In a significant decision involving a VA contract board delivery fee dispute over $133K, the Civilian Board of Contract Appeals has ruled that the U.S. Department of Veterans Affairs (VA) must pay over $133,000 to TransOx Inc., a supplier of home oxygen equipment, for delivery fees that the VA previously refused to reimburse.
In its June 2 opinion, the Board rejected the VA’s interpretation that the delivery fees were limited to “one-time or one-off” deliveries of equipment. Judge Harold Lester Jr., writing for the Board, emphasized that the contract language clearly allows for a delivery fee for “any purchased items, each, per delivery, per patient.”
“That is not a proper way to interpret contract language,” stated Judge Lester, criticizing the VA’s narrow focus on the phrase “one time delivery fee” while ignoring the full context.
TransOx had been awarded an indefinite-delivery, indefinite-quantity (IDIQ) contract in February 2024 to provide home oxygen services to VA outpatients. The company began fulfilling the contract in May 2024 for VA medical centers including the Tennessee Valley Healthcare System, Mountain Home, and Memphis facilities.
Despite the VA initially paying several invoices that included per-item delivery fees, it later instructed TransOx to resubmit invoices without those charges, claiming they were only applicable to non-routine visits. This led to the denial of reimbursement for 3,251 deliveries, totaling over $133,000.
TransOx submitted a certified claim for an equitable adjustment, but after receiving no response from the VA’s contracting officer, the company appealed to the Board in January 2025.
The Board found that the VA’s reliance on estimates from an earlier solicitation—rather than the actual contract language—was improper. Judge Lester concluded that the contract unambiguously entitled TransOx to the contested delivery fees, siding fully with the supplier.
As a result, the Board awarded TransOx over $133,000 in unpaid delivery fees and an additional $2,362.50 in contract administration costs.
The case is TransOx Inc. v. Department of Veterans Affairs, CBCA No. 8336.
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