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FAR
16.103: Negotiating contract type. |
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Comptroller
General - Key Excerpts |
Validity of the No-Cost Contract
LCPtracker and eMars both assert that the contract with Elation
should be considered void for lack of consideration. LCPtracker
Protest, May 27, 2015, at 1-2; eMars Comments on AR/Supp.
Protest, July 10, 2015, at 5-7. We disagree.
To be enforceable, a contract with the United States government
requires an offer, acceptance of the offer, and consideration.
Rick’s Mushroom Service, Inc. v. United States, 76 Fed. Cl. 250,
259 (2007), citing Total Medical Management Inc. v. United
States, 104 F.3d 1314, 1319 (Fed Cir. 1997). A contract is
supported by adequate consideration if it involves mutual
promises of the contracting parties whereby each party obtains a
benefit. See GSA: Real Estate Brokers’ Commissions, B‑291947,
Aug. 15, 2003; T.V. Travel, Inc.; World Travel Advisors, Inc.;
General Services Administration--Request for Reconsideration,
B-218198.6 et al., Dec. 10, 1985, 85‑2 CPD ¶ 640 at 4-6.
Consideration for a contract need not be monetary, and this
Office has repeatedly concluded that adequate consideration
exists where a contractor promises to perform certain services,
the government promises to grant the contractor the right to
perform the procured services, and both parties obtain benefits
from the arrangement. See, e.g., No‑Cost Contracts for Event
Planning Services, B-308968, n.2, Nov. 27, 2007; GSA: Real
Estate Brokers’ Commissions, supra.
Here, as the agency points out, the award of this contract
represents a commitment by HUD to use Elation’s wage-rate
services for projects across the nation that have a total value
of $8 billion--which will expose Elation’s system to more than
6,000 users nationwide. eMars AR, exh. 9, COC Referral Letter.
Elation expects to benefit from this exposure though an elevated
competitive position in the national marketplace, and further
expects to reduce the marketing costs that it would otherwise
incur. In short, Elation projects that the extensive visibility
it will obtain through performance of the HUD contract will
substantially increase its share of the national market, and
that this increase, along with marketing cost savings, will more
than offset Elation’s costs to perform the requisite services
without monetary compensation. On this record, we find no basis
to question the existence of benefits flowing to Elation as a
result of HUD’s promise to use Elation’s services, and we reject
the protesters’ assertions that the contract is void for lack of
consideration. (LCPtracker,
Inc.; eMars, Inc. B-410752.3, B-410752.4, B-410752.5: Sep 3,
2015) (pdf) |
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Comptroller
General - Listing of Decisions |
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For
the Government |
For
the Protester |
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LCPtracker, Inc.; eMars, Inc.
B-410752.3, B-410752.4, B-410752.5: Sep 3, 2015 (pdf) |
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U.
S. Court of Federal Claims - Key Excerpts |
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U.
S. Court of Federal Claims - Listing of Decisions |
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For
the Government |
For
the Protester |
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Court
of Appeals for the Federal Circuit - Key Excerpts |
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Court
of Appeals for the Federal Circuit - Listing of Decisions |
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For
the Government |
For
the Protester |
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