BOARD OF CONTRACT APPEALS U.S. GOVERNMENT PRINTING OFFICE In the matter of ) ) the Appeal of ) ) CIRCUIT SERVICES PRODUCTS, INC. ) Docket No. GPOBCA 12-98 ) Program 5565-S ) Purchase Order H-2105 ) For the Appellant: L. Lee Kull, Esq., Bird, Navratil & Kull, PLLC, Maryville, Tennessee. For the Respondent: Thomas T. Kelly, Esq., Assistant General Counsel, U.S. Government Printing Office. Before MILLER, Administrative Judge. DECISION This appeal arises out of a contract between the U.S. Government Printing Office (GPO) and Appellant, Circuit Services Products, Inc., (Circuit) that was terminated for the convenience of the Government. Appellant seeks $14,608.10 in termination costs, plus lost profits and attorney's fees. For the reasons that follow, the Contracting Officer's final decision denying all termination costs is REVERSED and the claim is REMANDED to the Contracting Officer. Appellant's claims for lost profits and attorney's fees are DENIED. FINDINGS OF FACT 1. In 1994 Martin Marietta Energy Systems, Inc. (Martin Marietta) operated a nuclear research and manufacturing facility known as the Y-12 Plant as part of the Oak Ridge National Laboratory for the U.S. Department of Energy (DOE) under DOE Contract # DE-AC05-840R21400. The plant is used for a variety of activities, including the manufacturing and reworking of nuclear weapon components and the storage and processing of nuclear materials. 2. On November 16, 1994, Martin Marietta issued a purchase order to Appellant for the purchase of 252,000 Military D Aperture - Air Sampler cards, used for monitoring plant atmospheric radiation levels. The cards were described in the purchase order as IBM-style punch cards containing a 1 7/8 by 1 3/8-inch rectangle of Whatman 41 filter paper1 mounted in a window in the card. Rule 4 File, Tab G. The cards were to be used as radiation sample holders, to transport dust samples collected on the Whatman filter paper, to and from an automated atmospheric sampler. Each card was to be individually numbered. Rule 4 File, Tab F. 3. Appellant accepted the Martin Marietta purchase order on December 5, 1994. Under the terms of that agreement, Appellant was to deliver 10,500 cards each month to the Y-12 Plant beginning December 6, 1994, and ending November 8, 1996. Rule 4 File, Tab G. On December 5, 1994, Appellant established a blanket ordering agreement with its supplier Bell & Howell Document Management Products Co. (Bell & Howell) to obtain Whatman filter paper cards for the years 1995 and 1996. Under the terms of the agreement, the supplier was to ship 33,000 cards to Appellant every three months. Rule 4 File, Tab P. 4. It is not clear from the record whether Appellant's agreement with Martin Marietta was ever formally terminated, but Appellant did not perform any orders under the contract. Instead, on December 8, 1994, Appellant was awarded a small purchase contract from the GPO's Columbus Regional Printing Procurement Office (RPPO) for 40,000 Military D Aperture Cards - Air Sampler, to be delivered by February 15, 1995. Rule 4 File, Tab Q. The product description was virtually identical to the product originally to be purchased by Martin Marietta from Appellant. Compare Rule 4 File, Tab Q with Rule 4 File, Tab G. 5. On March 3, 1995, the GPO's Columbus RPPO awarded Program 5565-S, to Appellant, following standard sealed bid solicitation procedures. Rule 4 File, Tab G. Program 5565-S was a requirements contract for the acquisition of approximately 126,000 Military D Aperture Cards - Air Sampler, per year. Rule 4 File, Tab O at 7, 10, 13. Under the terms of the contract, Appellant was responsible for performing approximately 12 orders per year, with each order consisting of approximately 10,500 cards. Rule 4 File, Tab O at 7. 6. The term of Program 5565-S was "for the period beginning Date of Award and ending February 29, 1996 with an option for 4 additional years, one year at a time, beginning March 1, 1996; March 1, 1997; March 1, 1998 and March 1, 1999." Rule 4 File, Tab O at 1. The contract's term was changed by a January 3, 1996, contract modification to read: "Date of Award thru April 30, 1996." The modification also changed the starting date for each option year to May 1. Rule 4 File, Tab G. Program 5565-S contained the following clause governing the Contracting Officer's exercise of contract options: OPTION TO EXTEND THE TERM OF THE CONTRACT: The Government may extend the term of this contract by written notice to the contractor not later than 60 days before the contract expires. If the Government exercises an option, the extended contract shall be considered to include this provision. The total duration of this contract shall not exceed 5 years. Rule 4 File, Tab O at 3. 7. The contract also contained a standard GPO clause governing the parties' obligations under a requirements contract: REQUIREMENTS: This is a requirements contract for the items and for the period specified herein. Shipment/delivery of items or performance of work shall be made only as authorized by orders issued in accordance with the clause entitled "Ordering". The quantities of items specified herein are estimates only, and are not purchased hereby. Except as may be otherwise provided in this contract, if the Government's requirements for the items set forth herein do not result in orders in the amounts or quantities described as "estimated", it shall not constitute the basis for an equitable price adjustment under this contract. Except as otherwise provided in this contract, the Government shall order from the contractor all the items set forth which are required to be purchased by the Government activity identified on page 1. Rule 4 File, Tab O at 5. 