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    Appeal of --

    United Healthcare Partners, Inc.

    Under Contract No. FA4877-12-C-0002


    ) ) ) ) )


    ASBCA No. 58123

    Mr. David D. Cooper CEO

    Col Matthew J. Mulbarger, USAF Air Force Chief Trial Attorney

    Michelle D. Coleman, Esq. Skye Mathieson, Esq.

    Trial Attorneys


    United Healthcare Partners, Inc. (UHP) appeals from the contracting officer's (CO's) final decision (COFD) to terminate for cause the parties' commercial items contract for telephone-based nurse triage answering services. 1 The parties filed cross-motions for summary judgment, and each relies upon multiple bases to justify its motion. The government alleges that termination was warranted by UHP's failure to perform in accordance with the contract, whereas UHP asserts that its actions are excused by the government's multiple material breaches of the contract. We deny each party's motion.


    1. The United States Air Force (AF or government) issued Contract No. FA4877-12-C-0002 to UHP on 1October2011 that included a base year and four optional years of performance (R4, tab 1). The single contract line item number (CLIN) 0001 required the contractor to "provide all facilities, equipment, tools, transportation, personnel, labor, supervision, and management to perform a 1-800 telephone-based Nurse Triage Answering Service on a 24/7 basis." This required the contractor to "provide clinical assessment and appropriate level of care support services for beneficiaries in the Davis-Monthan [Air Force Base, Arizona] [DMAFB] Catchment Area" from 1 October 2011 - 30 September 2012 for the base period. (Id. at 3)

    1 ASBCA No. 58123 is consolidated with ASBCA No. 59214, an appeal from a COFD denial of a claim for breach of contract damage, but the latter is not a subject of the cross-motions.

  • 2. The solicitation advised that historical data for FY I 0 indicates there were "19213" "Total Calls" during "Duty Hours" and "Non-Duty" hours (R4, tab 3 at 58). The terms "call(s)" and "all calls" are used throughout the contract (see, e.g., CLIN 0001 and Performance Work Statement (PWS) ~~ 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.1.12 (R4, tab I at 3, 27-28)), and "Total Calls" is used in the solicitation (R4, tab 3 at 58). Neither document states whether the historical data or estimated quantity in CLIN 0001 includes "calls" that UHP is not allowed to charge to the government.

    3. UHP's 15 September 2011 "Price Proposal" (R4, tab 3) complied with the solicitation requirement that prospective contractors' submissions be stated on a "price per call" basis (gov't mot., attach. D at 62). UHP's proposal stated the price of $12.90 per call (R4, tab 3 at 58).

    4. According to CLIN 0001, the contract is for the acquisition of "SERVICES/SUPPLIES" described as "Nurse Triage Answering Service[s]." The CLIN states a quantity of "19,710"; defines the unit being purchased as "Calls"; states the unit price as "$12.90"; and the contract "AMOUNT" as "$254,259.00." On a separate line below the above information, and before a summary of the work to be performed in accordance with the PWS, is the acronym "FFP," which indicates that this is a "firm fixed-price" contract. (R4, tab 1 at 3)

    5. The contract's "Performance Work Statement for Davis-Monthan Catchment Area Nurse Triage Services [DMCANTS]" for the "355th Medical Group (MDG)" (R4, tab 1 at 26) provided additional information regarding the anticipated telephone call volume:

    (Id. at 30)

    1.1.16. Estimated Monthly Call Volume. The 355 MDG estimates that total monthly calls answered by the nurse triage service will be approximately 1,800-2,000. Approximately 5% of these calls will require paging the on-call Life Skills provider. The number of calls will vary based on the number of holidays and/or base down days for each month, and on seasonal flu/cold patterns.

    6. The contract contains standard Federal Acquisition Regulation (FAR) clauses that are incorporated by reference. These include FAR 52.232-1, PAYMENTS (APR 1984); FAR 52.233-1, DISPUTES (JUL 2002)-ALTERNATE 1(DEC1991); and FAR 52.246-4, INSPECTION OF SERVICES-FIXED-PRICE (AUG 1996) (R4, tab 1 at 7-8). The contract does not include, by reference or full text, either FAR 52.216-21, REQUIREMENTS or FAR 52.216-22, INDEFINITE QUANTITY (id. at 7-8).


