Parsons Evergreene, LLC ( 2018 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Parsons Evergreene, LLC ) ASBCA No. 58634)
Under Contract No. FA8903-04-D-8703 )
APPEARANCES FOR THE APPELLANT: Douglas S. Oles, Esq.
James F. Nagle, Esq.
·Adam K. Lasky, Esq.
Howard W. Roth III, Esq.
Oles Morrison Rinker & Baker LLP
Seattle, WA
APPEARANCES FOR THE GOVERNMENT: . Jeffrey P. Hildebrant, Esq.
Air Force Deputy Chief Trial Attorney
Michelle D. Coleman, Esq.
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE CLARKE
This appeal I involves the design and construction of a Temporary Lodging Facility
and Visitor Quarters at McGuire Air Force Base (MAFB), New Jersey. The project was a
"Design-Build Plus" arrangement having two phases: the concept definition phase and the
completion of design and construction phase. Appellant, Parsons Evergreene, LLC's (PE's'
or Parsons'), claims arise out of the second phase. PE claim·s $28,843,173 based on a variety
of problems it experienced. As discussed at the end of this decision, we have jurisdiction
pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. We sustain
in part and deny in part. We sustain in the amount of$10,519,082.
FINDINGS OF FACT
Temporary Lodging Facility (TLF) & Visiting Quarters (VQ) Project at MAFB
1. The TLFNQ project is located on MAFB. The TLF facility provides a
50-unit transitional housing facility for military and civilian personnel until permanent
1
For reasons of judicial efficiency and clarity, pursuant to a separate order issued
today, we address the subject of government liability for costs associated with
allegedly tardy requests for payroll records in a separate opinion under a new
appeal numb~r, ASBCA No. 61784, though it was fully litigated under the
present appeal.
housing can be obtained. It includes one and two bedroom units with living room,
dining/kitchen, bath and storage. The VQ is a 175-unit facility similar to a hotel with
individual rooms with private baths. (R4, tab 7 at 20 2 ) The project employed a
"Design-Build-Plus 03" 3 (DBP03) process that integrated the DBP03 contractor, a .
contractor with experience in construction, with the concept definition contractor, a
contractor with experience in architectural design (id. at 19, 21 ).
Concept Definition (CD)4
2. The CD contractor for the MAFB TLFNQ project was Michael Baker &
Associates (Baker) 5 (tr. 5/8-10, 11/60; R4, tab 20C at 10). 6 The CD effort focus,ed on
"site, civil and architectural" design with "varied levels of development within
structural, mechanical, electrical and fire protection/detection" (id.). The objective of
the CD phase was to produce a 35% design that would be used to award the design ·
completion and construction contract.
3. Between 4 August 2003 and 27 February 2004, the Air Force Materiel Command
(AFMC) issued task orders TG 17 and TG31 to Contract No. F41622-02-D-0003 (contract
0003) 7 in the total amount of $255,276 for DBP03 services to Parsons Infrastructure &
Technology Group Inc., San Antonio, Texas (PI&T) (R4, tab 20 at 1, tab 20A at 1-2,
tab 20B at 1, 6, tab 20C at 1-2). PI&T was a business unit of Parsons responsible for
management and business growth in Parson's government contracting business. It exists
today under a different name not identified in the record. (Tr. 1/110-11) Under TG 17 and
TG31, PI&T was to provide architectural and engineering services to Baker to develop the
35% design package for the TLFNQ (tr. 1/121; R4, tab 20C at 8). PI&T was the "DB+
A-E" (Design Build Plus - Architectural & Engineering) contractor supporting Baker (R4,
tab 20C at 8). Specifically. PI&T was to provide "surveys, site analysis, constructability
2
All Rule 4 citations are to the PDF page numbers.
3 Design-Build-Plus 03 is referred to by various acronyms in the record: "DBP03,"
"DB," "DB+," "DB+A-E" and "DB03Plus."
4
This is sometirries referred to in the record as "Concept Design."
5
The record does not include a copy of Baker's CD phase contract with the Air Force·
(AF).
6
The documentary record in this case is voluminous consisting of an electronic Rule 4
having 3,443 tabs, many individual tabs having hundreds of pages, and numerous
hearing exhibits. The majority of the documents in the record were not cited by
the parties. The Board relies mainly on the documents identified by the parties in ·
their collective 1,500 pages of briefs. When we say a document is "not in the
record" we mean neither party cited to it or we did not independently identify it.
It is not an absolute confirmation that it is not somewhere in the voluminous
record.
7
Contract No. F41622-02-D-0003 is not in the record.
2
.reviews, design review com~ents, attendance at conferences for comment resolution, and
project cost validation" (id. at 9).
CD & Progressive Collapse
4. Mr. Basham is an architect who was accepted by the Board as an expert in
design-build contracting for appellant (tr. 1/228, 239). He testified that progressive
collapse is a phenomena that occurs when certain members of a building are damaged and
weight is transferred to other members that cannot handle the weight and the building starts
to collapse (tr. 2/7). A building designed to resist progressive collapse must have a
back-up/redundant structural system so that failure is avoided (tr. 2/7, 11/51-52):
5. Mr. Cochran is an architect who was the AF's project manager and design agent
on the TLFNQ contract from June 2003 to November 2004 (tr. 11/6-7). Mr. Cochran
explained that the purpose of a "charrette report" is "to prese_nt the functional and
engineering criteria, design information, procedure and basis of design to document project
requirements" (R4, tab 1474 at 5). The charrette report for the VQ was developed by
Baker (tr. 11/55). The charrette report summary.of the VQ structural design does not
specifically mention progressive collapse but does state at the end of section 3 .3 .4, ''Force
Protection: The structural needs of the VQ are not affected by force protection if the
25-rrieter standoff zone is maintained" (R4, tab 1474 at 27).
6. A 9 September 2003 review of the VQ Charrette report by Ms. Hopkins, PI&T,
included the following comment, "Ch 3, 3.3.4, pg 34[.] We suggest an alternate masonry
wall design using structural brick (e.g., Interstate Atlas Brick). The advantage is a single
brick wall system vs. two wall system (8" CMU and 4" brick veneer)" (R4, tab 467 at 2,
cmt. 20, tab 1761 at 7). Baker responded to this suggestion with, "Baker has investigated
the structural brick systems and do not believe that it is appropriate for this project" (R4,
1761 at 7). Baker went on to explain why it rejected structural brick (id.). Mr. Ward, an
architect with Baker, with assistance from Baker's engineers, wrote Baker's response
(tr. 14/149). Mr. Ward recalled that the use of structural brick was suggested by PI&T and
considered by Baker during-the 35% design phase b~t for a variety of reasons was not used
(tr. 14/143, 149-53). Mr. Cochran recalled "some discussion on structural brick" during
the 35% design phase but he did not recall receiving information on constructability, cost
analysis, product specifications, etc. of the structural brick ·design (tr. 11/64).
7. Ms. Willingham, Non-Appropriated Fund (NAF) program manager, reviewed
· the VQ Charrette report. Her 10 September 2003 comments, number nine, states:
"3.3.4. The position taken by the designer that the 'structural needs of the VQ are not
affected by force protection if the 25-meter standoff zone is maintained' is an incorrect
assumption. The structure does have to be designed to resist progressive collapse {Ref.
UFC4-010-0l, Standard 7) please re-evaluate." (R4, tab 468) 8
8
. On this document the "ACTION" column is blank.
3
8. Mr. Cochran also reviewed the VQ Charrette report. An entry on the
Charrette Report review, dated 12 September 2003, reads:
[Comment] Chapter 3, Section 3.3.4, page 34, Structural[.]
This paragraph notes force protection is not a consideration
. for structural needs. The charrette report should identity the
threat level, and the structural system designed accordingly.
Verify if the structural system.should be designed to prevent
progressive collapse.
[Action] Concur. In accordance with UFC 4-010-01, the
structure wiH be designed to resist progressive collapse.
(R4, tab 2 at 753, cmt. 10) Mr. Cochran testified that the 35% design team agreed that
the VQ would be designed to resist progressive collapse (tr. 11/58-59). Mr. Cochran
testified that PI&T was responsible for validating that the 35% design included
resistance to progressive collapse (tr..11/59).
, 9. Mr. Williams is an architect and was project manager with AF Services
during the VQ/TLF 35% CD phase through completion of the buildings (tr. 14/204, -
211 ). Mr. Williams testified that resistance to progressive collapse was a requirement
for the Cr;> phase of the VQ (tr. 14/206). During a meeting in December 2003 with
Baker, Mr. Williams told the design team that resistance to progressive collapse was a
requirement for the three story VQ (tr. 15/6-7).
10. Mr; Bennett has practiced architecture since 1989 and is the owner ofKCB .
Architecture (tr. 5/6). During the CD phase Mr. Bennett worked for PI&T. He and two
other PI&T employees (Mr. Martin and Mr. Binks) worked with Baker during
development of the 35% design under a contract with the AF (tr. 5/8~9). Their job was
to look at the preliminary design of the project and constructability (tr. 5/9). However,
Mr. Bennett was not architect of record for the 35% CD (tr. 5/10). Mr. Bennett testified
that he did not recall a detailed discussion of progressive collapse during development
of the 35% design. The progressive collapse requirement was in the statement of work
(SOW) for the Baker 35% design, but he recalled it only played inJhe location and
orientation of the building not in the structural design of the VQ. (Tr. 5/94-95) After it
was awarded the contract, PE hired Mr. Bennett for its contract to complete the design
and construct the TLF and VQ (tr. 1/121). He was the architect of record for the
construction project (tr. 5/6-7). Mr. Lengyel, a licensed architect, worked for
Mr. Bennett and did the day-to-day design work (tr. 5/7). Mr. Aldave, a structural
engineer, also worked on his design team (tr. 4/174-75, 5/7-8).
4
CD & Utilities
11. Mr. Ward is an architect who worked for Baker and participated in the 35%
design of the VQ/TLF (tr. 14/115). He participated in the design charrette (tr. 14/115-16).
Mr ..Ward recalled that after Baker issued the 35% design they gave the "topographic and
utility survey that was done for the TLF and VQ site, in electronic format" to PE
(tr. 14/120). He recalled providing three files, the base map, computer-aided tracking, and
existing utilities (tr. 14/121-22; R4, tab 1762). The utilities Computer-Aided Design
(CAD) file was created based on "GTAB" 9 files provided by the AF (tr. 14/167-68).
Baker did not subcontract for a full utility survey during the 35% design. Baker relied on
GTAB utility information from the AF. (Tr. 188-89)
CD 35% Drawings
12. Mr. Williams produced the 35% design drawings for the TLF and VQ
(tr. 14/133; R4, tabs 1745, 1746). The "Corrected Final Concept Design" drawings for the .
VQ are dated 18 May 2004 (R4, tab 1746). Each of the drawings for both buildings
include the following note. 10
ALL THE INFORMATION INCLUDED IN THE
REQUEST FOR PROPOSAL (RFP) CONSTRUCTION
DOCUMENTS REPRESENTS A 35% LEVEL OF
DESIGN AND IS NOT INTENDED TO REPRESENT A
COMPLETE SET OF CONSTRUCTION DOCUMENTS.
THIS.INFORMATION INCLUDES BUT IS NOT
LIMITED TO ALL GRAPHIC INFORMATION AND
VERBIAGE (TEXT) INCLUDED IN THE DRAWINGS.
SPECIFICATIONS, DESIGN ANALYSIS AS WELL AS
CID AND SID INTERIOR PACKAGE. THIS
INFORMATION ALSO INCLUDES QUANTITIES AND
CAPACITIES INCLUDING, BUT NOT LIMITED TO
ALL UTILITY REQUIREMENTS NEEDED TO
PROVIDE A FULLY OPERATIONAL FACILITY IN
ACCORDANCE WITH ALL APPLICABLE CODES AND
DESIGN GUIDELINES OUTLINED IN THE DESIGN
ANALYSIS. THE DESIGN-BUILD PLUS (DB+)
CONTRACTOR MUST COMPLETE THE DESIGN AND
CONSTRUCTION OF THE McGUIRE VISITING
QUARTERS TO A FULL.Y OPERATIONAL LEVEL OF
. COMPLETION IN ACCORDANCE WITH THE INTENT
9
In the record these are variously referred to as GTAB, G-TAB and G-Tab.
10
The only difference in this note is that the TLF drawings refer to the TLF and the VQ
drawings refer to the VQ.
5
OF ALL DESIGN(S) REPRESENTED IN THE (RFP)
CONSTRUCTION DOCUMENTS. THE DB+
CONTRACTOR MUST MEET ALL DESIGN
REQUIREMENTS, CODES AND STAND ARDS SET
FORTH IN THE RFP AND MUST FOLLOW THE FULL
DESIGN INTENT REPRESENTED IN THE RFP
CONSTRUCTION DOCUMENTS. IN THE EVENT ANY .
OF THE REQUEST FOR PROPOSAL INFORMATION
REPRESENTED IN THE DRAWINGS;
SPECIFICATIONS, DESIGN ANALYSIS OR CID AND
SID INTERIOR DESIGN PACKAGE MAY BE IN
CONFLICT, THE DB+ CONTRACTOR WILL BE
REQUIRED TO PROVIDE THE MOST STRINGENT
REQUIREMENT(S). THIS PROVISION WILL NOT
WARRANT ANY INCREASE IN THE CONSTRUCTION
COST LIMIT (CCL) OF THE DESIGN BUILD PLUS
CONTRACT AMOUNT.
(R4, tabs 1745-46) Drawing notes for both buildings referred to MAFB architectural
standards (R4, tab 1745 at L-101, tab 1746 at L-101, 502). RFP 8234 specified that the
"face brick" for the two buildings would be:
Brick: Face brick
1. Red Brick: Richtex Corporation, Type D-80, Shade-223
. flashed range wirecut. Size 2-1/4 in. x 3-5/8 in. x 7-5/8
in. ASTM C 216, Grade SW, Type FBS. Or BCE
approved equal.
(R4, tab 2 at 465, 1047)
13. VQ 35% drawings C-102, Site Demolition Plan, C-103, Utilities Demolition
Plan, C-104, Site Geometry and Paving Plan, C-105, Site Utility Plan, and C-106, Storm
Drainage and Grading Plan" each have a version 11 of the following note:.
1. THE LOCATION OF ALL EXISTING UTILITIES
. SHOWN ARE APPROXIMATE BASED ON G-TAB
. MAPPING FROM MCGUIRE AFB CIVIL
· ENGINEERING SQ. THE HORIZONTAL AND
VERTICAL LOCATIONS OF ALL EXISTING
UTILITIES SHALL BE VERIFIED BY THE
CONTRACTOR PRIOR TO CONSTRUCTION,
PARTICULARLY AT NEW PIPE CROSSINGS.
11
Drawings C-102, C-103 and C-104 have slightly different shorter versions of this note.
6
(R4, tab 1746 at 4-8) Mr. Temchin, vice president of program management with Parsons
(tr. 2/96), testified that Parsons went to the base "field shop" where the drawings were
maintained and asked for the drawings showing what was in the ground. The base
maintained two sets of "G-Tab" drawings, one for active utilities and one for abandoned
utilities. The abandoned utilities G-:-Tab drawings were never given· to PE. (Tr. 5/242-43)
14. VQ 35% drawing C-106, Storm Drainage and Grading Plan, includes a
stormwater detention basin, sometimes referred to as a "pond," and includes the following
note:
3. THE SIZE OF THE STORMWATERDETENTION
BASIN WAS APPROXIMATED BASED ON
CONTROLLING THE PEAK OF THE 1.5 YEAR STORM
EVENT. DURING FINAL DESIGN, A DETAILED .
HYDRAULIC ANALYSIS SHALL BE CONDUCTED AT
THE EXISTING CULVERTS DOWNSTREAM OF THE
BASIN OUTFALL (ACROSS MITCHELL ROAD) TO
DETERMINE IF A LESS-FREQUENT, HIGHER-
MAGNITUDE DESIGN STORM WOULD BE
APPROPRIATE. DURING FINAL DESIGN, THE
CONTRACTOR MAY CONSIDER OTHER OPTIONS TO
ADDRESS THE INCREASED PEAK FLOWS
INCLUDING UNDERGROUND DETENTION,
OVERSIZED STORM DRAIN PIPES, AND/OR
UPGRADING THE MITCHELL ROAD CULVERTS, OR
DO NOTHING AND ACCEPT THE CONSEQUENCES
OF HIGHER FLOWS. FINAL DETERMINATION
REGARDING SWM SHALL BE MADE DURING FINAL
DESIGN. IF SWM IS DISCARDED, THE STORM
DRAIN SYSTEM COULD BE RE-CONFIGURED TO
MORE DIRECTLY DISCHARGE lNTO THE CHANNEL
ALONG MITCHELL ROAD.
(R4, tab 1746 at 8, drawing C-106) The VQ 35% design, drawing C-106, Storm Drainage
and Grading Plan, shows a "Stormwater Basin" with "BOTTOM ELEVATION= 106.00"
(id.). Mr. Morrison, AF Center for Engineering and the Environment (AFCEE) 12 (R4, tab
213 at 337), program manager, testified that the EPA required that stormwater be retained
on the site but that a basin was "problematic in or near an airport or an Air Force base
because birds collect there and they're problematic for aircraft" (tr. 11/220). He explained
that the basin on drawing C-106 was 'just a place holder on the low spot on the site" and the
12
AFCEE provided technical support to the contracting officer (R4, tab 213 at 337).
7
contractor would have to do a percolation test to see how much water the basin would .
absorb in a 12 to 24 hour period to design the basin (tr. 11 /221).
IDIQ Contract
15. On 12 December 2003 AFMC awarded Parsons Infrastructure and Technology
(PI&T), indefinite-delivery, in.definite-quantity (IDIQ) Contract No. FA8903-04-D-8703
(contract 8703) in the total program amount of amount of$2.1 billion (R4, tab 1 at 1-5).
The contract provided that planning and programming (CLIN 1), constructability and
parametric estimates (CLIN 2), and construction (CLIN 3) services would be detailed
under "subsequent task order Statements of Work (SOW)" (id. at 2-5). Contract 8703
incorporated FAR 52.233-1, DISPUTES (JUL2002)-ALTERNATE I (DEC 1991); and
FAR 52.23.6-2, DIFFERfNG SITE CONDITIONS (APR 1984) (R4, tab 1 at 24).
Demolition Work
16. The VQ was to be constructed in a location where swimming pools existed
that required demolition (R4, tab 1746 at 4, drawing C-102). By email dated 29 April
2004 to Ms. Willingham, Mr.- Cochran, AFCEE, expressed concern that the demolition
of the pools had to be properly monitored to ensure that select fill was placed in the pool
excavation to avoid "unforeseen site conditions" (tr. 11/92-94; R4, tab 4248 at 2). By
email dated 14 May 2004 to Mr. Martin, PE's 13 project manager, !Lt McAlpine, project
manager, Civil Engineer Squadron; MAFB, informed him that another contractor would
perform the demolition of the Officer's Club pools and that contractor "would need to
ensure the backfill was placed in compacted lifts to ensure it would be suitable for the
future building" (R4, tab 3831 at 3). Mr. Martin responded 14 on 16 May 2004 stating
that the calculations for structural fill could not be completed until PE received the final
DB+ contract and if the fill placed by the demolition contractor did not meet the fill
requirements, it would have to be removed and replaced by PE at AF expense (id. at 3).
Mr. Cochran responded to Mr. Martin on 17 May 2004 stating that the backfill
requirements for the demolition contract were standard specifications on MAFB -and
should be acceptable for construction and that no additional costs would be expected
(id. at 2). Mr. Martin responded on 17 May 2004 stating that had PE been selected to
do the demolition the adequacy of the fill would ,not be an issue (id. at 1).
Novationfrom PI&T to PE
17. PI&T was involved in Parsons' purchase of "Evergreene" a construction
company, renamed Parsons Evergreene (PE) (tr. 1/110-11). Modification No. POOOOI to
contract 8703, dated 7 September 2004, changed the contractor from PI&T to PE based on
a novation (R4, tab IA).
13 PI&T had not yet novated the contract to PE.
14
Mr. Martin's email address was Tony.Martin@parsonsevergreene.com (R4, tab 3831 at 2).
8
Request for Proposals (R.FP) for 100% Design and Construction Task Order
18. Request for Proposal (RFP) No. FA8903-05-R-8234 (RFP 8234), dated
10 February 2005, solicited proposals for the task order (T0) 15 under contract 8703 to
complete the 100% design (from the 35% design) and construction of the TLF and VQ
(R4, tab 2 at 1). 16 The Baker 35% design analysis is the basis for the RFP (tr. 5/62; R4,
. tab 2 at 692). RFP 8234 included the Independent Government Estimate (IGE) for the VQ
of $17,977,243 and TLF of$15,373,500 for a total of $33,350,743 (R4, tab 2 at 2) ..
Award was to be "to the contractor offering the lowest price" (id.). RFP 8234 included
the SOW for the TLF, PTFL 04-5000, and the VQ, PTFL 02-3004 (ic/. at 1). Bidders were
informed "Only upon receipt of the executed TO will you commence work" (id. at 2).
The notice to proceed (NTP) was to be issued not later than 30 days after award and,
"Construction services shall not commence until the bortds have been submitted and
approved and a NTP has been issued by the Contracting Officer" (id.).
19. RFP 8234 includes a SOW, dated 20 January 2005, for the TLF and VQ that
includes the following note to paragraph 3 .0 Scope:
Note: Site demolition is not required. The demolition has
been accomplished locally by others. The site is clean and
ready for construction. Mock-up rooms for the VQ are not
required in this project. All references to mockup rooms are
not applicable.
(R4, tab 2 at 5)
20. RFP 8234 includes the following concerning the construction site:
1.7 DATABASE: These specificat.ions and accompanying
drawings were prepared using data derived from the
original construction drawings and from site visits. The
construction shown shall not be construed as exact or
complete nor are minor variations covered. It is
recognized that site conditions referred to vary and that
those building and site conditions ordinarily
encountered and generally recognized as inherent in
work of this character may include variations. The
15
Task order and delivery order are used interchangeably in the documents.
16
The PDF page numbers in Rule 4, tab 2, do not match the numbers marked on the
pages. There are 1,874 PDF pages in tab 2. The.last page number marked on the
page is 2,434. The AF brief refers to numbers marked on the pages but we use
the PDF page numbers.
9
contractor shall he responsible for determining the exact
conditions at the site and building and shall accept
them, as they exist at the time of contract award,
regardless of whether or not the contractor visited the
site prior to award: The contractor shall verify. all
measurements of existing conditions before ordering
sized materials. If materials are ordered on the basis of
what is shown on the construction drawings without
verification of existing conditions, the contractor does
so at his/her own risk and expense. All existing field
conditions shall be accounted for in all required shop
drawings. Actual dimensions and elevations take
precedence over any shown in the contract drawings.
(R4, tab 2 at 287) 17
21. RFP 8234 require~ submission of a Critical Path Schedule and included an
estimated "Design/Construction Schedule" starting with contract award on 15 February
2005 (R4, tab 2 at 294). It also included procedures for submittals:
. SECTION 01330-SUBMITTAL PROCEDURES
1.6 PROCEDURES FOR SUB MITTALS
C. Scheduling .
. 2. Except as specified otherwise, allow review period,
beginning with receipt by approving authority, that
includes at least 15 working days for submittals for
QC [Quality Control] Manager approval and 20
working days for submittals for contracting officer
approval. Period of review for submittals with
contracting officer approval begins when the
Contracting Officer receives submittal from QC
organiz~tion .. Period of review for each resubmittal is
the same as for initial submittal.
17
This paragraph is found on a page identified with the TLF, however, we interpret it to
·apply equally to the VQ because pages for the VQ and TLF are comingled in
RFP 8234 (R4, tab 2 at 350-51).
10
(R4, tab 2 at 330, 337) The "QC Organization Responsibilities" section requires that
the date of receipt from the contractor be noted on each submittal. The QC organization
then reviews the submittal (id. at 339). When the QC manager is the approving
authority, the manager will take the appropriate action in accordance with specification
01330 paragraph J. 6. b~ (id. at 340). When the contracting officer (CO) is the
approving authority, the QC organization will certify that the submittal is acceptable
and forward it to the CO (id. at 339). RFP 8234 included a list of key personnel
identified as located in Texas, Illinois, and New Jersey (id. at 1757-58).
22. RFP 8234 included the following concerning the High Temperature Hot
Water (HTHW) system:
The proposed high temperature hot water (HTHW)
service line will connect to a new HTHW main line, which
will connect at the.existing main along East Arnold Avenue
Gust west of the VQ) and extend eastward to Mitchell Road.
The new main will service both the new VQ and planned
TLF facility on the other side of Mitchell Road. The
capacity of the existing system at this point of connection
shall be verified during final design.
(R4, tab 2 at 701)
23. RFP 8234, Attachment No. 2 included a clause setting liquidated damages at
$5,043 a day that PE was late in completing the project (R4, tab 2 at 1807). It also
included a clause concerning "record drawings":
_Record drawings showing existing underground utilities will
be provided or made available to the Contractor. Record
Drawings shall be made available by the base C.E. at
McGuire AFB, NJ. Any utility-line shown on the record
drawings (or made knownto the contractor) and damaged
during construction work, will be repaired immediately by
the contractor at no cost to the Government
(Id. at 1808)
24. RFP 8234, Attachment #4 was Davis-Bacon Wage Determination
No. 120030002 dated 21 January 2005 (R4, tab 2 at 1811-34).
11
RFP 8234 - Standing Seam Metal Roof
25. RFP 8234 required a standing seam metal roof (SSl\!IR) for the TLF and VQ
(R4, tab 2 at 506, 1089). Specification Section 07411 Metal Roof Panels (SSSMR), 17
paragraph 1.6, "PRODUCTS," A.5. required, "Panels shall be manufactured of adequate ·
metal gauge an_d rigidity to eliminate any 'oil canning' effect" (R4, tab 2 at 507, 1090).
Oil canning is a waviness in the metal roofs (R4, tab 116 at 14).
26. When PE contacted subcontractors to bid on the SSMR, they all took exception
to the requirement to "eliminate" oil canning stating that it could not be eliminated (tr.
3/87-88). Mr. Temchin, PE's vice president, testified that the first RFP language made "no .
sense" because it was impossible to "eliminate oil canning" (tr. 6/l 74r On 24 March 2005
Amendment No. 1 to RFP 8234. was issued (R4, tab 2A at 1). The language concerning the
SSMR was changed:
5. COMPONENTS: SSSl\!IR.panels shall be 13 inches to 19
inches in width and standing seams shall be a minimum
of 2-1/2 inches in height. Though "oil canning" is
inherent in sheet metal formed panels. [sic] The panels
shall be manufactured of adequate metal gauge and
rigidity to eliminate or seriously minimize any "oil ..
canning" effect. The Government will not release any
Contractor/ Manufacturer liability for rejecting SSSMR
panels on the basis of the ''oil canning" effect on the final
installed system. All fasteners shall be concealed and
_applied sealants shall be the same color of the SSSMR
system.
(R4, tab 2A at 20) Liquidated damages were reduced from $5,043 to $1,347 per day. The
estimated construction costs were revised to VQ - $18,053,320 and TLF - $15,525,546.
(Id. at 1-2)
RFP 8234 -Amendment No. 2
27. On 5 April 2005 Amendment No. 2 to RFP 8234 was issued (R4, tab 2B at 1). -
The amendment replaced the SOW with a revised version dated 31 March 2005 18 that
included the following:
17
"SSSMR" stand for Structural Standing-Seam Metal Roof Panels (R4, tab 2 at 507).
We use Standing Seam Metal Roof (SSMR).
18
All future reference to the SOW refer to the 31 March 2005 version.
12
\
2.0 Purpose:
[delete]
Construct a 175 room multi story Visitors Quarters (VQ), a
50 unit Temporary Lodging Facility (TLF), and all support
facilities as identified and Needs Assessment Study. The
rn10 projects 1,.vill be interconnected and constructed on
adjacent sites.l 19 1
[substitute]
The contractor will utilize the t~ttached concept design to
· generate the construction drawings and build a 175 room
multi-storv Visitors Quarters (VO), a 50 unit Temporarv
Lodging Facility (TLF) 011 adiacent sites.
3.0 Scope:
Note: Site demolition is not required. The demolition of
the houses and swimming pools has been accomplished
locally by others; remaining site 1rork and utiliD-' work pe1~
the drawings is required. Electrical lines must be relocated
and transformers removed and turned in to the base. +he
site is elean and ready for constn1etion. Mockup rooms
for the VQ are not required in this project. All references to
mockup rooms are not applicable.
(R4, tab 2B at 6) 20 The SOW listed the attachments as, "Concept Design Documents
(2 CDs): TLF, VQ dated 5/18/2004, Rickenbacker October 2004" (id. at 11). The 35%
drawings are dated 18 May 2004 (R4, tabs 1745-46). Mr. Morrison was the AF
construction manager and contracting officer's representative (COR) for the TLF/VQ
project from January 2004 to September 2005 (tr. 11/153, 227). He drafted Amendment
No. 2 (tr. 11/165). He explained the change to the note was a response to questions from
bidders and the fact that "we realized that it might [be] clearer to say that the demo had
19
This lined through language was riot shown in the amendment, it was simply deleted.
We show it lined out here to enable comparison.
20
The words in bold/strikethrough· were deleted (tr. 1/179-80). The words in italics and
underlined were added.
13
been accomplished but there still remains some utilities and electrical transformers, et
cetera, in that area. Again, the - the fill dirt was supposed to be clean, but we realized
there was some subsurface utilities that need to be dealtwith." (Tr. 11/165)
28. SOW paragraph 3.2.2.2, Working Drawings, Construction, Delivery and
Warranty, reads: ' ·
At the conclusion of the CD phase, the Government will
issue a separate task order with a RFP or RFQ and thus,
transition from the Concept Definition Phase to the
Construction Phase. During the Construction Phase, design
completion, construction, and the delivery and warranting of
the projec_t/facility takes place. It is the intent of the.
Government to require the DBP03 contractor to use the
results of studies and investigations conducted during the
CD Phase by the same or a different DBP03 contractor. If
the same DBP03 contractor performs these studies and
investigations during the CD Phase and is awarded the
Construction Phase task order for essentially the same
project, then the DBP03 contractor is responsible for the
results of its efforts during the CD Phase. See paragraph 7
for possible Construction Phase tasks at the task order level.
(R4, tab 2B at 7) (Emphasis added)
Pre-Bid Questions and Answers
29. The record contains three sets of pre-bid questions and answers (R4, tabs 4, 21
52, 25 22 ). We consider them in chronological order.· A pre-proposal conference was held
on 2 March 2005. Attendees submitted questions in the form of Requests for Information
(RFis ). Answers to the RFis were provided in a 22 March 2005 memorandum by
CO Macdecy 23 (R4, tab 52). Three of the RFI's and answers are:
6. RFI: It appears the VQ structure was designed without
a provision for progressive collapse. Is this
.feature not required for this facility?
21
This document is also at Rule 4, tabs 24, 513.
22
These same questions and answers were emailed to bidders on 20 April 2005 (R4, tab 518).
23
Between 2004 and late 2005, Mr. Macdecy was the CO on the MAFB TLFNQ contract
(tr. 10/161-62).