8. The Government issued 11 print orders during the first year of the contract, each calling for 10,500 aperture cards. Appellant delivered the cards, submitted a separate voucher for each print order and was paid by the Government as follows: Print Order Date Quantity Voucher No. Payment Pay Date 20001 04/26/95 10,500 38854 $2,516,85 05/31/95 20002 05/22/95 10,500 51142 $2,516,85 07/03/95 20003 05/25/95 10,500 51142 $2,516,85 07/03/95 20004 05/25/95 10,500 623590 $2,516,85 07/21/95 20005 07/24/95 10,500 74298 $2,516,85 08/29/95 20006 10/13/95 10,500 12438 $2,516,85 11/22/95 20007 10/13/95 10,500 13962 $2,516,85 11/28/95 20008 11/09/95 10,500 26762 $2,516,85 01/03/96 20009 01/04/96 10,500 3869 $2,516,85 02/08/96 20010 01/04/96 10,500 3869 $2,516,85 02/08/96 20011 02/14/96 10,500 16559 $2,516,85 03/15/96 Declaration of Philip L. Jones. 9. On February 15, 1996, the Contracting Officer wrote to Martin Marietta, and inquired whether funds were available for the first option year. Martin Marietta responded that funds were available for the period of May 1, 1996, to April 30, 1997. Rule 4 File, Tab G. 10. By letter to Appellant dated March 1, 1996, the Contracting Officer exercised the Government's option to extend the term of the contract for an additional year (i.e., May 1, 1996 to April 30, 1997). Rule 4 File, Tab G. However, the Government did not actually issue any additional print orders calling for the production of aperture cards during this period. 11. Instead, on May 15, 1996, Martin Marietta wrote to the GPO asking that the contract be terminated for the convenience of the Government. Martin Marietta explained that it already had a four-year supply of air sampler cards on hand, and that the Y-12 Plant had been put in "shut-down mode" further decreasing the need for additional cards. Rule 4 File, Tab G. 12. On May 22, 1996, personnel from the Columbus RPPO left a message on Appellant's answering machine informing the company that the GPO was considering terminating the contract for the convenience of the Government and inquiring whether this action would cause Appellant to incur any costs. Rule 4 File, Tab B. The next day, the Contracting Officer sent Appellant a copy of GPO Form 911 - Settlement Proposal, a form used by contractors to submit termination for convenience claims. The Contracting Officer also discussed the termination procedures with Appellant's President, Erron W. Anderson. Rule 4 File, Tab C. 13. By letter dated July 18, 1996, Appellant's supplier, Bell & Howell informed Appellant that it would not accept the return of 60,000 aperture cards since the cards were imprinted with Appellant's logo and "are made of a special paper that no one else in the country uses." Rule 4 File, Tab D. 14. On August 5, 1996, Appellant wrote to the Contracting Officer seeking reimbursement for certain costs it would incur should the contract be terminated for convenience. Rule 4 File, Tab D. Most of the claim consisted of the cost of 21,000 completed cards and 60,000 uncompleted cards in Appellant's inventory. Id. After receiving Appellant's letter, the Contracting Officer issued a formal Notice of Termination - Convenience of the Government dated August 5, 1996. Id. 15. Appellant thereafter submitted a completed Form 911, seeking $13,517.44 in termination costs. Rule 4 File, Tab F. Appellant later revised its claim to $14,608.10. Pursuant to agency regulations, the Contracting Officer sought an audit of the claim by the GPO Office of Inspector General (OIG). Rule 4 File, Tab G. See, GPO Printing Procurement Regulation (PPR), GPO Publication 305.3 (Rev. 10-90), Chap. XIV, Sec. 2.3h(1). 16. Nine months later, the OIG issued an audit report that concluded the contractor's entire claim was "unallowable under the terms of the contract." Rule 4 File, Tab I. The OIG theorized that since Program 5565-S was a requirements contract, and since no print orders had been issued to Appellant during the second contract year, Appellant should not have incurred any costs during the second year. Id., Appendix C. 17. On May 29, 1997, the Contracting Officer denied Appellant's claim in its entirety, writing: This determination is a result of the audit recently completed. It is based on GPO Procurement Directive and the Federal Acquisition Regulations. This contract was a requirements contract that specified the quantities are estimates only, and are not purchased hereby. Rule 4 File, Tab J. On January 22, 1998, after several conversations with Appellant's President, the Contracting Officer issued a final decision denying Appellant's termination claim. Rule 4 File, Tabs K, L, and M. 18. Thereafter Appellant filed a timely notice of appeal with the GPO Board of Contract Appeals (GPOBCA). Rule 4 File, Tab N. DISCUSSION Appellant questions whether the Contracting Officer had the authority to terminate the contract for convenience, and claims the termination was wrongful. Respondent's position is that since Program 5565-S was a requirements contract, it does not owe Appellant any termination costs. The Board concludes that while the Contracting Officer had the legal right to terminate the contract for convenience, the termination created the legal obligation to compensate Appellant for certain termination costs. The Contracting Officer's Right to Terminate for Convenience Appellant complains that a contract it anticipated would continue for at least two years was ended prematurely by the Contracting Officer's exercise of the Termination for Convenience clause. Appellant is particularly troubled that the termination for convenience came soon after the Government had exercised its option to extend the contract for another year. Appellant argues that the Option to Extend the Term of the Contract clause acted as a limitation on the Contracting Officer's right to terminate the contract for convenience and that the Contracting Officer's action therefore amounts to a wrongful termination. Appellant's arguments are unpersuasive. Challenges to the Government's exercise of its right to terminate a contract for the convenience of the Government are rarely successful given the breadth of the Government's discretion. Program 5565-S contained a Termination for Convenience clause that provided, in part: The Government may terminate performance of work in whole or in part if the Contracting Officer determines that a