1993. However, we declined to rule on the effect of the termination for convenience clause, preferring to wait until further discovery had been completed.
In March of 1993, HACC renewed its motion for partial summary judgment as to the applicability and effect of the termination for convenience clause. On April 23, 1993, this Court granted the motion for summary judgment, limiting plaintiff's damages to those recoverable under the termination for convenience clause, but leaving open the possibility of recovery for damages accruing from defendant's failure to specifically identify the termination as one of convenience. The decisions were certified by the Court for interlocutory appeal to the Third Circuit, but plaintiff's petition to file such an appeal was denied.
On October 27, 1993, defendant filed its third motion for summary judgment, contending that since plaintiff "never began work under the Contract, never having mobilized the site," Defendant's Brief in Support at 3, it could not recover damages under the termination for convenience clause. Plaintiff responded that (1) it had incurred preparatory costs (e.g., soliciting subcontractors, pricing, preconstruction meetings) within the ambit of P 17; (2) it could recover damages resulting from the faulty termination notice; (3) it could recover damages for pre-termination delay; and (4) it could recover damages resulting from HACC's refusal to relinquish plaintiff's performance bonds.
II. LEGAL ANALYSIS
A. Choice of Law
The Maguire Gardens renovation project was funded by the Public and Indian Housing Comprehensive Improvement Assistance Program ("CIAP"), which in turn is administered by the United States Department of Housing and Urban Development through a series of federal statutes and regulations. See, e.g., 42 U.S.C. § 1437(1); 24 C.F.R. 968.101 et seq. The regulations require that contracts entered into pursuant to the CIAP contain certain provisions. 24 C.F.R. § 968.110(j). These provisions, which are collected in the Uniform Requirements for Grants and Cooperative Agreements to State, Local, and Federally Recognized Indian Tribal Governments (the "Uniform Requirements"), 24 C.F.R. § 85.1 et seq., include a requirement that all CIAP contracts in excess of $ 10,000.00 incorporate a termination for convenience clause. 24 C.F.R. § 85.36(i)(2).
Section 85.36(b) of the regulations permits grantees, such as the HACC in this case, to use applicable state and local procurement laws and regulations, "provided that the procurements conform to applicable Federal law and the standards identified in this section." 24 C.F.R. § 85.36(b). Plaintiff reasons from this provision that New Jersey law should govern interpretation of the termination for convenience clause. However, to paraphrase the plaintiff, this is a considerable and unnecessary leap in logic with which this Court cannot agree.
The text of § 85.36(b) expressly limits its applicability to state and local procurement laws and regulations. Nothing suggests it is a general choice-of-law provision, or that the federal government has any interest in mandating that the vagaries of fifty distinct state laws, rather than the federal common law, be applied to interpret a clause required by federal regulation to be included in contracts for construction projects around the country.
Whether state or federal law applies to disputes brought under the court's diversity jurisdiction depends upon the degree to which the outcome will affect the interests of the federal government.
Bank of America National Trust & Savings v. Parnell, 352 U.S. 29, 1 L. Ed. 2d 93, 77 S. Ct. 119 (1956). The application of federal law is appropriate where "a uniform national rule" is necessary to further federal interests. Clearfield Trust Co. v. United States, 318 U.S. 363, 87 L. Ed. 838, 63 S. Ct. 573 (1943), or where "there is significant conflict between some federal policy or interest and the use of state law." Miree v. DeKalb County, 433 U.S. 25, 29, 53 L. Ed. 2d 557, 97 S. Ct. 2490 (1977) (quoting Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 16 L. Ed. 2d 369, 86 S. Ct. 1301 (1966)); cf. Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 457, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1956) ("It is not uncommon for federal courts to fashion federal law where federal rights are concerned.").
