Appellant Cannot Argue Government Used Exercise of Option Year to Breach Contract, Where Option Was Rejected in Favor of Contract Modification; ASBCA No. 60907, Appeal of K2 Solutions Inc.

Motion to dismiss an appeal for failing to state a claim upon which relief could be granted is granted in part, where the government did not breach the contract by improperly using the first option year to reduce the scope of work, but instead rejected the option and issued a contract modification, which the contractor accepted by continuing performance; and denied in part, where the appellant may argue that the government breached the implied duty of good faith and fair dealing by using the modification to reduce the contract's scope of work, instead of negotiating a bilateral modification and price adjustment, and by failing to exercise delivery of the full quantity contemplated by the modification.