termination is in the Government's interest. Clause 19(a), GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88). That language is nearly identical to the standard Government-wide contract clauses contained in the Federal Acquisition Regulation (FAR). See, 48 C.F.R. §§ 52.249-1(a), 52.249-2(a), 52.249-3(a), 52.249-4(a), 52.249-5(a). Decisions construing the Government-wide Termination for Convenience clauses hold that a Contracting Officer's election to terminate is conclusive in the absence of bad faith or a clear abuse of discretion. See Melvin R. Kessler, PSBCA Nos. 2820, 2972, 92-2 BCA ¶ 24,857, at 123,996 (citing John Reiner v. United States, 325 F.2d 438, 442 (Ct. Cl. 1963), cert. den. 377 U.S. 931 (1964)), mot. for reconsid. denied 92-3 BCA ¶ 25,092; Salisbury Industries v. United States, 905 F.2d 1518 (Fed. Cir. 1990)), mot. for reconsid. denied 92-3 BCA ¶ 25,092. See also, Seaboard Lumber v. United States, 19 Cl. Ct. 310 (1989); Robert K. Adams, ASBCA No. 34519, 92-3 BCA ¶ 25,165; Automated Services, Inc., DOTBCA No. 1753, 87-1 BCA ¶ 19,459; ITG Corp., ASBCA No. 27285, 85-1 BCA ¶ 17,935. Any allegation of bad faith must be established by "well-nigh irrefragable" proof because there is a strong presumption that Government officials properly and honestly carry out their functions. See e.g., Asa L. Shipman's Sons, Ltd., GPOBCA No. 06-95 (August 29, 1995), 1995 GPOBCA LEXIS 17, 1995 WL 818784, slip op. at 12, fn. 16. Accord Brill Brothers, Inc., ASBCA No. 42573, 94-1 BCA ¶ 26,352; Karpak Data and Design, IBCA No. 2944 et al., 93-1 BCA ¶ 25,360; Local Contractors, Inc., ASBCA No. 37108, 92-1 BCA ¶ 24,491. The key to such evidence is that there must be a showing of a specific intent on the part of the Government to injure the contractor. See Stephenson, Inc., GPOBCA No. 2-88, (Dec. 20, 1991), 1991 GPOBCA LEXIS 14, 1991 WL 439274, slip op. at 54. Accord, Kalvar Corp. v. United States, 543 F.2d 1298, 1302 (Ct. Cl. 1976), cert. denied, 434 U.S. 830 (1977). See also, Solar Turbines, Inc. V. United States, 23 Cl. Ct. 142 (1991). Properly exercised, a contracting officer's discretion to act pursuant to the "Termination for Convenience" clause is very broad. See Caldwell & Santmyer, Inc., supra, 94-2 BCA at 133,625 (citing ARDCO Inc., AGBCA Nos. 94-101-1, 94-102-1, 94-103-1, 1994 WL 45000 (Feb. 16, 1994); Michael J. Earl, PSBCA No. 3332, 93-3 BCA ¶ 26,234). One obvious exception is when the Government enters into a contract with no intention of fulfilling its promises, it may not use a termination for convenience to avoid a breach of contract claim. See, Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756 (1982). However, recent decisions from the U.S. Court of Appeals for the Federal Circuit have reaffirmed the principle that in the absence of bad faith or clear abuse of discretion, the Contracting Officer's decision to terminate for convenience is conclusive. See, T & M Distributors, Inc. v. United States, No. 98-5106, slip op. (Fed. Cir. July 26, 1999); Krygoski Const. Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996) cert. denied, 520 U.S. 1210 (1997); Caldwell & Santmyer, Inc., v. Glickman, 55 F.3d 1578 (Fed. Cir. 1995); Salsbury Indus. v. United States, 905 F.2d 1518 (Fed. Cir. 1990). In the instant appeal, Appellant does not allege bad faith, but questions the authority of the Government to end the contract. The Board concludes that the Contracting Officer was well within his contractual rights to terminate this contract for the convenience of the Government. The unrebutted evidence of record is that the need of the GPO's customer agency for additional aperture cards was reduced due to a shutdown of a portion of the plant that utilized the cards. The customer agency was left with a large inventory of cards on hand, one that would not be exhausted for four years. Rule 4 File, Tab G. Thus, the Government had no need to continue ordering cards from Appellant under Program 5565-S. Under these circumstances, a termination for convenience was an appropriate exercise of the Contracting Officer's discretion. There is no merit to Appellant's argument that the exercise of the first year option operates as a bar to the use of the Termination for Convenience clause. While it is unfortunate that the Government chose to extend the contract for an additional year without any apparent need for the product, such an action does not limit the Government's contractual right to terminate the contract. The Termination for Convenience clause does not restrict its use to any particular time. The clause's only condition precedent is that the Contracting Officer must determine that such action is "in the Government's interest." Clause 19(a), GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88). The Board has no difficulty concluding that termination for convenience in these circumstances was in the Government's interest. Therefore, the Board concludes that the Contracting Officer had the right to terminate Program 5565-S for the convenience of the Government and that his exercise of that right was not an abuse of discretion. Entitlement to Convenience Termination Costs While the Government has an inherent right to terminate its contracts for the convenience of the Government, it also owes contractors the duty to fairly compensate them for legitimate termination costs. Having decided that the Contracting Officer appropriately exercised his discretion to terminate Program 5565-S for convenience, the analysis now shifts to an examination of the termination claims made by Appellant. In the instant appeal, the Contracting Officer, relied entirely upon an audit recommendation from the GPO Office of inspector General (OIG), that concluded Appellant was not entitled to any termination settlement costs because Program 5565-S was a requirements contract. There appears to be no support in the contract, or applicable case law for the OIG's conclusion. Program 5565-S incorporated by reference the GPO's standard Termination for Convenience clause contained in GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88). Rule 4 File, Tab O at 2. That provision sets forth the procedures for filing a termination claim and establishes the parameters of any termination settlement. Under the clause: (e) If the contractor and the Contracting Officer fail to agree on the whole amount to be paid because of the termination of work, the Contracting Officer shall pay the contractor the amounts determined by the Contracting Officer as follows, but without duplication of any amounts agreed on under paragraph (d) above: (1) The contract price for completed supplies or services accepted by the Government (or sold or acquired under subparagraph (b)(9) above) not previously paid for, adjusted for any savings of freight and other charges. (2) The total of- (i) The costs incurred in the performance of the work terminated, including initial costs and preparatory expenses allocable thereto, but excluding any costs attributable to supplies or services paid or to be paid under subparagraph (e)(1) above; (ii) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion if not included in subdivision (i) above; and (iii) A sum, as profit on subdivision (i) above, determined by the Contracting Officer to be fair and reasonable; however, if it appears that the contractor would have sustained a loss on the entire work had it been completed, the Contracting Officer shall allow no profit under this subdivision (iii) and shall reduce the settlement to reflect the indicated rate of loss. (3) The reasonable costs of settlement of the work terminated, including- (i) Accounting, legal, clerical, and other expenses reasonably necessary for the preparation of termination settlement proposals and supporting data; (ii) The termination and settlement of subcontracts (excluding the amounts of such settlement); and (iii) Storage, transportation, and other costs incurred, reasonably necessary for the preservation, protection, or disposition of the termination inventory. (f) Except for normal spoilage, and except to the extent that the Government expressly assumed the risk of loss, the Contracting Officer shall exclude from the amounts payable to the contractor under paragraph (e) above, the fair value, as determined by the Contracting Officer, of property that is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government or to a buyer. (g) The cost principles and procedures of article 45, Contract Clauses in effect on the date of this contract, shall govern all costs claimed, agreed to, or determined under this clause. * * * (i) In arriving at the amount due the contractor under this article, there shall be deducted- (1) All unliquidated advance or other payments to the contractor under the terminated portion; (2) Any claim which the Government has against the contractor under this contract; and (3) The agreed price for, or the proceeds of sale of, materials, supplies, or other things acquired by the contractor or sold under the provisions of this article and not recovered by or credited to the Government. * * * Id. § 19. The Termination for Convenience clause does not exempt requirements contracts. Nor does Program 5565-S contain any provision2 restricting the contractor's right to receive compensation under the Termination for Convenience clause. The GPOBCA and other Boards have found entitlement to termination costs in situations where requirements contracts or indefinite quantities contracts were terminated for convenience. See e.g., R.C. Swanson Printing & Typesetting Co., GPOBCA No. 15-90 (July 1, 1993), 1993 GPOBCA LEXIS 22, 1993 WL 526638; New South Press & Assoc., GPOBCA No. 14-92 (Jan. 31, 1996), 1996 GPOBCA LEXIS 23, 1996 WL 112555; Edward V. Cambell, LBCA No. 82-BCA-4, 84-2 BCA ¶ 15,375; A-American, Inc., ASBCA No. 28823, 84-1 BCA ¶ 17,479. Thus, both the Contracting Officer and the OIG were mistaken about the fundamental legal principles to use in analyzing Appellant's termination claim. Accordingly, this appeal must be remanded to the Contracting Officer to allow him an opportunity to reconsider Appellant's termination claim. To assist the parties in their subsequent consideration of this claim, the Board offers the following summary of the applicable termination for convenience recovery standards. The GPO Termination for Convenience clause contains the general rule that once a contract is terminated, the contractor is entitled to recover its incurred costs, plus a reasonable profit. See GPO Contract Terms, GPO Publication 310.2 (Rev. 9-88), Contract Clause 19(d); PPR Chap. XIV, Sec. 2.3.n. See also, R.C. Swanson Printing & Typesetting Co., Supplemental Decision, GPOBCA No. 15-90, (July 1, 1993) slip op. at 17-18, 1993 GPOBCA LEXIS 26, 1993 WL 526638 (citing Humphrey Logging Co., AGBCA Nos. 84-359-3, 85-204-3, 85-3 BCA ¶ 18,433); Graphic Litho Co., Inc., GPOBCA No. 17-85, (Feb. 23, 1988) slip op. at 10, 1988 GPOBCA LEXIS 15, 1988 WL 363327. Accord, Youngstrand Surveying, AGBCA No. 90-150-1, 92-2 BCA ¶ 25,017, at 124,694; Chamberlain Manufacturing Corp., ASBCA No. 16877, 73-2 BCA ¶ 10,139 at 47,678. However, recovery of anticipated profits is not allowed. See PPR, Chap. XIV, Sec. 2.3.n. Accord, D.E.W. & D.E. Wurzbach, JV, ASBCA No. 50796, 98-1 BCA ¶ 29,385 at 146,055; Plaza 70 Interiors, Ltd., HUD BCA No. 94-C-150-C9, 95-2 BCA ¶ 27,668, at 137,939 (citing FAR 49.202; Steelcare, Inc., GSBCA No. 5491, 81-1 BCA ¶ 15,143, at 74,901). Similarly, where a contractor is in a loss position on the terminated contract, it is not entitled to recovery of any profit. See GPO Contract Terms, Contract Clauses, ¶ 19(e)(2)(iii); PPR, Chap. XIV, Sec. 2.3.o. See also Maitland Brothers Co., ASBCA No. 40388, 93-3 BCA ¶ 26,007, at 129,304, motion for reconsid. denied 94-1 BCA ¶ 26,285; Tom Shaw, Inc., ENG BCA Nos. 5540, 5541, 5620-5628, 93-2 BCA ¶ 25,742, at 128,082. The terminated contractor has the burden of establishing both that it actually incurred costs and the amount of its incurred costs. See R.C. Swanson, supra, Supplemental Decision, slip op. at 19 (citing