The government establishes a Blanket Purchase Agreement (BPA) with qualified sources when it anticipates having repetitive needs for supplies or services. Federal Courts and Contract Appeals Boards have repeatedly held that a BPA is not a contract because it lacks mutuality of consideration between the government and its contractor, which is an essential element for the formation of a contract. Instead, a BPA is an overarching framework of terms and conditions for future contracts. These future contracts incorporate the terms of the BPA and come into existence when an order is placed and accepted under the BPA. Since BPAs are not considered contracts on their own, courts and contract appeals boards lack the necessary Contract Disputes Act (CDA) jurisdiction to adjudicate claims arising out of them until the contractor receives an order under the BPA. However, once an order is placed and accepted under the BPA, a contract is formed and CDA jurisdiction attaches. Thus, when the underlying BPA is issued by one federal agency, but the terms of that BPA permit other federal agencies to place orders under it, contractors may find it challenging to identify the appropriate agency to file their claims. In such situations, contractors should typically file their claims against the agency that placed the BPA order that most closely corresponds to the dispute instead of the agency that issued the overarching BPA.

In Civilian Board of Contract Appeals (CBCA) 7323, 7918, a decision issued on September 11, 2024, the CBCA dismissed the contractor’s monetary claim for destroyed equipment against the BPA issuing agency for lack of jurisdiction, instead finding that the agency that placed the BPA order was the proper respondent. The U.S. Department of Agriculture (USDA) issued the relevant BPA in June 2021 for the ongoing acquisition of heavy equipment and machinery to protect government lands and minimize loss of life or damage to property and natural resources from fire and other hazardous incidents. The terms of the BPA permitted several other federal agencies besides the USDA to place “resource orders” for goods or services from pre-approved vendors. Soon after the issuance of the BPA, the contractor accepted a resource order for a masticator machine. The resource order for the masticator was placed by the Department of the Interior (DOI) to assist in clearing areas impacted by the Summit Trail Fire. The resource order duly identified DOI as the ordering agency.

The masticator was later destroyed in a fire, and the contractor submitted a claim to the USDA for $451,782 to replace it. In its claim the contractor alleged that the government was liable for the loss of the masticator due to its grossly negligent and reckless acts. In her final decision denying the claim, the USDA contracting officer (CO) indicated that she possessed the requisite authority to settle the dispute. After the USDA CO denied its claim, the contractor submitted a claim to the DOI CO that placed the purchase order and requested $632,010 for damages related to the destruction of the masticator in the fire. However, the DOI CO also denied the contractor’s claim. The contractor challenged both final decisions at the CBCA, where the two appeals were docketed and then consolidated. During the appeal, the USDA took the position that it was not the appropriate respondent as it was not the agency that issued the resource order for the masticator. In response, the contractor pointed to the USDA CO’s final decision, in which the CO had claimed that she possessed the requisite authority to deny the claim. The contractor also attempted to rely upon CBCA 6358, where the Board had decided it had jurisdiction to decide an appeal against a BPA issuing agency that was not the ordering agency because the contractor had alleged that a contract existed between it and the BPA issuing agency.

However, the CBCA agreed with the USDA and dismissed the contractor’s appeal against it. The CBCA explained that since the BPA is merely a framework of terms for future contracts, it lacks the mutuality of obligation necessary to form a contract. Therefore, the Board lacks jurisdiction under the CDA to decide claims arising out of a BPA unless an order is issued under it because BPAs are not considered contracts. The CBCA did not find the contractor’s reliance on its decision in CBCA 6358 appropriate, noting that the Board’s decision in that case did not reference the Federal Circuit’s binding precedent that a BPA is not a contract. The Board was similarly unpersuaded by the argument that the USDA CO’s determination that she could resolve the claim meant that the USDA was a proper respondent in the appeal. Consequently, the CBCA dismissed the portion of the claim against the USDA after finding that the contractor only had a contract with the DOI as the agency that placed the order against the BPA and not the USDA, which was merely the agency that issued the BPA.

To be enforceable, a federal contract must be sufficiently defined to provide a basis for determining the existence of a breach and for providing an appropriate remedy. Since BPAs are not contracts on their own, courts and contract appeals boards lack the necessary CDA jurisdiction to adjudicate appeals on claims arising out of them – unless an order has been placed by the government and accepted by the contractor bringing the claim. Nevertheless, contractors should be mindful that while a BPA is not a contract in and of itself, its terms are still relevant for the purposes of a claim since the terms and conditions of the BPA are incorporated in each order. However, in cases where the BPA issuing agency is different from the agency that placed the order, contractors should typically file their claims against the agency that placed the order most relevant to the claim instead of the agency that issued the BPA. Any subsequent appeals should be similarly filed against the agency that issued the relevant order as the appropriate respondent agency.

This Federal Contract Claims Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.