In diversity cases involving contract disputes, the federal courts ordinarily apply state law. See generally Erie R.R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938); Eugene F. Scoles and Peter Hay, Conflict of Laws § 3.52 (1984). And while federal law governs the rights and obligations of the United States under government contracts, United States v. Seckinger, 397 U.S. 203, 25 L. Ed. 2d 224, 90 S. Ct. 880 (1970), state law often governs the construction of contracts between government contractors and their subcontractors. See, e.g., American Pipe & Steel Corp. v. Firestone Tire & Rubber Co., 292 F.2d 640 (9th Cir. 1961); Peter Kiewit Sons' Co. v. Summit Construction Co., 422 F.2d 242 (8th Cir. 1969); 1A Moore's Federal Practice § 0.321 (1980). However, where the dispute implicates significant federal interests, resolution will be accomplished by resort to federal law. American Pipe & Steel Corp., 292 F.2d at 644; United States v. Taylor, 333 F.2d 633 (5th Cir. 1964), adhered to on reh'g., 336 F.2d 149 (5th Cir. 1964). See generally Whittaker Corp. v. Calspan Corp., 810 F. Supp. 457, 462 (W.D.N.Y. 1992); Grinnell Fire Protection Systems Company, Inc. v. Regents of the University of California, 554 F. Supp. 495, 497-98 (N.D. Cal. 1982).
We find that the extensive statutory and regulatory framework governing the administration of CIAP projects nationwide, together with the reality that these projects are funded almost entirely by the federal government, lead to the conclusion that the interpretation of provisions required to be included in CIAP contracts is a uniquely federal concern. The CIAP regulations extend into all areas of project management, from financial administration and recordkeeping to contract requirements. See generally 24 C.F.R. Part 85 (containing uniform administrative rules for grants and cooperative agreements); Part 968 (setting forth regulations addressing public housing modernization).
In fact, contracts entered into pursuant to the CIAP are almost, if not entirely, prescribed by the federal government. The contract documents in the instant case, for example, comprise two HUD forms -- the General Conditions of the Contract and the Supplement thereto. In light of the pervasive regulatory and financial influence of the federal government, and the nationwide scope of the CIAP program, we conclude that there is a uniquely federal interest in a uniform interpretation of provisions, like the termination for convenience clause, that are required to be included in contracts entered into pursuant to the program.
That a lawsuit involves a uniquely federal interest, however, does not by itself authorize the federal courts to employ federal common law in its resolution. "That merely establishes a necessary, not a sufficient, condition for the displacement of state law." Boyle v. United Technologies Corp., 487 U.S. 500, 507, 101 L. Ed. 2d 442, 108 S. Ct. 2510 (1988). "Displacement will only occur where . . . a 'significant conflict' exists between an identifiable 'federal policy or interest and the [operation] of state law . . . or the application of state law would 'frustrate specific objectives' of federal legislation. . . ." Id. (citations omitted); see also Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 16 L. Ed. 2d 369, 86 S. Ct. 1301 (1966) (noting that, in deciding whether to fashion rules of federal common law, "normally the guiding principle is [the existence of] a significant conflict between some federal policy or interest and the use of state law"); but cf. Miree v. DeKalb County, 433 U.S. 25, 29, 53 L. Ed. 2d 557, 97 S. Ct. 2490 (1977) (noting that uniform national law should not be employed in disputes in which no federal interest is promoted).
We find it implausible that the federal government would require all CIAP contracts in excess of $ 10,000.00 to contain a termination for convenience clause, and then leave interpretation of that clause to the vagaries of state law, particularly where, like New Jersey, there are few or no state law cases interpreting this type of provision. Rather, we believe that the decision to include a termination for convenience clause in the "Uniform Requirements" section of the C.F.R. reflects a federal interest in a consistent interpretation of that clause. We therefore find it appropriate to use federal common law to discern the scope and effect of the termination for convenience clause.
Even assuming that New Jersey law were to apply, we have no basis for believing that New Jersey courts would look elsewhere than to the federal common law for guidance. As a preliminary matter, we note the sheer absence of New Jersey case law on point. Moreover, we think that courts in New Jersey would recognize that where the parties have incorporated a particular clause pursuant to federal regulation, they do so against the backdrop of federal case law addressing the clause. Therefore, we believe that New Jersey courts would draw from this rich body of federal common law, unless to do so would violate some enshrined principle of New Jersey law.