Building Maintenance Specialists, Inc., ENG BCA No. 5654, 90-3 BCA ¶ 23,032). Accord, Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 767 (Fed. Cir. 1987); J.W. Cook & Sons, Inc., ASBCA No. 39691, 92-3 BCA ¶ 25,053, at 124,863 (citing Tubergen & Associates, Inc., ASBCA Nos. 34106, 34107, 90-3 BCA ¶ 23,058); Youngstrand Surveying, supra, 92-2 BCA at 124,694 (citing Roberts International Corp., ASBCA No. 15118, 71-1 BCA ¶ 8869); R.G. Robbins & Co., Inc., ASBCA No. 27516, 83-1 BCA ¶ 16,420. The actual incurrence of costs is a prerequisite to recovery under a termination for convenience; i.e., if the contractor has incurred no cost, there is no recovery. See R.C. Swanson, supra, Supplemental Decision, slip op. at 19 (citing Seiler Instrument and Manufacturing Co., Inc., ASBCA No. 44380, 93-1 BCA ¶ 25,436). Accordingly, in these cases it is the contractor's cost, not the value of the performance to the Government, that is the measure of recovery. See, e.g., Fil-Coil, ASBCA No. 23,137, 79-1 BCA ¶ 13,618 (1978), mot. for reconsid. denied, 79-1 BCA ¶ 13,683 (1979); Scope Electronics, Inc., ASBCA No. 20359, 77-1 BCA ¶ 12,404, mot. for reconsid. denied, 77-2 BCA ¶ 12,586 (1977); Arnold H. Leibowitz, GSBCA No. CCR-1, 76-2 BCA ¶ 11,930 (1976). Another significant convenience termination principle is that the "total contract price" sets the outside limit of the contractor's potential recovery. See R.C. Swanson, supra, Supplemental Decision, slip op. at 19 (citing GPO Contract Terms, Contract Clause 19(d); FAR 52.249-2(e)). Accord Alta Construction Co., PSBCA Nos. 1463, 2820, 94-3 BCA ¶ 27,053, at 134,816; Tom Shaw, Inc., supra, 93-2 BCA at 128,073. GPO's Termination for Convenience clause provides that the convenience termination settlement may not generally exceed the "total contract price" as reduced by: (1) the amount of payments previously made; and (2) the contract price of work not terminated. See GPO Contract Terms, Contract Clauses, ¶ 19(d). The theory behind this limitation is that the contractor should not receive more than the contract price for doing less than the full amount of work required by the contract. Id. The "total contract price" concept encompasses three things: (1) it sets the maximum amount a contractor may recover under a termination for convenience; (2) it is important when considering the recovery of costs continuing after termination; and (3) the rules for setting the "total contract price" vary depending on the type of contract terminated. See R.C. Swanson, supra, Supplemental Decision, slip op. at 19-20 (citing Nolan Bros., Inc. v. United States, 405 F.2d 1250 (Ct. Cl. 1969); Alta Construction Co., PSBCA No. 1463, 92-2 BCA ¶ 24,824; Celesco Industries, Inc., ASBCA No. 22460, 84-2 BCA ¶ 17,295; Pioneer Recovery Systems, Inc., ASBCA No. 24658, 81-1 BCA ¶ 15,059; Okaw Industries, Inc., ASBCA Nos. 17863, 17864, 77-2 BCA ¶ 12,793; Chamberlain Manufacturing Corp., supra). In the case of a requirements contract, like Program 5565-S, the "total contract price" is the estimated value of the contract, determined by multiplying the Government's estimate of the number of cards to be purchased3 by the "per 1000 cards" price bid by Appellant. See, Albano Cleaners, Inc. v. United States, 197 Ct. Cl. 450, 455 F.2d 556 (1972); R.C. Swanson Printing & Typesetting Co., GPOBCA No. 15-90 (July 1, 1993), 1993 GPOBCA LEXIS 26, 1993 WL 526638, slip op. at 21-27; Alta Constr. Co., PSBCA Nos. 1463, 2920, 92-2 BCA ¶ 24,824; Aviation Specialists, Inc., DOT BCA No. 1967, 91-1 BCA ¶ 23,534. The "total contract price" for Program 5565-S is further modified by doubling the initial year's estimates due to the Government's decision to extend the contract into the first option year. Finally, the OIG and the Contracting Officer must not ignore the underlying philosophy of the termination for convenience procedure when compensating a terminated contractor. It is "fairness," rather than strict adherence to principles of cost accounting, that should guide settlement calculations. See Richerson Construction, Inc., GSBCA Nos. 11161, 11263(11045)-REIN, 11430, 93-1 BCA ¶ 25,239; Youngstrand Surveying, supra; Industrial Refrigeration Service Corp., VABCA No. 2532, 91-3 BCA ¶ 24,093, at 120,595; Arctic Corner, Inc., VABCA No. 2393, 86-3 BCA ¶ 19,278; American Electric, Inc., ASBCA No. 16635, 76-2 BCA ¶ 12,151. The General Services Administration Board of Contract Appeals recently explained: Under applicable Federal Acquisition Regulations (FAR), the objective of a termination for convenience settlement is to provide the contractor with "fair compensation" both for the work that has been completed prior to termination and for preparations made for terminated portions of the contract, including a reasonable allowance for profit. FAR 49.201. . . . To this end, the cost standards of the FAR, in part 31, are applied in accordance with principles of business judgment and fairness, Codex Corp. v. United States, 226 Ct. Cl. 693, 699 (1981), with the ultimate objective of making the contractor "whole." See Industrial Refrigeration Service Corp., VABCA 2532, 91-3 BCA ¶ 24,093, at 120,595; American Electric, Inc., ASBCA 16635, 76-2 BCA ¶ 12,151. See Richerson Construction, Inc., supra, 93-1 BCA at 125,704. See also, General Electric Co., ASBCA No. 24111, 82-1 BCA ¶ 15,725, reconsid. denied 83-1 BCA ¶ 16,207. See also, Industrial Refrigeration Service Corp., supra, 91-3 BCA ¶ 24,093, at 120,594-95. Although a convenience termination settlement should compensate a contractor fairly, this is not to say that the concept has no boundaries. A contractor may not use "fairness" as a "sword to dispense with its obligation to prove its monetary claim." See J.W. Cook & Sons, Inc., supra, 92-3 BCA at 124,863. The ASBCA takes a narrower view of "fairness" as a concept in termination settlements: . . . It is not our province to fashion equitable or extracontractual relief on the grounds of fairness, or otherwise. In this context, "fairness" to the parties is the realization of the benefit of each