBCA said it wasn’t because it omitted the FAR’s Requirements clause. The Federal Circuit reversed. The contract may not have contained the Requirements clause, but the contract’s plain language clearly indicated it was a requirements contract. 

Caring Hands Health Equipment & Supplies, LLC v. Secretary of Veterans Affairs, CBCA 2022-2202 

• CBCA Proceedings – The contractor claimed it had requirements contracts, and the agency breached when it ordered from another contractor. The agency denied the claim. The contractor appealed to the CBCA. The board denied the appeal. The board said the contractor had two types of contracts. First, a group of contracts from 2014 were IDIQ contracts, not requirements contracts. The second set of contracts, from 2015, looked like requirements contracts. But CBCA said they were not because they didn’t incorporate the FAR’s requirements clause. The 2015 contracts were illusory. 
• Requirements Clause – The contractor appealed to the Federal Circuit. The court reversed on the 2015 contracts. To be sure, the 2015 contracts did not include the FAR’s Requirements clause. But they explicitly stated they were for the agency’s actual requirements. Thus, the plain language of the contracts established the exclusivity required for a requirements contract regardless of the FAR clause. 
• IDIQ Contracts – The contractor attempted to argue the 2014 contracts were requirements contracts. But the court disagreed. Those contracts contained neither the FAR clause nor language of exclusivity.  

The contractor is represented by Edward J. Tolchin of Offit Kurman. The government is represented by Geoffrey Martin Long, Brian M. Boynton, Patricia M. McCarthy, and Corrine Anne Niosi of the Department of Justice as well as Nel Deol of the Department of Veterans Affairs. 

–Case summary by Craig LaChance, Senior Editor 

[pdf-embedder url=”https://staging.pub-k.org/wp-content/uploads/2024/01/Fed.-Cir.-Caring-Hands.pdf” title=”Fed. Cir. – Caring Hands”]