  • 7. The contract also contains two different standard clauses which authorize the government to terminate where the contractor fails to perform. In relevant part, FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPL y AND SERVICE) (APR 1984 ), incorporated by reference, provides in~~ (a)(l) and (a)(l)(i) for termination where the contractor fails to "Deliver the supplies or to perform the services within the time specified in this contract or any extension" without a cure notice (52.249-8(a)(2)). (R4, tab 1 at 8)

    8. The second clause allowing the government to terminate the contract is FAR 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUN 2010), which is incorporated by full text (R4, tab 1at8-12). In relevant part,~ (a) Inspection/ Acceptance, states that the contractor "shall only tender for acceptance those items that conform to the requirements of this contract. The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance." (Id. at 8) Paragraph (g) Invoice,~~ (l)(iv) requires the contractor's invoice to include a "Description, quantity, unit of measure, unit price and extended price of the items delivered." Paragraph (i), Payment, provides at ~ ( 1) that "Payment shall be made for items accepted by the Government." (Id. at 8-9) Paragraph (m), Termination for Cause, allows the government to "terminate this contract, or any part hereof, for cause in the event of any default by the Contractor, or ifthe Contractor fails to comply with any contract terms and conditions, or fails to provide the Government, upon request, with adequate assurances of future performance." If the contract is terminated for cause, "the Government shall not be liable to the Contractor for any amount for ... services not accepted .... If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience." (Id. at 11)

    9. Contract clause FAR 52.212-4(d), Disputes, provides in relevant part that:

    This contract is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613). Failure of the parties to this contract to reach agreement on any request for equitable adjustment, claim, appeal or action arising under or relating to this contract shall be a dispute to be resolved in accordance with the clause at FAR 52.233-1 Disputes, which is incorporated herein by reference. The Contractor shall proceed diligently with performance of this contract, pending final resolution of any dispute arising under the contract.

    (R4, tab 1 at 8)

    10. The language of FAR 52.212-4(d) is consistent with contract provision FAR 52.233-1, DISPUTES (JUL 2002HALTERNATE I), which was incorporated by reference. The latter clause states in~ (i) that "The Contractor shall proceed diligently


  • with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the contract, and comply with any decision of the Contracting Officer." (R4, tab I at 7)

    11. Contract clause FAR 52.246-4, INSPECTION OF SERVICES-FIXED-PRICE (AUG 1996) (R4, tab I at 7), is incorporated by reference and provides in relevant part:

    ( e) If any of the services do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, at no increase in contract amount. When the defects in services cannot be corrected by reperformance, the Government may (I) require the Contractor to take necessary action to ensure that future performance conforms to contract requirements and (2) reduce the contract price to reflect the reduced value of the services performed.

    ( f) If the Contractor fails to promptly perform the services again or take the necessary action to ensure future performance in conformity with contract requirements, the Government may (I) by contract or otherwise, perform the services and charge to the Contractor any cost incurred by the Government that is directly related to the performance of such services or (2) terminate the contract for default.

    12. CLIN 000 I required UHP to perform in accordance with the PWS for DMCANTS for the 355th MDG (R4, tab I at 3). PWS ~I.I.I, Background, describes DMCANTS as a "key entry point into the Military Health System." The PWS provided in relevant part:


    1.1.2. Scope. The contractor shall provide a 1-800 telephone-based nurse triage service for the Davis-Monthan Catchment Area, to perform clinical assessment and appropriate level of care support services for the TRICARE program, 24 hours per day, 7 days a week, including all holidays. All calls into the DMCANTS shall be answered by Registered Nurses [RNs], following nationally recognized and physician approved clinical


  • protocols and guidelines for symptom-based calls. The contractor shall gather information from the nurse triage service calls and enter the information into a database to show assessments, documented resolution, and/or further action needed from a Primary Care Manager (PCM) or the Chief of the Medical Staff. The contractor shall e-mail or fa