party's bargain through the contractual instrument they signed. We exercise "fairness" through the reasonable interpretation of that contractual instrument and the related regulations, with due regard to all relevant circumstances. Id., 92-3 BCA at 124,865. In New South Press & Assoc., Inc., GPOBCA No. 14-92 (Jan. 31, 1996), 1996 GPOBCA LEXIS 23, 1996 WL 112555, the Board discussed how these fairness concepts should be applied. The Board noted that both the GPO Cost Directive4 and the PPR caution contracting officers that in negotiating termination settlements, the objective is to negotiate prices that are fair and reasonable, notwithstanding the mandatory use of cost principles. See GPO Cost Directive, Sec. 2, ¶ 3, p. 6; PPR, Chap. VIII, Sec. 1.3.a. The overall philosophy of the GPO regulations appears to be similar to and in harmony with the approach taken by the Court of Claims in Codex Corp. v. United States, and adopted by the GSBCA in Richerson Construction, Inc., and the VABCA in Industrial Refrigeration Service Corp., and Arctic Corner, Inc. In that regard, the above-cited provisions from the GPO Cost Directive and the PPR appear to be simply condensed versions of the regulatory provisions at issue in Arctic Corner, Inc., supra, 86-3 BCA at 97,456. Where GPO adopts the regulatory language followed by other agencies as its own, in this case the cost principal rules governing contracts which are terminated for convenience, we must presume that the uniform interpretation given to those words has also been accepted. See Banta Co., GPOBCA 03-91 (November 15, 1993), slip op. at 34, 1993 WL 526843 ("Changes" clause); McDonald & Eudy Printers, Inc., supra, slip op. at 11-12 ("Requirements" clause); Shepard Printing, supra, slip op. at 21-22 ("Requirements" clause). Consequently, this Board will continue to administer the cost principles in the relevant regulations of this agency-the GPO Cost Directive, the PPR, and the implementing provisions of GPO Contract Terms-consistent with the meaning and philosophy of the parallel provisions in the FAR, as interpreted by the Claims Court, the GSBCA and the VABCA in the above cited cases. The Board will likewise approach disputed cost elements with an eye toward fair compensation rather than imposing strict accounting principles upon the Appellant. New South Press & Assoc., Inc., GPOBCA No. 14-92 (Jan. 31, 1996), 1996 GPOBCA LEXIS 23, 1996 WL 112555; George Marr Co., GPOBCA No. 31-94 (Apr. 23, 1996), 1996 GPOBCA LEXIS 43, 1996 WL 273662. See also, Foremost Mechanical Systems, GSBCA No. 13250-C (12335), et al., 98-1 BCA ¶ 29,652 at 146,917-8; Industrial Refrigeration Service Corp., supra, 91-3 at 120,594; Arctic Corner, Inc., supra, 86-3 BCA at 97,457. In the instant appeal, the bulk of Appellant's termination for convenience claim is for its unused inventory, consisting both of completed aperture cards and the raw materials used to manufacture the cards.5 Rule 4 File, Tab G. Such items do not appear to be "common items" which Appellant could utilize in its other work, and which would be excluded from recovery under a termination settlement. See, GPO Cost Directive ¶49(a). Rather, Appellant alleges, and Respondent does not dispute, that Appellant designed these cards specifically for use in the Y-12 Plant's air monitoring equipment. In addition, the Whatman filter paper used was manufactured in England and not used by any other company in this country, thus limiting Appellant's ability to sell the excess materials to other companies or to return them to Appellant's supplier. Rule 4 File, Tab G. It would appear, based on the thin record developed in this appeal, that the claimed materials fall into the category of direct costs. Respondent argues that Appellant should not be compensated for any of the supplies it received after the Contracting Officer's May 22, 1996, oral notification of Respondent's intent to terminate the contract for convenience. However, the contractor was not obligated to stop work and discontinue subcontracts for supplies until "[a]fter receipt of a Notice of Termination" GPO Contract Terms, term 19 (b). Appellant did not receive the formal notice of termination until August 5, 1996. Rule 4 File, Tab D. Therefore, Appellant's receipt of materials in June 1996 was not per se unreasonable. 6 In its audit report the OIG takes the position that since no print orders requesting the delivery of cards were issued by the Government during the second contract year, then none of the costs incurred by Appellant during the second year are allowable. The OIG reasons that since Program 5565-S was a requirements contract with no guarantees of orders, Appellant should not have incurred any costs in anticipation of orders. Rule 4 File, Tab I. This view ignores the evidence that the Whatman 41 filter paper required by the contract specifications had to be imported from England and required approximately 18 weeks for delivery. Rule 4 File, Tab G. Since Program 5565-S obligated Appellant to deliver completed aperture cards to the Government within 20 workdays of receipt of the Government's order, it would have been impossible to comply with the delivery schedule unless the contractor had on hand a supply of the necessary raw materials.7 See Rule 4 File, Tab O at 8. The fact that some of the raw materials may have been delivered during the first year of the contract is not significant. If the contractor's acquisition of raw materials was reasonable during the first year of the contract, the fact that termination occurred during the second year does not bar recovery, since once exercised, a contract option becomes part of a single unitary contract. VHC Inc., No. 98-1327 (Fed. Cir. June 10, 1999), 1999 U.S. App. LEXIS 11943; International Business Investments, Inc. v. United States, 21 Cl. Ct. 79, 80 (1990); C.M.P., Inc. v. United States, 8 Cl. Ct. 743, 746 (1985); Boeing Aeorospace Operations, Inc., ASBCA Nos. 46274, 46275, 94-2 BCA ¶ 26,802 at 133,281 n.4; Varo, Inc., ASBCA No. 16606, 72-2 BCA ¶ 9720. Neither