Coyle’s Pest Control, Inc. v. Cuomo

The Department of Housing and Urban Development (HUD) (defendant) awarded a contract to Coyle’s Pest Control, Inc. (Coyle) (plaintiff) to inspect for, and treat, termite infestations in HUD-owned properties in Texas. The contract stated that termite work would be assigned on an as-needed basis and that the contract could be extended for up to three years. There was a fixed pricing system for Coyle’s inspection and treatment services that was based on both the service provided and the number of HUD properties serviced within a monthly period. The estimated value of the contract was $1.93 million. The contract was labeled as a “fixed unit rate-indefinite quantity contract.” After entering into the contract with Coyle, HUD changed its internal policies to allow HUD property buyers to use their own termite inspectors rather than HUD contractors. HUD terminated Coyle’s contract shortly after the first year and paid Coyle approximately $695,000 for services performed. Coyle submitted a claim to the HUD Board of Contract Appeals (Board) for approximately $1.5 million, or the difference between what Coyle was paid and the estimated value of the contract, arguing that Coyle’s contract with HUD should be interpreted as either an indefinite-quantity contract or a requirements contract. The Board denied Coyle’s claim, holding that (1) the contract was not an indefinite-quantity contract because it did not have either the required specified minimum number of properties to be serviced or an indefinite-quantity clause; and (2) the contract was not a requirements contract because it did not have the required exclusivity clause requiring HUD to assign all relevant termite work to Coyle. Coyle appealed. It was undisputed that Coyle and HUD had a valid contract, the dispute solely focused on the contract’s scope and classification.