14
Answer: Yes, progressive collapse features are required for
VQ ! The architect of record resulting from the
award of a task order under the DBP03 concept
will be expected to include this feature in the final
stamped drawings.
8. RFI: Has any environmental testing been accomplished
post demolition and has an environmental
baseline of the site been established? If so, is it
available?
Answer: No to all three questions. The site is clean and
ready for construction. The SOW utilized by the
base in the demolition contract did not require
compaction of fill dirt.
l3. RFI: Will copies of fill reports and geotech reports on
the demo'd pools be provided?
Answer: No. A Geotech report for the swimming pools
does not exist. It should be assumed that soil
content is at least equivalent to the worst
condition level permitted in the Base Demo
contract requirements.
{R4, tab 52 at 2,. 3) Mr. Morrison, the AFCEE Program Manager, testified that the base
assured him that the backfill_would be clean but not compacted (tr. 11/161, 163-64).
30. On 7 April 2005 PE received AF answers to various additional questions
(R4, tab 25 at 1). In an email dated 20 April 2005 to PE, with a copy sent to
CO Macdecy, Mr. Hillestad who worked as a contracted contract specialist for the
government during the RFP phase (tr. 10/ 114 ), sent out the same set of questions and
answers (R{ tab 518). Concerning the VQ, question and answer number 3 is as
follows: .
3. Concerns continue to exist regarding the adequacy of the
structure as shown in the_ 35% documents to satisfy the
progressive collapse requirements. Confirm the
structural adequacy of the pre-cast has been confirmed in
the 35% submittal calculations. All roof loads and the
15
line load of the third floor-are transferred to the third
floor hollow core planks (See Section 2 / A-302). Are
we allowed to substitute assemblies and structural
systems in order to be compliant with the progressive
collapse requirement provided the performance
requirements and appearance of the building are
satisfied. Yes, the drawings are concept only. You
have the responsibility to generate. the construction
details and drawings. Tim Morrison, AFCEE/HDM
Note[ 24J: A design to provide a facility compliant with
the Progressive Collapse criteria would require
substantial work at a considerable additional
compensation.
(R4, tab 25 at 3) A copy was sent to CO Macdecy (R4, tab 518 at 1). Drawing A-302 is
an architectural drawing that shows the Baker double wall design (R4, tab 1746 at A-302).
This question specifically points to Wall Section 2 on drawing A-302 where the thirq floor
roof load is transferred to the third floor hollow core plank. instead of the second floor
reinforce9 concrete masonry wall. We find that this is at least one place in the design .
where the progressive collapse problem is found. Neither party presented testimony on the
meaning of the note warning of substantial work at considerable expense to provide a VQ
that meets progressive collapse. Mr. Bennett testified that this question and answer
demonstrated that the 3 5% design "was a concept that therefore needed to be fully fleshed
out and developed with the responsibility of the Design-Build tearri to do that very thing to
bring the design to the completion" (tr. 5/23).
31. There were a total of 32 questions and answers in the memo and the statement (or
words to that effect) "The drawings are concept only. You have the responsibility to generate ·
the construction details and drawings. Tim Morrison, AFCEE/HDM" was used 7 times
therein in the responses to questions (TLF) Nos. 2, 3 (VQ) Nos. 1, 3, 12 (TLFNQ) Nos. 6, 7.
(R4, tab 25 at 2-6)
· 32. A 5 April 2005 memo by CO Macdecy containing a set of consolidated
questions and answers was sent to the bidders on 7 April 2005 (answer in. bold italics):
7. Page 6- The second paragraph references Buildings 33
and 3 5. These buildings do not appear anywhere near
the Sanitary POC on C-104. The scope of the
recommended "downstream survey" is hard to finitely
24
This note was part of the original question (R4, tab 4363 at 4).
16
estimate until a copy of the Base "G-Tabs"r 25 1 is
received.
Refer to attached "G-Tab" files that were provided to
the Title I AIE. DB+ contractor needs to verify that
these are the most up to date G-Tabs available.
15. Page 82- Item #8- Has the "Note 2" on C-104 been
modified to indicate the capacity of all utilities are
adequate as per response provided?
A site utility survey was not performed by Baker. .All
capacities were derived from G~Tab.information or
were provided by Base CE.
21. It is assumed that the location and elevation of all utility
"capped" locations "By Others" will be documented,
physically marked, and provided to successful offeror.
No information is available. Lines are capped at the
main and abandoned in place. Only the electrical
service must be relocated as part of this project per the
drawings.
42. Page 6- Para 2.5- Should the service line from the new
HTHW main be tied into the main with a manhole and
valves? (See also question 13 above)
This is to be determined duringfinal design. The DB+
. contractor shall be required to address this.
25
"G-Tab" drawings are a base map that purports to show all of the utilities and their
location and identification (tr. 11/166). It was provided to all bidders (id.).
Mr .. Morrison testified that the G-Tabs would show all of the locations accurately
(tr.11/169). ·
17
A minimum of two (2) new HTHW manholesl26 l shall
be required, one at the tee for the VQ and a second on
the TLF site POC. Note to all contractors there are a
lot of existing utilities along East Arnold gas, phone,
water, etc. (both sides). Extreme care will be required
when approaching and crossing east Arnold with the
HTHW/ines.
,.43. Page 6- Para 2.5- What is the capacity of the· existing
HTHW system at the proposed tie-in point?
Refer to the drawings (H-201). This will have to ~e
verified by the DB+ contractor.
46. Page 28-Para 5.7.1- Last bullet- Ceilings in corridors
are indicated as GWB and at 9' -0". These will need to
be lowered to 8'-0" and 'revised to acoustical ceil_ing to
facilitate necessary water, electrical and communication
rough in fat each floor.
The space above the corridors was designed around a
9'-0" corridor ceiling height. This is only a 35% level
of design, so not every access panel is shown. There
are alternative design solutions that the DB+
contractor may have to implement in order to achieve
the design intent of the RFP drawings. The end user.
and the VQ design guides both specified the need for
gyp. board in the corridors and to have a 9'-0" ceiling
height. If the contractor feels they need to deviate
· from this requirement, then the base will have to
authorize this change.
48. Page 32 - Civil -Are the results of the "key manhole
study" available yet?
26
Neither party submitted evidence of the location of the two new manholes; however,
one is "on the TLF site" and we found the other on VQ 100% drawing C-107
where the new HTHW line divides into two lines for the VQ and TLF, i.e., the
''tey" (R4, tab 1755 at sheet 9, drawing C-107). ·
18
A key manhole study was never performed. The
design was based on information taken from the base
map/G..,tab data.
51. Page 82'." Item 1- Is the scope of all required utility,
demolition indicated on C-103 or will the Gov't use the
"catch all" notes to require additional demolition
without additional reimbursement?
It remains the responsibility of the DB03Plus
Contractor to determine requirements utilizing
existing documentation and drawings to complete the
final designs and project requirements. Should
changes occur involving additional and/or
. unanticipated work post mobilization, the Contractor
has recourse under various provisions of the contract.
61. Dwg. C-102 & C-103 - Site visit revealed that some of
the demolition indicated on this drawing has been
accomplished. It is assumed that all demolition below
grade has been completed in accordance with contract
requirements and that all backfill is compacted in .
accordance with contract requirements. What items
indicated on this drawing have not been accomplished
and remain part,ofthis contract? Are demolished
utilities physically marked at capped locations?
See the attached base demolition SOW to amendment
#1. The backfill is clean but not compacted. Use the
worst soil boring sample for calculations. Utilities
are capped at the mains and lines abandoned in
place. Electrical system must be re-routed and
· transformers removed and turned in to the base.
68. Dwg. C-105 -Are there any HTHW manholes
required?
The DB+ Contractor will need to make this
determination. However, a (minimum) of two (2) new
HTHW manholes shat/be required, one at the tee for
19
the VQ and a second on the TLF site POC. Note to
all contractors there are a lot of existing utilities
along East Arnold gas, phone, water, etc. (both sides) .
.Extreme care will be required when approaching and
crossing east Arnold with the HTHW lines.
70. Dwg. C-106 -Location of proposed HTHW line is
drawn through proposed storm drain lines, headwalls,
and catch basins. It is assumed that the location of the
new HTHW can be relocated south to avoid these
structures.
DB contractor shall be required to provide new
routing for all new utilities to avoid existing/new
structures, utilities, trees, etc.
(R4, tab 4 at 3-5, 7-10) Mr. Morrison testified about the answer to question 68:
In our preliminary design, we determined that it looks like
it's going to take twid. at 177).
PE's Proposal
59. In April 2005, Mr. Tengler was PE's chief estimator (tr. 4/6). He computed
PE's bid of $33,566,277 (tr. 4/30; R4, tab3732 at 343). Mr. Booth is also an estimator
for PE (tr. 7/9). He first became involved in the TLF/VQ project in March 2005 (tr. 7/11).
Mr. Booth prepared a "check estimate" on the TLFNQ project (tr. 7/12; R4, tab 506).
The purpose was to conduct an independent estimate to check the "ball park" validity of
Mr. Tengler's estimate and "flesh out any scope items" added since the prior estimate
(tr. 7/13, 29). He was given only the Baker drawings, the RFP, specifications and
drawings (tr. 7/14-15; R4, tab 506 at 1). The estimate was based on the assumption that
the "site will be delivered clean, per the RFP" (R4, tab 506 at 1). He didn't do "takeoffs"
from the drawings, but used "RS Means" values per square foot of the various systems in
the building (tr. 7/25-27). The estimate for the VQ was $18,182,698 (R4, tab 506 at 19)
and the TLF was $15,160,521 (id. at 33) for a total of$33,343,219.
60. PE signed and submitted its "Price Proposals" on 27 April 2005 in the total ·
amount of $33,566,277 (R4, tab 5). The offer had an acceptance period of 120 calendar
days from the date of the signed offer34 (id. at 1). Before award the AF contacted PE and
asked PE to confirm its bid. The AF did not suggest that the bid was too low compared to
the-other bids. (Tr. 1/114-15) PE held an executive level meeting to discuss the AF's
. request. Mr. Radin recalled they discussed the three different estimates supporting the
bid: (1) the original $33,566,277 estimate by Mr. Tengler used for the bid (tr. 1/117; R4,
tab 506 at 3), (2) the $33,343,219 check estimate by Mr. Booth that used RS Means
(tr. 1/l 17-19;R4, tab 506 at 6, 19, 33) and (3) the U.S. Cost estimate of$29,514,000
(tr. 1/116; R4, tab 506 at 36, 51) .. As a result of this meeting PE decided it was a good bid
and they would stand by it (id.).
AF Price Competition Memorandum ·
61. The Price Competition Memorandum (PCM) for RFP 8234, signed by
Mr. Hillestad, Mr. Brackett and CO Macdecy, all from A.FCEE," lists the Construction
Cost Limitation (CCL), 35 IGE, and bids from the three bidders, MWH, Caddell and PE:
34
One hundred and twenty (120) days from 27 April 2005 is 25 August 2005.
35
The CCL sets the maximum price authorized at the time.
33
TLF CCL IGE MWH Caddell PE
Base Bid $15373,202 $12,936.476 $19,128,036 $17,456,748 $15,373,202
Equip't $192,046 $176,994 $204,302 $159,106 $159.755
VQ
Base Bid $17,977,243 $16,160367 $28.229,644 $27.429,776 $17,977.243
Equip't $56,077 $69.239 $106,902 $137,434 $56.077
TOTAL $3J,598,568 $29,343,076 $47,668,884 $45,183,064 $33,566,277
(R4, tab 3743 at 1)
62. Part of the Introductory Summary to _the PCM reads:
A total of three (3) offers were timely received. All three
exceeded the CCL. The MWH and Caddell Offers \.Vere too
far out of range to allow further consideration. The Parson
Offer was determined to be salvageable with discussions.
Follmving a series of discussions it was determined that
Parsons-Evergreene was willing to revise their original offer
to an extent that would assure an acceptable proposed
(Price/Cost) for this acquisition. Parson's representatives
advised they had been able to utilize knowledge acquired
during the Constructability Review to gain assurance that
the project was doable at their final figure. Their proposed
offer was affinned in writing by The Corporate President,
Mr. Christopher Nielson. Additionally, they were confident
that there ,vould be no problem in obtaining subcontractors
during the work progression. Despite their organizational
HQ location in Salt Lake City, Parsons has main_tained a
strong presence on the Eastern Seaboard. These assurances
are deemed adequate to substantiate the decision to award to
Parsons-Evergreene, LLC.
(R4, tab 3743 at 3)
63. The PCM Evaluation Summarv., read·.
a. Reasonableness
The three proposals received were compared to each
other and with the Independent Gover111i:1ent Estimate (IGE)
and the Construction Cost Limitation (CCL). The proposals
received from MWH Americas and Caddell Construction,
Inc. were deemed irreparably high \vhen compared with the
.34
CCL, the IGE and the offer from Parsons. MWH and
Caddell offers were rejected out. of hand. The Parsons offer
was less than .07% higher than the CCL and approximately
16% above the IGE. The IGE was a Year old at the time of
comparison. Given rapidly fluctuating prices resulting from
high oil prices and other market influences, the CCL was
given heavier comparative weight. The Parsons offer was
determined to be sufficiently within range to attempt a
satisfactory resolution. Following a series of telephonic and
electronic discussions, Parsons submitted an offer that
allowed award \,Vithin the funds set forth in the CCL. A
final decision \Vas made to proceed with the award to
Parsons.
(:i4, tab 3743 at 6) ·
64. The Determination of Adequate Price Competition, attached to the PCM,
reads in part:
Considering all factors, the offered price selected (see
attachment 2 to the PCM) is determined to be fair and
reasonable based on adequate price competition ....
(R4, tab 3743 at 9) ·
Delivery Order No. 0013 for 100% Design and Construction
65. Delivery Order No. 0013 (DO 13) was issued to PE on 13 July 2005 (R4, tab T
at 1). DO 13, CLIN 0003AA was for "DESIGN & CONSTRUCT TLF" at a fixed price of
$15,269,702.00 (id. at 2). DO 13, CLIN 0003AB was for "DESIGN & CONSTRUCT
VQ" at a fixed price of $17,859,043.00 (id.). The completion date for both the TLF and
VQ was 5 March 2007 (id. at 5) for a total period from award to finish of 600 days. PE
was the "Design-Build-Plus 03 (DBP03)" contractor for this project (id. at 20).
66. DO 13 required construction of the TLF and VQ in accordance with the SOW
which was Attachment 1, entitled, "Temporary Lodging Facility (PTFL 04-5000) &
Visiting Quarters (PTFL 02-3004) McGuire AfB, NJ" dated 31 March 2005 (R4, tab 7 at
2). The SOW was the same one found in RFP 8234 (R4, tab 2B at 3, tab 7 at 17). The
SOW incorporated the 18 May 2004 concept design documents for the TLF and VQ on
two compact disks (R4, tab 7 at 25).
35
Project Management Plan (PMP)
67. By email dated 25 July 2005 to Mr. Binks, one of PE's Project Managers,
and a number of AF personnel, Mr. Morrison forwarded the AF's PMP, dated 17 May
2005 (R4, tab 528). The PMP defines the roles and responsibilities for the following
AF organizations: Headquarters Air Mobility Command (HQ AMC); Headquarters AF
Services Agency (HQ AFSVA); 305 1h CES, Civil Engineer Squadron, MAFB; 305 1h
SVS, Services Squadron, MAFB; and Title II Contractor Services Support (id.). The
PMP informed PE of the following:
As minimum the Title II contractor, Base Civil Engineer and
Services Representatives, HQ AMC Services, HQ AFSV A,
CM, CA, and any other organization interested will
participate in all final acceptance inspections The DB+
contractor will schedule the final acceptance inspection
through the Title II contractor with sufficient advance notice
for maximum participation by interested parties.
(R4, tab 528 at 13)
27 July 2005 "Kick:-0.ff" Meeting & Initial Notice to Proceed {NTP)
68. A "Pre-Construction and Pre.;. Work Conference" was held on 27 July 2005 R4,
tab 3004 at 110). Even though there was no requirement for an NTP for design (R4, tab 2
at 565; tr. 10/170), the AF issued an NTP on the "design completion phase" just prior to
this meeting. It was signed by CO Macdecy on 25 July 2005 with an ·"effective date" of
· 13 July 2005 (tr. 7/229-30; R4, tab 3004 at 108). Mr. Binks signed acknowledging receipt
on 26 July 2005 (R4, tab 27). Mr. Evans, PE's expert in scheduling issues, testified that
the government initially "backdated" the NTP to 13 July 2005 but changing the date to
27 July 2005 was discussed during the 26 July 2005 meeting (tr. 7/230-32; R4, tab 3004 at
111). Notes of the meeting include the following:
NTP presented to Parsons Evergreene was dated
13 July 2005, twelve (12) days prior to actual receipt. Issue
date needs to reflect date of this meeting, 27 July 2005,
which would then be the official start of the six hundred
(600) days allotted in the FNA for.construction.
(R4, tab 3004 at 111) Mr. Hillestad attended the 27 July 2005 "kick-off' meeting
(tr. 10/128-29, 153-54). He disagreed with the above-quoted meeting notes, testifying that
he and Mr. Binks agreed that the NTP date would be 13 July 2005 (tr. 10/119-22, 130; R4,
tab 525 at 1:-2).
36
69. Mr. Bennett recalled that at the 27 July 2005 kick-off meeting he explained
to th~ government representatives that design-build allowed PE the flexibility to make
changes so long as the overall intent of the building was satisfied (tr. 5/24 ).
PE's Initial Schedule
70. PE's initial as-planed Critical Path Method (CPM) schedule for the VQ and TLF,
dated 11 August 2005, was submitted to CO Macdecy on 12 August 2005 (R4, tab 1562,
. tab 538; tr. 16/135). The schedule includes a "Delay orNTP" from 12 May 2005 to 13 July
2005 (R4, tab 1562 at 3). The schedule indicates PE would buy out all of its subcontr~cts
for the VQ and TLF between 11 August 2005 and 3 November 2005 (id. at 3-4, 20-21 ).
Although there is little evidence in the record explaining this schedule, it shows the critical
path (red bars) running through the foundation work for Wing A of the VQ (id. at 6).
August- September 2005 Communications & Meetings
71. By letter dated 23 August 2005 entitled "Memo of Understanding:
Design/Build Procedures" from Mr. Richardson, Parsons Regional Construction Manager 36
(tr. 2/104), to CO Macdecy, Mr. Richardson expressed PE's "understanding of recent
· discussions concerning construction means and methods to be used for the design and
construction of the Temporary Lodging Facility and Visitors Quarters at McGuire AFB"
(R4, tab 4609). The letter read in pertinent part:· ·
In the particular case of the McGuire AFB V.Q and TLF.
Parsons Evergreene was the DBP03 contractor during the
CD phase and thus is very much aware that the designs
produced during the CD phase were "conceptual" in nature
by the government. It was repeatedly discussed, that beyond
specific design elements, the DBP03 contractor of record
had the ability to modify design elements in order to keep
the project within budget and schedule, as long as the
overall intent of the end user was not compromised and
the design meets all applicable building codes and
government design criteria.
I. Overall concept and expression of the building will
follow the 35% design. (Materials, and design details
36
The PDF version. of the letter is not signed, but there was no objection from the
government when it was used at the hearing and we assume it was signed, sent
and received (tr. 5/25-27).
37
will be further developed and designed through the 64%
and 95% design.)
2. Floor plan layout and interior design have been
established as final and are to be per conceptual
drawings.
5. Structural systems have not been designed or stamped
and therefore will be advanced, changed or otherwise
"designed" to meet constructability reviews, code
reviews, AF design guideline reviews and to work with
the required conceptual architectural, mechanical, and
electrical items as set forth in the RFP. It will be the
responsibility of Parsons Evergreene to determine the
structural system that meets the codes and AG design
guideline.
(R4, tab 4609 at 1, 2)
72. A contract coordination meeting was held on 1 September 2005 between· .
Mr. Romano, PE's project manager and Messrs. Morrison and Hillestad from AFCEE
contracting (R4, tab 3016 at 1). PE's notes ofthe meeting included:
The group discussed the idea of "conceptual" drawings and
design build. Everyone agreed that Parsons has the
opportunity to improve on the conceptual drawings in the
less developed portions of the drawings such as electrical,
mechanical, structural, and civil. Architectural drawings are
much more developed and the expectation is that the floor
plans and room layouts are fixed and will not change.
Parsons agrees with this understanding.·
(Id. at 1-2) Mr: Bennett, PE's Architect, testified that the structural drawings in the 35%
drawi~gs was basic, but did not account for lateral design, seismic design, wind loads, and
full sheer and connection details (tr. 5/29-30}. He testified that progressive collapse was
"not even part of that original discussion" (tr. 5/30). The notes of the meeting indicate
that after the meeting Mr. Romano asked if the area where houses and a swimming pool '
had been demolished had been backfilled with engineered fill. He asked for test reports
documenting the fill and if an environmental site assessment had been completed for these
areas. (Id. ar2)
38
Structural Brick Proposal
73. On 5 October 2005, Mr. Bennett sent a letter to Mr. Romano, PE, suggesting a
change in the structural design of the VQ _(R4, tab 3885 at 7-8). The letter listed six design
"issues" and "solutions" including use of structural brick walls (id.). Mr. Bennett testified
that this design change was intended, in part, to address progressive collapse (tr. 5/31 ).
On 10 October 2005, Mr. Romano, submitted to the AF a "Notice oflntent to Modify
Structural Design" for the VQ (R4, tab 3 885 at 9-10). In the letter PE explains that the
structural design embodied in the 35% design was "incapable of being utilized as shown
AND remain able to maintain the integrity of the desired architectural elements" (id. at 9).
Mr. Lengyel worked on the change and testified that they (PE) recommended changing
from the double wall concept to a single wall made of structural brick with an "open web
metal joist and metal B-deck with concrete topping" (tr. 4/188). Mr. Lengyel testified
that the 35% design did not address "progressive collapse" and that, once they (PE) put
that criteria in the design, the VQ "became inordinately heavy and difficult to detail"
(tr. 4/190-91 ).
74. On 16 November 2005, Ms. Kite 1 PE contracts manager, sent CO Macdecy a
letter entitled, "Request to Proceed with Structural Brick system" (R4, tab 557). The
letter included as Attachment 1 a copy of another 16 November 2005 letter to
CO Macdecy answering various questions and Appendices A through F presenting
information about structural brick. Attachment 1 included:
The color of brick has not been finalized at this time. The
manufacturer we are negotiating with has been finding
various brick colors for us to analyze. If necessary, we will
have a custom color brick fabrkated to match the base
standard. Parsons understands that the brick color must
meet the base standard and will submit the brick color
during the submittal process .
. (Id. at 3) Ms. Kite also stated PE could match the brick size required by the Base
Architectural Compatibility Guide (id.). Ms. Kite stated that the Appendices included
sufficient information to answer CO Macdecy's questions in his 21 October 2005 37 letter
and she asked for permission to proceed with the structural brick solution (id. at 1).
75. On 8 December 2005 the parties held a coordination meeting (R4, tab 239).
Minutes of the meeting document that the parties discussed PE's desire to change the
design of the VQ to structural brick. The AF expressed its desire to stick to the 35%
design and that only "undeveloped areas" of the 35% design were subject to change by
PE. The AF directed PE "to discontinue structural brick design," but PE expressed
concern that the 35% design could not be built without significant modifications to
37
This letter is not in the Rule 4 index.
39
address progressive collapse. The AF agreed to consider "additional information and
supporting documentation outHning" PE's concerns. (Id. at 2-3)
76. Ms. Brown became the CO for the VQ/TLF contract in December 2005
when Mr. Macdecy left (tr. 11/255; R4, tab 7A at 2). In a 14 December 2005 email to
CO Brown, Mr. Williams stated that the RFP/35% design did not have shear walls that
lined up in the Admin/Housekeeping wing of the VQ that will "require additional
structural members to be installed that will impact the design in an adverse way" (R4,
tab 4379 at 2). Mr. Williams wrote: .
Can the RFP design be built? Yes. However, if the
government takes the position that the DB contractor cannot
deviate from the RFP at all then we will have clearance
problems between the ceiling and structure. That would
leave only two option as I can see it at this time: 1) increase
the floor to floor height or 2) lower the ceiling height. HQ
AFSVA does not support the second option.
The requested structural change [structural brick] appears to
resolve these issues of clearance and improves AT/FP.
(R4, tab 4379 at 2) Mr. Williams supported the change to structural brick suggested by
PE stating, ''Please ensure Parsons makes the proper request for the structural system
only and modify the contract as required (id. at 3; tr. 15/47).
77. By letter dated 15 December 2005 to PE, Subject "Sixty-five Percent Design
Submittal Requirements, Contract No. FA8903-04-D-8703, Task Order 0013,"
CO Brown expressed the AF's concern over PE's proposed change to structural brick:
1. The Government is serio.usly concerned about the
direction that Parsons Evergreene has chosen to take with
respect to the design of the subject task order. That task
order identifies the controlling contractual documents,
including the statement of work, specifications and
drawings. These documents provide the legal framework
for the basic design as represented by the 35% design for
these projects.
2. You have a contractual obligation to comply with all
contractual documents, including the designs that are
indicated in the specifications and drawings. If you find
during the continuation of your design that the initial design
· work includes errors or other deficiencies, it is your
affirmative obligation under the task order to identify the
40
error or deficiency, specifically referencing the applicable
portion of the task order," include specific data substantiating
the existence of the error or deficiency, and identify any
proposed solution to the design error or deficiency. That
information will be used to evaluate the proposed solution
and either incorporate your design changes into the task
order or advise that the solution is not acceptable to the
Government. .
3. What has occurred, essentially, in the current situation
concerning the structural brick is that you have identified
that there are structural problems and you have proposed a
significant redirection on several structural components.
This contention is without sufficient rationale to substantiate
that there is indeed a problem that cannot be resolved
through design development of the task order documents.
The "Structural Brick Proposal" is considered an incomplete
and unacceptable method to identify a design solution.
Ideally, we seek a solution that most closely reflects the
structural character that is on contract.
(R4, tab 32 at 1) CO Brown directed PE to provide a "comprehensive and concise list
of errors, deficiencies, or other specific issues that you have identified with the original
design" (id.). Mr. Lengyel testified that such information was included in the
information submitted to the AF in the October 2005 letter (tr. 4/202). CO Brown also
directed PE to submit recommendations that "more closely resembles the structural
system that is in the task order" (R4, tab 32 at 1-2).
78. PE responded to CO Brown's 15 December 2005 memorandum on
22 December 2005 (R4, tab 36). PE began the letter with, "Parsons Evergreene (PE) is
also very concerned about this project, but specifically with our inability to make
progress on our structural design using what we consider necessary and appropriate
alternative systems" (id.). PE elaborated on three "primary issues in the current concept
design.that need to be addressed" (id.). The issues were: (1) Inadequate Shear Walls and
Beams on the second and third floors in the business center wing and interior lobby that
do not line up with the main floor that will require larger beams that will interfere with .
ceiling heights and mechanical runs; (2) Inadequate Mechanical Plenum Space caused by
the concrete floor plank system that does not allow space for ducts and lighting fixtures;
and (3)Progressive Collapse and Structural Redundancy is not accounted for in the 3~%
design (id. at 1-2). Mr. Lengyel testified that it was impossible to build the 35% design
the way it was depicted with the double wall design and meet the nine-foot ceiling
clearances. and other architectural details in the design (tr. 4/205). Mr. Bennett testified
that the 35% design was deficient because it did not account for progressive collapse
(tr. 5/36). In the 22 December 2005 letter, PE went on to explain how its structural brick
41
design would solve these problems. It also quoted the pre-bid question. and answer that
questioned the adequacy of the 35% design to satisfy the progressive collapse·
requirement, including "[a]re we allowed to substitute assemblies and structural systems
in order to be compliant with the progressive collapses requirement provided the
performance requirements and appearance of the building are satisfied?" (id. at 4). The
question also noted that providing "a facility compliant with the Progressive Collapse
criteria would require substantial work at a considerable additional compensation"
(id.). PE included the AF's answer:
Yes, the drawings are concept only. You have the
responsibility to generate the construction details and
drawings. Tim Morrison, AFCEE/HDM
(R4, tab 36 at 4) .
79. The AF commissioned a review of structural systems for the VQ by
Jaster Quintanilla & Associates (JQA) (R4, tab "588 at 1). The resulting report, dated
7 January 2006, included the following:
The configuration of the load-bearing masonry walls and
structural steel beams at this level should be similar to that
indicated on Sheet S-105 (Third Floor Framing Area A).
Because the interior walls in the north-south direction on the
Second Floor do not align with the walls on the First Floor,
it is likely that a structural steel frame will be required at
these locations on the First Floor to adequately resist the
lateral forces. This condition can be readily addressed
through proper structural design and detailing.
At this time, it does not appear that the structural system
indicated in the 35% Level of Design Documents has been
designed and detailed to meet the requirements to resist
progressive collapse. However, there is nothing that
suggests that the primary structural system selected
(load-bearing concrete masonry with hollow core concrete
planks) cannot be adequately designed, reinforced, and
detailed to meet those requirements. ·
(R4, tab 588 at 1-2) Mr. Radin testified that this report disclosed design flaws in the
35% design, and the structural brick design suggested by PE was an attempt to fix this
problem (tr. 1/219-20). Mr. Lengyel testified that JQA agreed with PE that the 3 5%
design would require structural changes (tr. 4/219).
42
80. The government responded to PE's 22 Detember 2005 letter on 12 January
2006 (R4, tab 3913 at 6). The memorandum criticizes PE for continuing to advocate for
its structural brick design stating "On 21 October 2005, the government formally
rejected Parsons alternative design proposal (specifically the structural brick) and
directed Parsons on proper process for submission of requests for contract changes"
(id.). The government responded to the three technical issues raised by PE stating that:
( 1) Inadequate Shear WaHs and Beams can be resolved with structural design of any ·
needed beams and changes to floor plans; (2) Inadequate Mechanical Plenum Space can
be resolved by "slightly lowering the ceiling height, reshaping the duct work, or as a last
resort, slightly raising the building height"; (3) Progressive Collapse and Structural
Redundancy can be resolved by adding additional reinforcement to the 35% design to
meet the minimum progressive collapse criteria (id at 7). The government also
revealed that it had employed JQA to analyze the 35% design. The AF informed PE
that JQA reported that the progressive collapse requirement could be met with the 35%
design "with the proper detailing and design completion" (id.). With regard to the pre-
bid question and answer the government stated that "[n]otwithstanding Government
responses to RFI questions during the RFP process" PE was required to comply with the
specifications and drawings, but should notify the government of design deficiencies for
government consideration (id. at 8).
81. On 17 January 2006 PE submitted to the AF a PDF "Binder" including a
cover summary letter entitled "Request to Proceed with Structural Brick system,"
supported by 148 pages of backup (tr. 4/197-98, 5/32-33; R4, tab 592). This submission
provided the information requested in CO Brown's 15 December 2005 letter.