the Contracting Officer nor the OIG considered the details of Appellant's claim, focussing instead on what they viewed as Appellant's lack of entitlement to any recovery given that Program 5565-S was a requirements contract. Accordingly, neither evaluated the inventory claim to determine whether Appellant's arrangements with its suppliers were reasonable or whether they resulted in the delivery of excess quantities of raw materials or whether Appellant's manufacturing plan resulted in the stockpiling of an unreasonably large inventory of completed cards. See, DCAA Contract Audit Manual §§12-304.3, 12-304.4. Therefore, the Contracting Officer's final decision denying all termination costs is REVERSED and Appellant's claim is REMANDED to the Contracting Officer for a re-evaluation of the claimed costs. Lost Profits Claim Appellant also seeks to recover "lost profits" as part of this appeal. Complaint ¶ 7. It is unclear from the complaint whether lost profits are sought as a component of Appellant's termination for convenience claim, or as a separate breach of contract claim arising out of the Contracting Officer's termination of the contract for the convenience of the Government. Appellant is not entitled to recovery under either theory. A contractor terminated for convenience may not recover anticipated profits as part of its termination for convenience cost claim. Salsbury Indus. v. United States, 905 F.2d 1518, 1522 (Fed. Cir. 1990); G.C. Casebolt Co. v. United States, 190 Ct. Cl. 783, 421 F.2d 710, 713 (1970); Nolan Bros., Inc. v. United States, 405 F.2d 1250 (Ct. Cl. 1969). Recovery of lost or anticipatory profits under a termination for convenience claim is prohibited by the Termination for Convenience clause. That clause relieves the Government from the obligation of paying anticipated profits by limiting profit to profit on work performed. Dairy Sales Corp. v. United States, 219 Ct. Cl. 431, 593 F.2d 1002 (1979), aff'g Dairy Sales Corp., ASBCA No. 20193, 75-2 BCA ¶ 11,613). See PPR, Chap. XIV, Sec. 2.3.n. Accord, D.E.W. & D.E. Wurzbach, JV, ASBCA No. 50796, 98-1 BCA ¶ 29,385 at 146,055; Plaza 70 Interiors, Ltd., supra, 95-2 BCA at 137,939 (citing FAR 49.202; Steelcare, Inc., GSBCA No. 5491, 81-1 BCA ¶ 15,143, at 74,901). Similarly, termination claims cannot be based on loss of business or anticipated sales. Unified Engineering, Inc., ASBCA No. 21565, 81-1 BCA ¶ 14,940. Appellant cannot use a breach of contract theory to recover lost profits, as it is settled law that this Board has no jurisdiction over breach of contract claims. The Board's decision in Wessel Company, Inc., GPOBCA No. 90-8 (Feb. 28, 1992), 1992 GPOBCA LEXIS 19, 1992 WL 487877 is dispositive of that issue. See also, Rim Advertising, GPOBCA No. 38-94, (Sept. 24, 1997) 1997 GPOBCA LEXIS 15, 1997 WL 742429; Rose Printing, Inc., GPOBCA No. 32-95 (Dec. 16, 1996), 1996 GPOBCA LEXIS 34, 1996 WL 812880; R. C. Swanson Printing and Typesetting Co., GPOBCA No. 15-90 (Mar. 6, 1992), 1992 GPOBCA LEXIS 20, 1992 WL 382924,; Cloverleaf Enterprises, Inc., GPOCAB 79-12 (May 9, 1980), 1980 GPOBCA LEXIS, 1980 WL 81267, slip op. at 10-11; Microform Data System, Inc., GPOCAB 3-79 (Feb. 1, 1980), 1980 GPOBCA LEXIS 41, 1980 WL 81258, slip op. at 11-12; Information Systems, Inc., GPOCAB 78-11 (Jan. 18, 1979), slip op. at 5-7, 1979 GPOBCA LEXIS 38, 1979 WL 28889; Harbor Printing & Copy Service, Inc., GPOCAB 77-5 (Nov. 4, 1977), slip op. at 1, 1977 GPOBCA LEXIS 26, 1977 WL 24257. As a creature of contract, rather than of statute, this Board's remedial authority is strictly limited, and confined to the contract before it. See Olympic Graphic Systems, GPOBCA No. 1-92 (Sept. 13, 1996), slip op. 36, 1996 GPOBCA LEXIS 32, 1996 WL 812957; Big Red Enterprises, supra, slip op. at 38; GraphicData, Inc., GPOBCA No. 35-94 (June 14, 1996), slip op. at 57, 1996 GPOBCA LEXIS 28, 1996 WL 812875; The Wessel Co., Inc., supra, slip op. at 32. As a forum of limited jurisdiction whose remedial powers are tied to the clauses in the contract, the Board functions essentially as a pre-CDA board of contract appeals. See Olympic Graphic Systems, supra, slip op. 37; GraphicData, II, supra, slip op. at 85; R.C. Swanson Printing and Typesetting Co., GPOBCA 15-90, Supplemental Decision (July 1, 1993), slip op. at 28, 1993 GPOBCA LEXIS 26, 1993 WL 526638; The Wessel Co., Inc., supra, slip op. at 34. Accord United States v. Utah Construction and Mining Co., 384 U.S. 394 (1966); Jet Services, Inc., DOT CAB No. 77-14, 78-2 BCA ¶ 13,223; Blake Construction Co., Inc., GSBCA No. 2205, 67-1 BCA ¶ 6,311. This simply means that the Board must take the agreement as it finds it, and unless the Board can locate the relief granting source within the "four corners" of the contract, the contractor will have to seek its remedy in another forum. See Olympic Graphic Systems, supra, slip op. 37; R.C. Swanson Printing and Typesetting Co., supra, slip op. at 40-41; The Wessel Co., Inc., supra, slip op. at 45-46. Thus, even if the Board concluded that the termination for convenience was improper in this case, its remedial authority would not encompass awarding Appellant anticipated profits as breach of contract damages. Accordingly Appellant's claim for anticipated profits is DENIED. Claim for Attorney's Fees Appellant also seeks to be reimbursed for the attorney's fees it incurred in pursuing the instant appeal. Complaint ¶ 7. Such costs are generally unallowable when asserted in the context of a termination for convenience settlement claim. Robertson Co. v. United States, 194 Ct. Cl. 289, 437 F.2d 1360 (1971). GPO Contract Terms, which is incorporated by reference in Appellant's contract, requires the application of the provisions of GPO Procurement Directive 306.2, Subject: Contract Cost Principles and Procedures, dated April 1, 1988 (GPO Contract Cost Principles) to GPO contracts, in appropriate circumstances. GPO Contract Terms, Contract Clauses, ¶ 45. See, Banta Company, GPOBCA 03-91 (November 15, 1993), slip op. 34-35, 1993 GPOBCA LEXIS 20, 1993 WL 526843. One such circumstance mandated by GPO's procurement regulations is the determination of costs under terminated contracts. PPR, Chap. VIII, Sec. 1.3.b.