A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transportation Authority (Lawyers Weekly No. 12-052-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION 1684CV05562 A.L. PRIME ENERGY CONSULTANT, INC. vs. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY RESERVIATION AND REPORT OF AN INTERLOCUTORY ORDER TO THE APPEALS COURT This action arises out of a contract between the plaintiff, A.L. Prime Energy Consultant, Inc. (Prime), and the defendant, Massachusetts Bay Transportation Authority (MBTA) for the supply of Ultra Low Sulfur Diesel Fuel (ULSDF) (the Supply Contract), and the unilateral termination of the Supply Contract by the MBTA. Prime asserts, among other claims, that the MBTA breached the Supply Contract by terminating it before its end date. Factual Background Prime was awarded the Supply Contract on July 1, 2015, after a public bidding process. It was to continue for a period of two years. The Supply Contract contained a so-called “termination for convenience” provision that states: Termination for Convenience. The Authority [MBTA] may, in its sole discretion, terminate all or any portion of this Agreement or the work required hereunder, at any time for its convenience and/or for any reason by giving written notice to the Contractor [Prime] thirty (30) calendar days prior to the effective date of termination or such other period as is mutually agreed upon in advance by the parties. If the Contractor is not in default or in breach of any material term or condition of this Agreement, the Contractor shall be paid its reasonable, proper and verifiable costs in accordance with generally accepted government contracting principals as set forth in the Federal Acquisition Regulations, including demobilization and contract closeout costs, and profit on work performed and Accepted up to the time of termination to the extent previous payments made by the Authority to the Contractor have not already done so. Such payment shall be the Contractor’s sole and exclusive remedy for any Termination for Convenience, and upon such payment by the Authority to the Contractor, the Authority shall have no further obligation to the Contractor. The Authority shall not be responsible for the Contractor’s anticipatory profits or overhead costs attributable to unperformed work. On July 12, 2016, the MBTA terminated the Supply Contract pursuant to the termination for convenience clause quoted above. In its complaint, Prime alleges that the sole reason for the MBTA’s exercise of the termination for convenience clause was that it had learned that it could obtain ULSDF at a cheaper price from another vendor. It contends that an agency’s right to invoke termination for convenience clauses is limited by principles of bad faith and abuse of discretion and, under these principles, a government agency is not permitted to cancel a contract solely to enable it to purchase the same […]
Categories: News Tags: 1205217, A.L., Authority, Consultant, Energy, Inc., Lawyers, massachusetts, Prime, Transportation, Weekly
A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transportation Authority (Lawyers Weekly No. 12-052-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION 1684CV05562 A.L. PRIME ENERGY CONSULTANT, INC. vs. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY RESERVIATION AND REPORT OF AN INTERLOCUTORY ORDER TO THE APPEALS COURT This action arises out of a contract between the plaintiff, A.L. Prime Energy Consultant, Inc. (Prime), and the defendant, Massachusetts Bay Transportation Authority (MBTA) for the supply of Ultra Low Sulfur Diesel Fuel (ULSDF) (the Supply Contract), and the unilateral termination of the Supply Contract by the MBTA. Prime asserts, among other claims, that the MBTA breached the Supply Contract by terminating it before its end date. Factual Background Prime was awarded the Supply Contract on July 1, 2015, after a public bidding process. It was to continue for a period of two years. The Supply Contract contained a so-called “termination for convenience” provision that states: Termination for Convenience. The Authority [MBTA] may, in its sole discretion, terminate all or any portion of this Agreement or the work required hereunder, at any time for its convenience and/or for any reason by giving written notice to the Contractor [Prime] thirty (30) calendar days prior to the effective date of termination or such other period as is mutually agreed upon in advance by the parties. If the Contractor is not in default or in breach of any material term or condition of this Agreement, the Contractor shall be paid its reasonable, proper and verifiable costs in accordance with generally accepted government contracting principals as set forth in the Federal Acquisition Regulations, including demobilization and contract closeout costs, and profit on work performed and Accepted up to the time of termination to the extent previous payments made by the Authority to the Contractor have not already done so. Such payment shall be the Contractor’s sole and exclusive remedy for any Termination for Convenience, and upon such payment by the Authority to the Contractor, the Authority shall have no further obligation to the Contractor. The Authority shall not be responsible for the Contractor’s anticipatory profits or overhead costs attributable to unperformed work. On July 12, 2016, the MBTA terminated the Supply Contract pursuant to the termination for convenience clause quoted above. In its complaint, Prime alleges that the sole reason for the MBTA’s exercise of the termination for convenience clause was that it had learned that it could obtain ULSDF at a cheaper price from another vendor. It contends that an agency’s right to invoke termination for convenience clauses is limited by principles of bad faith and abuse of discretion and, under these principles, a government agency is not permitted to cancel a contract solely to enable it to purchase the same […]
Categories: News Tags: 1205217, A.L., Authority, Consultant, Energy, Inc., Lawyers, massachusetts, Prime, Transportation, Weekly