Mr. Lengyel worked on putting the binder together and he testified that it addressed the
AF's concerns over brick size, and acoustical and fire ratings (tr. 4/198). Mr. Lengyel
developed drawings of the wall sections to show how the new wall design would work
(tr. 41199). The binder also included a report from a ·structural engineer indicating that
the structural brick wall was stronger than the CMU wall (tr. 4/200; R4, tab 592 at 120,
200-01). Mr. Lengyel testified that the manufacturer of the structural brick, Atlas Brick,
could provide different size and color brick so size and color would not be a valid
reason for rejecting the structural brick (tr. 4/192-94 ). He testified that the structural
brick met MAFB architectural standards for brick (tr. 4/195-96; R4, tab 833 at 18).
Mr. Rola, AF senior civil engineer, agreed that PE offered to provide structural brick
that met the base architectural standard or the brick specified in Baker's 35% design
(tr. 15/121-22). In PE's structural brick proposal it used four by four by eight inch
closure face brick that was the base standard (tr. 5/89-90; R4, tab 833 at 8). PE
proposed two different wall assemblies, each performed better than the CMU with
veneer brickin the RFP (tr. 4/196-97).
82. CO Brown agreed that one problem with the 35% design was that "the shear
walls in the different floors didn't line up and they had to be moved in order to carry the
loads down and meet the progressive collapse requirements" {tr. 12/109-10). She agreed
43
that the structural brick design would solve the progressive collapse problem with the
35% design (tr. 12/110).
83. CO Brown testified that PE told her that the Baker design "would be near to
impossible to build" due to many technical problems (tr. 12/14). She asked her
technical support people about PE's concerns. She was told there were some problems
with the Baker design but they could be corrected "by somebody that knew what they
were doing." (Tr. 12/15)
84. CO Brown convened a "summit meeting" in San Antonio, Texas, on
25 January 2006. CO Brown started the meeting with a discussion of the design build
process:
The premise comes down to the contractual document; what
ever documents we start the process with is what drives the
design. If there is something in the basic contract that is
incorrect the contractor has the responsibility to propose
solutions. However, in order to change the contract there
must be consideration with respect to cost either positive or
negative.
(R4, tab 38 at 1) Mr. Bennett attended and the meeting minutes document that
Mr. Bennett said the following:
f) Keith Bennett responded to above comments by stating
that early in the bid process concerns with the structure
were voiced and requests were made for liberty to
substitute structural systems within the same
architecture. Keith Bennett stated that it was never ·
portrayed that the exact structure or the exactness of the
drawings was what they would be held to. Therefore
they did not feel it was necessary to point out specific
deficiencies with the 35% because they felt it clearly
stated they could look at other options. I know
contractually that may be messy but that was what was
portrayed at the 35% review pre going out on the street.
(Id. at 2) Mr. Bennett stated that PE was "okay with being told the 'Structural Brick' is ·
off the table we can move on, but it needs to be clear that there will be cost impacts that
will need to be looked at regarding solutions to deficiencies" (tr. 4/207, 209; R4, tab 3 8 at
2). He explained that the structural brick design would solve the problems with the 35%
design and not "have a cost "implication" (id. at 2). Mr. Bennett affirmed what he said in
his testimony at the hearing (tr. 5/46, 48-49).' Mr. Romano stated that "Parsons never said
they couldn't build this [35%] design," however, the structural brick approach was an
44
attempt to keep the project within budget (R4, tab 38,at 4). Mr. Aldave, PE's structural
design engineer, explained that the structural btick design was necessitated by the
requirement to design to avoid progressive collapse (id. at 2-3). He stated that the Baker
35% design did not satisfy the requirement to avoid progressive collapse (id. at 4 ). There
was discussion of pre-bid questions, "Brian Lamont respond that if you go back to the
pre-bid Q and A notes, one of the comments was that a design to provide a progressive
collapse compliant facility will require substantial work at a considerable additional cost"
(id. at 5). AF representatives from the Air Mobility Command (AMC) and MAFB stated
that "architectural compatibility" (matching surrounding buildings brick) was the "main
issue" that caused them to stick with the concrete masonry unit (CMU) and brick veneer
of the 35% design (id. at 5). Mr. Romano stated that they could match the brick in the
surrounding buildings with the structural brick (id.). CO Brown directed PE to proceed
with the 35% design (id. at 7; tr. 15/52). The structural brick design was finally rejected
by Ms. Brown during the 25 January 2006 meeting (tr. 2/231, 12/15). Mr. Lengyel
recalled that at the end of the meeting PE understood that the structural brick design was a
dead issue and they were to build to the 3 5% design (tr. 4/217-18). PE had developed the
65% design using structural brick and when the decision to use the Baker 35% design was
issued, PE had to "go backwards and redo the 65 percent design" (tr. 2/193).
85. Mr. Basham testified that PE's structural brick design would solve the lack
of progressive collapse protection in the 35% design. Since the AF would not accept
the structural brick, PE had to change the double wall design to account for progressive
collapse. PE realigned some structural systems to line up the columns on the second
floor with those on the third floor and the ceilings had to be lowered. (Tr. 2/92-94)
Hollow core planks are not industry standard when progressive collapse is involved
(tr. 5/87). PE used the hollow core planks in the VQ but as a result had to add
substantial reinforcement in the 35% design (tr. 5/87-88).
86. Mr. Temchin testified that after the January meeting, PE had to redesign the
double-wall 35% design (tr. 7/191-92). PE designed and built a steel frame inside the
VQ to prevent progressive collapse because the brick veneer facing would not carry the
loads (tr. 2/246). Staying_with the 35% double wall design required "an entire interior
. redesign" involving realignment of the vertical columns, shear columns and creation of.
a new joint system for the hollow core planks (tr. 7/191-92). PE had to add "a moment
frame and structural steel to the VQ" because they were not able to provide protection
from progressive collapse using the original wall design (tr. 2/142). Mr. Tengler
estimated that use of the structural brick would have saved $1,906,401 38 in construction ·
costs (tr. 4/98; R4, tab 3154 at 2).
87. By letter dated 6 February 2006 to CO Brown, Mr. Dukes, PE's senior
procurement manager (tr. 2/106), acknowledged CO Brown's direction to discontinue
development of the structural brick alternative. Mr. Dukes informed CO Brown that PE
38
The estimate is dated 6 October 2014 (R4, tab 3154).
45
considered this direction to be a constructive change and that as a result PE would incur
"additional design expense and the loss of performance time." (R4, tab 3926 at 2;
tr. 4/222-23)
Submission of TLF & VQ 65% Drawings and Specifications
88. PE submitted for approval its 65% drawings and specifications for the TLF
and VQ on 27 February 2006 (R4, tabs 8, 9). The drawings included 100% of the civil
and structural and at least 50% of the architectural, mechanical, and electrical design
(tr. 12/125; R4, tab 2 at 294, tab 3923).
27 March 2006 Limited NTP
· 89. On 27 March 2006, CO Brown issued a limited notice to proceed (LNTP)
for sedimentation and erosion control, stripping top soil, and cutting and filling the site
to proposed rough grades (R4, tab 623 at 3; tr. 8/24-25) .
. Approved ofSite Civil/Structural 100%/or Construction Drawings/or TLF & VQ
90. The Site Civil/Structural 100% for Construction Drawings for the TLF are dated
17 April 2006 (R4, tab 1750). These drawings include the fin~l design of the TLF
foundations (id., drawings S-101.a, b, S-501). The Site Civil/Structural 100% Drawings for
Construction for the VQ are dated 27 April 2006 (R4, tab 1751 ). These drawings include the
final design of the VQ foundations (id., drawings S-100, -lOOA, -101, -102, -501). 39
Modification No. 02
91. By letter dated 25 April 2006 to CO Brown, Mr. Dukes offered two
alternatives to resolving "the remaining contractual aspects of the impasse that has been
resolved in regards to the structural brick" (R4, tab 4504 at 2). PE was willing to accept
either a 120-day ext~nsion plus $100,000 or a six-month extension with no money (id.).
The letter includes, "To add greater detail to the understanding of this agreement,
Parsons is estimating the following impacts that have been absorbed to date and will
have to be absorbed with the execution of a contract modification under.the proposed
resolution modification" (id. at 2-3). PE listed "$100,000.00 in actual redesign
expenses," $500,000.00 in increased construction costs to follow the original 35%
design, and $700,000.00 "[i]n consideration for signing a release of claims for the
direction given on the design effort to date" (id. at 3). 40
39
We infer that these are the approved versions of the 100% civil drawings submitted
on 27 February 2006 (finding 88).
40
No testimony was presented by either party at the hearing to explain exactly the
meaning of this language in the letter.
46
92. Modification No. 02 (Mod. 2) to DO 13, dated 6 June 2006, extended the
period of performance by 126 days from 5 March 2007 to 9 July 2007. This accounted
for a 126-day delay associated with the structural brick discussion that occurred from
22 September 2005 to 25 January 2006. 41 Mod. 2 included the following release:
2. Release of Claims: In consideration of the modification
agreed to herein as complete equitable adjustment for any
delays or costs rising from varying design approaches,
in
including delays reviewing approaches, the contractor
hereby releases the government from any liability under this
contract for further equitable adjustments attributable to
such facts or circumstances giving rise to this contract
modification.
(R4, tab 7B at 2) CO Brown believes. the release includes what PE claims in this appeal
for the increase in cost of constructing the VQ to the Baker 35% design (tr. 12/18).
Mr. Temchin believes the release covered the four months of design costs associated
with its attempt to convince the AF to use the structural brick design, not the increases
in construction costs incurred later to incorporate resistance to progressive collapse in
the Baker double wall design (tr. 2/196).
93. CO Brown signed a Memo for Record, <;lated 12 June 2006, explaining
Mod. 2 (R4, tab 1514 at 8-9). After reciting some background, CO Brown concluded,
"The period of performance will be changed from 05 March 2007 to 09 July 2007 with
no increase to the total amount. The contractor agreed to the extension and agreed to
sign a release of claims for the additional time consideration." (Id. at 9)
LNTP - Underground Utilities
94. The AF issued an LNTP on 6 June 2006 for:
[W]ork affecting underground utilities and some related
items including but not limit[ ed] to the following: site storm
and sanitary sewerage, piping and structures, taps, and tie-
ins, site domestic water piping, taps, tie-ins including
metering and vaults, site telecommunication and data to
include any duct banks, below grade HTHW, metering and
vaults, taps, and tie-ins, high and low voltage electrical
underground.
41
Mr. Evans, PE's scheduling expert, started his 126-day delay on l3 July 2005 (R4,
tab 3290 at 6, item 1).
47
(R4, tab 3948 at 2) Mr. Temchin testified that this LNTP was equivalent to the "l June
2005 NTP civil site work package" (tr. 2/141). The civil site work is referred to as
"horizontal" work (tr. 1/129). The LNTP did not allow PE to start foundation work
(tr. 8/32-33).
PE Stop-Work Order/Concerns over Environmental Contamination
95. A coordination meeting between the government and PE was held on
27 June 2006. During the meeting, PE requested a "Certificate of Clean Site" for areas
where the AF had contracted for the demolition of two swimming pools and other
buildings. (Tr. 6/52, 54; R4, tab 56 at 4) The meeting notes state that the requested
documents did not exist (id.).
96. On 5 July 2006 PE's subcontractors Giberson Plumbing & Excavating, Inc.
· (Giberson) and S&C Construction, LLC (S&C) were setting up equipment to start work
on footings (ex. A-3 at 130). 42 On 7 July 2006 PE sent S&C a letter instructing it to
stop work on the TLF and VQ footings "at the point in time where you are starting to
pour concrete for the footings for these buildings" because of "questions about the
condition of the subsurface" (R4, tab 58; ex. A-3 at 134). The daily log for 7 July 2006
indicates that subcontractor S&C was working on footings at the VQ site and had to
stop work because it encountered "issues revolving around the soils and testing from
prior demo work" (R4, tab 3744 at 63-64).
97. By letter dated 14 July 2006 to CO Brown, Mr. Dukes informed the AF the.following:
Since the Air Force cannot provide any documentation as
to either the condition of the site prior to demolition, the
actual scope of demolition carried out, or the adherence of
the demolition contractor to the demolition statement of
work, we have to project based on what we understand
was done that the potential for asbestos pollution, mercury
contamination, and other forms of improper fill materials
(such as fluorescent light ballasts) may exist in the site.
(R4, tab 62 at 1) Mr. Temchin testified that at this time PE was very concerned with the
condition of the construction site (tr. 3/32).
42
Also on 5 July 2006, PE sent a letter to CO Brown complaining about the lack of an
unlimited NTP (R4, tab 3004 at 140). However, this letter doesn't square with
PE's subcontractor commencing foundation excavation on 5 July 2006.
48
Unlimited Notice to Proceed (NTP)
98. By letter dated 5 July 2006 to CO Brown, Mr. Dukes complained about the
· government's use of "limited" notices to proceed and that PE had not yet been given a NTP
for the foundations. Mr. Dukes estimated thatthis practice had delayed construction
"approximately 60 days" and he requested an unlimited NTP be issued. (R4, tab 3004
at 140-41; tr. 8/33-34) The AF issued an unlimited NTP on 10 July 2006 (R4, tab 3973
at 2). 43 PE started working on the complete project after this NTP (tr. 2/150).
PE's Concerns over Environmental Contaminatzon Resolved/JOO% Drawings
99. On 21 July 2006 PE sent S&C a letter lifting the stop-work order for
excavation at the TLF site (R4, tab 1558 at 43). The stop-work order for the VQ
· remained in effect. PE completed and received approval of the "100% for construction"
drawings for the TLF and VQ dated 24 July 2006. (R4, tabs 1754-55)
100. By early August 2006 PE had completed its review of various documents
provided by t~e AF concerning the demolition of houses and pools in the VQ areas. By
letter dated 4 August 2006, PE notified CO Brown that it had cpncluded that the VQ site
was environmentally "clean" and ready for construction (R4, tab 65 at 4-5). PE decided
to "immediately proceed with the geotechnical investigation of the in-situ conditions of
the backfill within these demolition sites" (id. at 1, 5). A total of 28 days of delay
occurred between 7 July 2006 when PE stopped work and 4 August 2006 when PE
lifted its stop-work order at the VQ. 44
First Cure Notice
101. On 9 August 2006 the government issued the first cure notice to PE (R4,
tab 3982 at 2; tr. 1/132). In this cure notice the AF cited PE's failure to develop a
project schedule, lack of cut and fill calculations, lack of sufficient labor, lack of
responsiveness relating to TLF subsurface .conditions, design deficiencies relating to
parking lot, failure to give notice of steel delays, and failure to provide pricing for the
changes to be incorporated into the design, i.e., the "shopping list" (R4, tab 3982 at 2).
The "shopping list'; was a list of out-of-scope items that the government wanted priced
so it could decide whether to purchase them or not (tr. 5/219-20, 12120-21). The
shopping list was·supposed to consist of "credits and debits" to be developed by PE so
that the cost of the contract would not increase (tr. 13/50, 14/234-35). The two major
· . items on the list were parking lot lighting and landscaping (tr. 5/220).
43
The letter was erroneously identified as a limited NTP, but PE understood it to be an
unlimited NTP (tr. 8/35). .
44
· Mr. Evans seems to combine the contaminated fill issue with the unsuitable fill issue in his
Delay Review Period 3 (R4, tab 3004 at 25-26). We consider them separately.
49
102. PE submitted its detailed response to the 9 August 2006 cure notice on
24 August 2006 (tr. 2/247; R4, tab 1499 at 13). By letter dated 10 October 2006 to
CO Brown, Mt. Dukes noted that the AF had not yet responded to PE's cure notice·
recovery plan and advised that not having a response "has the potential of causing an
adverse impact on the progress of the project" (R4, tab 4565 at 1).
Unsuitable Fill
103. PE hired PSI to do a test pit exploration of the TLFNQ footprint areas. PSI
excavated ten test pits on 16 and 17 August 2006 (R4, tab 796 at 2). Test pits 1, 2, and .3
were at the VQ where demolition had .occurred (tr. 6/238; R4,.tab 796 at 6). PSI reported its
results to PE by letter dated 27 September 2006 (R4, tab 796 at 1). The log for test pits 1, 2,
and 3 indicate that construction debris was found in pits 1 and 2 and "trace" debris in pit 3
(tr. 6/239-40; R4, tab 796 at 8-10). The "construction-type debris" found is shown in a
picture date stamped "08/l 7/2006" (tr. 3/9; R4, tab 4675 at 4).
104. By email dated 16 August 2006 to CO Brown, PE provided notice of a
differing site condition _after finding "wood, concrete rubble, metal, wire, charred debris
and other construction debris" that indicated that the previous demolition contractor did
not back fill with clean fill (R4, tab 68). The topic of the construction debris was
discussed during a meeting on 22 August 2006. PE was to remove the unsuitable
material and CO Brown stated MAFB was responsible for paying for the work. (R4,
tab 3058 at 3) Also on 22 August 2006, PE emailed S&C a stop-work order for
foundation work at the VQ due to concerns over subsurface conditions45 (R4, tab 69).
This order did not affect the work at the TLF. Mr. Shockley testified that the unsuitable
fill issue applied to the VQ only (tr. 6/117).
105. In a 14 September 2006 internal email, CO Brown acknowledged
"probably unforeseen site conditions that can cost the government to remediate some of
the soil" but that she did not have funding to enable her to direct PE to do the work (R4,
tab 4403 at 1). By 2 November 2006 CO Brown had funding and issued a NTP for
disposal of the unsuitable material and backfilling, but she imposed a not-to-exceed
(NTE) amount of$70,000 (tr. 12/151, 221-22, 277; R4, tab 4447). A total of72 days of
45
Mr. Evans seems to misconstrue the "contaminated soil" delay and the "unsuitable fill"
delay. He writes, "On August 21, 2006, Parsons issued a Stop Work Order for the
VQ and marks the end of the delay for unsuitable fill and starts the new delay for
the organic layer" (R4, tab 3004 at 28). -As we· read the record, 4 August 2006
marks the end of the contaminated soil delay (R4, tab 65 at 4-5) and 21 August
2006 marks the beginning of the unsuitable fill delay. ·
50
delay occurred between 22 August 2006 when PE stopped work at the VQ and 6 August
2006 when CO Brown issued the NTP to remove the unsuitable fill. 46
106. On 15 November 2006 the 27 September 2006 PSI report was emailed to
CO Brown (R4, tab 846 at 47). On 16 November 2006 the PSI report was forwarded to
Mr. Williams, who wrote in a 29 November 2006 email to CO Brown the following:
I am also disappointed it took so long for this report to reach
us. However, ifl interpret the report correctly, I don't
understand how the contractor that demolished the existing
facilities was allowed to leave so much large construction
debris on site and cover it with a shallow layer of dirt. Six
of the ten tests contained construction· debris and one of
those had the "green" soil. Two additional test sites
contained the "green" soil. Only two of the tests seem to be
Ok.
Yes, this report is disturbing
(R4, tab 3999 at 1-2)
Organic Layer/"Transite" Asbestos Pipe
107. By email dated 23 August 2006 to CO Brown, PE stated that on 22 August
20·06 PSI found "organic material" in two of the test pits they had dug that day at the VQ
. site (R4, tab 3988). PE also stated, "Based on this discovery, we will not be placing
concrete or excavating on the VQ side this week" (id.). PE had PSI take small diameter
borings to map out the organic layer under VQ wing A (tr. 3/18; R4, tab 4675 at 13). PE
also had PSI do some large diameter borings (tr. 3/19-20). PSI identified the location of
the organic layer overlaid on the VQ footprint with the black "crosshatched" area on slide
13 in a 18 December 2014 PowerPoint presentation (tr. 3/20-21; R4, tab 4675 at 13). Slide
15 shows a picture of what the material in the organic layer looks like (tr. 3/22; R4,
tab 4675 at 15). Slide 16 shows a tree trunk and organic layer material encountered during
excavation (tr. 3/23; R4, tab 4675 at 16). The material PE uncovered could not be
characterized as "trace" organic material (tr. 3/24-25)}7
108. By letter dated 19 October 2006 to Mr. Dukes, PSI reported the results of
its settlement investigation at the VQ due to "organic laden stratum," i.e., organic layer.
P~I recommended that the organic layer be removed in the northwest comer of VQ
46
We need not determine how long it took to remove and replace the unsuitable fill
because this delay was concurrent with the organic layer/asbestos pipe delay
discussed bel?w. For our purposes it is the 22 August 2006 stop-work date that
is important.
47
The original RFP 8234 boring logs identified "trace" organic material (R4, tab 2 at 825).
51
wing A. (Tr. 3/25-26, 125-26; R4, tab 74) The PSI report was provided to the AF, but
the AF did not respond (tr. 3/26-28, 127).
109. Mr. Temchin testified that the organic layer material is "made up of grasses
and other materials that will decompose over time and create voids or cavities in the
substrata under the building if it were left under the building" (tr. 3/18-19). The organic
layer was at a depth of about twelve feet and the building's footing was seven feet, so the
organic layer was five feet below the footing and that was "significant to our structural
· engineers" (tr. 3/126). PE determined that the organic layer needed to be removed because
of differential settlement to insure long-term stability of the foundation (tr. 3/50).
110. By email dated 3 November 2006 to CO Brown, Mr. Thomas, PE's vice
president and project manager, notified CO Brown that, while excavating to remove the
organic layer, PE encountered another differing site condition in the form of "old pipe with
asbestos insulation" 48 and "immediately stopped work" and notified Mr. Rola (tr. 2/103,
3/131-32; R4, tab 81 at 1). The email was followed up by a 7 November 2006 letter to
CO Brown notifying the AF of the differing site condition (R4, tab 841). Asbestos removal
was not within the scope of PE's Gontract(tr. 7/43-44, 5/235-36; R4, tab 838).
111. Meanwhile, Mr. Rola told PE that the organic layer did not need to be removed
(tr. 3/127, 6/245-46). Mr. Temchin testified that Mr. Rola's position was "totally ridiculous"
(tr. 6/246). In her 9 November 2006 email to Mr. Rola and others, CO Brown expressed her
opinion that PE was entitled to rely on PSI's recommendation to remove the layer:
If they [PE] trusted us and built on the site and the building
had structural cracks in the foundation later because of
48
Mr. Temchin testified that the asbestos insulated pipe was "transite" pipe that is a clay
pipe with asbestos in it. It was also identified as "transite" in a 22 February 2007
meeting (R4, tab 3067 at 3). There is some confusion over whether the pipe was
shown on drawings given to PE. The AF provided PE with drawings of active
utilities. However, the AF had drawings that showed abandoned utilities that the AF
did not provide to PE. (Tr. 3/56-57, 5/242-43) Mr. Temchin testified that the
transite pipe was not shown on any of the draw~ngs provided to PE (tr. 3/131-32).
However, there is also evidence that this pipe was shown on the 35% drawings.
There is existing HTHW pipe that is to be removed shown on drawing C-103 (R4,
tab 1746, sheet 5). We resolve this confusion based on PE's reply brief where it
admits that the drawings showed the HTHW pipe to be removed, "In PFFs 728-729,
the AF points out that PE should have planned to remove the old HTHW line, and
that point is undisputed" (app. reply br. at 109). We infer that PE's point is that
ev.en if the HTHW pipe was disclosed on the drawings, the fact that it was "transite"
insulated with asbestos was not. Therefore, we find that the differing site condition
is not the old HTHW pipe but the fact that it was "transite" pipe insulated with
asbestos.
52
settling from the organic layer, what do you thirik the
chances are that the government would step up and say
"that's okay, we told them it was okay to build on." Heck·
no! We would go after them with a vengeance.
(Tr. 12/151; R4, tab 4296 at 3) By email dated 22 November 2006 to Mr. Thomas, PE,
-Mr. Rola requested "complete calculations of the Settlement Analysis" and asked
various questions about why the organic soil should be removed (R4, tab 855 at 1).
112. Apparently PE was able to continue removal of the organic layer in locations
unaffected by the asbestos pipe because by letter dated 29 November 2006 to PE, PSI
reported that backfill in the area where the organic layer had been removed was
accomplished on 10 and 11 November 2006. PSI conducted field compaction tests and
verified the compaction requirements of 95% were met. However, PSI determined that
the backfill had been placed in "about 12 inch" lifts that exceeded the lift thickness
required by the contract. (R4, tab 79 at 1) The contract required that backfill be pl~ced
in 6-'inch layers (lifts) (R4, tab 16 at 104). Apparently the backfill associated with the
organic layer excavation was placed in thicker layers (lifts) (R4, tab 1573 at 39).
Mr. Temchin agreed that PE's subcontractor did not comply with the 6-inch lift
requirement 49 (tr. 5/230). ·
113. Meanwhile, Mr. Rola took the position that the asbestos insulated pipe was
not a differing site condition (R4, tab 4298 at 1-2). In four emails, dated 30 November
2006, between Mr. Rola and CO Brown, the CO disagreed:
[Rola to Brown 9:36 AM] The.Base cannot justify Parsons'
claim of a differing site condition. Please see attached.
[Brown to Rola 11 :07 AM] If we did not identify asbestos
as being applicable to this site, then IAW FAR 52.236-
2(a)(2), this is a differing site condition and was not
anticipated in our "clean site."
[Rola to Brown 1:20 PM] Did you receive this attachment?
Our position is well supported in Construction Claims
Monthly (January 1995 issue).
[Brown to Rola 2:59 PM] Yes, but I will reiterate that you
have a cancer-causing agent in- the site and it requires
remediation. You did not identify asbestos on the project.
49
Mr. Temchin's testimony was in response to a question that PE's subcontractor
backfilled in 12-inch lifts rather than 8-inch lifts (tr. 5/230).
53
They did not therefore identify the costs for remediation in
the proposal. We will LOSE this if they submit a claim.
(R4, tab 4298 at 1-2)
114. By email dated 1 December 2006, Mr. Dukes sent PSI's settlement
calculations to Mr. Thomas and Mr. Temchin (R4, tab 862). On the top of the email is a
handwritten note by Mr. Rola, "2/23/07 Provided by Myron Terrichin" (id. at 1;
tr. 13/197). In September 2014, Mr. Rola wrote a summary of his 2006 evaluation of
PSI's organic soils calculations wherein he disagreed with PSI's recommendation to
remove organic soil (tr. 13/190, 193_-94; R4, tab 1452). Another technical analysis
dated 9 September 2014 from Versar, hired for purposes of the claim defense, agreed·
with Mr. Rola's _opinion that the organic layer did not have to be removed (tr. 13/215;
R4, tab 962).
115. Mr. Temchin testified that PE had the risk associated with settlement and as
design-build contractor should have the right to decide how to construct the building
(tf.7/39, 44). Since PE was the engineer of record, it decided to remove the organic
layer without AF approval {tr. 3/127-28).
116. By letter dated 18 December 2006 to PE, CO Brown requested more
information supporting PE's position that the organic layer should be removed (R4,
tab 254). By email dated 31 January 2007 to PE, Mr. Rola continued to take the
position that the organic layer did not need removal and that PE would remove it at its
own risk (tr. 3/50, 7/36; R4, tab 4018 at 1).
117. Concerning the nonconforming backfill, by_ letter dated 18 December 2006
CO Brown notified PE that its backfiUwas not placed in 6-inch layers and directed PE to
provide adcHtional testing to show that proper compaction was achieved (R4, tab 878).
Mr. Temchin testified that the AF "wanted" PE to remove the backfill and install it in
6-inch lifts (tr. 5/231). The AF does not agree that it ordered the removal of the
noncompliant backfill, but instead asked PE to conduct additional testing to prove the
compaction was correct (gov't br. at 159-60).
118. As of21 December 2006 the AF had not authorized the removal and
remediation of the "transite" asbestos pipe:
Final Update and Result 12/21: 1) Asbestos Removal-
Parsons preparing T&M ROM/or review and acceptance
by the Government-NOTE: Area A of the VQ site remains
at a standstill.
54
(R4, tab 3058 at 3) PE submitted its rough order of magnitude (ROM) estimate on
28 December 2006 however Mr. Rola continued to argue that the asbestos pipe was not
a differing site condition (R4, tab 4391 at 1-2). CO Brown continued to disagree:
We had discussed it with our legal gurus and cannot concur.
If we. the government, had not emphatically and repeatedly
told the contractor that it was a clean site, your argument
would have merit. However, because we, the government.
did, we have a differing site condition.
(Id. at 1)
119. After verifying that the pipe· contained asbestos, the AF issued an NTP on
28 December 2006 for the remediation of the asbestos pipe with a not-to-exceed amount
of $27,000 (tr. 3/135; R4, tab 85 at 1). The pipe is shown in pictures in the record
(tr. 3/30-31; R4, tabs 83, 4675 at 26). PE hired Horizon Environmental Group to
perform the asbestos abatement which was completed between 25 January 2007 and
1 February 2007 (R4, tab 1533 at 19, tab 3067 at 2, item 22.2). The delay associated
with the asbestos is 90 days, 3 November 2006 to 1 February 2007, which was
concurrent with the delay for the organic layer. After remediation of the asbestos
insulated pipe, PE was able to restart removal of the organic layer material and then.
move forward with the footings (R4, tab 3067 at 3). Mr·. Evans' as-built schedule
indicates that "Removal & Replace Remaining Organic Layer" ended on 28 February
2007 (R4, tab 3004 at 29).
120. Concerning the fill placed in nonconforming lifts, ·PE removed and replaced it in
conforming lifts and compaction. According to daily reports the work starting on 2 January
2007 was sporadic due to winter weather. The work occurred between 2 to 4 January 2007,
17 to 19 January 2007 and 26 to 28 February 2007 for nine days of work. (Ex. A-4 at 1-6,
26""29, 86-90)
121. Mr. Temchin testified that the three differing site conditions identified as
· "unsuitable fill," "organic layer," and "asbestos pipe" prevented PE from starting work on VQ
Wing A foundation (tr. 2/178-80). Notes from a 22 February 2007 Contracting-Contractor
Coordination meeting, that Mr. Temchin attended, contain a chronology of the asbestos pipe
and organic layer work at note 22.2 (tr. 7/165-68; R4, tab 3067 at 2). Based on our review of
the record we find Mr. Evans' as-built timeline for the organic layer and asbestos pipe delays
to be credible (R4, tab 3004 at 29). The total delay was from 21 August 2006 to'28 February
2007 or 191 days (id.). From this we subtract the 9 days taken by PE to remove and replace
the fill that was improperly installed in lifts exceeding 6 inches, resulting in a delay of 182.
days. We do not accept Mr. Evans' conclusion that the "unsuitable fill" delay occurred before
the organic layer delay because they were both discovered on or about 21 August 2006 (R4,
tabs 69, 3988). The unsuitable fill delay ran concurrently with the organic layer/asbestos pipe
55
delay. Therefore, the total delay caused by the unsuitable fill, organic layer and asbestos pipe
was 182 days. 50
AF Considers Termination/PE Accelerates Performance
122. The record includes minutes of a 7 March 2007 meeting to discuss
termination (tr. 12/50-51 ). The PowerPoint presentation used during the meeting was
prepared by PE (tr. 12/53). Slide #4 "Impacts to Our Project" listed:
• Subsurface Conditions
• Unsuitable Fill - Completed
• Organic Layer - Completed
• Asbestos Pipe - Completed
• Hollow Core Plank Issue - Active Correction
• Unusually Severe Weather- Over (hopefully)
• Water Pipeline Relocation - Completed
Acceleration to Recover
(R4, tab 937 at 4) The hollow core plank issue was that PE ordered planks that were too
short (tr. 12/54). Slide #5 "Reasons for Acceleration" listed:
• Impacts
Unsuitable Fill, Organic Layer, and Asbestos Impacts
Schedule to 21 March 2008 Project Completion
Hollow Core Plank (Parsons Delay) Reduces Impacts
. to 22 Febru~ry 2008 Completion
Parso1,1s Is Accelerating Our Operations
• Additional Resources
• 6 Day Week Accelerated Work
• Acceleration of Schedule Lcigic
· (R4, tab 937 at 5) CO Brown recalled that PE was going to accelerate work to meet the
27 December 2007 completion· date, to be established in Modification No. 03, and the
AF decided not to terminate (tr: 12/51:-52, 56).
