## Facts

- The United States awarded Air Terminal Services, Inc. a 1957 concession contract to operate designated automobile parking lots at Washington National Airport, after providing bidders historical gross receipts for the lots.
- At contract formation, 32 metered curbside parking spaces near the terminal existed outside the concession and were operated by the government.
- Before the contract, airport officials had adopted a traffic-management plan contemplating expansion of curbside metered parking, but this plan was not disclosed during bidding.
- A published regulation in effect before the contract reserved to the government broad authority over airport roadways, including traffic control and parking-meter installation.
- About one year into performance, the government installed 122 additional metered curbside spaces adjacent to the terminal, outside the concession areas.
- Air Terminal alleged the new meters diverted customers from the concession lots and caused a sharp, lasting decline in concession revenues.
- Air Terminal continued operating for the remainder of the contract term and later sued for damages, alleging breach of contract and improper nondisclosure.

## Issues

1. Whether installing additional curbside parking meters breached an express or implied contractual duty not to hinder performance or to maintain the competitive conditions assumed when the concession was bid.
2. Whether the government was contractually liable for revenue losses caused by installing meters as a public, general traffic-regulation measure under the sovereign acts doctrine.
3. Whether failure to disclose the preexisting plan to expand metered parking was an actionable nondisclosure supporting contract damages.

## Decision

- The Court of Claims dismissed the petition and denied damages.
- The court held the concession contract did not contain an express or implied warranty of exclusivity or of maintaining existing competitive conditions for airport parking.
- The court held that installing additional meters was a public and general sovereign act for traffic control and public convenience, and the United States was not liable for incidental burdens that act imposed on the concession.
- The court rejected the nondisclosure theory, reasoning that the government did not assume a contractual duty to disclose prospective regulatory actions where public regulations already confirmed retained roadway-control authority.

## Legal Principles

- Absent clear contractual language, a government concession does not imply a warranty that the government will preserve existing competitive conditions or refrain from measures that increase competition.
- A contractor is charged with knowledge of publicly promulgated regulations affecting the subject matter of performance; implied contract terms will not be inferred to contradict such regulations.
- Under the sovereign acts doctrine, the government is not contractually liable for incidental effects on a contract caused by public and general acts taken in its sovereign/regulatory capacity, as opposed to actions targeted at the contract.
- Reduced profitability from government regulatory measures, without rendering performance impossible or impracticable, is generally a business risk not shifted to the government by implication.

## Conclusion

The Court of Claims held that the government’s expansion of curbside metered parking at an airport did not breach the parking-lot concession contract because the contract did not guarantee a stable competitive environment, and the meter installation was a public, general traffic-regulation act for which the United States bore no contract damages liability.


Air Terminal Servs., Inc. v. United States, 330 F.2d 974 (Ct. Cl. 1964)