Plaintiff contends that federal common law and the law of New Jersey are at odds. We disagree, having found no indication that the general principles of New Jersey contract law upon which the plaintiff relies -- such as the notion that the "government must 'turn square corners' rather than exploit litigational or bargaining advantages," W.V. Pangborne & Co. v. New Jersey Dept. of Transportation, 116 N.J. 543, 561, 562 A.2d 222 (1989) -- are any different than those used by courts applying federal common law. Cf. Maxima Corporation v. United States, 847 F.2d 1549 (Fed.Cir. 1988) (refusing to allow government to invoke termination for convenience clause where other party had already completed its obligations under the contract); Kalvar Corporation v. United States, 211 Ct. Cl. 192, 543 F.2d 1298, 1301-03 (Ct.Cl. 1976) (recognizing that government may not act in bad faith in employing the convenience-termination clause) and cases cited therein.
B. Termination for Convenience Clauses
An exception to the common-law requirement of mutuality of contract is the doctrine of termination for convenience, by which the Government is permitted to terminate contracts when it determines that it would be in its interest to do so, without incurring a breach. When a contracting officer invokes the doctrine, the contractor's recovery is limited to costs incurred on the work performed, a reasonable profit based on the value of the work performed, and costs incurred in preparing the termination settlement proposal. Significantly, the contractor is precluded from recovering anticipated profits, which "confers a major contracting right on the government with no commensurate advantage to the contractor." Ralph Cibinic & John Nash, Administration of Government Contracts 817 (1985).
The concept of termination for the convenience of the Government arose in response to the massive procurement efforts that accompanied major wars. See generally Cibinic & Nash, supra, at 817-72; Stephen N. Young, Note, Limiting the Government's Ability to Terminate for Its Convenience Following Torncello, 52 Geo. Wash. L. Rev. 892 (1984). Although the Government had always had the power to terminate its contracts, exercise of that power would amount to a breach of the contract, unless the government acted pursuant to contractual agreement or statutory right. Convenience termination allowed the government to conclude burdensome contracts by paying for the work performed (including a profit thereon) without having to pay anticipated profits.
A number of regulatory and statutory provisions were developed to resolve questions concerning the breadth of authority to terminate a contract for convenience and the amount of recovery to which the terminated contractor was entitled. See, e.g., United States v. Speed, 75 U.S. (8 Wall.) 77, 19 L. Ed. 449 (1868) (discussing Rule 1179 of Army Regulations of 1863, a prototype for the modern termination for convenience doctrine); United States v. Corliss Steam-Engine Co., 91 U.S. 321, 23 L. Ed. 397 (1876) (presenting legal theory that became basis for modern doctrine); 40 Stat. 1272 (1919) (the Dent Act); 58 Stat. 649 (1944) (the Contract Settlement Act). See generally Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756, 765-66 (Ct.Cl. 1982) (detailing history of usage); Cibinic & Nash, supra, at 818-19 (discussing evolution of the Armed Service Procurement Regulations and the Federal Procurement Regulations, later renamed the Federal Acquisition Regulations).
After World War II, termination for convenience clauses were imported into civilian contracts. In 1964, the first edition of the Federal Procurement Regulations contained optional termination for convenience clauses to be used "whenever an agency considered it necessary or desirable." See FPR 1-8.700-2 (1964), quoted in Cibinic & Nash, supra, at 818. The current version of the Federal Acquisition Regulations requires the inclusion of such clauses in a broad variety of government contracts, civilian as well as military. See FAR 49.502, 48 C.F.R. § 49.502 (setting forth requirements for inclusion); FAR 52.249-1 to -4, 48 C.F.R. § 52.249-1 to -4 (containing various forms of termination for convenience clause).
2. Grounds and Effect
The termination for convenience clause offers no guidance in determining what actions are in "the government's interest." As such, the contracting officer has considerable discretion in deciding when and to what extent a contract may be terminated. Courts have upheld decisions to terminate even for contracts that are "improvident in their origin and which subsequent to their making prove to be onerous or unprofitable for the government." W. Noel Keyes, Government Contracts under the Federal Acquisition Regulation § 49.32 (1986), and cases cited therein.