(1). In that regard, GPO Contract Cost Principles expressly states that: "[c] osts of legal . . . services and directly associated costs incurred in connection with . . . defense against Government claims or appeals, or the prosecution of claims or appeals against the Government are unallowable [Cross reference omitted.]." GPO Contract Cost Principles, p. 28, ¶ 3.41(d). See also, FAR 31.205-47(f)(1); A.T. Kearney, Inc., DOTCAB No. 1580, 86-1 BCA ¶ 18,613. Attorney's fees are not available to Appellant as a prevailing party in this appeal, as such a remedy is beyond the power of the GPOBCA to grant. Sterling Printing, Inc., GPOBCA No. 8-90 (Feb. 28, 1992), 1992 GPOBCA LEXIS 19, 1992 WL 487877. The Board's counterparts in the Executive branch are now8, authorized to award attorneys fees under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, to prevailing parties in administrative hearings. Congress amended EAJA in 1985 to include the proceedings of agency contract appeals boards established pursuant to the Contract Disputes Act (CDA), 41 U.S.C. §601 et seq., within the definition of an "adversary adjudication." See, 5 U.S.C. § 504(b)(1)(C). See, e.g., Marty's Maid and Janitorial Service, GSBCA Nos. 11980-C (10614), 11981-C (10996), 93-2 BCA ¶ 25,713; JR and Associates, ASBCA No. 41377, 92-3 BCA ¶ 25,121. However, the GPOBCA is not a CDA Board because GPO, as a Legislative branch agency, is excluded from the coverage of that statute. See, Tatelbaum v. United States, 749 F.2d 729 (Fed. Cir. 1984). Furthermore, because the EAJA also excludes the Legislative branch from its sweep, the Board derives no powers or authority from that law. 5 U.S.C. § 504(b)(2) (incorporating the definitions of 5 U.S.C. § 551, which excludes "the Congress" from the definition of "agency"). Cf., Mayo v. Government Printing Office, 9 F.3d 1450, 1451 (9th Cir. 1993) (GPO excluded from coverage of the Freedom of Information Act, 5 U.S.C. § 552); Gray Graphics Corporation v. U.S. Government Printing Office, et al., Civil Action No. 82-2869 (D.D.C. 1982) (GPO not covered by the Small Business Act, 15 U.S.C. § 631 et seq.). See also, Chavis and Chavis Printing, GPOBCA No. 20-90 (Feb. 6, 1991), slip op. at 7, fn. 7, 1991 GPOBCA LEXIS 15, 1991 WL 439270 (where the Board held that GPO was not subject to the Prompt Payment Act of 1982, as amended, 31 U.S.C. § 3901 et seq., because the Prompt Payment Act defined its agency coverage in terms of 5 U.S.C. § 551). This Board's authority is derived from the "Disputes" clause of the contract. See, GPO Contract Terms, Contract Clause 5. See also, R.C. Swanson Printing and Typesetting Company, supra, slip op. at 27-28, 41; The Wessel Company, Inc., supra, slip op. at 32-35, 46. As such, the Board, its proceedings, and its powers, are ". . . closer to the administrative practice followed in contract appeals prior to the enactment of the CDA, . . .". B. P. Printing and Office Supplies, GPOBCA No. 14-91, (Aug. 10, 1992), slip op. at 20 1992 GPOBCA LEXIS 15, 1992 WL 488447. Thus, the Board is without authority to award attorney's fees and appeal expenses in proceedings such as this. Accordingly, Appellant's claim for attorney's fees is DENIED. CONCLUSION For the foregoing reasons, the Contracting Officer's final decision regarding entitlement to termination for convenience costs is REVERSED and the claim is REMANDED to the Contracting Officer9 with instructions to reconsider Appellant's termination claim in accordance with this decision. Appellant's claims for attorney's fees and anticipated profits are DENIED. July 29, 1999 KERRY L. MILLER Administrative Judge _______________ 1 Whatman 41 filter paper is used in aerosol sampling as a medium for the collection of airborne particles. See, D.H. Lowenthal & K.A. Rahn, B.T. Storr & J.L. Baker "The Use of Whatman 41 Filter Papers For High Volume Aerosol Sampling - Further Comments" Atmos. Environ. 21, 2732-2736. 2 The only provision in Program 5565-S touching on this issue is the Limitation of Performance and Contractor Obligations clause that defines 'total contract price' as that term is used in the Termination for Convenience clause. Rule 4 File, Tab O at 4. 3 The estimate is contained in the Determination of Award section of the IFB. See Rule 4 File, Tab O at 10. 4 The GPO Cost Directive, Procurement Directive 306.2, April 1, 1988, Contract Cost Principles and Procedures, is incorporated by reference by GPO Contract Terms, Contract Clauses, ¶¶ 19(g), 45. 5 The existence of these cards in Appellant's plant was verified by the Department of Energy during an inventory conducted at the request of the OIG. Rule 4 File, Tab I, Appendix A. 6 In addition, the record is unclear whether Appellant actually received the materials after May 22, 1996. Although the record contains an invoice from Appellant's supplier dated June 6, 1996, the supplier certified later that this invoice was a bill for three previous deliveries, the last of which occurred on May 9, 1996. See, Appellant's Supplement to the Record, April 6, 1999. 7 The contractor's difficulty would have been compounded, should the Government decide, as it did in May 1995, to place three orders within a three-day period. See Rule 4 File Tabs S, T, and U. On two other occasions the Government placed two orders in a single day. See Rule 4 File, Tabs W, X, Z, AA. 8 Prior to 1985, CDA contract appeals boards were without jurisdiction to award attorneys fees and litigation costs under the EAJA. Fidelity Construction Company v. United States, 700 F.2d 1379, 1385 (Fed. Cir. 1983), cert. denied, 464 U.S. 826; C.S. Smith Training, Inc., DOT CAB No. 1434, 84-3 BCA ¶ 17,700. 9 While the Board cannot order the GPO Office of Inspector General to conduct an audit, the Board strongly urges that one be performed in order to provide the Contracting Officer with the data needed to make an informed final decision.