50
The AF's scheduling expert, Mr. Ockman, believes that tli.e construction debris,
organic layer and asbestos pipe were differing site conditions, but that PE is not
entitled to any time extension (tr. 18/61 ). We reject this position.
56
Modification No. 03 (Mod. 3)
123. Leading up to Mod. 3, by letter dated 13 December 2006 to CO Brown, PE
agreed to "pay 171 days of value equivalent to the liquidated damages rate ($134 7/day
times 171 = $230,337) as consideration for the revised contractual completion date of
27 Dec 07'' (R4, tab 4007 at 2). PE made. it clear that it intended to "seek recovery of
this payment" because it believed REAs it intended to submit would "account for and
absorb most, if not all, of these 171 days" (id.). ·By letter dated 8 March 2007 to
CO Brown, PE listed seven claims (REAs) that were to be excluded from a release PE
. agreed to sign in upcoming Mod. 3:
1. [T]he proposal for unsuitable fills submitted 7 Mar 2007,
2. the proposal for the organic layer submitted 7 Mar 2007,
3. the proposal for the remydiation of the asbestos pipe
submitted 7 Mar 2007, '
4. any condition rell:l.ted to unusually severe weather during
the time period 1 Noy 2006 to 1 Mar 2007,
5. any conditions related to delays in issuance of the notice
to proceeds during the design stage of the project,·.
6. any conditions relating to the delays resulting from the
Air Force failure to promptly process submittal requests
within agreed to time frames,
7. any conditions relating to delays as a result of the
submittal approval process for the roofing requirements
of this project.
(R4, tab 3004 at 134)
124. Bilateral Mod. 3, dated 20 March 2007, was signed by Mr. Radin (R4, tab 7C
at 1). Mod. 3 extended the period of performance of DO 13 by 171 days from 9 July·2007
to 27 December 2007 and decreased the total contract amount by $230,337 (R4, tab 7C
at 2). This accounted for the 171-day delay in starting horizontal work (foundations 83
days) and unsuitable fill (88 days) that occurred from 18 April 2006 to 9 October 2006 ,
(tr. 7/214, 233-34; R4, tab 3004 at 134-38). Mr. Radin testified that a time extension was
needed for the unsuitable fill, organic layer and asbestos pipe differing site conditions that ·
, was causing PE delay (tr. 1/130, 132-33). Mod. 3 included a qualified release:
6. In consideration of the modification agreed to herein
as complete equitable adjustments for the extended
period of performance, the contractor hereby releases the
government from any and all liability under this
cont[r]act for further equitable adjustments attributable to
such factors or circumstances giving rise to this contract
57
modification (except for the items listed on Parsons letter
dated 8 Mar 07, Subject: Release of Claims Wording,
Modification 03, McGuire TLFNQ, FA8903-04-D-
8703-0013 (version 3)).
(R4, tab 7C at 4) PE putthe limiting language in the release to preserve its rights to
submit a claim for the $230,337 in order to recover it in the future (tr. 1/105, 132, 134,
7/214, 233-34; R4, tab 4007 at 2). PE agreed to Mod. 3 to resolve the August cure
notice (tr. 1/133-35). The 9 August 2006 cure notice was closed on 20 March 2007, the
_date of Mod. 3 (R4, tab 4028 at 7; tr. 1/136).
24 May 2007 Partnering Meeting/VQ Truss Delay
125. On 24 May 2007 the parties held a partnering meeting to discuss the status
of the project. The record includes minutes from the meeting (tr. 12/61; R4, tab 983),
and slides that were used during the meeting (tr. 12/60; R4, tab 9,84). The minutes
stated that, "based on a worst case scenario" there appeared to be a five-week delay in
the completion date of the VQ and the "[m]ain reason for the slip in completion date on-
the VQ is truss delivery" (R4, tab 983 at 2). However, the slides indicate a twelve
workday delay in the completion of the VQ (R4, tab 984 at 21). The truss problem was
caused by a redesign from the 35% to the 100% design that caused a conflict be.tween
the truss shop drawings and the elevator shop drawings and the trusses could not be
ordered until the design issues \Vere corrected and shop drawings accepted (id. at 3).
CO Brown recalled that during the meeting PE acknowledged that the truss problem
was PE's-responsibility (tr. 12/63).
Second Cure Notice
. .
126. On 31 May 2007 the government issued Cure Notice Number Two for the
following deficiencies:
(a) Failure to provide a proposal as outlined in the Request
. for Proposal (RFP), dated l Nov 06 for Shopping List
Items
(b) Delays in the schedule
(C) Failure to ensure timely delivery of the steel trusses for
the VQ in a timely matter
(R4, tab 4039 at 2; tr. 1/138) The government issued the cure notice to PE "because we
couldn't get any reaction out of Parsons" on pricing the shopping list items (tr. 13/51-54).
Assembling the quotes for the shopping list was a lot of work and Mr. Radin felt that the
use of a c·ure notice for the shopp~ng list was a "very big misuse of the cure notice" ·
(tr. 1/139-41 ). PE responded on 29 June 2007 stating that it had submitted updated pricing
58
for the "shopping list" on 19 June 2007 51 , accelerated the schedule by adding five
management staff and that the trusses had arrived on site (R4, tab 1499 at 631 ).
High Temperature Hot Water (HTHW) Differing Site Conditions
127. The VQ 35% design drawing include drawing C-101 Existing Condition Plan
and C-103 Utilities Demolition Plan, however, these drawings do not extend to East
Arnold Avenue, a road west of the VQ site (R4, tab 1746, drawings C-101, -103). The
24 July 2006 100% VQ "for construction" drawing package, drawing C-10:4, General
Site Layout Plan, depicts the TLF and VQ adjacent to but on opposite sides of
Mitchell Road. On the drawing, the TLF is "above" (north) and the VQ is "below"
(south) Mitchell Road. (R4, tab 1755, drawing C-104) East Arnold Avenue is below the
VQ on C-107. Drawing C-107, Site Utility Plan, shows the "proposed" new HTHW52
line running from manhole #35 just below East Arnold Avenue up through manhole #35A
to a new manhole where the HTHW line divides going right to the VQ and further north
and under Mitchell Road to the TLF. (Id., drawing C-107}-
128. The 100% VQ drawings include four drawings that provide information on
utilities: drawings C-101, Overall Existing Conditions Plan; C-102," Overall Existing
Conditions Plan; C-103, Demolition Plan; and C-107, Site Utility Plan 53 (R4, tab 1755,
drawings C-101, -102, -103). These drawings all have the following note:
UNDERGROUND UTILITIES SHOWN HEREON WERE
FIELD LOCATED BY MASTER LOCATORS, INC.
BETWEEN 08/23/05 & 08/3 l/05.E54J THE CONTRACTOR
SHALL'PHYSICALL Y VERIFY ALL LOCATIONS AND
ELEVATIONS OF EXISTING UTILITIES PRIOR TO
STARTING CONSTRUCTION.
(Id.) Mr. Temchin testified that in his experience this note required PE to verify the
utilities shown on the drawing, but does not obligate PE to locate every other utility on
the site that is not indicated on the drawing (tr. 3/63).
51
Parson's proposal for the shopping list is actually dated 20 June 2007 (R4, tab 1013
at 1; tr. 1/208). The most costly item is the additional site lighting at $593,698
(R4, tab 1013 at 5). .
52
The HTHW system was a loop that provided·hot water to heat buildings on MAFB
(tr. 3/144).
53
There is no drawin·g C-107 in the 35% drawing package.
54
While the parties referenced this note (gov't br. at 176; app. reply br. at 136), neither
party included evidence explaining who hired Master Locators or the work
performed between 23 August and 31 August 2005 which was after award of DO
13 on 13 July 2005.
59
129. The 100% VQ drawing C-107 included the following note:
UTILITY LOCATIONS AND INVERTS ARE BASED
UPON FIELD SURVEY AND BEST AVAILABLE
DATA. THE CONTRACTOR IS TO VERIFY ALL
UTILITY LOCATIONS AND INVERTS PRIOR TO
CONSTRUCTION. IF ANY DISCREPANCIES ARE
FOUND THE CONTRACTOR IS TO CONTACT THE
DESIGN ENGINEER IMMEDIATELY.
(R4, tab 1755, drawing C-107)
130. Before PE could start digging it had to get a dig permit from the base
(tr. 3/159). The dig permit provides that all utilities be marked by the base. Various
"shops" from the base came out and marked utilities using different color paint indicating ·
the type of utility but they were unable to detect everything. (Tr. 3/64, 159-60, 6/81-82,
18/296-97)
131. PE' s subcontractor began installing the HTHW line to the VQ on 24 July
2007 (R4, tab 1574 at 93). Mr. Burdick, PE "tiger team" member, was assigned to
manage installation of the new HTHW system (tr. 3/138, 141-43). PE took pictures of
obstructions encountered during installation of the new HTHW line that it considered
differing site conditions. The pictures are identified numerically and some are date~:
• DC #1: Picture dated 11/24/2007. "Existing HTHW Expansion Loop" encased
in concrete not shown on drawingsl55 l or marked out. (R4, tab 153 8 at 74, tab 21
at 38; tr. 3/146-47, 158-59, 184-85)
• DC #2: No date. "Two Chilled Water Lines 30' Away From Design Drawing
Location." (R4, tab 1538 at 75, tab 21 at 38; tr. 3/161-62)
• Dc'#3: Picture dated 11/24/2007. "20" Storm Drain Not Shown On Design
Drawing." (R4, tab 1538 at 76, tab 21 at 38; tr. 3/165-67) ·
• DC #4: Picture dated 11/24/2007. "Ruptured Terra-Cotta Sewer Line Running
North To South" not shown on drawing or marked out. (R4, tab 1538 at 77,
tab 21 at 38-39; tr. 3/167-69, 187)
• DC #5: Picture not dated. "Two Metal 1 Inch Diameter Conduits Thought To
Be Parking Lot Power Feeds Not Shown On Design Drawings.'' (R4, tab 1538 at
78, tab 21 at39; tr. 3/169-72)
• DC #6: Picture not dated. "20" Inch Storm Drain On The South Side Of The
Excavation Beyond The Sanitary Sewer Line." (R4, tab 1538 at 79, tab 21 at 39;
tr. 3/174-75)
• DC #7: Condition removed (R4, tab 21 at 39). ·
55
At a later date the base produced a drawing that showed this feature (tr. 3/186).
60
• DC #8: Picture dated 12/01/2007. "24 Inch Storm Drain Beyond The Road
Crossing." (R4, tab 1538 at 80, tab 21 at 39; tr. 3/175)
• DC #9: Picture dated 12/01/2007. "Rerouting Of The HTHW To Meet The New
Manhole 358 Location" because manhole #35 was not big enough to connect
new HTHW line.· (R4, tab 1538 at 81, tab 21 at39, tab 3015 at 190-91;
tr. 3/147-49, 176-77, 6/80-82)
• DC #10: Picture dated 11/30/2007. "Temporary Removal And Replacement Of
Sign At Community Center" caused by DC #1. (R4, tab 1538 at 82, tab 21 at 40;
tt. 3/179-80)
• DC #11: Picture dated 12/03/2007. "HTHW Loop Just Beyond Arnold Road
Crossing."[561 (R4, tab 1538 at 83, tab 21 at 40;tr. 3/181) '
According to PE, these differing site conditions caused additional time and costs for
hand digging, ~dditional HTHW pipe, additional welding, additional backpoe time, and
rerouting HTHW lines (tr. 3/182-83 ). PE planned to connect to the existing HTHW
system in manhole #35, however, with the existing piping in the manhole it was not big
enough and PE had to reroute the HTHW line, DC #9 above, and install a new manhole
#358 (tr. 3/147-50, 6/80-82; R4, tab 3015 at 190-91). The new manhole #358 was
adjacent to #35 (tr. 3/150). On cross-examination, however, Mr. Burdick agreed that if
one looked in manhole #35 it was immediately apparent there was not enough room to
make the new HTHW connection (tr. 3/203; R4, tab 3015 at 190-91).
132. PE marked the locations of these numbered pictures on a copy of 100% VQ
drawing C-107 (tr. 3/181-82; R4, tab 1538 at 73 57 ) and they were annotated during the
trial in red ink on drawing C-107 (R4, tab 1755 at C-107). We compared the locations
of the pictures with the utilities shown on C-107. There are no utilities shown on C-107
crossing the HTHW line for pictures #1, #4, #5 and #6. Pictures #2, #3,:and #.10 are in
the vicinity where the HTHW line crosses telephone and storm sewer lines. Pictures #2
and # 10 do not involve telephone lines or the storm sewer. Picture #8 is in the vicinity
of where the HTHW line crosses a water line but picture #8 shows a storm sewer.
Picture #9 shows the existing HTHW line at manhole #3 5 where the new HTHW line
had to be rerouted to the new manhole. Picture # 11 shows a concrete encased
abandoned HTHW line not shown on C-107.
· 133. We discuss picture #3 separately. In its brief, PE identifies the utilities
shown in picture #3 as two chilled water lines, a 20"storm drain, and phone and
communication conduit lines (app. br. at 207-08). PE argues that all it had was the
· Baker 35% drawings and the base colored .utility markings to go by and they do not
show the utilities shown in picture #3 (id. at 208-09). PE is correct that the 35% YQ
drawings do not show what is seen in picture #3 because those drawings do not extend
56
After the expansion loop was discovered the base located a drawing indicating it was
an active HTHW line (tr. 3/189).
57
This is incorrectly identified in the transcript at page 76 (tr. 3/181-82).
61
. down to East Arnold Avenue (R4, t~b 1746, drawings C-101 to -103). But we rely on
the 100% for construction drawings, not the 35% drawings. Looking closely at VQ
100% drawing C-107 in the vicinity of picture #3 we see lines marked "ST" and "T"
crossing the path of the new·HTHW line (R4, tab 1755 at sheet 9). Drawing C-107's
legend identified "ST" 58 as storm sewer and "T" as telephone line (id.). We see in
. picture #3 the telephone lines and the storm sewer, just where they are supposed to be. ·
PE' s argument is inconsistent with what we see on C-107. PE drafted C-107 and must
have gotten the locations of the utilities around- East Arnold Avenue from somewhere,
but PE does not explain where. Also, neither party explains the drawing note that state,
"UNDERGROUND UTILITIES SHOWN HEREON WERE FIELD LOCATED BY
MASTER LOCATORS, INC. BETWEEN 08/23/05 & 08/31/05." (R4, tab 1755,
drawings C-101 to -103) In any event, we are left with many questions, but find that the
20" storm drain that PE contends is a differing site condition, DC #3, was shown on
C-107 in the path of the new HTHW.
134. According to Mr. Morrison, the utilities that PE contends are differing site
conditions shown in the numbered pictures and annotated on drawing C-107 were
· identified on the AF "G-Tab" drawings (tr. 11/176-77; R4, tab 1406 59 at 36).
Mr. Morrison testified that he received the G-Tabs from Mr. Ward and gave them to the
bidders (tr. 11/178, 196-97). Mr. Lengyel testified that PE received G-Tab drawings which
are AutoCAD files that showed utilities on MAFB (tr. 4/224). The record included an
example of a G-Tab 60 that shows the locations of existing utilities, abandoned utilities and
the new HTHW line (tr. 4/229; R4, tab 4678). 61 Mr. Lengyel testified that this G-Tab
showed the utilities that existed before the demolition of the pools and someone from PE
overlaid the footprint of the VQ and the new HTHW line on it (tr. 4/229). The G-Tab
identifies utilities by colors: purple is "G-Tab water," tan is "G-Tab sewer," light blue is
"G-Tab storm drain," yellow is "G-Tab Electrical," green is "G-Tab [existing] HTHW,"
58
There is a conflict on C-107 in that the symbol "ST" is the same for "existing storm
sewer" and "proposed storm sewer." Because the line we see crossing the new
HTHW connects "existing storm grates" and "existing headwall," we conclude
that the storm sewer line at this location was an existing and not a proposed
sewer line. We also believe that the new utilities were meant to be. shown in bold
as many are and it may be a problem with reproduction of the drawing. The·
parties did not present any evidence to assist us in resolving this conflict.
59
Rule 4, tab 1406 at 36 is the same document with the marked drawing C-107 that is
at Rule 4, tab 1538 at 73.
60
This G-Tab was produced for the first time at the hearing. The government was given
the opportunity to verify the accuracy of PE' s composite utility map after the
hearing but did not report back to the Board that it was inaccurate. (Tr. 18/291-93)
61
Another G-Tab is at appellant's exhibit 17 (tr. 19/272), however, although we can
make out the general location, exhibit 17 is illegible, and no detailed testimony
was presented on this G-Tab. ·
62
and violet is "new HTHW" (R4, tab 4678). PE created hearing exhibit 15 where it
. annotated the G-Tab with the locations of the numbered pictures as it had on drawing
C-107 and included the pictures associated with each G-Tab location (ex. A-15; app. br. at
219). 62 In evaluating this evidence, we compared.the path of the new HTHW line on the
G-Tab with that on C-107 and they are obviously different. 63 9n the G-Tab tl.ie new
HTHW line is generally shown on the right side of the existing HTHW line but on C-107 it
is shown parallel to but on the left side of the existing HTHW line. The G-Tab path of the
new HTHW line (violet) shows an expansion joint directly over manhole #35A on the
existing HTHW line (green), an expansion joint on the existing line that is not shown on
C-107, and the line going directly through manhole #35. Also, we took into account that
PE initially marked the locations of the numbered pictures on the new HTHW line shown
on C-107. (R4, tab 2538 at 73) Therefore, absent evidence to the contrary, we rely on the
location of the new HTHW line as shown on C-107 and not the location on the G-Tab. We
approximated the path of the HTHW line shown on C-107 on the G-Tab, and looked to see
if the obstructions PE encountered were shown on the G-Tab. While we are able to see.
utilities shown ori both the G-Tab and C-107, as best as we can decipher and contrary to
Mr. Morrison's testimony 64, the obstructions shown in PE's pictures are not shown on the
G-Tab except for the storm sewer seen in picture #3 we discussed above (R4, Jab 4678;
ex. A-15 at 6).
135. The differing site conditions are identified above as numbers 1, 2, 4, 5, 6, 8,
10, and 11. PE does not contend that there is critical path delay. We deal with this
further in the quantum section of this decision.
Temporary Heat
136. Mr. Burdick'was asked by Mr. Temchin to be part of a tiger team to assess
progress on the contract (tr. 3/138). He started in June 2007 (tr. 3/139). Mr. Burdick
testified that PE planned to install the HTHW system in the summer of 2007 but it was
pushed into the fall and winter due to delays in approval of documents so they had to
provide heat to the buildings (tr. 3/196-97).
62
We are a bit confused because the colors are not the same on exhibit 15 and the G-Tab
we believe it is based on, i.e., storm drain is light blue on the Q:. Tab and dark blue
on exhibit 15. Additionally there is .a gas line on exhibit 15 we do not see on the
, G-Tab. (Ex. A-1.5; R4, tab4678)
63
There was no testimony or argument in the parties' briefs recognizing this obvious
discrepancy. If, in fact, PE's installation of the new HTHW deviated from the
path required on C-107, it should have been explained in the record.
64
If in fact this or some other G-Tab. contradicts PE' s differing site conditions, we
would have expected the AF to present specific evidence on each differing site
condition actually identified on the G-Tab.
63
13 7. Ms. Mendez is a CO who started work with AFCEE on 1 October 2009
(tr. 15/246-47). She testified that the 100% design specification for the VQ, paragraph
1.15, provided that the government would provide "domestic water and electricity."
Heat was not provided because if it was on during construction the ducting and
equipment would take in construction dust and debris; (Tr. 15/248-49; R4, tab 16 at 19)
138. Mr. Temchin testified that PE planned to use the HTHW to heat the
buildings. The restriction CO Mendez testified about is not in the contract. PE could
work around the restriction to heat the buildings. (Tr. 18/298-99) PE planned to hook
up the HTHW in the warm months and do a "cold tap" but due to delays putting the
hook-up in the winter months, PE had to do a "hot tap" that was completed in February
2008 (tr. 3/193-94; R4, tab 3014 at 4-11). The record includes pictures of work being
performed in snow (R4, tab 3014 at 12-16) .. PE purchased and rented heaters and
generators to heat the TLF arid VQ during construction (tr. 3/195-96).
Stormwater Detention Pond and Underground Storage
139. The Baker 35% design, drawing C-106, included a stormwater "detention
· basin" at the VQ (tr. 2/197-200; R4, tab 1746 at sheet 8). The NAF made the decision to
use an open pond to control stormwater runoff (tr. 2/204). PE hired Everland Shourds
& Associates (ES.A), a geotechnical consultant, to help complete the design for the
100% drawings (tr. 2/202).
140., The VQ 100% design drawing package "for construction" is dated 24 July
2006 (R4, tab 1755). The 100%design included drawing C-106, "GRADING &
DRAINAGE PLAN," that showed the pond. Drawing C-106 included a Soil Boring _
Log that indicated groundwater at 114". 65 The depth of the boring was 114" and it was
adjacent to the pond at elevation 110.40. (R4, tab 1755 at sheet 8) The Soil Boring Log
on Drawing C-106 indicates that groundwater was approximately 5 feet below the
bottom of the pond (tr. 18/304-05; ex. A-16 at 2). Mr. Temchin testified this depth was
consistent with the 5 to 7 feet groundwater depth found in the 2003 66 PSI geotechnical
· report (tr. 18/305-06). MAFB, including Mr. Rola, base civil engineer, approved the
100% drawings with the surface retention pond design (tr. 2/212). PE built the pond as
it was designed and approved (tr. 2/203, 205,212; R4, tab 1755 at sheet 8).
I
141. In the fall of 2006 there was a "hundred year storm" that filled the pond with
water (tr. 2/205-06). By email dated 8 September 2006 to Mr. Ward, PE; Mr. Rola stated
that he had observed an "apparent deficiency in the construction of the stormwater
detention basin" in that the basin had not drained after 36 hours (R4, tab 4537). The .
65 There is a note that indicates groundwater at 112", but the actual boring log indicates
114" and that is what we rely on (R4, tab 1755 at sheet 8).
66
In transcript, volume 18, page 305, the question incorrectly refers to the report as being
from 2005, but the answer correctly identifies it as from 2003 (tr. 18/306).
64
stormwater detention pond was required by the New Jersey Pinelands Commission, a state.
organization (R4, tab 2A at 9) and was supposed to drain into the aquifer within 72 hours
(tr. 13/223). PE, in its brief, accepts this 72-hour requirement (app. br. at 257). The pond
did not drain the way it was designed to drain (tr. 13/224 ). When the detention pond did
not drain PE had ESA investigate. By letter dated 10 July 2007, ESA reported its res!]lts.
ESA found groundwater 10 inches below the bottom of the pond, a little over 4 feet higher
than found in the PSA report and ESA's boring on drawing C-106. (Tr. 18/306-08;
ex. A-16 at 15-17) Mr. Temchin testified the pond did not drain because the water table
was higher than indicated on the original boring; which PE says is a differing site condition
(tr. 18/307-10). ESA suggested a solution at additional expense buttook the position that
it was not its responsi.bility 67 because of the unforeseen field conditions (tr. 2/208-09,
7/170-74; R4, tab 4049 at 3-4).
142. Mr. Temchin recalls a face-to-face meeting with an AF environmental attorney
from MAFB where he was informed that an open pond for stormwater runoff with
freestanding water was a violation of base regulations due to bird hazards near runways
(tr. 2/204-05, 2/211). In a 19 July 2007 joint coordination meeting Mr: Rola stated that
MAFB has a "no ponds - no birds -: no standing water" requirement and that the basin had
to "drain constantly" (R4, tab 3103 at 3). In a 25 July 2007 email to Mr. Richardson, PE,
Ms. Ampula, PE, documented a meeting with "Alice" the base environmental attorney
where "Alice" said the Base no longer allowed retention ponds (R4;tab 4649 at 1). Since
MAFB did not allow surface retention ponds, PE/ESA had to design and install an
undergroundwater storage and draining "tank farm" consisting of large corrugated pipes
(tr. 2/207-08). On 28 September 2007 ESA submitted an addendum to the Stormwater
Management Report that documented modifications to the retention basin to construct an
underground retention system (R4, tab 4654 at 2, 4). Mr. Temchin testified that the change
was caused by the differing site condition (high water table) and new set of regulations
(tr. 7/174-77). PE "went out and installed the underground pipe storage tank gravel liner
pond, without any formal approval or funding given to us or without any recognition of a
differing site condition" (tr. 2/222-23; R4, tab 3982 at 2). PE contracted with Robert E.
Haas, Inc., excavation subcontractor, to instaHthe underground retention system for a price
of $248,390.00 (R4, tab 4282 at 1, 11-13, 19).
· Architect's Supplemental Instruction No. 13
143. After award of DO 13 in July 2005, the AF continued to create confusion
concerning the use of Sherman Williams paint on walls of the VQ (R4, tab 293 at 1-2,
16). The 100% Room Finish drawing 1-301 for the TLF, dated 24 July 2006, was the
same as the 35% drawing requiring "paint" identified as "TRIARCH INDUSTRIES
ANTIQUA DS II" for the guest rooms (R4, tab 1754, drawing 1-301). The 100% Room
67
Mr. Shockley, PE's general superintendent, testified that ESA accepted responsibility
for $15,917.50 in work related to resolution of the drainage problem with the
stormwater retention pond (tr. 6/45,125; R4, tab 3011 at 4).
65
Finish drawing ID-401 for the VQ, dated 24 July 2006, was the same as the 3 5%
drawings requiring "paint" identified as "Sherwin Williams" for the guest rooms (R4,
tab 1755, drawing ID-401). The AF failed to correctthe error in the VQ 35% drawings
when it approved the 100% drawings. ·
144. In RFI No. 43, 7 November 2006, concerning the VQ, PE asked, "[i]t was
mentioned by Ann Mongiovi, that the designers at AMC do not like the Triarch paint
that is specified and that it is difficult to patch if damaged. Is there an alternative that
the client would like to use instead." (R4, tab 96 at 1) The response listed Sherwin
Williams paint:
ITEM REFERENCE COMMENTS
1 Drawing ID-401 Finish and Material Schedules.
Please correct the schedules
according to the following:
2. Change the wall finish in all
other guest rooms to PNT-3 ·
throughout (including the
entries and bathrooms)
7. Change PNT-1 to Sherwin
Williams SW 6098 Pacer White.
8. · Change PNT-2 to Sherwin
Williams SW 6099 Sand Dollar.
7. Change PNT-3 to Sherwin
Williams SW 6126 Navajo White.
8. Change PNT-5 to Sherwin
Williams SW 7027 Well-Bred Brown
9. Delete PNT6
(Id. at 3) The only change was to the color of the Sherwin Williams paint. Mr. Temchin
testified that this response directed the us~ of Sherwin Williams paint even though this
direction conflicted with Mr. Williams, of AFCEE, who wanted °Triarch to be used in the
VQ (tr. 5/255-58).
145. Mr. Temchin testified that there was confusion over how the AF wanted the
VQ and TLF painted (tr. 3/69). To resolve this confusion, PE wrote Architect's
66
· Supplemental -Instruction 68 (ASI) No. 13 to clarify what wall covering to apply in the
VQ and TLF (tr. 3/69, 5/260-62). ASI No. 13, dated 27 August 2007, signed by
Mr. Bennett, KCB Architect, included the following:
DESCRIPTION:
Attached are revised specifications for PAINTING 09911
(for both the VQ and TLF) and new specifications for
TEXTURED ACRYLICCOATING 09960 (for the TLF).
Also, the following is a clarification of the Duroplex -
Triarch Industries product indicated on .the Material
Schedule of the Interior Design Package for the TLF (Sheet
I301): ·
PNT-1 "Pasta"' indicates Duroplex-triarch 525 for ceiling
locations. This is to be changed to have all ceilings to be
painted with standard satin paint matching "Pasta" 525 in
color.
PNT-2 "Limestone - eggshell" indicates Duroplex-Triarch
555 for wall locations in living room, bedroom and closets.
This is correct. The eggshell finish is the natural finish for
the Duroplex product.
PNT-3 "Limestone - semi-gloss" indicated
Duroplex-Triarch 555 for wall locations in kitchen, dining,
bath and trim locations. This is correct. The semi-gloss
finish is a clear sealant application by Duroplex for
wet-washable wall areas.
EXPLANATION:
The specification section PAINT 09911, as indicated in the
RFP and subsequently in the 100% documents for both the
VQ and TLF, was specifically for the Duroplex-Triarch
material. not paint in general. There was no paint
specification for general pain,ting applications. Thus. the
paint specification 09911 has been revised and is reissued
per this ASI f~r general painting applications (both TLF and
68
An ASI ,is an Architect's Supplemental Instruction that is similar to an RFI except for
archhectural questions (tr. 2/107).
67
VQ), while the Duroplex-Triarch material has. been clarified
properly as 09960 TEXTURED ACRYLIC
COATING (for just the TLF. NOTE: there is no Duroplex
system specified for the VQ).
The owner clarified that the ceilings in the TLF will be
painted only (no textured coating) with the color to match
the PNT-1 "Pasta 525" color. This ASI formalizes this
clarification.
(R4, tab 4088 at 7-8) ASI No. 13 was approved by CO Brown on 19 September 2007
(tr. 5/263, 6/158; R4, tab 4088 at 6). PE understood that it was to apply Duroplex-Triarch
to the walls of the TLF and Sherwin Williams paint to the walls of the VQ (tr. 3/78).
Mr. Cardinale was PE's project manager on the TLFNQ project from the end of 2007
through November 2008 (tr. 5199). Mr. Cardinale testified that ASI No. 13 indicated that
no Triarch would be used in the VQ (tr. 5/208). After approval of ASI No. 13, PE directed
its painting subcontractor; Pro-Spec, to start applying Sherwin Williams paint to the walls
of the VQ (tr. 3/70). 69
146 .. By letter dated 25 January 2008 to PE, CO Elizalde stated that Specification
Section 09911 required that Triarch be applied to the walls of the VQ. The letter
acknowledged that Triarch was not specified in 100% VQ drawing ID-401 but stated that
according to the contract, specifications take precedence over drawings. (R4, tab 316 at 2)
PE responded by letter on 1 February 2008 stating that it issued ASI No. 13 to resolve
concerns over ''discrepancies between and the Government revised painting schedule
shown on Drawing ID401 and the requirements of Technical Specification Section 09911"
(R4, tab 4629 at 3). PE went on to write:.