The effect of the termination for convenience clause is most evident in the amount of damages permitted:
Thus, a contractor's protection on a convenience-termination is that he normally becomes entitled to the cost of the work performed plus a profit thereon and the cost of settling subcontract claims. The principal difference between the sum calculated under this standard and the amount recoverable in a common law action for breach of contract is the omission in the former of anticipated but unearned profits. This is true even where the government breaches the contract. By agreeing to the termination clause, a contractor relinquishes the common law formula and acquiesces in the substitution of a rule under which profit is only allowed on the work actually performed. Of course, this situation is changed in a "loss" contract because an injured party should not be put in a better position than if the contract had been performed.
Keyes, supra, at § 49.32.
3. Constructive Application of the Termination for Convenience Clause
The impact of the termination for convenience doctrine was significantly enhanced in the 1963 case of John Reiner & Co. v. United States, 163 Ct. Cl. 381, 325 F.2d 438 (Ct.Cl. 1963), cert. denied, 377 U.S. 931, 12 L. Ed. 2d 295, 84 S. Ct. 1332 (1964). Plaintiff had submitted a bid to the Army Corps of Engineers for the construction of 3,567 generator sets, and the bid was accepted in June of 1956. Plaintiff executed the contract and proceeded to negotiate with suppliers of the main components of the generator sets. Approximately six weeks after receiving the initial acceptance, plaintiff was advised by the government to suspend operations under the contract and inform its suppliers and subcontractors accordingly. The contract with the plaintiff was then cancelled, pursuant to a ruling by the General Accounting Office that the award had been improperly made, and new bids were solicited.
Plaintiff argued that because the government had not expressly relied on the termination for convenience clause in the contract, its actions were a breach of the contract for which plaintiff would seek recovery of full damages. The Court of Claims disagreed, finding that "the failure to invoke the termination [for convenience] article leaves untouched the defendant's right to rely on the damage limitation of that clause." 325 F.2d at 444; see also Nesbitt v. United States, 170 Ct. Cl. 666, 345 F.2d 583 (Ct.Cl. 1965), cert. denied 383 U.S. 926, 15 L. Ed. 2d 846, 86 S. Ct. 931 (1966) (noting that the liability of the government was bounded by the termination for convenience clause, even where the clause was not invoked by the government at the time of termination); cf. College Point Boat Corp. v. United States, 267 U.S. 12, 15-16, 69 L. Ed. 490, 45 S. Ct. 199 (1925) (holding that a valid ground for termination may be asserted as a defense to a breach action even though the ground may not have been known at the time of cancellation). Similarly, the Court found that defendant's failure to abide by the termination procedures of the Armed Services Procurement Regulations was "ineffective to broaden plaintiff's right of recovery," absent a showing that plaintiff had been injured by the failure to pursue the ASPR procedures. 325 F.2d at 444.
Reiner marked the beginning of a new, "constructive" application of the doctrine of termination for convenience. This new version was not found in any statute, but was rather "a judge-made doctrine" applied "when the basis upon which a contract was actually terminated is legally inadequate to justify the action taken." Maxima Corporation v. United States, 847 F.2d 1549, 1553 (Fed.Cir. 1989); see also Erwin v. United States, 19 Cl.Ct. 47, 53 (Cl.Ct. 1989) ("Constructive termination for convenience is a judge-made doctrine that allows an actual breach by the government to be retroactively justified. . . . This doctrine applies in situations where the government stops or curtails a contractor's performance for reasons that are later found to be questionable or invalid.").
Initially, courts viewed terminations for convenience -- actual and constructive -- as means of "allocating the risk of a change in the circumstances of the bargain or in the expectations of the parties." Torncello, 681 F.2d at 766. However, the 1974 decision in Colonial Metals v. United States, 204 Ct. Cl. 320, 494 F.2d 1355 (1974), allowed the termination for convenience provision to be used as an exculpatory clause, "available for contracts improvident in their origin as for contracts which show to be onerous or unprofitable for the Government." Id. at 767.
