Complaint That Government Failed To Order Specified Minimum Quantity Under Contract

A firm complained that an agency did not meet its contractual obligation to purchase an estimated quantity of its product. The contract had reserved to the Government the right to vary the quantities ordered by a plus or minus 20 percent of the quantity listed. The protester asserted that the agency did not order the minimum amount contemplated in the contract. The minimum quantity of the product proved to be an overestimate of the agency's needs. Due to the nature of the product, the agency could not purchase the additional quantity and stockpile it. The contract included a termination for convenience clause which the contracting officer did not exercise. Since the Government's lack of any need for the product was a justifiable cause for termination, the termination clause operated to limit damages to the termination charges specified in the contract rather than breach of contract damages. The agency should settle the matter pursuant to the terms of the termination for convenience clause of the contract. If any amount is found due under that clause, payment should be made to the contractor. Otherwise, the matter should be handled under the Contract Disputes Act if it is applicable.