· ASI-13 offers clarification and revises the requirements of
Technical Specification Section 09911, Painting dated
24 July 2006 by eliminating Duroplex coatings by Triarch
Industries from the VQ and revises Technical Specification
Section 9960, Textured Acrylic Coating by defining
requirements for Duroplex Triarch for use only in the TLF.
The Government reviewed ASl-13 and the Contracting
Officer approved it on 19 September 2007 ([attach.] 2, page
1) .. Since that approval, Parsons µas completed our
subcontracting process, mobilized resources to the site and
is currently painting in the TLF and VQ.
69
We cannot reconcile this testimony with Mr. Evans' Delay Review Period 9 as-built
schedule that shows that painting ·in the VQ started on 26 January 2008 (R4,
tab 3004 at 47).
68
(Id.) Mr. Cruz took CO Brown's place as CO at the end of2007 and served as CO through
a portion of 2008 (tr. 2/252). On 1 February 2008 CO Cruz called Mr, Dukes disagreeing ·
with the letter and stating he expected Triarch to be used in the VQ (R4, tab 4629 at l ).
ASI No. 13 authorized Sherwin Williams paint, not Triarch, in the VQ. 70
147. By letter dated 4 February 2008, CO Brown confirmed her verbal direction
that PE was to "paint the VQ in accordance with Section 09911 - Painting" that specified
Duroplex by Triarch Industries (R4, tab 318). By letter dated 8 February 2008, PE
responded to the 4 February 2008 letter contending that the direction was a constructive
suspension (R4, tab 104). By letter dat~d 15 February 2008 to PE, CO Cruz rescinded
ASI No. 13 and directed PE to follow TLF specification Sections 09911 Painting and
09960 Textured Acrylic Coating for both the TLF and VQ and directed that a Triarch
Duroplex finish be applied to the interior walls of both the TLF and VQ (tr. 3/71; R4,
105 at 2) 71 • Mr. Williams was the person who insisted that ASI No. 13 be rescinded
because Triarch was an AF lodging standard and could not be taken out of the contract
(tr. 15/26-27). PE responded to CO Cruz's 15 February 2008 letter on 19 February 2008
stating that the direction in the letter created an "impossibility of performance" and
"constructive suspension" at the VQ and TLF until certain issues, itemized in the letter,
were clarified (R4, tab 107). Mr. Temchin testified that the direction to use Triarch cost
PE additional time and expense (tr. 3/84).
148. PE subcontracted with Pro-Spec to apply Triarch in the VQ. Mr. Cardinale,
PE, recalled that Pro-Spec's overall performance was "poor" (tr. 5/101). The Triarch VP,
Mr. Wingate, looked at Pro-Spec's application ofTriarch in the sample room and said it
was not acceptable (tr. 5/102-03). PE terminated Pro-Spec (tr. 5/104). PE hired two
contractors, KLM and Fromkin Brothers, to replace Pro-Spec (tr. 3/79-80, 5/104):
Fromkin installed Triarch in the TLF, and KLM installed Triarch in the VQ (tr. 5/105). A
total of 149 days elapsed between CO Brown's approval of ASI No. 13 on 19 September
2007 and CO Cruz's rescinding ASI No. 13 on 15 February 2008.
Modification No. 05 (Mod. 5)
149. Bilateral Mod. 5, 23 June 2008, incorporated the agreed upon "shopping
list" and increased the contract price by $499,441.00 (R4, tab 7E). The modification
included a release for "any and all liability under this modification for further equitable
70
In its reply brief PE contends that ASI No. 13 did not change Triarch to paint (app.
reply br. at 170-71 ), but that is based on its argument that VQ Section 09911
specifies paint not Triarch, an interpretation we do not agree with. It is also
inconsistent with PE's 1 February 2008 letter.
71
Mr. Evans' as-built schedule for Delay Review Period 9 shows the Triarch being
installed in the VQ between 3 March 2008 and 24 March 2008 (Areas B & C)
and 3 March 2008 to 22 April 2008 (Area A) (R4, tab 3004 at 47).
69
adjustments attributable to such facts or circumstances giving rise to the 'proposal(s) for
adjustment' (except for None)" (id. at 3). The release also included a statement that PE
"will not release the government in a 'blanket' fashion· for all events that have occurred
on the project to date" (id.).
Standing Seam Metal Roof (SSMR)
150. Both the TLF and VQ have SSMR's (R4, tab 2 at 506, 1089). These types
of roofs are subject to "oil canning" that is a "perceived waviness in the flat areas of
metal roofing" that is "an inherent part of light gauge cold formed metal products" (R4,
tab 116 at 14). After RFP 8234 Amendment No. 1, the r~quirement for the SSMR was,
"The panels shall be manufactured of adequate metal gauge and rigidity to eliminate or
seriously minimize any 'oil canning' effect" (R4, tab 2A at 20).
151. The submittal log for the SSMR indicates that PE's initial submittal was
made on 16 February 2006 (R4, tab 361 at 1): The submittal was disapproved and PE
w~s told to revise and resubmit (id.). The SSMR submittal was resubmitted on or about
15 August 2006 and on 4 October 2006 was again disapproved (R4, tab 116 at 34). The
reason was explained by Mr. Rola:
_ 1. The Fabralsystem notes indicate, "Oil-canning in panels
is common to the industry and shall not be cause for product
refusal." The Base standard and the Parsons specification
(spec 07411 1.6A (5)) say, "Panels shall be manufactured of
adequate gauge and rigidity to eliminate any 'oil-canning'
effect. The Government will not release any
Contractor/Manufacturer from liability for rejecting SSMR
panels on the basis of the 'oi.1-canning' effect on the final
·system." Therefore, Fabral does not meet the specification
for oil-canning.
(Id. at 16, 35)
152. By letter dated 23 October 2006 to PE, the SSMR installer, Warburton's,
Inc., responded to the AF's disapproval of the SSMR submittal and included a letter .
from Fabral, the manufacturer of the SSMR panels, discussing oil canning (R4, tab 116
at 18-20). Citing, and attaching-to the letter, the Metal Construction Association's
technical bulletin covering oil canning, Fabral explained, "we agree with the industry
position that no manufacturer can guaranty that oil canning will not occur" (id. at 20).
----....._
153. On 30 November 2006 PE resubmitted its SSMR submittal and on
11 January 2007 it was again disapproved by CO Brown (R4, tab 116 at 43). One of the
reasons for the disapproval was, "Manufacturer should insure that material will not oil
can" (id. at 44 ). The disapproval apparently relied on an em_ail exchange on 4 December
70
2006 where Mr. Lyman, MAFB design chief, and Mr. Rola agreed that the submission
should be disapproved because the manufacturer, Fabral, would not say there will be no
oil canning (R4, tab 4306 at 1-2). Mr. Lengyel testified that Mr. Rola refused to approve
metal roof submittals that did not include a guarantee against oil canning. However, he
al~o testified that it was not possible to eliminate oil canning and the disapproval caused
delay in installing the roof. (Tr. 4/261-62)
154. On 5 March 2007, Mr. Slade, AF contract inspector, emailed his roofing
submittal comments to Mr. Thomas. Comment No. 5 reads, "Identify how this system
shall be manufactured and installed to elimate [sic] 'oil canning."' (R4, tab 116 at 62)
155. On 27 March 2007 PE resubmitted its SSMR submittal (R4, tab 370 at 1).
In a 12 April 2007 internal email, Mr. Rola wrote:
Also, we all need to understand that the FABRAL system .
was initially rejected because FABRAL could not warrantee
"oil-canning" as required in the spec. Parsons continued to
make the same submittal (three times) and assured us that
they would do everything possible to minimize.oil canning.
So we caved in and said OK.
(R4, tab 367 at 2) During a 12 April 2007 meeting Mr. Thomas stated that the SSMR
was on the critical path (R4, tab 368 at 1, 3). On 18 April 2007, CO Brown formally
approved PE's submittal for the SSMR (R4, tab 370 at 1).
156. On 27 April 2007 a meeting was held to discuss the acceptability criteria for the
SSMR (R4, tab 371 at 1). Oil canning was discussed and Mr. Lyman asked if the thickness
of the roof material (24 gauge) might be a problem (id. at 2). Mr. Rola asked if a thicker
22 gauge would be better (id. at 2-3). PE agreed to "look at" 22 gauge and the Fabral
representative at the meeting agreed to provide a quote for 22 gauge material (id. at 3).
After learning of the increased cost for the thicker 22 gauge material, CO Brown formally
approved the 24 gauge material in her 7 May 2007 letter to PE (R4, tab 116 at 91 ).
Installation of the SSMR began on or about 17 May 2007 (R4, tab 3084 at 3, ,r 59.2).
157. Mr. Shockley testified that the government's refusal to approve the standing
metal roof contractor without a commitment to eliminate "oil canning" caused delay and
moved the work into the rainy season resulting in leaks and damage to wallboard (tr. 6/99).
Mr. Temchin testified that the delay in approving the SSMR caused by the "oil canning"
issue resulted in leaks (tr. 6/176). Because of the leaks, PE incurred additional costs to
change to all weather (mold resistant) sheetrock (tr. 6/176-77, 7/125-26).
71 .
Exterior Insulation and Finish System (EIFS) 72
158. On 9 May 2007 Mr. Bennett issued an ASI No. 8 correcting a problem with
the 100% construction drawings for the TLF and VQ (R4, tab 4603). The drawings
specified that stucco was to be installed on rigid insulation that was contrary to the
manufacturer's recommendations and warranty requirements (id. at 1). The ASI
changed the application of the stucco to solid substrate, not rigid insulation 73 (id.). EIFS
was mentioned in ASI No. 8 but was not part of the recommended change (id.).
159. In a 31 May 2007 email; Mr. Rola criticized ASI No. 8 stating that it was
taken to be an RFI (R4, tab 992). In .a 30 August 2007 internal email Mr. Bennett state~T'
that PE originally intended to use EIFS but changed to stucco during the 65% design
phase (R4, tab 4605). Also, in that email Mr. Bennett complained that Mr. Rola was not
referring to RFP 8234: \
Andy Rola is comparing our 100-percent drawings with the
ASI 8. He is not comparing our ASI 8 with the RFP. Ifhe
were to do so, he would find that there is no way to measure
whether we are in compliance or not, thus we are being·
penalized by our own design which isn't contractually correct
and Cheryl Brown needs to be told so. All that can be
enforced is the code and the RFP. Ifwe meet that, including
the design details, then how we come up with the R-values is
part of the· design they hired us to do.
(R4, tab 4605) Mr. Bennett recommended returningto EIFS (id.).
\
160. The next mention of EIFS in the record is a series of emails on 31 August
2007 (R4, tab 117 at 2-3). Apparently there was a problem with window clearance,
"What I think we are looking at here is that the EIFS window 1-1/2" return detail did not
get incorporated in ASI 8 and we now have a dimension bust as a result" (id. at 5).
Apparently ASI No. 8 caused this problem, "ASI 8 is the problem. Therein lies the bust
because that is where the thickness change occurred." (Id. at 4) In a 4 October 2007
internal email from Mr. Bennett, he stated, "I have just received a verbal commitment
from David Williams that EIFS CAN and WILL be used on the TLF, not the stucco, and
that this will solve the window trim issue!" (id.). bn 17 October 2007 PE's submittal
for "EIFS System vs. Stucco System" was approved by CO Cruz (R4, tab 375).
72 There was almost no discussion of this issue at.the hearing.
73 In its brief PE incorrectly states that ASI No. 8 "proposed utilizing an exterior
coating system known as Exterior Insulation and Finish System (EIFS) in lieu of
stucco" (app. br. at 308).
72
161. In its brief PE, continues to argue that as the design-build contractor it
should have the unilateral right to make EIFS design changes: "Meanwhile, the delay
continued, and [PE] continued to invest staff time in trying to get approval of a design
correction that it should have had unilateral authority to implement under the design
build contract" (app. br. at 310).
Liquidated Damages
162. By letter dated 27 December 2007 to PE, CO Brown stated the TLF and
VQ were scheduled to be 100% complete on 27 December 2007 but were 82.1 % and
73.4% complete respectively and the government would start assessing liquidated
damages in the daily amount of $1,347 on 28 December 2007 (R4, tab 4079).
Subcontractor Buyout Overruns
163. Mr. Temchin explained that "subcontractor buy..:.out" is "the procurement of
the subcontract services required to complete Parsons' prime contract.... When we have
100 percent of all the subcontract services procured and under contract, then-our job is
bought out." (Tr. 2/177-78) The subcontractbids were not indefinite and most
subcontractors said if costs increased they would pass the costs on to PE (tr.,2/186-87).
According to Mr. Temchin, PE could not lock in fixed prices with the subcontractors
untjl the 100% design for construction was approved by the government:
So we needed the fixed scope of work to procure
fixed price services from the subcontractors, because that
was our methodology of controlling cost. Ifwe had a lump
sum or a fixed price to do a piece of work and we had a
scope of work, we held the subcontractor for that fixed
price, so that they wouldn't embellish the job or try to
overrun the job.
(Tr. 2/177) Mr. Temchin also testified, "So because we didn't have--- because the design
was broken into releases of little pieces of work, we never got to the full scope of the
vertical package until the final rel~ase in the end of June or early July [2006]" (tr. 2/178).
164. Mr. Rosenfeld is a partner in the accounting firm the Sutor Group (tr. 9/7) and
was recognized by the Board as an expert in construction cost accounting and_ claim
calculations (tr. 9/8, 11 ). Mr. Tengler worked with Mr. Rosenfeld to calculate the
subcontract buyout claim (tr. 9/125). The buyout claim is summarized in two spreadsheets
in Rule 4, tab 3003 at 198-99 and tab 3009 (tr. 9/147, 150). These summaries have similar
columns, however, Rule 4, tab 3009, has the column "Government Buyout Overrun" that
explains the claimed amount of $4,068,497, so we use tab 3009. The subcontractors are
· listed in column 1. Column 6, "Original Subcontract" lists the "initial subcontract
agreements with each one of these subcontractors" (tr. 9/147-48). Column 5, "Date" was
73
not explained during the hearing or in PE's briefs. Since the "Date" column is adjacent to
the "Original Subcontract" column we interpret it to be the date of the "Original
Subcontract." There are no other dates on the spreadsheet and since the dates range from
31 October 2005 (Giberson2 (earthwork)) to 9 October 2008 (Giberson Plumbing (Finish
Carpentry)) we interpret these to be the original buyout dates. A rough count indicates
buyouts by year as: 3 in 2005, 16 in 2006, 17 in 2007 and 9 in 2008 (R4, tab 3009).
Column 7, "MODS Re: Original Scope" list the amount of modifications to the original
subcontract scope (tr. 9/148). Column 8, "Adjust. Base Subcontract" is the sum of
columns 6 and 7. Column 9, "Estimate Amount" is PE's original price estimates included
in its bid based on subcontractor's bids. (Tr. 9/143) Column 11 is the difference between
the adjusted original subcontract and PE's estimate (bid) or the overrun that PE then
assigns responsibility for, either to the government or PE or it splits responsibility.
165. The record includes the following actual _dates for design drawings:
R4, tab TLFNQ % PAGES DATE
1748 TLF 65%/100% FOOTING & 83 14 NOV 05
FOUNDATION REVIEW SET
1749 VQ 65%/100% CIVIL/STRUCTURAL 105 14 NOV 05
FOR REVIEW
1750 TLF 65%/100% CIVIL/STRUCTURAL 30 17 APR 06
FOR CONSTRUCTION
1751 VQ · 65%/100% CIVIL STRUCTURAL 32 27 APR 06
1752 TLF 95% 97 17 MAY 06
1753 VQ 95%· 130 17MAY06·
1754 TLF 100% FOR CONSTRUCTION 109 24 JUL 06
1755 VQ 100% FOR CONSTRUCTION 140 24 JUL 06
166. At the hearing Mr. Temchin explained that three major earthwork delays
(unsuitable fill, organic soil, and asbestos pipe) had "a significant negative effect in our
ability to buy-out the packages" (tr. 2/179). He testified:
That six months ... precluded us from buying out the
contracts, because although we had a scope of work, we
didn't have a schedule as to when we could start
construction again. Without the schedule, we couldn't lock
in the contract.
(Tr. 2/179-80) Mr. Temchin also testified thatcosts escalated due to Hurricane Katrina and
demand for material from China (tr. 2/181). The AF' s expert, Mr. Rushing, was accepted by
the Board as an expert in design-build, design-build-plus and design-build-plus-3 used by the
AF (tr. 18/112). Mr. Rushing, wrote in his expert report that in 2004-2005 the construction
74
industry ''was experiencing a significant amount of escalation in both materials and labor
costs" (tr. 18/113; R4, tab 1449 at 8).
Subcontract Change Orders Paid ($5,672,525)
167. This aspect of PE's claim is based on a review of subcontract change orders
by Mr. Rosenfeld and Mr. Cardinale. They went "change order by change order" for
every subcontractor and allocated responsibility between PE and the AF. The results of
their effort are reported on spreadsheets. (Tr. 5/146, 9/153; R4, tab 3003 at 203-212,
tab 3010) PE chose not to present detailed testimony at the hearing on each of the 118
changes allocated to the AF 74 (app. br. at 262-64). PE characterized the changes in six
categories as follows:
1. Design & Other Changes_- The largest category
($3,316,701) aHocated to Air Force, which is typically
related to constructive changes that affected either scope
of the required work. (Attachment 3)
2. Unanticipated Overtime - Constructive Acceleration
- The next category ($628,599) represents charges by
subcontractors who were required to incur premium
wages for extended hours or work weeks to mitigate
delays arising primarily from differing site conditions but
· also from the other delays alleged in this appeal.
3.· Trade Stacking-The third category ($164,093)
includes change orders paid to compensate
· subcontractors for increased crew sizes and congestion
that occurred when the project was constructively
accelerated.
4. Unplanned Winter Work-The fourth category
($354,032) includes- a change orders paid to cover costs
of unplanned winter work in the 2007-08 season (when
the buildings were reasonably planned to be complete or
at least fully enclosed and hooked up to the permanent
heating system). (Attachment 3)
74
Consequently, absent extensive testimony, we have examined the documentary
record along with such testimony as was presented and determine the changes
and costs claimed that have been proven by PE. The results are presented in
tabular form, by category, with reference to the record evidence we rely on.
75
5. Delay Resulting from Differing Site Conditions - The
fifth category ($1,126,815) includes change orders
compensating subcontractors for delay and/ or
) prolongation ·of work due to the differing site conditions
and other claimed delays.
6. Delay Related Increases in Material Costs - The last
category ($81,285) includes change orders paid to four
subcontractors for (delay-related) increases in material
costs. Again, the claimed subcontract change order
payments have been extracted from a substantially larger
pool of subcontract change orders, many of which
Parsons allocated to its own account (as shown in R4, tab
3003 at 203 et seq.)_
(App. br. at 264; ex. A-10) We do not accept these categories as proof of what work
was actually done for each change order. Testimony about the change orders is cryptic
and generally of little use. To the extent the record includes actual work "tickets" for
each change order, PE fails to cite us to those documents.
168. In its brief PE addresses each change by contractor in alphabetical order. 75
We fook at each change order and supporting material. We list them by category
number addressing all Category 1 change orders first etc. We consider if the change
order should be the responsibility of PE and if so will indicate "Deny." An example of
this is where the change order is caused by changes to the 35% or 65% design to reach
the 100% design. Except for costs associated with progressive collapse, PE is
responsible for completing the design. Next, we look to see if the record supports AF
1
liability and if so we indicate "Agree." An example of this is costs incurred for winter
heat. If there is a question about the documentary evidence and there is no testimony to
clear it up, we indicate that we find a failure of proof (FOP). So, for each change order
we will annotate "Deny" meaning the AF is not liable, "Agree" meaning the AF is
liable, or "FOP" meaning we are not sure and PE did not satisfy its burden of proof, i.e.,
AF not liable. ·
75
· We consider this approach to be essentially a record submission, with some
supporting testimony.
76
Category Contractor Change Amount[76 1 Comments
\
Order
(CO)#
1 ABJ Sprinkler 5 $43,893 Agree: CO signed, no comment
from AF, acceleration (R4, 3194
atS-16).
1 American Masonry-2 9 $115,655 Deny: 65% to 100% design
change is PE responsibility
(gov't br. at 317-18; R4, tab
3204 at 3).
1 B&S Sheet Metal 14 $63,836 Agree: Latent defect in 35%
design (size of toilets, R4, tab
1216, tab 1746 at ID-203, -204),
no AF testimony (R4; tab 3208).
1 Black Horse Pike 3 $10,600 Agree: Acceleration, latent
Plumbing defect, see B&S. (R4, tab 3261).
1 Eastern Cqnstruction 2 I $12,500 Deny: See decision on differing
site conditions, DC#9 - manhole.
1 Eastern Construction· 6 $12,000 FOP: No testimony (~4, tab
3215 at 9-10).
1 ERCO 1 $8,571 Agree: CO dated after 100%
design, No comment from AF
(R4, DVD tab 3286 at PDF 1)
1 ERCO 2 $5,940 Agree: CO dated after 100%
design, no comment from AF
(R4, tab 3286 at 3).
1 Gaudelli Brothers-2" 3 $36,700 Agree: No comment from AF,
see decision on structural brick
(R4, tab 3217 at 1).
1 Giberson Plumbing 3 $13,650 FOP: Complete design from
& Excavating-2 35% to 100%, no testimony.
(R4, tab 3228 at 1-10).
1 Giberson Plumbing 4 $41,008 Agree: Testimony re differing
& Excavating-2 site condition, no comment from
AF (R4, tab 3228 at 11; tr.
18/173-74).
76
The amounts are those listed in PE's brief and may differ from the amounts on the
change orders (app. br. at 266-88).
77
1 Giberson Plumbing 5 $2,578 Agree: Differing site condition, ·
& Excavating-2 no comment from AF (R4, tab
3228 at 12).
1 Giberson Plumbing 6 $114,700 FOP:[77 1 No testimony (R4, tab
& Excavating-2 3228 at 13-27).
1 Giberson Plumbing 7 $5,224 FOP: No testimony, change to
& Excavating-2 "required grade" (R4, tab 3228
at 28).
1 Giberson Plumbing 8 $ 130,643 Agree: CO dated after 100%
& Excavating-2 design approval on 6 July
shopping list, no testimony (R4,
tab 3228 at 30).
1 Giberson Plumbing 10 $17,586 FOP: Requirement of 100%
& Excavating-2 design, no testimony (R4, tab
3228 at 35-37).
1 Giberson Plumbing 11 ($36,878) Agreed: Deductive CO (R4, tab
& Excavating-2 3228 at 39).
1 Giberson Plumbing 14 $3,727 FOP: Requirement of 100%
& Excavating-2 design, no testimony (R4,
tab 3228 at 41).
1 Giberson Plumbing 20 $9,000 Agree: Continual draining
& Excavating-2 change, no comment from AF
(R4, tab 3228 at 55-58).
1 Giberson Plumbing 22 $11,725 FOP: Concrete pavers shown
& Excavating-2 on VQ 100% A-402, no
testimony (R4, tab 3228 at 5967)
1 Giberson Plumbing 24 $10,000 FOP: Shopping list not on CO
& Excavating-2 24, no testimony, Mod. 5 in
2008 (R4, tab 3228 at 69).
1 Kepple's Carpet 4 $42,500 Deny: PE responsible for
mistake in 100% design (R4, tab
3234 at 7).
1/2 Kepple's Carpet 7 $15,941 FOP: No testimony explaining
supporting documents and
liability (R4, tab 3234 at 10-17).
77
The AF's brief (gov't br. at 288-90) and PE's reply brief (app. reply br. at 217-18)
discussed change order No. 6 in some detail. RFP 8234 required at least six
inches of "Compacted Graded Aggregate Base Course" under pavement (R4,
tab 2 at 698, 819). PE does not explain how the "dense graded aggregate" in
change order No. 6 is a change to what was required nor doe·s it refer us to the
100% design in support of its claim. ·
78
1 KRN Painting- I 1 ($12,700) Agree: Credit (R4, tab 3257 at
32).
1 KRN Painting- I 6 $5,944 Agree: No comment by AF/not
warranty (R4, tab 3257 at 84).
1 Miller Metal Fab. 3 $110,480 FOP:[78 l Mod for both VQ &
TLF, no progressive collapse in
· TLF, no testimony on this point
(R4, tab 3236 at 1).
1 Miller Metal Fab. 8 $22,577 Agreed: Structure required to
account for progressive collapse
interfered with catwalk (R4, tab
21 at 70, tab 3235 at 1, 9-10).
1 NIC Construction-I 20 $15,930 Agreed: Accelerated constr.,
winter (R4, tab 3238 at 1).
1 NIC Construction-2 18 $23,634 FOP: No proof CO related to
progressive collapse, no
testimony (R4, tab 3238 at 7-8).
1 NIC Construction-2 21 $14,888 FOP: No proof CO related to
progressive collapse, no
testimony (R4, tab 3238 at 12-
13)
1/2 Prime Design- I 2 $32,620 FOP: Design changes ($25,340)
Agreed: Acceleration, no
comment from AF ($7,280) (R4,
tab 3251 at 1).
1 RC Fabricators-I 1 $65,500 Deny: Mod 5 paid for shopping
list w/release, "no cost" email
(R4, tab 1665 at 3, tab 7E; see
gov't br. at 301).
1 RC Fabricators-I 5 $39,000 FOP: (See gov't br. at 303-10).
1 RC Fabricators-2 1 $35,660 FOP: No testimony (R4, tab
3255 at 57).
1 Ridgeline-1 1 $377,946 FOP: Trusses for TLF, PE cites
progressive collapse in CO
justification (app. br. at 280).
Progressive G_ollapse not relevant
78
We have found that PE may recover for modifying the 35% VQ design to account for
progressive collapse. However, this CO refers to a "design change to the shear
wall connection details at both the VQ and TLF" (R4, tab 3236 at 1).
· Progressive collapse does not apply to the TLF. PE failed to explain how this
was related to progressive collapse at the VQ and therefore we find a FOP.
79
to TLF. Changes from 65% to
100% PE's responsibility (R4,
tab 3185 at 1).
1 Ridgeline-2 1[79] $350,899 Agree: Trusses for VQ, we infer
that they relate to addressing
progressive collapse (R4, tab
3185 at 48).
1 Robert Haas 1 $4,625 FOP:[ 80 1 No testimony (R4, tab
4281atl).
1 Roger Appliances 3 $24,020 FOP: No testimony on stacked
models (R4, tab 3262 at 5).
1 Roger Appliances 4 $15,079 FOP: Documents indicate
violation of Buy America Act,
no testimony (R4, tab 3262 at 9,
tabs 4100, 4104, 4107, 4112).
1 S&C Construction- I 2 $1,851 Agree: AF liable for unsuitable
fill (R4, tab 3266 at 1).
1 Schindler Elevator 5 $5,092 FOP: No testimony, documents
do not support stated reason (R4,
tab 3270 at 29-33).
1 Sodon's Electric 4 $6,775 Agree: Organic layer differing
' site cond. (R4, tab 3276 at 1-11).
1 Sodon's Electric 9 $1,378,000 Deny: See discussion at end of
table.
1 Sodon's Electric 15 $21,149 Agree: differing site condition
(R4, tab 3276 at 131-38).
1 Sodon' s Electric 24 $8,322 Agree: $2,522 winter heat. FOP
$5,800 notestimony (R4, tab
/
3276 at 161).
1 Sodon's Electric 30 $15,950 FOP: Documents vague, No
testimony (R4, tab 3276 at 180).
1 Sodon' s Electric 32 $70,000 FOP: Documents vague, No
testimony (R4, tab 3276 at 206).
1 Wei Tee 1 $15,987 FOP: No testimony (R4, tab
3273 at 3) ..
2 Gaudelli Brothers-3 6 $7,653 Denied: No testimony, see
decision on differing site
79
The copy in the record is unsigned, but the AF does not contend it was never signed.
80
We found the AF liable for the underground detention system and if this were proven
to be part of that effort we would have agreed with it, however, nothing on the
face of Haas change order No. 1 refers to the underground system and there is no
sworn testimony supporting PE's characterization.
80
conditions, DC #9 - manhole 35
(R4, tab 3217 at 12).
2 ABJ Sprinkler 3 $35,658 Agree: No comment from AF,
acceleration (R4, 3194 at 1-4 ).
2 American Masonry-2 11 $56,374 Agree: No comment from AF,
acceleration (R4, tab 3204 at 4).
2 American Masonry-2 12 $6,313.38 Agree: No comment from AF,
acceleration (R4, tab 3204 at
5-6).
2 Cardinal Paving- I 4 $62,669 Agree: Testimony/acceleration
-·
(app. br. at 467), no comment
from AF (R4, tab 3212 at 4-12) ..
2 Kepple's Carpet 1 $34,500 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 1).
2 Kepple's Carpet 2 $1,035 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 2).
2 Kepple's Carpet 6 $40,000 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 9).
2 Kepple's Carpet 10 $6,695 Agree: Acceleration, no
comment from AF (R4, tab 3234
·at 18).
2 Kepple's Carpet 11 $34,089 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 22).
2 _KRN Painting-2 2 $1,600 Agree: Acceleration, no
comment from AF (R4, tab 3257
at 1-5).
2 KRN Painting-2 4 $13,490 Agree: Acceleration, no
comment from AF (R4, tab 3257
at 6, 8, 11).
2 KRN Painting-2 5 $7,330 Agree: Acceleration, no
co111ment from AF (R4, tab 3257
at 18, 21, 23).
2 KRN Painting-I 4 $2,700 Agree: Acceleration, no
comment from AF (R4, tab 3257
at 74, 78).
2 NIC Construction-2 19 $20,000 Agree: Acceleration, no
comment from AF (R4, tab 1238
at 9).
81
2 Oldcastle Precast 1 $12,500 Agree: Acceleration, no
comment from AF (R4, tab 3250
at 1).
Agree: Acceleration, no
2 Pillar Construction 3
- $20,000 comment from AF (R4, tab 3258
at 21).
2 Pillar Construction 6 $30,000 Agree: Acceleration, no
comment from AF (R4, tab 3258
at 33).
2 Pillar Construction 7 $42,303 Denied: See decision denying
EIFS claim.
2 .Pillar Construction 8 $17,962 Denied: See decision denying
EIFS claim.
2 Prime Design- I 3 $67,061 Agree: Acceleration, no
comment from AF (R4, tab 3251
at 3).
2 Prime Design- I 6 $18,750 Agree: Acceleration, no
comment from AF (R4, tab 3251
at 6).
2 Prime Design-2 1 $20,865 Agree: Acceleration, no
comment frorn·AF (R4, tab 3251
at 8).
2 S&C Construction-2 19 $34,077 Agree: Acceleration, no
comment from AF (R4, tab 3266
at 8).
2 Sod on' s Electric 27 $787 Agree: Winter heat (R4, tab
3276 at 175).
2 Sodon' s Electric 31 $16,300 Agree: $16,128 (reduced in
brief) Acceleration (R4, tab 3276
at 184).