The plaintiff in Colonial Metals had entered into a contract to supply a definite quantity of copper to the government. However, because plaintiff was a "secondary source supplier" of copper, its prices were noticeably higher than those charged by primary source suppliers. Soon after contracting with Colonial Metals, the government decided to remake the contract with primary source suppliers, and terminated its contract with Colonial Metals. Plaintiff argued that the government's actions amounted to bad faith, in that it "acted in order to obtain elsewhere a better price known at the time of the award to be available." 494 F.2d at 1359. The Court of Claims found that termination to buy elsewhere at a cheaper price "is not improper," and held that the termination of the contract did not amount to a breach. Id.
A later decision commented on the significance of Colonial Metals as follows:
It is clear, however, that Colonial Metals marked a dramatic departure from the development of convenience termination as a method of risk allocation. It established a new reading of the clause, convenience termination for exculpation. . . . It is the only decision of this court in which a plaintiff was denied recovery after convenience termination that was based on knowledge acquired before the contract was awarded.
Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756, 768 (Ct.Cl. 1982).
The twin expansions of the termination for convenience doctrine -- its constructive application and its use as an exculpatory clause -- prompted a slew of unfavorable commentary. See generally Torncello, 681 F.2d at 767 (listing critical articles). Some analysts focused on the sheer absence of legal authority in support of the Colonial Metals holding. Others noted the unenviable position into which government contractors were now placed -- unable to free themselves from a burdensome government contract, but subject to damage limitations if the government chose to invoke a convenience termination.
Courts began to recede from the high-water mark set in Colonial Metals in different ways. In Torncello v. United States, 231 Ct. Cl. 20, 681 F.2d 756 (Ct.Cl. 1982), for example, the Court of Claims found that where the government had entered into a contract knowing that it could obtain the services more cheaply from another supplier, and then sought to terminate the contract based on the difference in cost, it had acted in bad faith and could not invoke the constructive termination for convenience clause. Id. at 772.
A majority of the Torncello court agreed that the government could not construe the termination for convenience clause so as to render the contract illusory. A plurality of the court cited "some kind of change from the circumstances of the bargain or in the expectations of the parties" as one situation where the government could terminate for convenience without rendering the contract illusory. Id.; see also SMS Data Products Group, Inc. v. United States, 19 Cl.Ct. 612 (Cl.Ct. 1990).
However, subsequent decisions, while conceding that the government may not use the clause to render the contract illusory, have not uniformly adopted the "changed circumstances" test of the Torncello court.
A 1990 decision from the Federal Circuit indicated that Torncello "stands for the unremarkable proposition that when the government contracts with a party knowing full well that it will not honor the contract, it cannot avoid a breach claim by adverting to the convenience termination clause." Salsbury Industries v. United States, 905 F.2d 1518, 1521 (Fed. Cir. 1990).
Courts will examine the business relationship for evidence of bad faith, but will not always require proof of changed circumstances.
C. The Standard for Summary Judgment and the Issues Presented
Under Fed. R. Civ. P. Rule 56(c), "summary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
At the summary judgment stage, it is not the role of the judge to weigh the evidence or to evaluate its credibility, but to determine "whether there is a genuine issue for trial." Id. at 249. There is no issue for trial unless there is sufficient evidence favoring the nonmoving party such that a reasonable jury could return a verdict for that party. Id. A non-moving party may not rest upon mere allegations, general denials, or vague statements. If the non-moving party's evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Bixler v. Central Penn. Teamsters Health & Welfare Fund, No. 93-7048, 1993 WL 533735 (3d Cir. Dec. 28, 1993); Trap Rock Indus. Inc. v. Local 825, Int'l Union of Operating Engineers, 982 F.2d 884, 980-91 (3d Cir. 1992).
The substantive law governing the dispute will determine which facts are material, and only disputes over those facts "that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Finally, summary judgment should be granted unless a dispute over a material fact is genuine, which the Court has defined as such that "a reasonable jury could return a verdict for the nonmoving party." Id.