3 Black Horse Pike 11 $18,298 Agree: No comment from AF,
Plumbing acceleration (R4, DVD tab 3261
at PDF 3)
3 NIC Construction-2 11 $6,080 Agree: Acceleration, trade
stacking, no comment from AF
(R4, tab 3238 at 3).
3 Prime Design- I 5 $164,093 Deny: Punch list item
($119,662.80); FOP: See gov't
br. at 310-11 ($44,429.99) (R4,
tab 3251 at 4-5).
4 ABJ Sprinkl~r 8 $1,732 FOP: CO unsigned, no
testimony, no invoice (R4, tab
3194 at 17-20).
82
4 American Masonry-2 3 $4,003 Agree: No comment from AF
(R4, tab 3204 at 1).
4 Eastern Construction 1 $7,916 FOP: CO appears to be
permanent installation, not
temporary, no testimony (R4, tab
3215 at 1).
4 Giberson Plumbing 26 $30,000 Agree: Re~et cmty. sign due to
& Excavating-2 differing site cond./acceleration/
snow removal (R4, tab 3228 at
71-75; tr. 6/105-06).
4 Giberson Plumbing 27 $48,000 Agree: Acceleration/snow
& Excavating-2 removal (R4, tab 3228 at 76;
tr. 6/106-07).
4 Giberson Plumbing 28 $50,000 Agree: Acceleration/snow
& Excavating-2 removal (R4, tab 3228 at 77;
tr. 6/107).
4 Giberson Plumbing 29 $50,000 Agree: Acceleration/snow
& Excavating-2 removal (R4, tab 3228 at 78;
tr. 6/108-09) ..
4 Kepple's Carpet 3 $1,530 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 3).
4 Kepple's Carpet 5 $3,315 Agree: Acceleration, no
comment from AF (R4, tab 3234
at 8).
4 NIC Construction-2 15 $36,120 Agree: Acceleration, no
comment from AF (R4, tab 3238
at 5).
4 Pillar Construction 1 $150,600 Denied: See decision denying
EIFS claim.
4 Pillar Construction 5 $80,802 Denied:[ 81 l See decision denying
EIFS claim.
4 S&C Construction-2 13 $6,963 Agree: AF delay (R4; tab 3266
at 6).
4 S&C Construction-2 14 $10,000 Agree: AF delay (R4, tab 3266
at 7).
4/2 Sodon's Electric 16 $5,309 Agree: Winter heat (R4, tab
3276 at 139).
4 Sodon's Electric 21 $6,272 Agree: Winter heat (R4, tab
3276 at 146).
81
This is a credit to change order No. 1. Since change order No. I was denied, this
credit will not be available to the AF.
83
4 Sodon' s Electric 22 $6;647 Agree: Winter heat (R4, tab
3276 at 149).
5 Giberson Plumbing 16(82] $150,000 FOPl 83 1: Nature of work not
& Excavating-2 ($142,800 explained, insufficient
site work testimony. Agree: $7200 grass
+ $7,200 . cutting caused by compensable
lawn delay (R4, tab 3228 at 43).
cutting)
5 Giberson Plumbing 17 $150,000 Agree: We agree that temporary
& Excavating-2 windows were required to
enclose buildings during winter
acceleration (R4, tab 3228 at 54;
tr. 6/102).
5. Giberson Plumbing 21 $30,000 FOP: No testimony/no evidence
& Excavating-2 of actual work/lawn mowing not
separately identified (R4, tab
3228 at 58).
5 Giberson Plumbing 23 $40,000 FOP: No testimony/no evidence
& Excavating-2 of actual work/lawn mowing not
82 PE lists change order Nos. 16, 17, 21, 23, 25, 30, 31, 34, 35, and 36 together as
category 5 changes resulting from differing site condition delays. There is very
little discussion of the individual changes and PE points to its hearing exhibits 7
and 8 in support for its claims. Exhibit 7 consists of 274 pages of cost documents
that have no obvious relationship to individual change orders. Mr. Temchin
testified there was a "ticket" for every dollar Giberson spent (tr. 6/145) but PE
fails to direct the Board's attention to these individual documents, if they are in
exhibit 7, that support each change order. Without ~uch assistance from PE, we
find hearing exhibit 7 essentially useless. We also note that PE's hearing exhibit
8, which it explains is a summary of Giberson invoices identified all but one of
the payments to Giberson as "earthwork" which is not explained. The meager
testimony presented on these change orders does not assist us. Without some
documentary evidence of what work these change orders funded that persuades us
that they are caused by the compensable delays we indicate FOP.
83 While Mr. Shockley testified that change order No. 16 was caused by the earlier
deiays (tr. 6/101) he failed to go into any detail. We agree there is compensable
delay, however, we see that the majority of the work was hauling fill dirt off base
with some bringing DGA (stone) onto the site (R4, tab 3228 at 43-53). These
documents do not square with the testimony. This work does not appear to us to
be caused by the delay as opposed to work needed to complete the job. PE fails
to explain how hauling off dirt is caused by acceleration. We agree that
additional grass cutting is the type of work caused by the delay.
84
separately identified (R4,
tab 3228 at 68).
5 Giberson Plumbing 25 $25,000 FOP: No testimony/no evidence
& Excavating-2 of actual work/lawn mowing not
separately identified (R4,
tab 3228 at 70).
5 Giberson Plumbing 30£84] $100,000 Deny: Punch list items (R4,
& Excavating-2 tab 3228 at 79).
5 Giberson Plumbing 31 $50,000 Deny: Punch list items (R4,
& Excavating-2 tab 3228 at 80).
5 Giberson Plumbing 34 $15,000 Deny: Punch list items (R4,
& Excavating-2 tab 3228 at 81 ).
5 Giberson Plumbing 35 $10,000 Deny: Punch list items (R4,
& Excavating-2 tab 3228 at 82).
5 Giberson Plumbing 36 $15,000 Deny: Punch list items (R4,
& Excavating-2 tab 3228 at 84 ).
5 Pillar Construction 4 $107,389 FOP: No testimony, PE failed
to prove this delay was not
related to EFIS, EFIS claim
denied
5 Roger Appliances 1 $21,903 Deny: See buyout decision, no
testimony (R4, tab 3262 at 1).
5 Schindler Elevator 2 $22,500 FOP: No testimony why AF
liable for operators to move
material (R4, tab 3270 at 1-18).
5 Schindler Elevator 3 $7,200 FOP: No testimony why AF
liable for operators to move
material/appliances (R4,
tab 3270 at 19-28).
5 Schindler Elevator 6 $1,200 FOP: No testimony why AF
liable for operators for "hatch
- work" (R4, tab.3270 at 34-38).
84 We accept Mr. Temchin's testimony (tr. 6/137-39) that change orders to Giberson
starting in about April 2008 were needed to deal with punch list items. However,
these change orders pay for the correction of punch list items and PE has not
objected to the accuracy of the individual punch list items (tr. 5/174, 176; app. br.
at 336). PE objects to the 28 inspections and time it took to get to beneficial
odcupancy date (BOD). As discussed herein, we agree with PE and find
compensable delay associated with the inspections, but we do not agree to
compensate PE for correcting the punch list items it does not challenge. Therefore,
we deny the Category 5 change orders s that corrected punch list items.
85
5 Sodon' s Electric 7 $86,630 FOP:[ 85 1No testimony,
inconsistent and confusing
justification (R4, tab 3276 at
12-14).
5 .Sodon's Electric 23 $123,989 Agree:[ 86 1Caused by differing
site conditions delay (R4, tab .
3276 at 155). ·
5 Sodon's Electric. 26 $53,559 Agree: . See CO 23 (R4,
tab 3276 at 171).
5 Sodon's Electric 29 $57,350 Agree: See CO 23 (R4,
tab 3276 at 178).
5 Sodon's Electric 30 $63,700 Agree: Differing site conditions
delay (R4, tab 3276 at 180).
6 Cardinal Paving- I 2 $34,657 Deny: See buyout decision[ 87 l
(R4, tab 3212 at 1).
6 Giberson Plumbing 37 ($9,648) Agree: Credit (R4, tab 3228 at
· & Excavating-2 85).
6/1 Glass Artistry 1 $47,501 Deny: 35% to 100% design
responsibility of PE, See
contract buyout decision on price
escalation, testimony insufficient
(R4, tab 3231).
Concerning CO #9 (Sodon), we looked very closely at the solid brass bathroom light fixture
. portion of change order No. 9. The VQ 35% Architectural drawings specified "VANITY
LIGHT RE: CID PACKAGE (VL-1)" and recessed lighting in the bathrooms (R4, tab 1746
at A-401). The VQ 35% Electrical drawings specified "C - Incandescent Vanity Wall
Fixture" (id. at E-101). The 35% drawings did not specify a specific fixture. The AF's
85
The problem with this claim is that PE calculated the $188,370 it "took responsibility
for" using a daily rate of $1,495 for Mod. 2 for 126 days not actual costs. We do
not know where this daily rate came from, the LD rate is $1,347. We could
substitute the correct LD rate, but we do not know why using the LD rate is
logical. Also, Mod. 2 was for the structural brick delay not differing site
conditions. PE then allocate~ the remaining actual costs to the AF. The stated
reason for change order No. 7 was the cost of extending performance to
27 December 2007 which was done by Mod. 3 not Mod. 2. Even if we agreed
that Sodon's was entitled to some amount for extended performance, this method
of quantification is completely unexplained and therefore unreliable.
86
Even though Mod. 23 refers to Mod. 7 which we found FOP, we understand it and
rely on Mr. Chavan's testimony to agree.
87
Both Cardinal Paving I & 2 were bought-out on 14 May 2007 (R4, tab 3009 at 1).
Therefore we are unable to determine if the escalation costs were caused by the
delayed buyout or by compensable delay.
86
failure to include the VQ CID in RFP 8234 allowed Sodon's Electric to formulate its bid
based on best commercial practices (tr. 5/163-64) which we find it did. The VQ 100% For
Construction Architectural drawings likewise specified "VANITY LIGHT RE: CID
PACKAGE (VL-1 )" (no manufacture model number) and recessed lighting in the
bathrooms (R4, tab 1755 at A-401). The 100% For Construction Electrical drawings,
developed by Morris Johnson & Associates (MJA); specified Nessen brushed brass/white
frosted glass vanity light (NA W535-0B) in the VQ, the same fixture specified in the TLF
CID (R4, tab 1755 at E-01, E-08, tab 2 at 33, item 29). The only other lights in the
bathrooms were a heat lamp and fluorescent lights (R4, tab 1755 at E-01, E-08). The
specification sheet for the Nessen fixtur.e in the TLF CID does not say solid brass (R4, tab 2
· at 67). If it is solid brass then it was required by the VQ 100% For Construction drawings,
however, it was also a change to Sodon's bid. Importantly, we see no evidence that the AF
was involved in the identifi.cation of the Nessen fixture; The only document PE points to as
proof of an AF constructive change supporting its claim is a "VQ finish schedule" dated
9 February 2004 that PE says was "belatedly issued on or about December 15, 2006 (R4,
tab 877 at 13 & 14)" (app. br. at 284). The problem with that document is that the only
fixture priced over $400.00 is the Meltemi Wall Sconce but the quantity is only nine and
they are not used in the bathrooms (R4, tab 1746 at A-104, tab 1755 at E-01, E-08). It does
list the VL-1 Challenger bathroom vanity lights having a unit price of $96.09 and a quantity
of 350 (R4, tab 877 at 13). None of this is explained by PE. We find that the VQ 100%
For Construction drawings required the Nessen vanity light because that is identified on
drawing E-01. We have no idea if that fixture is solid brass or not. Mr. Dukes wrote a
memo explaining Sodon's change order No. 9 and stated that the MJA in the 100% for
construction design specified solid brass light fixtures in the bathrooms costing $440.00
each resulting in an increase in $450,000 over Sodon's bid (R4, tab 1044 at 13). This
doesn't square with the $96.09 Challenger fixture in the finish schedule PE points us to.
Mr. Temchin explained that since there was no CID for the VQ they '"just took what was
specified from the TLF and moved it over to the VQ" (tr. 5/218). Based on the VQ 35%
drawings Sodon had the right to bid based on commercial practice. If the Nessen fixture is
solid brass it was a change to the fixture Sodon bid. PE would have to prove the AF
somehow directed that change. We are sympathetic to the solid brass fixture claim but
cannot find evidence of AF involvement and if there is PE-failed to clearly guide us to that
evidence. We cannot hold the AF responsible for the brass fixture claim without evidence
that the AF directed the change. We see no evidence that the AF was ever given a chance
to agree to accept the fixtures Sodon bid or pay more for solid brass fixtures. As Mr. Dukes
said in his memo "In essence, PIE passed along all the risk of increases in the cost of
building the project to the subcontractor [Sodon], witho:ut promise of equitable adjustment"
(R4, tab 1044 at 13). We are mindful that the AF's error in failing to include the VQ CID
in the RFP contributed to this problem, but we cannot hold the AF ultimately liable without
, more. As for the over-designed transformer, we are confused aboufthe fact that it appears
to be in change order No. 9 (app. br. at.283) but there is also a $412,656 "credit" for it that
was "removed from the claim" (app. reply br. at 222). All of the remaining changes
discussed are requirements of the 35% to 100% design effort. Therefore, we deny change
87
order No. 9. The total in "agreed" change orders is $2,068,652. Subtracting $59,226 in
"credits" results in a total of $2,009,426.
Winter Work Costs - HTHW
169. PE includes this section as part of the Subcontractor Change Order section
(app. br. at 289-94). It claims generally that it was delayed by the AF's untimely ·
approvals of submittals, the differing site conditions encountered when installing the
HTHW pipe, and the fact that PE assumed it would be allowed to use the HTHW
system to heat the buildings. The HTHW differing site condition is discussed earlier in·
PE's brief in great detail (app. br. at 195-221). We agreed that it was appropriate to
approve subcontractor change orders relating to providing winter heat.
Extra Work Coded During Project ($2,593,064)
170. PE presents nine categories of costs under the umbrella description "Extra
Work Coded During Project":
Category Cost Code Payment
1. Claim Preparation R4, tab 3003 at 179 $1,840,112
2. Response to Cure Notices 1704 $71,015 ·
3. Delays in Issuance ofNTPs 20030 $63,021
4. Tiger Team Recovery Efforts 20070 $230,342
5. Increase Mgmt. of Acceleration 20050 $107,181
6. Preparation of Revisions to REAs , 20120 $51,695
7. Extra Warranty Work 1990 $154,918
8. Response to Noise Level C.oncerns· 20140 $72,500
9. Miscellaneous other Work $2,280
Total: $2,593,064
(App. br. at 314)
171. PE includes a short explanation for each category in its brief. Except for
the noise claim, the record supporting these claims is sparse. Claim Preparation:
1. Claim Preparation: The largest component in this claim
category is $1,840,112 in claim preparation costs incurred
before Appellant's claim was certified and submitted to
the Contracting Officer on June 29, 2012. The
reasonableness of those costs was never challenged in this
appeal, and their award is authorized pursuant to FAR
31.205-33.
(App. br. at 314)
88
172. Response to Cure Notices:
2. Response to Cure Notices: The second item cost of
$71,015 was coded costs associated with responding to
Air Force cure notices, which were primarily based on
complaints that Parsons was falling behind schedule or
failing to provide "shopping list" pricing fast enough.
Appellant believes such complaints were unreasonable,
because the Air Force was asking Parsons to bear the
costs of making up for delays that were excusable under
the contract (e.g., associated with admitted differing site
conditions or with documented Government delays).
(App. br. at 314)
173. Delays in Issuance ofNTPs:
3. Delays in Issuance of NTPs: The third coded cost was
$63,021 arising from delays in the Air Force's issuance of
notices to proceed for construction. As discussed
elsewhere in this brief, the Air Force should have issued a
full NTP for construction promptly after Parsons
submitted drawings that incorporated the Government's
comments on the 95% design (mid-April 2006), but that
NTP was in fact delayed until almost mid-July of that
year.
(App. br. at 314)
174. "Ti~er Team" Recovery Efforts:
4. "Tiger Team" Recovery. Efforts: The next coded extra
work cost of $230,342 is for the "Tiger Team" that was
brought in by Parsons to handle rescheduling,
acceleration, and other added management required to
deal with major excusable project delays, unreasonable
cure notices, and their many disruptive effects on the
orderly administration of the TLFNQ project. Neither
the DCAA nor the Air Force hearing witnesses
challenged the reasonableness of these costs.
(App. br. at 315)
89
175. Increased PE's Management of Acceleration:
5. In~reased Parsons Management of Acceleration: The
next coded extra work was Parsons' own cost in
connection with acceleration ($107,181), which was in
addition to the substantial costs that Parsons had to incur
in paying change orders to accelerating subcontractors.
This constructive acceleration arose from the Air Force's
persistent cure notices (demanding faster completion)
coupled with its failure to grant equitable time extensions
for excusable delays, including the major earthwork
differing site conditions for which the Air Force later
admitted entitlement.
(App. br. at 314-15)
176. Preparation of Revisions to REAs:
6. Preparation of Revisions to REAs:. The next extra work
item is $51,695 in costs to prepare the revised versions of
REA's 4, 5 and 6 that were submitted to the Air Force in
December 2008. ([S]e~ R4, tabs 1536, 1537 and 1538)
Those costs were not questioned and should be allowed if
the Board finds entitlement on these subjects.
(App. br. at 315)
177. Extra Warranty Work:
7. Extra Warranty Work: The next extra work item is
$154,918 that were contemporaneously identified as
"warranty" work that was not properly within Parsons'
original scope and recorded under cost code O1990.
(App. br. at 315)
178. Response to Noise Levels:
8. Response to Noise [L]evel Concerns: The next extra
· work item is $72,500, coded for extra work in attempting
to satisfy Air Force concerns about noise levels in TLF
Room 206. (see discussion below).
90
(App. br. at 315). With respect to this issue, there is a mechanical room on the first floor
of the TLF and it is below a guest room (tr. 5/123). There are-two contract requirements
relating to sound transmission. TLF I 00% for construction drawing M-01 has the
following note:
VIBRATION ISOLATION & SEISMIC RESTRAINTS
AS DESCRIBED BELOW AND IN THE
SPECIFICATION, MECHANICAL SYSTEMS SHALL BE
INSTALLED WITH THE SEISMIC RESTRAINTS AND
VIBRATION ISOLATORS TO PREVENT THE
TRANSMISSION OF VIBRATION AND
MECHANICALLY TRANSMITTED SOUND TO THE
BUILDING STRUCTURE.
(R4, tab 1754, drawing M-01) Mr. Cochran testified that spring isolation was to be
provided for all vibrating mechanical equipment to reduce vibration through the
building (tr. 11/73; R4, tab 2 at 740, #121). The TLF design analysis includes a
requirement on acoustics:
Careful attention to acoustic design is essential for lodging
facilities to ensure a high degree of privacy for residents
within their livirig units. Walls between units and corridors
shall have a Sound Transmission Class (STC) of 55.
Isolation of noise from a variety of sources must be
.addressed, including adjacent living units, units on a floor
level above or below, hallways, mechanical rooms and
systems, service areas, employee areas, supply/delivery
pick-up points, and externally generated soun·d such as
aircraft and automobile noise.
(R4, tab 2 at 200)
179. Mr. Rola was concerned about excessive noise from the mechanical room
in the guest quarters above. Mr. Cardinale testified that the "Base environmental folks
came in with a measuring device. They thought it was okay." (Tr. 5/122) However,
Mr. Rola also took a measurement of the noise in the room above the mechanical room
and was concerned that the noise level was too hig;h_ (tr. 5/123). In a 23 July 2008
internal email, Mr. Rola stated that the noise level in the room over the mechanical level
was "noticeably louder than in other rooms" and that PE "should have designed
soundproofing beneath this room." (R4, tab 4186 at I) Mr. Kissler, COR, responded, .
"it was not in Parsons['] contract to insulate the room [sic] mechanical room in the TLF
so we need to drop this issue" (id.). Mr. Rola continued to compla,in about the noise
level in the room above the mechanical room (R4, tab 4543). Finally after nine months
91
, without complaints about noise in the room from residents, the issue was dropped
(tr. 5/123). PE created a separate cost code for work on the mechanical room noise
issue to which people working on this issue charged their time (tr. 4/121-22).
180. Miscellaneous Other Work:
8. Miscellaneous Other Work: There is also a
miscellaneous "extra work" account in which $2,280
was recorded.
(App. br. at 315)
Increased General Condition Costs
-
181. PE's claim includes the following general condition costs (app. br. at 318-21 ):
COST AMOUNT CODE
Office Labor $2,164,484 L
i:;'ield Labor $157,397 FL
wodging/Meals/Subsistence $802,119 s
rrotal Labor Items $3,124,000
Legal (REA Prep) $430 A
Office Expense/ODC's $156,387 0
Sanitary Facilities $33,855 HB
Final Cleaning $280,600 FC
Equipment $146,388 E.
rwinter Heat $493,196
2nd Winter Fencing $27,153
Office Trailer $37,185 OT
Consulting $117,304 C
Dumpsters $68,613 D
Material $129,326 M
Rounding $1
TOTAL $4,614,438
Added Costs Due To Rejection of "Structural Brick" Design ($1,906,401) ·
182. In its brief PE states that the decision to use the 3 5% double wall design,
"forced Parsons and its structural engineers to develop a series of costly changes to
92
other p_arts of the VQ building to support the (unnecessarily) heavy structure against
potential progressive collapse" (app. br. at 323). The $1,906,401 is derived from a 2014
estimate done by Mr. Tengler entitled, "Structural Brick in Lieu of Double Wythe
System -Total Cost Savings" (R4, tab 3154). Mr. Tengler testified he used "RSMeans
database" to calculate the savings (tr. 4/98).
Project Closeout
183. PE's contract SOW, paragraph 3.2.2.2.2.2, Pre-Final Inspection, required
PE to conduct a pre-final inspection and publish a pre-final inspection report (R4, tab 2
at 7, tab 7 at 22). SOW paragraph 3.2.2.2.2.3 Final Inspection, required PE to conduct a
final inspection and publish a final inspection report. "The [final] inspection shall
concentrate on the items identified _at the pre-final inspection and recorded in the pre-
final report." (Id.) At the final inspection PE was to "present a completed DD Form
1354, Transfer and Acceptance of Real Property to the Base Civil Engineer (BCE) for
signature and acceptance" (id.). Paragraph 3.2.2.2.2 Delivery/Warranty reads:
3.2.2.2.21 88 1 Delivery/Warranty: The DBP03 contractor
shall complete all inspection and commissioning
requirements prior to final inspection. Following final
inspection, the DBPQ3 contractor shall deliver to the
Government the as-built drawings in the fonnat and media.
as required by the task order. Further details regarding
project closeout will be provided at the task order level. The
warranty shall be issued in accordance with FAR 52.246-21.
Extended warranties offered by the DBP03 contractor and
its subcontractors or suppliers may be accepted by the
Government at its discretion.
(R4, tab 2 at 7, tab 7 at 22)
184. A "Contracting - Contractor Coordination" meeting was held on 3 April.
2008 to discuss, among various things, closeout procedures (R4, tab 128). Attached to
the meeting minutes was a draft TLF NQ Closeout Schedule prepared by PE 89 dated
3 April 2008 (id. at 7). According to the schedule the "Commissioning and Final
Report" and TAB was to be submitted by 29 April 2008, the AF pre-final inspection
88
This paragraph number appears to be in error since the preceding paragraph is
3.2.2.2.2.3.
89
There is nothing on the schedule or in the minutes that indicates PE prepared the
schedule, however, the AF stated that PE did (gov't br. at 318, ~ 1564) and PE's
response to paragraph 1564 agrees that PE prepared the schedule (app. reply br.
at 238).
93
was to occur between 5 and 9 May 2008, the final inspection was to be completed on
19 May 2008 and beneficial occupancy was to occur on 22 May 2008 (id.).
185. In April 2008 the AF appointed a new COR, Mr: Kissler, to participate in the
final inspection (tr. 14/79-81). By email dated 27 April 2008 to COR Kissler, Mr. Cardinale
transmitted the TLF pre-final punch list containing 1440 items (R4, tab 417). Mr. Cardinale
I .
recalled that PE had the punch list "down to 50 in about two weeks" (tr. 5/110). PE initially I.
planned on doing the pre-final for the TLF and VQ at the same time. However, since
progress on the TLF was ahead of the__,. VQ, PE provided notice for the TLF first so they
could stop incurring liquidated damages. (Tr. 5/106-07)
186. By email dated 29 April 2008 to CO Brown, Mr . Williams stated that because
the furniture for the TLF and VQ had not yet been ordered, "there is no rush to accomplish
the pre-final on the TLF" (R4, tab 4135). He also stated, "Bottom-line, we need to go
back to Parsons thanking them for the notice but informing them that the pre-final for the
TLF will not occur until the VQ is also ready" (id.).
187. By letter dated 29 April 2008 to PE, CO Brown acknowledged receipt of PE's
"formal 14 day notice for the pre-final inspection for the TLF" (R4, tab 145). CO Brown
stated that the notice was "pre-mature" that the AF projected that the "earliest" the
inspection could be conducted was on 15 May 2008 due to travel schedules for off-site AF
"principles" that were required to attend. She stated that to keep travel at a minimum "the
pre-final for the TLF will not occur until the VQ is also ready." (Id.)
188. By letter dated 5 May 2008 to CO Brown, Mr. Cardinale provided "the
required 14 day notice for the pre final inspection for the VQ" (R4, tab 147). By letter
dated 8 May 2008 to PE, CO Brown stated the 5 May 2008 notice was "pre-mature" based
on a "cursory site tour" by AFCEE Project Management personnel (R4, tab 148). No
further detail was provided in the letter. CO Brown reminded PE that SOW paragraph
3.2.2.2.2 of the basic task order required PE to provide the Commissioning Final Report,
the Test and Balance Report and PE's Pre-Final Inspection Report before submitting the
14-day notice. She stated, "We will continue to monitor Parson's progress on the
requested reports and continue to be in daily correspondence with Parson's On-Site Project
Management through AFCEE Project Management personnel or On-Site Title II
personnel" (id.). -
189. In an internal email dated 8 May 2008, Mr. Cardinale reported that he
talked to Mr. Kissler that afternoon and asked him who would run the final inspection.
Mr. Kissler replied, "then~ will be a cast of thousands." (R4, tab 149) Mr. Cardinale
testified that based on a review of his emails he determined there were at least 28
separate inspections during closeout lasting from April through the end of August 2008
94
(tr. 5/114). Mr. Rothwell, AF Title II 90 , agreed that they did multiple inspections over a
four-month period of time at the end of the contract (tr. 14/72-75). Mr. Rothwell agreed
that the final inspection team included AFCEE, services, base shop, base engineers and
Title II (tr. 14/81). Mr. Rothwell testified if everyone was coordinated and the work
was complete, the government team should be able to inspect and have a consolidated
punch list in "approximately a week" (tr. 14/98).
190. Mr. Rothwell identified a consolidated TLFNQ Action Item List as of
3 June 2008 as a "punch list" of 324 items that needed correction (tr. 14/26, 59; R4,
tab 4591) The record includes documents evidencing AF punch lists on 18 June 2008
(R4, tabs 150, 151) and 25 June 2008 (R4, tab 152). In a 25 June 2008 email to
CO Brown, Mr. Cardinale wrote:
Dick Cardinale received this from Tracy today. Are we to
understand this is the complete, final, pre-final list of items
the AF has identified as needing attention?
If so, then do we also understand correctly that the AF
inspection phase is complete or will there continue to be
additional inspections accomplished? Since none of this
follows the pre-final and final inspection criteria from the
specifications, we are trying to understand what exactly to
expect from the AF inspections.
(R4, tab 152 at 1) .
191. By letter dated 30 June 2008 to PE, CO Brown submitted the AF's
consolidated punch list of 113 items for the TLFNQ (R4, tab 153). CO Brown requested
that all deficiencies be corrected no later than 15 July 2008 (id.). As of 14 July 2008,
Mr. Cardinale counted 19 items left on the AF punch list (R4, tab 15 8). As of 25 July
2008 Mr. Cardinale reported PE was working on 5 items on the AF punch list (R4,
tab 159). A 28 July 2008 email to AF and PE's employees from "McGuire Title II"
identified a pre-final punch list "as of 7-28-08" that listed "still outstanding" and
"additional items" that.needed to be resolved before the beneficial occupancy date (BOD)
(tr._ 14/61; R4, tab 1300 at 4). By email dated 29 July 2008, Mr. Kissler recommended
beneficial occupai:icy if the commissioning report was acceptable leaving the remaining
punch list items to be corrected after the furniture arrived (R4, tab 160 at 1).
_ 192. Mr. Temchin testified about a chronological "sail" diagram of the closeout
activities including the various inspection and number of items on the punch list. A
graph at the bottom of the diagram summarizes the number of punch list items between
90
AF Title II refers to the contract to provide inspectors construction oversight (R4,
tab 528 at 9). ·
95
}\pril 2008 and BOD on 11 September 2008. The number fluctuated from around 40 in
April 2008 to 90, to 240, to 110, to 293, to 70 in June 2008 and then tapered off through
September 2008. (Tr. 6/139-144; R4, tab 4673 at 6)
193. By email dated 14 August 2008, Mr. Dukes reported that CO Brown told him
what needed to be completed for BOD was a "resolution of why the chiller is freezing the
line and a clean, completed commissioning report" and that "all other items that are being
brought up will be handled as warranty items for correction" (R4, tab 1536 at 120).
194. By internal email dated 19 August 2008, Mr. Cardinale reported that
Mr. Rola was complaining about noise from the TLF mechanical room affecting the
.guest quarters above (R4, tab 161 at 1). By email dated 25 August 2008 to CO Brown,
Mr. Cardinale stated, "We are ready to tum the McGuire TLF and VQ over to the
government and have been, in our opinion, for a long t1me" (R4, tab 162 at 1). He
identified two items PE intended to resolve before transfer to the AF and other items
· that could be completed as punch list items after BOD (id.).
195. By internal email dated 3 September 2008, Mr. Dukes reported a conversation
he had with CO Brown (R4, tab 163 ). CO Brown stated that the AF would accept the TLF
and establish BOD upon receipt of the HTHW certificate from the manufacturer (id. at 1).
The AF would not accept the VQ because it had heard there was a glycol leak in the HV AC
system. Mr. Dukes wrote that he was unaware of a glycol leak. (Id.)
196 .. In a series of emails dated 9 and 10 September 2008, between PE and the
AF, the parties discussed Mr. Rola's measurement of sound from the mechanical room
in the unit directly above (R4, tab 164 at 1-5). PE questionedwhat criteria Mr. Rola
used to evaluate the results (id. at 2). CO Brown stated to Mr. Dukes that she had the
BOD ready but could not get approval to release it (id. at 1).
197. By letter dated 11 September 2008 CO Brown acknowledged that the
government accepted the TLF and VQ for "beneficial use" as of 11 September 2008
(R4, tab 3004 at 246; tr. 8/96). On 12 September 2008 Mr. Dukes signed the
acknowledgement that PE received the AF's notification of beneficial use of the TLF
and VQ the day before (R4, tab 165 al: 2). There was a punch list attached to the BOD
notification that PE would treat as warranty work (id. at 1).
198. The record includes a table prepared by Mr. Scott of PE that contains a
chronological list of punch list related emails between 9 April 2008 and BOD on
11 September 2008. The table shows that between 9 April and 17 June 2008 the number
of deficiencies rose from 26 to 238. 91 Thereafter from 26 June to 9 September 2008 the
number of deficiencies gradually reduced to 2. Attached to the 11 September 2008 notice
91
PE's "sail" diagram identified the 238 number with Rule 4, tab 4592 (R4, tab 4673 at 3).
Rule 4, tab 4592 is a table having less than 100 punch list items (R4, tab 4592 at 1-9).
96
of BOD were an additional 44 punch lis~ items. (R4, tab 125) Mr. Cardinale testified that
most of the punch list items were "not unreasonable" (tr. 5/174, 176). In its brief PE
argues that it is not so concerned about the number of inspectors _that conducted the
inspections, it is that the inspections took so long - over four months (app. br. at 336).
The length of time to conduct multiple inspections by multiple organizations caused
inefficiency and additional expense incurred by the subcontractors PE used to correct the
punch list items (tr. 5/120-21, 6/138-41).
Davis-Bacon Act Compliance & Office of Special Investigations (OSI) Report
199. IDIQ contract 8703, DO 13, obligated PE to comply with the Davis-Bacon Act
(DBA) (R4, tab 7 at 8). As such contract 8703 incorporated by reference OBA-related
clauses FAR 52.222-1 through 16 (R4, tab 1 at 23). PE was obligated to pay its workers in
accordance with applicable wage.determinations (WDs). FAR 52.222-6(b)(l). PE was
obligated to submit payrolls to the AF CO on a weekly basis. FAR 52.222-8(b )(1 ).
200. FAR 22.404 provides guidance concerning DBA wage determinations.
FAR 22.404-2 General requirements, directs the CO to incorporate "only the appropriate
wage determinations in solicitations and contracts." FAR 22.404-2(a). FAR 22.404~3
Procedures, for requesting wage determinations (WD) directs the contracting agency to
examine the WD "immediately upon receipt" and inform DOL of any changes needed to
correct errors. FAR 22.404-3(d) .
. 201. FAR Part 22, "APPLICATION OF LABOR LAWS TO GOVERNMENT
ACQUISITIONS," provides relevant guidance. FAR 22.404-2 and FAR 22.404-3
direct the CO to incorporate the appropriate WD in the solicitation and contract and
ensure the WD is correct. If the CO determines that the WD is not correct, the CO may
ask the Department of Labor (DOL) to correct the WD. FAR 22.404-7. FAR 22.406
. Administration and enforcement, includes 22A06-1 Policy, that requires:
_(a) General. Contracting agencies are responsible for
ensuring the full and impartial enforcement of labor
standards in the administration of construction contracts.
Contracting agencies shall maintain an effective program
and shall include-
· ( 1) Ensuring that contractors and subcontractors are
informed, before commencement of work, of their
obligations under the labor standards clauses of the contract;
(2) Adequate payroll reviews, on-site inspections,
and employee interviews to determine compliance by the
contractor and subcontractors, and prompt initiation of
corrective action when required;
97
(3) Prompt investigation and disposition of
complaints; and
(4) Prompt submission of all reports required by this
subpart.
FAR 22.406-1.
Wage' Determination (WD) NJ20030002 and Payrolls
202. DO 13 included WD NJ20030002 dated 21 January 2005 (R4, tab 7 at 9).
According to the PE, it didn't notice that the WD was missing classifications until late
2008 (tr. 4/129), however, as we discuss below, the 4 April 2008 Memorandum to PE
reporting results from an AF payroll review listed payroll classifications that were not in
WD NJ20030002 (R4, tab 1526 at 1-3).
203. Mr. Loftis testified that PE and its subcontractors submitted certified payrolls
from the beginning of the project in 2005 (tr. 4/122). There were errors that were corrected
but no major problems with the payrolls were identified by the AF until around April 2008
(tr. 4/123). Ms. Fernandez, contract specialist, testified that PE submitted weekly payrolls
and the AF would sample them to make sure everything was correct (tr. 13/49, 71). The
first labor interviews were conducted by Ms. Fernandez on 6 December 2007 (tr. 13/73; ·
ex. G-1 ). She found discrepancies between the payrolls and what she learned from the
interviews (tr. 13/71-73). This caused the AF to take a closer look at the payrolls
(tr. 13/72-74, 79). Around March 2008 the AF asked PE to resubmit all of the payrolls all
the way back to the beginning of the project in 2005 (tr. 4/123-24). 92 Mr. Loftis testified
that complying with this request was "extremely difficult" (tr. 4/124). He explained:
It was just an extremely difficult process. I mean, as you
can imagine three years after, two, three years after the
project started, many of them [subcontractors] had already
left. Soine of the employees of some of the subcontractors
had already left the company. And I know at least one
company went bankrupt.
92
CO Mendez testified that PE did not submit payrolls in 2006 and 2007 (tr. 16/59).
She explained this was the reason the government asked for old payrolls
(tr. 16/63-64 ). However, she was not on the project in 2006 and 2007 (tr. 16/59)
and in its brief the AF does not contend that PE failed to submit payrolls for 2006
and 2007 (gov't br. at 242-44). We find that Ms. Mendez's testimony that PE
failed to submit the 2006 and 2007 payrolls is not as credible as Mr. Loftis'
testimony on the subject ·
'98
(Tr. 4/125) The task of getting all of the subcontractors to cooperate was "extremely
difficult" (tr. 4/124, 141-42).
204. By memorandum dated 4 April 2008 to PE, CO Brown listed "concerns"
based on a "review of payrolls submitted for the pay period commencing on the [sic]
22 Sep 06 through 15 Mar 08" for the TLFNQ contract (R4, tab 1526 at 1-3) 93 • For
these payrolls she found problems with deductions, unpaid fringe benefits, unidentified
"other" deductions, unpaid overtime, and employees classified as carpenters not found
on WD NJ20030002 (id.).
205. By memorandum dated 7 April 2008 to PE, CO Brown provided a spreadsheet
listing the problems found with payrolls (R4, tab 1226 at 2, 4-7) 94 • For PE's subcontractors
she found incomplete/missing payrolls, classifications missing from WD NJ20030002
(Carpenter, Plumber, Journeyman, Pipefitter), missing statement of compliance,
unidentified "other" deductions and missing apprentice documentation (tr. 13/91-93; R4,
tab 1226 at 2-7). CO Brown requested that PE provide the information so that the AF can
complete its payroll review (id. at 3). By letter dated 2 July 2008 to PE, CO Brown
submitted another spreadsheet listing various problems requiring correction (R4, tab 1280).
The 2 July 2008 spreadsheet included unidentified "other'' deductions, missing apprentice
documentation, missing statement of compliance, and work classifications listed on
payrolls not in WD NJ20030002 (id.).
206. The AF continued to review payrolls after the BOD on 11 September 2008
(tr. 16/74). By letter dated 15 October 2008 to PE, CO Brown provided another list of
problems with payrolls and notified PE that "no payments will be made until we receive
all the requested payroll information" (R4, tab 1526 at 8). Ms. Fernandez conducted
15 to 20 such reviews before she left the project in 2010 (tr. 13/93) .. They found similar
problems in all reviews and "a lot of people that they're not being paid the minimum
wages that they were entitled to so we had to have the subcontractors or even Parsons
pay restitution to those individuals" (tr. 13/94).
207. By letter dated 16.March 2009 to Mr. De Quiroga, AF labor advisor, PE
requested his assistance initiating a letter of inadvertences to correct the omission of work
classifications to WD NJ20030002 (R4, tab 173). A letter of inadvertency is used when a
DOL classification exists but was "inadvertently" omitted from a WD (tr. 15/159-60).
On 4 May 2009, Ms. Carson, PE, called Ms. Myers, AF, requesting assistance in resolving
payroll issues because the AF was withholding over $3 million in final payment until the
issues were resolved. Ms. Myers forwarded the inquiry to AF labor advisors Mr. De Quiroga
93
The 4 April 2008 memorandum in the Rule 4 file is incomplete.
94
_ The spreadsheet was updated overtime (tr. 15/261-62; R4, tabs 439,441, 1429).
99
and Ms. Gillam. (R4, tab 174) On 25 March 2010 95 the DOL sent similar letters of
inadvertence to CO Robarge and CO Muniz, AFCEE (R4, tabs 166-67), identifying errors in
·WD NJ20030002 that omitted thirteen wage classifications (bricklayers, stonemasons, ·
marble masons, cement masons, plasters, tile layers, terrazzo workers, elevator mechanics,
carpenters,' insulators, miilwrights, soft floor layers, and drywall finishers/tapers). (R4,
.tabs 166, 167) CO Muniz signed an AF 1444 on 16 April 2010 requesting that a drywall
hanger be added to WD NJ20030002, Mod. 12 (R4, tab 1566 at 11). By letter dated 19 April
2010 the DOL approved the request for the added classificati_on of drywall hanger (R4,.
:tabl68). Ms. Mendez stopped payroll review in August 2012 even though they had not
achieved 100% review (tr. 16/33). A total of 3,690 payrolls were received by the AF from
PE (R4, tab 1745 at 3). Ms. Mendez had a spreadsheet documenting restitution that indicates
PE paid $88,510.66 in restitution (tr. 16/34-35; R4, tab 1735 at 1-2).
OSI Investigation
2Q8. Ms. Hom is an agent with the AF Offo::e of Special Investigations (OSI)
(tr. 14/6). Just after she became an agent at MAFB in December 2010 she was assigned to
an investigation concerning the VQ/TLF project (tr. 14/6, 8). Ms. Hom wrote the final
report of investigation (ROI) dated 20 January 2012 dealing with the VQ/TLF project
(tr. 14/7; R4, tab 1437). Ms. Hom would not identify the confidential sources who
initiated the investigation in 2007, but she testified they were not "on the government" side
(tr. 14/9, 22; R4, tab 1437 at 8). In February 2008 OSI received information from another
· confidential source about payroll discrepancies (tr. 14/13-14).
209. Citing the AF OSI Report of Investigation, dated 20 January 2012, PE argues:
Even though the first onsite AF employee interview
was conducted in December 2007, the Government was
slow to follow through. Rather than quickly notifying the
contractor of any problem, AFCEE instead contacted OSI,
which added a payroll investigation to its existing
investigation. (See R4, tab 1437)
(App. br. at 391) The report, however, states:
This case was initiated ba~ed upon information provided by
Confidential Source (CS) 1 in Fall of 2007. CS 1 indicated
Parsons might have been engaging in.potential fraudulent
activities within the realms of the TLF and VQ project on
JBMDI, NJ.. .. The allegation brought forth by CS 1 was
95
Only one of the letters, the one to CO Muniz, is dated (R4, tab 167). We have no idea
why these letters were issued in March 2010 well past the BOD of 11 September
2008 and a year past PE's request to Mr. De Quiroga.
100
that Parsons was violating the Davis Bacon Act (DBA) in
the payment of employees, and then committing Title 18
USC § 1001, False Statements, and Title 18 USC § 287,
False Claims, when certifying those payrolls and forwarding
then to AFCEE for processing and payment.
(R4, tab 1437 at 8) We find that the OSI investigation of PE was not initiated by OSI at the
request of the government but rather due to information received from nongovernmental
confidential sources. -
· PE's Claim
210. By letter dated 29 June 2012, PE submitted its claim in the amount of
$33,826,872, plus $1,834,072 in unpaid contract balance 96 (R4, tab 21 at 1, 8). PE
claimed Design Impact, $775,776; Earthwork Differing Site Conditions, $369,486;
High Temperature Hot Water, $597,899; Triarch Coating, $99,972; Closure Inspections,
$232,321; Certified Payroll, $1,090,098; Schedule Delay/Extended OH, $2,503,326;
and Modified Total Cost Method, $28,157,994 (id. at 8).
DCAA Audit
21 L DCAA conducted an audit of PE's $33,826,872 claim and issued an audit
report on 18 January 2013 (R4, tab 213). DCAA questioned all but $135,305 of the
claim (id. at 6). In denying the claims, DCAA relied on technical evaluations provided
by the AF (AFCEE/EXA) (id. at 7). DCAA found that the claimed costs had been
incurred, but did notchallenge the reasonableness of the costs (id. at 5-6, 8-9, 13-15,
18-19,22,27,31,34). \ - -
212. DCAA listed "SIGNIFICANT ISSUES" at the start of its audit report:
·,
The contractor included a significant amount of unallowable
and unallocable costs including:
a. PE's incorrect use of the Modified Total Cost Method
(MTCM) to calculate Claim V. Both the DCAA and Air
Force Center of Engineering and the
Environment-Strategic Executive Branch (AFCEE/EXA)
determined the MTCM should not be utilized. In order
to calculate a claim using the MTCM, a contractor needs
to meet the four specified criteria namely (i) ability to
separate costs, (ii) realistic bid; (iii) reasonable costs; and
(iv) Government responsibility for additional costs,
96
This was reduced to $347,526 in PE'.s Quantum argument(app. br. at 487).
101
which have been set forth in precedent court cases. We
· determined PE did not meet the requirements.
b. The contractor claimed schedule delay and extended
jobsite overhead in its claims. The AFCEE/EXA
technical evaluations found both the number of days and ·
daily general conditions rate us~d in the calculation of
Claim Vlll to be overstated. ·
c. AFCEE/EXA found the costs in multiple claims to be
unwarranted and not substantiated. We questioned the
costs, based on the recommendations of AFCEE/EXA.
(R4, tab 213 at 4)
213. Claim I is Design Impacts (R4, tab 213 at 7). · The claimed amount after
markups i~ $775,776 (id.). DCAA described how this amount was calculated:
PE calculated the net design cost by summing design
labor cost, design labor burden, third party cost,
blueprints/reproductions, and client directed design. changes
and then subtracting estimated design ~osts, and budget
drawing allowance. Estimated design costs and budget
drawing allowance are based on PE's original budget for the
task and amounts PE claims it would have incurred without
unforeseen costs caused by additional Government
reqµirements and delays. To finish the calculation, the
contractor also subtracted the allowance for modification 2
design costs, which were based on actual costs incurred.
The allowance for modification 2 design costs were
subtracted, because the costs were funded by modification 2
and were not beipg claimed by PE as costs caused by the
Government.
(R4, tab 213 ·at 8) PE claims markups for bond, GL & BR insurance, G&A, and profit.
DCAA ''[took] no exception to the bond, profit and composite G&A claimed rates" but
found a calculation error in PE's GL & BR insurance markup of 1.31 %. DCAA questioned
0.4784% of the 1.31 % for a rate of 0.8316%. (Id. at 9, 10) The individual costs were
Design Labor, Design Labor Burden, Third Party Cost97 , Blueprints/Reproductions and
Client Directed Design Changes with adjustments (id. at 8). DCAA questioned all of Claim
97
Third-party design costs relate in large part to engineering and architecture
subcontracts (R4, tab 3003 at 26-30).
102
I based on the AF's technical evaluation (id. at 7). However, at the CO's request, DCAA
determined that the Claim I design costs were incurred:
We determined the claimed costs were incurred based on
our review of the contractor's accounting records and source
documents. In addition, we reviewed the calculations and
documentation for the estimated design, budgeted drawing
allowance and allowance for modification 2 design costs
and determined the calculations and documentation support
the costs in its claim.
(Id. at 8-9) DCAA did not independently evaluate the reasonableness of the claimed
costs. CO Santiago issued his final decision (COFD) on 27 March 2013 (R4, tab 214).
The COFD denied Claim I in its entirety (id. at 15).
214. Claim II, Differing Site Conditions in Earthwork Costs, consists of three
claims for unsuitable fill, organic layer, and asbestos contamination (R4, tab 213 at 11 ).
DCAA found the same calculation error in PE's GL & BR insurance markup of 1.31 %
(id. at 6). The post-markup corrected results for all three claims were:
Claimed Amount Audit Amount Questioned Amount
$369,486 $95,241 $274,246
(R4, tab 213 at 16) The allowed amount of $95,241 and questioned costs were based on
the AF's technical evaluation (id. at 12-15). DCAA found that the costs had been incurred
for all three of these claims (id. at 13-15). DCAA did not independently evaluate the
reasonableness of the claimed costs. The COFD accepted liability for the unsuitable fill
claim, "valid costs applicable to the removal and haul-off of unsuitable soil, replacement
with 'clean-fill' material and compaction of clean backfill" (R4, tab 214 at 24). The
COFD allowed a total of $37,331 for the unsuitable soil claim (id. at 26). The COFD
denied the organic layer claim in its entirety (id. at 30). The COFD agreed that the
asbestos pipe was a Type I differing site condition (id. at 31 ). However, the COFD found
PE costs were unreasonable and made changes to PE's labor hours: ·
• FYs 2006 & 2008 labor hours deleted because asbestos pipe did not occur
during this timeframe.
• Labor hours with no labor categories assigned were removed.
• Contract management hours reduced to 9 .5 hours.
• Project Engineer hours removed as the work was subcontracted.
• On-Site Project Manager hours removed as the work was subcontracted.
• Submittal Engineer hours removed as not required for this task.
103
(Id. at 31-32) The COFD allowed a total of $51,940.08 for the asbestos pipe claim (id. at
33). The total allowed for these three differing site conditions claims was $89,271 (id.).
215. Claim III is Impacts from Differing Site Conditions at High Temperature
Hot Water Line (R4, tab 213 at 17). The total claimed costs after markup was $597,899
(id.). DCAA questioned all costs based on the AF's technical evaluation (id.). DCAA
found that the costs were incurred (id. at 19). DCAA found the same calculation error
in PE's GL & BR insurance markup of 1.31 % (id. at 20). DCAA did not independently
evaluate the reasonableness of the claimed costs. The COFD denied Claim III in its
entirety (R4, tab 214 at 39).
216. Claim IV relates to the Triarch Coating (R4, tab 213 at 21). The total claimed
costs after markup was $99,972 (id.). DCAA questioned all costs based on the AF's
technical evaluation (id.). DCAA found that the costs were incurred (id. at 22). DCAA
found the same calculation error in PE's GL & BR insurance markup of 1.31 % (id. at 23).
DCAA did not independently evaluate the reasonableness of the claimed costs. The COFD
denied Claim IV in its entirety (R4, tab 214 at 58).
217. Claim V is Government Management and Administration of the Design-Build
Process During the Build Phase .(R4, tab 213 at 24). This claim was a modified total cost
method (MTCM) claim in the amount of $28,157,994 (id.). DCAA determined that the total
job cost ledger (cost incurred) was valued at $65,234,583, Le., a 100% overrun from the bid
(id. at 27). DCAA determined none of the elements of a MTCM were satisfied and
questioned all of the costs claimed based in part on the AF technical evaluation (id. at 25-27):
• Ability to Separate Costs: DCAA concluded PE's accounting system was
capable of separating various claimed costs (id. at 25-26).
• Bid is Realistic: DCAA concluded that PE's bid was unrealistic for two
reasons. First it was about 38% lower than the other two bidders. 98 Second,
since the AF technical analysis found no "cardinal change" directing work
outside the scope of the contract, the 100% overrun indicates an unrealistic
bid. (Id. at 26)
• Reasonable Costs: DCAA found that since the AF technical analysis found
no "cardinal change" the 100% overrunindicates costs are not reasonable
(id. at 26-27).
· 98 Caddell Construction, a competitor for the project, bid $45,183,064 (tr. 4/96; R4,
tab 3731 at 6). Mr. Tengler testified that it was not unusual for these types of
jobs to have "considerable differences" in the PE's bid and Caddell's bid does
not mean there was a problem with PE's bid (tr. 4/96-97). Mr. Tengler believes
PE's bid was reasonable (tr. 4/97).
104
• Gov~mment is Clearly Responsible: DCAA found that the AF was not
responsible based on the AF's technical analysis (id. at 27).
DCAA conducted a "dollar unit statistical sample" ar:id determined that the costs were
incurred (id. at 27). The COFD denied Claim V in its entirety (R4, tab 214 at 110).
218. Claim VI is Closure Inspection process (R4, tab 213 at 30). The total
claimed costs after markup was $232,321 (id.). DCAA questioned all costs based on the
AF's technical evaluation (id.).· DCAA found that the costs were incurred (id. at 31).
DCAA found the same calculation error in PE's GL & BR insurance markup of 1.31 %
(id. at 32). The COFD denied Claim VI in its entirety (R4, tab 214 at 127).
219. Claim VII is Incomplete Wage Determination and Processing of Payrolls
(R4, tab 213 at 33). The total claimed costs after markup was $1,090,098 (id.). DCAA
questioned all costs because violations of the Davis-Bacon Act are PE's responsibility
(id. at 34). DCAA found that the costs were incurred (id.). DCAA found the same
calculation error in PE's GL & BR insurance markup of 1.31 % (id. at 35). The COFD
denied Claim VII in its entirety (R4, tab 214 at 133).
220. Claim VIII is Schedule Delay and Extended Jobsite Overhead (R4, tab 213 at
36). The total claimed costs after markup was $2,503,326 (id.). DCAA questioned all but
$40,065, after markup, of the costs based on the AF's technical evaluation (id.). DCAA
relied on the AF's technical evaluation that found that PE's daily General Conditions (GC)
rate of $7,298 was excessive and applied a rate of $833 99 per day (id. at 37-38). The AF
technical evaluation found 42 days of delay and $833 multiplied by 42 equals $34,986
which is $40,065 after markups (id. at 36-38). DCAA found the same calculation error in
PE's GL & BR insurance markup of 1.31 % (id. at 39). The COFD denied Claim VIII in
its entirety (R4, tab 214 at 141 ).
PE Replaces MTCM Claim with "Balance of Construction Phase" Claim
221. As explained it its brief, PE responded to the DCAA's & AF's criticism
and "replaced" the $28,157,994 modified total cost method (MTCM) claim with a
"balance of construction phase" claim. This was done after the DCAA audit so we do
not have an audit of the discrete elements ofthe Balance of Construction Phase Claim.
However, we know that these costs were incurred by PE because they are the same costs
in the MTCM claim. The Balance of Construction Phase Claim we consider in this
decision is as follows:
99
DCAA quoted the AF's technical evaluation, "Parsons was requesting only $833 per
day in 2006, when they were fully mobilized to the jobsite" (R4, tab 213 at 37).
105
Cost
1. Selected overruns in :mbcontractor buyouts: $4,068,798
2. Selected subcontract change orders: $5,672,525
3. Misc. Construction cost credits: ($800,506)
4. Other extra work coded during the-project: $2,593,064
5. Increased General Conditions costs not
reimbursed by change orders or settled on Mod. 2: $4,614,438
6. Construction costs added by AF rejection
of "structural brick" design and requirement
.to accommodate heavy building design with
added reinforcement, etc.: $1,906,401
Subtotal _$18,054,720
A.dd (undisputed) markups at 14.524% $2,622,270
Total in claim $20,676,990
(App. br. at 234)
AF's Expert in Construction Accounting
222. The Board accepted Mr. McGeehin, FTI Consulting, as an AF expert in
construction accounting and pricing of damages (tr. 17/12). Mr. McGeehin testified that
he did not question that the $65,000,000 PE spent on this contract was "incurred and was
recorded and charged to this project" (tr. 17i21). He does not question that PE incurred the
costs it claims (tr. 17/59). He does not question markups for bonds, G&A and insurance
because they were not questioned by DCAA (tr. 17/49, 97-9&). He found that PE did not
double count (tr. 17/58). -,
223. PE calculated its extended site overhead based on four time periods because
"[t]he jobsite overhead requirements varied substantially between those periods" (app. br. at
482; R4, tab 3012 at 12). Mr. McGeehin evaluated PE's daily rate and made adjustments (tr.
17/3 9-42). He reported his results in an 18 June 2014 Expert Report. In this report he
explained that certain time-related general condition costs were included in PE's discrete
claims and should be removed (R4, tab 1451 at 18-21). He did not otherwise challenge PE's
calculation of its daily rates (id.). Mr. McGeehin developed slide 106 of his PowerPoint
presentation to summarize his work (ex. G-4 at 107). The table below shows slide 106 with
the time periods for each daily rate added in by the Board:
106
FTI Daily FTI Daily
Dates Rates/Time Rates/Removal
Period/ PE Daily Related of Non-Time
Description Rates[tooJ Amounts Related
Amounts
Design 13 July 2005 to 31 July 2006 $1;696 $1,887 $1,732
Period
Horizontal 1 Aug 2006 to 31 Aug 2007 $7,712 $7,949 $7,353
Construction
Acceleration . 1 Sept 2007 to 31 May 2008 $13,548 $14,081 $13,761
Vertical
Constr.
Closeout 1 June 2008 to 31 Oct. 2008 $4,688 $5,863 $5,851
(Ex. G-4 at 107; R4, tab 3012 at 12) Mr. McGeehin also developed handouts to further
explain how he arrived at the daily rates in the three columns on slide 106 101 (tr. 17/44-49;
Handout Schedules A, B, C, D).
DelayAnalysis Expert Witnesses
224. The Board accepted Mr. Ockman as an AF expert in construction scheduling
and estimating (tr. 16/128-29). Mr. Ockman used a "time impact study" to analyze the
delays (tr. 8/100-101, 16/134, 209; R4, tab 1764). Mr. Ockman used PE's baseline schedule,
dated 11 August 2005, but he did not have the electronic version, he had a PDF version so he
couldn't see some information (tr. 16/135, 215, 18/6-7, 9-10; R4, tabs 538, 3873).
225. The Board accepted Mr. Evans as PE's expert in scheduling issues and delay
analysis (tr. 7/202). Mr. Evans used a delay analysis using as-planned and as-built
activities (tr. 7/203). Mr. Evans used the as-planned schedule dated 27 October 2006 that
was approved by the government (tr. 7/210, 212; R4, tab 3004 at 90). The critical path ran
through the VQ not the TLF because the TLF was not affected by the differing site
conditions at the VQ (tr. 7/216). Mr. Evans' as-built schedules are derived from daily
reports and other documentation that provides actual starts and finishes (tr. 7/206, 218-20).
100
PE's daily rates did not include mark-ups (ex. A-19 at 27; R4, tab 3012 at 11).
101
AF counsel asked Mr. M~Geehin if he "mirrored what Mr~ Rosenfeld [PE's expert]
did in his report" and Mr. McGeehin answered "That's correct" (tr. 17/49). We
have no idea what this testimony is supposed to mean because we did not see it
explained in the AF's brief. We found no discussion of daily rates to assist us in
the AF's brief so we adopt PE's rates.
107
226. The main difference between Mr. Evans' method and Mr. Ockman's method
is that Mr. Evans measured critical path delay in terms of how much later the critical work
actually began as opposed to a predicted start (tr. 8/119-20). Mr. Evans testified that in
developing the CPM schedule "[y Jou want to look at the contemporaneous documents to
find out what actually happened" (tr. 8/129). Mr. Evans' analysis uses the actual as-built
information whereas Mr. Ockman's time-impact analysis uses forecasts (tr. 18/211-12).
227. While the competing expert reports used different approaches, we need not go
into the relative merits of each expert's approach because they both generally agree the VQ
was on the critical path starting with the foundation work at Wing A where the earthwork
differing site conditions were encountered. To the extent the experts provide opinions as
to which party is responsible for delays or other questions of law, such opinions exceed the
scope of expert evidence and are inadmissible. Parsons-UXB Joint Venture, ASBCA
No. 56481, 12-1BCAi134,919 at 171,695 (expert testimony pertaining to issues of law is
inadmissible).~
Appeal & Docketing
228. PE timely appealed the 27 March 2013 COFD to the Board on 22 April
2013. The Board docketed the appeal as ASBCA No. 58634 on 24 April 2013.
DECISION
Preliminary Matters
. The parties insisted that the Board decide both entitlement and quantum. The
Board agreed. However, we have unanswered questions about both parties' quantum
presentations. PE discussed discrete entitlement facts that were not separately discussed
in its quantum section, and made quantum arguments that were not easily traceable to
its unnumbered entitlement facts. The AF responded in general terms to PE's quantum
arguments but chose not to individually address the itemized arguments in Section K of
f>E's quantum section. Additionally, because we agreed to decide quantum, there are
several areas where we agreed PE was entitled to recover but because our decision
varied from PE's quantum presentation we could not calculate an amount for PE.
35%Design
In numerous places in its brief PE refers to RFP 8234 35% design as if the 35%
design survived the approval of PE' s 100% for construction design., We address that
argument here rather than each time it appears. The 35% design was used in the
contract solicitation and bidding process (finding 18). After award, PE was required to
complete the design and construct the buildings. PE's 100% Site Civil/Structural
. drawings for the TLF ( 17 April 2006) and VQ (27 April 2006) completed the design for
the foundations (finding 90). PE's 100% for construction drawings for the entire project
108
were approved on 24 July 2006 (finding 99). Thereafter, the 35% drawings·become
irrelevant to the construction of the buildings. For the reasons stated in this decision,
the only exception relates to progressive collapse.
"NewArguments"
PE includes Addendum A, PFF Analysis, to its reply brief. In it PE lists and
comments upon every numbered Proposed Finding of Fact (PFF) in the AF's brief. One
column in the Addendum is titled "New Argument" where "X" indicates the PFF is an
argumerit PE has not seen before. PE asks the Board to reject these new arguments:
NEW ARGUMENTS. Government counsel have combed
selectively through the contract documents and exhibits and
come up with a number of completely new arguments and
interpretations. We ask the Board to reject such new
defenses as untimely, and because Appellant never had an
opportunity to challenge them either through
cross-examination or through its own witnesses at trial.
(Addendum A at 1) The problem with PE's request is that all the documents used by the
AF in these "new arguments" were admitted into the record without objection from PE.
Such argument is acceptable. See, e.g., United Technologies Corp., ASBCA No. 25501,
86-3 BCA ,r 19,171 at 96,920 ("Attachment A to the Government's brief presents
arguments of data contained in Rule 4, tab 44, Exhibits G-15 and G-5, tab C. Arguments of
evidence in the record are permissible. Attachment [A] shall remain in the brief."). 102 The
record in this case includes over 3,000 Rule 4 tabs, some tabs having hundreds and a few
over a thousand pages. It is clear to us that this is a danger associated with extensive
electronic Rule 4 files. With electronic files, it is easy for the parties to "dump" so many
documents into evidence that they simply do notknow what is in the record and certainly
cannot use them all. Nevertheless, in the circumstances before us here, the documents PE
complains about are in the record, they are fair game for use by either party. We deny PE's
request that we "reject" these "new arguments."
FAR 31.201-2 Determining Allowability
PE accurately identifies the elements listed in FAR 31.201-2 required to determine
that a cost is allowable:
102
Changes to spreadsheets attached to the government's brief that had previously been
introduced into evidence were not allowed. United Technologies, 86-3 BCA
,r 19,171 at 96,923. Summaries of voluminous documents (invoices) without
citation to the record have likewise been stricken for lack of authentication.
Versar, Inc., ASBCA No. 56857 eta!., 12-1 BCA ,r 35,025 at 172,118.
109
(I) Reasonableness.
(2) Allocability.
(3) Standards promulgated by the CAS ?oard, if applicable,
generally accepted accounting principles and practices
appropriate to the circumstances. ·
(4) Terms of the c~mtract.