At the motion for partial summary judgment decided in April of 1993, we left open the possibility that the plaintiff might be able to recover damages attributable to the delay in labelling the termination as one of convenience for the government. However, after reviewing the case law, we have concluded that the government may not be penalized when it labels the termination as one for default and later converts it into one of convenience. Therefore, no damages for a delay in labelling the termination may be awarded. See, e.g., Kalvar Corp. v. United States, 211 Ct. Cl. 192, 543 F.2d 1298, 1304 (Ct.Cl. 1976); Nolan Bros. v. United States, 186 Ct. Cl. 602, 405 F.2d 1250 (Ct.Cl. 1969); Nesbitt v. United States, 170 Ct. Cl. 666, 345 F.2d 583 (1965), cert. denied, 383 U.S. 926, 15 L. Ed. 2d 846, 86 S. Ct. 931 (1966) ("We have held that the failure of the defendant to invoke the convenience-termination clause makes no difference and that clause nevertheless sets the limit to any possible recovery.") (collecting cases); Cibinic & Nash, supra, at 817 ("In [constructive termination for convenience] cases the contracting officer elects not to use the clause but is still given the benefit of the clause in limiting the contractor's recovery.").
Three issues, then, are left for resolution in this motion: (1) the effect of the doctrine of constructive termination for convenience on pre-termination breaches; (2) the liability vel non of HACC for retaining Linan-Faye's performance bonds during the pendency of the latter's action for specific performance of the contract; and (3) the scope of compensable costs under the HACC contract.
D. The Termination for Convenience Clause and Pre-termination Breaches
It is quite clear that constructive application of the termination for convenience clause would cure any breaches committed by the government in the course of terminating the contract. After all, the primary purpose of convenience-termination is to permit the government to avoid breach while terminating unproductive contracts. The issue raised by the plaintiff is somewhat different: whether a constructive termination for convenience would cure breaches incurred prior to termination, for example, a breach arising from the failure of the government promptly to turn over the site to the contractor.
Originally, the termination for convenience clause was designed to permit the government to relieve itself from burdensome procurement contracts once the raison d'etre of the contracts had ceased. The typical example involved a wartime requirements contract which was terminated once the war had ended. However, the expansion of the clause into peacetime and civilian contracts brought with it an expansion of the clause's purpose. Today, the termination for convenience clause operates to allow the government to extricate itself from contractual relationships that have soured, for whatever reason, without quibbling with the contractor as to which party is in default.
In addition, by settling disputes pursuant to procedures outlined in the contract, the government is able to cut through the thicket of construction litigation, where the costs of litigation often exceed the amount of damages claimed.
The cases that have addressed the issue of liability for pre-termination breaches have concluded that claims for such damages are subsumed in the termination for convenience clause. For example, in Nolan Brothers, Inc. v. United States, 186 Ct. Cl. 602, 405 F.2d 1250 (Ct.Cl. 1969), plaintiff entered into a contract with the Corps of Engineers to construct two rock jetties out into the Gulf of Mexico. Numerous difficulties developed, which plaintiff ascribed to the government's provision of faulty design specifications and its misrepresentation of key facts. After one-third of the work had been completed, the government terminated the contract for its convenience. Attempts to settle the matter by negotiation failed, prompting the contracting officer to issue a unilateral determination of what the plaintiff could recover, which plaintiff appealed to the Board of Contract Appeals.
Plaintiff then filed a two-count action in federal court, the first of which addressed the alleged pre-termination breaches committed by the government, and the second of which addressed claims under the termination for convenience clause. The trial commissioner, noting that the first count had not been addressed by the Board of Contract Appeals, ordered a separate, de novo trial on that claim, and the government appealed. The Court of Claims framed the issues as (1) whether, in light of the recovery under the termination for convenience clause, it was necessary for the court to consider the various breach claims, and (2) if a trial was determined to be necessary, whether adequate relief could be granted administratively under the contract. 405 F.2d at 1252.
The court found that plaintiff's various theories of recovery were all subsumed under the termination for convenience clause:
All the plaintiff is now entitled to is a proper award under the convenience-termination article -- the claim covered by the second cause of action -- and a separate claim of the kind set forth in the first cause of action no longer exists for the plaintiff. . . .
Accordingly, the significant role of the first cause of action in plaintiff's petition is to lay claim to the unearned profits which plaintiff cannot recover under the termination clause. All else is subsumed within the second cause of action testing the administrative award under that article.