(5) Any limitations set forth in this subpart.
(App. br. at 427-30) In its brief the AF identifies which of the elements it contests,
"What Respondent contests is the allegation that the incurred costs were caused by
Respondent or were reasonable in amount" (gov't br. at 475). This narrows our inquiry
to reasonableness and causation.
PE's Claimed' Costs were Incurred
At the request of the AF, DCAA verified that the claimed costs were incurred
(findings 211, 213-19). Mr. McGeehin found that all of PE's claimed costs were .
actually incurred (tr. 17/59). The AF does not take issue with DCAA's finding, "The
fact that Appellant incurred its claimed costs is not at issue in the litigation -
Respondent concedes that Appellant incurred costs" (gov't br. at 475).
PE's Incurred Costs are Allocable to DO 13
Mr. McGeehin found that all of the incurred costs were allocable to the contract
(tr. 17/59-60). The AF does not contest that PE's claimed costs are allocable.
PE's Bid was Reasonable
Even though we do not see this as a modified total cost claim, we feel we need to
deal with this point. We evaluate bid reasonableness primarily based on what was known
before award. PE discusses the process it went through to arrive· at its bid consisting of
Mr. Tengler's calculation of the bid, Mr. Booth's "check estimate," the U.S. Cost estimate
and the executive review meeting (app. br. at 435-40; findings 59, 60). The AF responds
with various facts in support of its argument that the bid was unreasonable (gov't br. at
477-81). The AF argues that because PE failed to implement its mitigation strategy to
110
address cost escalation 103 after award its bid must have been unreasonable (id. at 479).
We disagree.
Whether a cost is reasonable is a question of fact. Kellogg Brown & Root
Services, Inc., ASBCA No. 58081, 17-1 BCA 136,595 at 178,240 (The Federal Circuit
additionally noted that cost reasonableness "is a question of fact."). We understand the
same to be true for the reasonableness of a bid. In Ingalls Shipbuilding Division, Litton
Systems, Inc., ASBCA No. 17579, 78-1BCA113,038, we explained that "the purpose
of an accurate bid or estimate is to enable us to determine with some degree of
reliability what portion of the actual cost exceeds what it properly should have cost."
Id. at 63,671. While we agree with PE that the process it used to reach its bid price was
logical, that is only one factor we consider in arriving at our conclusion that the
$33,566,277 bid was reasonable.
We consider the unusual way the bids were solicited and evaluated. RFP 8234
informed bidders that contract award would be "to the contractor offering the lowest price"
(finding 18). RFP 8234 included the AF's IGE for the VQ of $17,977,243.00 and TLF of
$15,373,500 for a total of$33,350,743 (id.). There was also something called the
Construction Cost Limitation (CCL) that was mentioned in a note on the 35% drawings
(finding 12). However, the amount of the CCL of $33,598,568 was not disclosed in RPF ·
8234 but was discussed in the Price Competition Memorandum (PCM) (finding 61). The
CCL was only about $250,000 greater than the IGE. The CCL appears to be a price-cap
imposed by the AF on the award of the contract. We come to this conclusion based on the
PCM that stated the two other bidders, MWH and Caddell, were "too far out of range [over
the CCL] to allow further consideration" and "were deemed irreparably high when
compared with the CCL, the IGE and the offer from Parsons" and were "rejected out cif
hand" (findings 62-63). The AF then negotiated with PE to allow "award within the funds
set forth in the CCL" (finding 63). The AF then found that PE's bid was reasonable based
on "adequate price competition" (finding 64 ). 104
We are not convinced that the AF acted appropriately in its pre-award dealings
with PE. If there was truly price competition we would expect the record to reflect AF
concern that PE's bid might be mistaken. We understand that the AF asked PE if it
would confirm its bid but did not point out the disparity between PE's bid and the other
two bids (finding 60). To the contrary, the AF rejected the other two bids "out of hand"
103 PE planned to require subcontractors to hold their bids for 120 days, that bids would
include material costs, that "volatile materials such as concrete and steel" were to
be purchased within that 120 days and "stored either on site or in bonded and
insured warehouses" (finding 58).
104
We recognize that the government's pre-award assessment that a bid was reasonable
is not binding on the Board. Grumman Aerospace Corp., ASBCA No. 48006,
06-1BCA133,216 at 164,620-21.
111
and focused solely on getting PE within the CCL. We understand we are not dealing
with a mistake in bid/reformation case because PE defends its bid. However, FAR
imposes an obligation on the government to guard against mistakes in bid. 105 This
obligation is not diminished by the fact that award is based on price alone. There is no
evidence in the record that the AF ever considered alerting PE to a possible mistake. The
record convinces us that the only thing the AF was interested in was getting PE's bid at
or below the CCL, mistaken or not. 106 Now, when it suits the AF's purposes, it argues
that the two higher bids are proof that PE's bid is unreasonable (gov't br. at 477-78). We
will not give any weight to this argument given the AF's completely contradictory
behavior before award.
We also consider the fact that DCAA's conclusion that PE's bid was
unreasonable was based on the AFCEE's technical evaluation of the claims. DCAA
noted that since the AFCEE technical evaluation found there was no "cardinal
change," 107 the 100% overrun indicates the bid was unreasonable (finding 217). We do
not agree with DCAA's conclusion because, contrary to the AF's technical evaluation,
we find in this decision substantial changes and delays that increased the cost of
performance for which the AF is responsible. Other post-award factors such as
commodity and labor price escalation and PE's failure to execute its pre-award
mitigation plans, do not support the conclusion that PE's bid itself was unreasonable.
By way of example, if the fair market price for concrete was $10 .00 a unit before award
and $20.00 a unit when it was purchased, both prices were reasonable. We find that
PE's bid was reasonable.
PE's Costs are Reasonable
It is PE's burden to prove its claimed costs are reasonable. PE argues its costs
are reasonable because, "The Contracting Officer asked DCAA to verify that Parson's
actual incurred costs were reasonable, and the DCAA audit report did not question the
reasonableness of those costs (R4, tab 213 at 109-112)" (app. br. at 427). This ts not
accurate. The record cite provided by PE does not support PE's argument. The DCAA
audit report indicates that the contracting officer asked DCAA to verify that the claimed
costs were incurred. In response, DCAA traced the applicable costs in job cost ledgers
to supporting accounting records and source documents and found that the claimed costs
105
FAR 14.407-1 requires that when a "contracting officer has reason to believe that a
mistake may have been made, the contracting officer shall request from the
bidder a verification of the bid, calling attention to the suspected-mistake." We
discussed this obligation in Orion Technology, Inc., ASBCA No. 54608, 06-1
BCA, 33,266 at 164,854-55.
106
The AF's expert, Mr. Rushing, seems to reach the same conclusion, "It appears this
discussion effort was geared more toward getting the Parsons team to the CCL than
with clarifying their understanding of the RFP requirements" (R4, tab 1449 at 7).
107
We have no idea why AFCEE and DCAA focused on a "cardinal change."
112
were incurred. (Findings 211-20) In its audit, DCAA did not challenge the
· reasonableness of any specific costs. DCAA generally questioned all costs based on the
AF's flawed te.chnical review basically finding no entitlement.
The AF argues that PE's claimed costs were not reasonable because it "failed to
perform in accordance with its bid plans" and failed to hold subcontractors to fixed
price bids, and failed to implement its mitigation plan (gov't br. at 481-82). We agree
that PE failed to fully execute its plans, but we fail to see how this relates to the
reasonableness of specific ii:curred costs.
PE's costs are not presumed reasonable just because they were incurred. Northrop
Worldwide Aircraft Services, Inc., ASBCA Nos. 45216, 45877, 96-2 BCA ,r 28,574 at
142,628-29. Although the AF accurately quotes FAR 31.201-3(a) (gov't br. at 476-77), it
fails to properly interpret the clause. We focus on the following language:
Reasonableness of specific costs must be examined with
particular care in connection with firms or their separate
divisions that may not be subject to effective competitive
restraints. No presumption of reasonableness shall be
. attached to the incurrence of costs by a contractor. If an
initial review of the facts results in a challenge of a specific
cost by the contracting officer cir the contracting officer's
representative, the burden of proof shall be upon the
contractor to establish that such cost is reasonable.
FAR 31.201-3(a) (Emphasis added) When interpreting a procurement regulation, ''we
seek an interpretation consistent with the plain terms provided; it is not our prerogative
to insert additional words or phrases to alter an otherwise plain and clear meaning."
Raytheon Company, ASBCA No. 57576 et al., 15-1 BCA ,r 36,043 at 176,050. The
critical language is, "If an initial review of the facts results in a challenge of a specific
cost by the contracting officer or the contracting officer's representative, the burden of
proo.f shall be upon the contractor to establish that such cost is reasonable." This
language in FAR 31.20 l-3(a) is unambiguous. It requires two actions by the
government: (1) it must perform an "initial review of the facts," and (2) that review
results in a "challenge" to "specific costs." It is the contractor's burden to prove the
reasonableness of the challenged specific costs.
We interpreted FAR 3 l .201-3(a) in our recent case of Kellogg Brown & Root,
17-1 BCA ,r 36,595, where we recognized that contesting reasonableness "is significant
because it shifts the burden of proof'to the contractor. Id. at 178,240. We went on to
hold that a general assertion that all costs are unreasonable is insufficient to require the
contractor to do more to prove reasonableness:
113
[T]he Navy also asserts that the disallowed costs are all
improper on a price reasonableness basis. However, the
Navy does not cite any specific evidence challenging the
reasonableness of these costs, instead simply asserting that
the costs are unreasonable. Based upon the evidence
presented, including KBR's testimony that BE&K was the
only offeror able to provide the required labor, and was the
lowest bidder with the prices of the two other offerors being
roughly 50% higher (finding 95), the Board finds that the
cited costs were reasonable.
Id. at 178,250 (Emphasis added).
We must consider if the AF satisfied FAR 3 l.201-3(a). The CO requested a
. DCAA audit of PE's claim. We hold that DCAA's audit satisfies the requirement for an
"initial review of the facts." However, although DCAA found that PE's claimed costs
were incurred, it relied on the AFCEE's technical_review to question all of the costs in
PE's claim. As is obvious from this decision, AFCEE's technical review was wrong.
Neither DCAA nor the AF challenged the reasonableness of any "specific costs" in the
claims. (Findings 211-20)
During the course of this litigation the Board ordered PE to file a Statement of
Costs (SOC). PE did so on 14 March 7014 (R4, tab 3001). The AF then had the
opportunity to audit the SOC. The AF did not request a DCM audit of the SOC.
Mr. McGeehin is the AF's construction accounting and pricing of damages expert
(finding 222). Mr. McGeehin reviewed the SOC and issued a report on 13 August 2014
(R4, tab 1447). This also satisfies the FAR 31.201-3(a) requirement for an "initial
review." Mr. McGeehin found that the SOC did not provide sufficient information to
determine the reasonableness of PE's estimate (bid) (id. at 9). The reasonableness of the
pre-award bid is separate and distinct from the reasonableness of SOC costs incurred after
award. Mr. McGeehin did not "question" mark-up rates for Bond, GL & BR Insurance,
Composite G&A and 10% profit (id. at 11 ). He did not take "exception" to Labor and
other Direct Costs (id. at 6-7), Labor Burden (id. at 7-8), and Subcontractor costs (id. at 8).
He found that "Timberline" and "Prism," accounting software used by PE to maintain its
books and records, was "widely used in the construction industry;' (id. at 9). _
Mr. McGeehin also issued an expert report, dated 18 June 2014, responding to
Mr. Rosenfeld's updated expert report (R4, tab 1451). He again questioned certain
estimates, but did not challenge any of the underlying incurred costs as unreasonable (id.).
Additionally, we carefully read all of Mr. McGeehin's testimony; we did not see testimony
that specific costs identified in the SOC were unreasonable (tr. 17 /5-100). Likewise, the
114
PowerPoint version of his expert report used during the hearing does not address
reasonableness of PE's costs in any detail (ex. G-4). 108
Just as in Kellogg Brown & Root Services, the DCAA's audit of PE's claim and
Mr. McGeehin's review of PE's SOC challenged all costs based on the AFCEE's flawed
technical review, but failed to challenge the reasonableness of any specific costs in the claim.
Such a blanket challenge to all costs is insufficient to satisfy FAR 31.201-3(a). Therefore, we
hold that PE has satisfied its burden to prove that its claimed costs are reasonable.
Causation
Having found that PE's claimed costs were incurred, are allocable to DO 13 and
reasonable and there being no other assertions that the elements of FAR 31.201-2,
Determining allowability, are not met, our quantum analysis boils down to causation, or
which party is responsible for the cost. The importance of this conclusion is not lost on
the Board. It means that if we find that the AF caused a claimed cost, we will accept
PE's claimed amounts.
Design Impact Claim ($772,176)
This claim in large part is to compensate PE for structural design work to make
the VQ resist progressive collapse. We start by addressing the obvious question of why
would PE be entitled to additional compensation for designing the VQ to resist
progressive collapse when that requirement was in RFP 8234? (Findings 29, 37-39) As
explained below, the answer is that PE was entitled to bid believing it had the right to
make unilateral changes to the VQ 35% design. In pre-bid questions and answers the
AF was warned that modifying the Baker double wall design to resist progressive
collapse would cost more (finding 30).
PE devotes 110 pages to the design impact portion of its entitlement Section IV,
A. (app. br. at 62-172). As is made clearer in PE's four-page quantum discussion (id. at
446-50), this claim deals with design costs not construction costs. However, in order
for us to .decide this design impact claim we must deal with topics relating to
construction.
PE claims that it was improperly prohibited from exercising its inherent rights as
the DBP03 contractor to change the structural design from Baker's double wall design .
to PE's single wall structural brick design (app. br. at 162). PE argues the AF should be
responsible for all the additional costs and delays caused by its direction that PE build to
Baker's design. The AF counters that there is no authority for such design flexibility in
the contract and, in any event, the claim is barred by the release in Mod. 2 (gov't br. at
108 The AF does not refer to·Mr. McGeehin's reports or testimony in support of its
quantum argument (gov't br. at 481-82).
115
347-350). PE agrees Mod. 2 settled both time and PE's general condition costs and
design costs associated with the structural brick proposal. However, PE contends Mod.
2's release does not cover the cost to correct the deficiencies in Baker's 35% design
(app. br. at 169-72).
We start by considering what was required in Baker's CD contract as regards
progressive collapse. This is relevant because the contract required Baker to account for
progressive collapse and because ?I&T, part of Parsons, participated as an AF
contractor. Baker was the CD prime contractor with support from PI&T, not as a Baker
subcontractor, but as an AF contractor (findings 2, 3). We were not able to find Baker's
contract with the AF in the record (finding 2 n.3). PI&T's contract with the AF is in the
record (finding 3): PI&T was responsible for, "surveys, site analysis, constructability
reviews, design review comments, attendance at conferences for comment resolution,
and project cost validation" (finding 3). However, Baker was the prime CD contractor
and architect of record and as such was ultimately responsible for the 35% design.
It appears that initially Baker did not intend to include structural design to resist
progressive collapse because the "25-meter standoff zone is maintained" (finding 5). This
fact is corroborated by Mr. Bennett who·worked for PI&T and testified that progressive
collapse requirement was in the SOW for the.Baker 35% design but it only played in the
location and orientation of the VQ not in the structural design (finding 10). However
there is ample evidence that the AF informed Baker and Baker agreed that it was required
to account for progressive collapse in its 35% structural design (findings 7-9). It was also
made clear in RFP 8234 that the VQ must be designed to resist progressive collapse
(findings 29-30, 37-39). The preponderance of the evidence before us leads us to find that
the CD contract required Baker's 35% structural design to resist progressive collapse and
not simply through the location of the VQ.
· Next we consider the relationship between PI&T and PE. PE would have us find
that PI&T and PE were completely separate entities. PI&T was the DBP03 contractor
supporting .Baker during the CD contract (finding 3). PI&T and PE were both part of
Parsons. Sometime before 7 September 2004, PI&T novated IDIQ contract8703 to.PE
(finding 17). As early as May 2004, well before the novation, PE was involved in the
project (finding 16). In PE's Executive-Proposal Review/EPR it stated several times that
it performed/completed the 35% design (finding 58). PE was the DBP03 contractor for
the final design and construction contract (findings 65-66). Mr. Bennett was the architect
for both PI&T and PE during both Baker's CD contract and PE's construction contract
(finding 10). In August 2005 PE represented to the AF that "Parsons Evergreene was the .
DBP03 contractor during the CD phase" (finding 71 ). Based on these facts we consider
PE to be effectively the sam~ DBP03 for both contracts. We find that PI&T and PE are
the same entity. This conclusion raises another question. SOW paragraph 3.2.2.2,
Working Drawings, Construction, Delivery and Warranty states, "If the same DBP03
contractor performs these studies and investigations during the CD Phase and is awarded
the Construction Phase task order for essentially the same project, then the DBP03
116
contractor is responsible for the results of its efforts during the CD Phase" (finding 28).
Although we consider PE to be the "same DBP03" contractor during both the CD and
construction phase, we do not hold PE responsible for Baker's flawed double wall design
for two reasons. First, PI&T attempted to persuade Baker to abandon the double wall
design in favor of the structural brick design during the CD phase (finding 6). Second,
PI&T was not the architect of record and the scope of PI&T's contract was limited to
"surveys, site analysis, constructability reviews, design review comments, attendance at
conferences for comment resolution, and project cost validation" (finding 3). Therefore,
the double wall design was not the "results of its [PE' s] efforts during the CD Phase" and
PE is not responsible for the failure of Baker's 3 5% design to account for progressive
collapse.
Next we deal with PE's contention that, as DBP03 contractor it had the unilateral
right to change the wall design from Baker's double wall to a single structural brick wall.
. In a letter entitled "Memo of Understanding Design/Build Procedures" dated 23 August
2005, PE seemed to agree it would follow the Baker double wall design by stating the
"Overall concept and expression of the building will follow the 35% design. (Materials.
and design details will be further developed and designed through the 64% and 95%
design.)." (Finding 71) Likewise, in notes from a meeting held on 1 September 2005, the
parties "agreed that Parsons has the opportunity to improve on the conceptual drawings in
the less developed portions of the drawings such as electrical, mechanical, structural, and
civil. Architectural drawings are much more developed and the expectation is that the
floor plans and room layouts are fixed and will not change. Parsons agrees with this
understanding." (Finding 72) The Baker double wall design is shown on the architectural
drawings (finding 30). The VQ 35% drawings included a note that required the contractor
to complete design and construction "in accordance with the intent of all design(s)
represented in the (RFP) construction documents" and "must follow the full design intent
represented in the RFP construction documents" (finding 12). We consider this drawing
note clear and unambiguous and disposhive of this issue. We find that Baker's double
wall design as shown on the 35% construction drawings was the "design intent represented
in the RFP construction documents." We interpret this note to require PE to adhere to
Baker's double wall hollow core plank design. 109. Without more, PE was not free to vary
from Baker's design without AF approval. However, we must also consider if pre-bid
communications affect our interpretation of the drawing note.
During the .bidding period there were a series of pre-bid questions and answers
that dealt with progressive collapse and other design matters. A 22 March 2005 memo
109
We considered PE's witness testimony, including expert testimony, urging us to find
that a design-build contractor has the right to select the design it prefers. We find
this testimony unpersuasive when faced with explicit language on the 35%
drawings that require PE to follow the "full design intent represented in the RFP
construction documents," i.e., the Baker design (finding 12).
117
included question No. 6 asking that, since the VQ 35% design did not address
_progressive collapse, was it required in the final design. The answer was:
Yes, progressive collapse features are required for VQ ! The
architect of record resulting from the award of a task order
under the DBP03 concept will be expected to include ·this
feature in the final stamped drawings.
(Finding 29)
Another set of questions and answers sent to PE on 7 and 20 April 2005 included
question No. 3 that expressed concern over the adequacy of the 35% drawings to
"satisfy the progressive collapse requirements" and asked, "Are we allowed to substitute
assemblies and structural systems in order to be compliant with the progressive collapse
requirement provided the performance requirements and appearance of the building are
satisfied." This question specifically points to Section 2· on drawing A-302 where the
. third floor roof load is transferred to the third floor hollow core plank instead of the
second floor reinforced concrete masonry w~ll. This design was at least one example of
the 35% design's failure to address progressive collapse. The question included the
note, "A design to provide a facility compliant with the Progressive Collapse criteria
would require substantial work at a considerable additional compensation." The AF's
answer was:
Yes, the drawings are concept only. You have the
· responsibility to generate the construction details and
drawings. Tim Morrison, AFCEE/HDM
(Finding 30) A copy of the 20 April 2005 email was sent to CO Macdecy (id.). This or
a similar answer was repeated many times in the pre-award questions and answers
(finding 31 ). There was no testimony or other evidence in the record about the parties'
understanding or communications about the note warning "substantial work at a
considerable additional compensation" would be required to make the VQ compliant
with progressive collapse. In interpreting the question we read the question and note
together. NVT Technologies Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)
(When interpreting the contract, the document must be considered as a whole and
interpreted so as to harmonize and give reasonable meaning to all of its parts.). Taken
as a whole, question No. 3 asks if bidders can substitute a different design to resist
progressive collapse and if not, it would cost a lot more to do so with the Baker double
wall design. The AF's answer clearly told the bidders that they could choose a different
design. It specifically did not say only with AF approval. We have a conflict between
the drawing note requiring PE to adhere to the Baker 35% double wall design and the
AF's answers to pre-bid questions. ·
118
Mr. Hillestad recognized this conflict and expressed concern over the bidder's
questions in a 14 April 2005 email, "what latitude, if any, we are willing to allow the
contractor in departing from specific criteria provided in the concept design" (finding 35).
The record does not include further evidence of any response to or discussion of
Mr. Hillestad's c.oncern. We conclude the issue raised by the questions was understood
';Vithin the AF when the answers were sent to bidders.
On 15 April 2005, Mr. Hillestad sent out an email to bidders that stated:
· Effective this date the time for submittal of additional
1
questions is now dosed .... Ambiguities and/or patently
obvious errors in the concept design criteria will henceforth
be resolved after receipt of proposals and prior to award.
(Finding 36) We find that because the bidders recognized that Baker's 35% design
failed to resist progressive collapse, there was a ""patently obvious error in the concept
design" that was not "resolved prior to award."
In a final email before award, dated 19 April 2005, addressing progressive
collapse, Mr. Hillestad stated:
(2) When addressing the progressive collapse design
requirements for the VQ at McGuire, the specified threat
level is "LOW". ·
"""
Further clarification should not be required. To the extent
mis-information, erroneous, or misleading direction is
contained in the RFP, appropriate corrections shall be
accomplished in the award document(s).
(Finding 39) This email did ~othing to clarify the confusion relating to how to deal with
progressive collap~e.
There is no question that RFP 8234 required the VQ to be designed to resist
progressive collapse (findings 29-30, 37-39). Above, we interpreted the drawing note on
the VQ 35% drawings to require PE to adhere to Baker's double wall design. However,
the AF's repeated statement in responses to pre-bid questions and answers that "the
drawings are concept only. You have the responsibility to generate the construction details
and drawings" is a concern. (Findings 30-31) This is especially true of question No. 3 that
specifically questions the 35% structural design ability to resist progressive collapse and
warns that "substantial work at a considerable additional compensation" if the-Baker
double wall design was followed (finding 30). We have held that pre-bid questions and
answers are not "wiped from the record by formal execution of the contract." Northwest
Marine, Inc., ASBCA No. 43502, 94-1 BCA ,i 26,521 at 131,999. In Metcalf Construction
119
Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014), the Federal Circuit held that pre-bid.
questions and answers used by bidders in estimating and submitting bids are highly
relevant to the post award interpretation of contract provisions. Id. at 995-97. ·In earlier
decisions we have held the same. Ogden Allied Services Corp., ASBCA No. 40823, 91-1
BCA ,i 23,455 at 117,671 (appellant has the right to rely on pre-bid questions and answers
as to matters of contract interpretation); Bogue Electric Manufacturing Co., ASBCA
No. 16958, 74-1 BCA ,i 10,513 at 49,794 (questions,and answers at a pre-bid conference
can properly be referred to for the purpose of evaluating the reasonableness of appellant's
interpretation). The Court of Federal Claims follows the same law. Aero Corp., S.A. v.
United States, 38 Fed. Cl. 739, 762 (citing Sharpe Refrigeration, Inc. v. United States,
30 Fed. Cl. 735, 739 (1994)) (Official statements made during pre-bid conferences to
clarify contract language should be utilized in resolving questions of contract
interpretation.). Therefore, contrary to the AF's position that the pre-bid questions are
irrelevant (finding 80), we find that PE was entitled to rely on the AF's answers to pre-bid
questions that "the drawings are concept only. You have the responsibility to generate the
construction details and drawings" and allowed PE to "substitute assemblies and structural
systems in order to be compliant with_ the progressive collapse." (Finding 30) We find
that as a result of the pre-bid answers provided by the AF that conflicted with the notes on
the 35% drawings, the AF bestowed upon PE the unilateral right to change Baker's double
wall design to structural brick.
There is another problem with the AF's argum~nts. The AF hired a structural
engineering consultant, JQA, to evaluate Baker's 35% design. JQA agreed with PE that the
Baker design did not resist progressive collapse and would require structural changes
(finding 79). It is undisputed that the AF was warned in Question #3, that making the Baker
design resist progressive collapse would require "substantial work at a considerable
additional compensation" (finding 30). · The AF was again warned at the 25 January 2006
"summit" meeting that there would be a cost impact if PE was directed to build the double
wall design (finding 84). The record supports our conclusion that PE's structural brick
design accounted for progressive collapse at no increase in price (findings 73, 76, 78, 82).
Mr. Williams, AF architect and project manager, supported the change to structural brick
(finding76). There is evidence in the record that the reason the structural brick design was
rejected was th~ ~ppearance of the brick (finding 84). However, PE assured the AF that
the structural brick would meet the base's color and size standards (findings 74, 81, 84).
Even Mr. Rola agreed the structural brick could be matched with the brick MAFB wanted
(finding 81). In MA. Mortenson Co., ASBCA No. 39978, 93-3 BCA ,i 26,189, a case
involving a similar design-build contract, we held that the government warranted the
adequacy of the 35% "concept submittal" drawings. Id. at 130,367. Therefore, the AF
warranted that the Baker 35% double wall design would account for progressive collapse
and the record overwhelmingly indicates it did not. Given this warranty, the pre-bid
answers, all the facts the AF knew and the right it effectively bestowed on PE to change
the 35% design, we conclude there was no right or good reason to reject the structural brick
design. Having done so we apply the logic of MA. Mortenson and allocate the additional
cost of design and construction required to make the Baker 35% design resist progressive
120
collapse Jo the AF. We must now consider if the release in Mod. 2 affects this allocation
of risk.
During the discussions with the AF about structural brick, PE developed the 65%
design assuming it would be allowed to use structural brick. When the AF directed PE
to build to the Baker 3 5% design, PE effectively had to start the 65% design over' and
redesign the entire interior of !he VQ necessitating additional time. (Findings 84-87) In
Mod. 2, dated 6 June 2006, the parties agreed to extend the period of performance by
126 days to account for the time spent on the structural brick issue (finding 92). Mod. 2
extended the period of performance to 9 July 2007 and included a release. The release.
covered "any delays or costs rising from varying design approaches, including delays in
reviewing approaches" relating to the structural brick issue (finding 92). The AF
contends that this release covers all costs claimed by PE to modify the Baker 35%
design to resist progressive collapse (gov't br: at 347-50). PE counters that the release
is limited to evaluation of the structural brick design not subsequent design and
construction costs (app. reply br; at 81-84). PE states that Mod. 2 "was a settlement of
both time ( 4 months of time lost while the parties debated PE's Structural Brick Design
solution), PE's General Conditions costs associated with that time, and design costs
incurred during that period to support the Structural Brick proposal" (id. at 82). The
general principles of contract interpretation apply to release language and if the
language is clear and unambiguous it inust be given its plain and ordinary meaning.
United Launch Services, LLC, ASBCA No. 56850 et al., 16-1 BCA 136,483 at
177,764. We consider the release in Mod. 2 to be clear and unambiguous. It is limited
to "delays and costs arising from varying design approaches including delays in
reviewing approaches." This can only be interpreted as referring to the structural brick
"design approach" and not the additional costs of correcting the Baker 35% design. We
agree with PE's interpretation and are not persuaded by the AF's argument to expand
· ·the clear language of the release to cover the cost of fixing the Baker 35% design. The
AF is responsible for the additional design and construction costs incurred to change the
Baker 35% design to resist progressive collapse.
In the quantum section of its brief PE discusses what design costs are included in
the claimed $772,176 (app. br. at 446-50). Specifically, PE wrote:
Parsons completed its 100% design within its bid budget,
but the budget th~reafter overran as the contractor was
forced to (a) make ongoing design changes to accommodate
the heavy structural wall system and hollow core planks
floors on which the Air Force insisted and (b) develop
design and pricing for multiple iterations of "shopping list"
proposals demanded by the Air Force.
121
(Id. at 446) 110 We found above that the AF is liable for (a). However, (b) design costs
related to the "shopping list," is another matter. The shopping list was formalized in
Mod. 5 wherein the parties agreed on a price of $499,441.00 (finding 149). First, we would
expect PE to include its design costs in the price for the shopping list. PE failed to enter
evidence on this point in the record or address this in its brief. Second, Mod. 5 includes a
release that also included, PE "will not release the government in a 'blanket' fashion for all
events that have occurred on the project to date." (Finding 149) Neither party discussed
this release. Because of the questions surrounding design costs for the shopping list,. we
find that PE failed to meet its burden of proof as to AF liability for (b ). We will have to
apportion the $772,176 to account for this split in liability. Before we -move on to that, we
must deal with PE's characterization of its claim.
PE characterizes this claim as using a "Modified Total Cost methodology" (MTCM) ·
(app. br. at 447). We disagree. That is_because PE tracked its design costs and calculated
the claim on "design costs as booked in the contemporaneous job cost records" (id. at 446).
That means that all of the costs claimed are for the design work and nothing else. A total
cost or modified total cost approach does not specifically track costs for a single effort as
was the case for the design effort. We faced a similar situation in Raytheon Missile Systems
Company, ASBCA No. 59258, 15-1BCAi136,102:
The Navy characterizes Raytheon's quantum analysis·
as a "total cost" claim and structures much of its quantum
briefs argument around the elements of proof required to
sustain a total cost claim (gov't br. at 27-36). We agree with
Raytheon, this is not a total cost claim. See, e.g., Raytheon
Co. v. White, 305 F.3d 1354, 1365 (Fed. Cir. 2002) ("Under
the total cost method, the measure of damages is the
difference between the actual cost of the contract and the
contractor's bid."); WRB Corp. v. United States, 183 Ct. Cl.
· 409,426 (1968) (total cost claim is difference between
actual and estimated expenses). Rather, Raytheon's approach
to quantum identifies the number of gallons of fuel priced at
$25.00 that it loaded into Contract 0569 missiles and, with
certain other adjustments, simply calculates quantum based
on the $11.00 difference between $14.00/gallon Raytheon
bid and the $25.00/gallon charged. This approach is a direct
quantification of the damage caused by the Navy's breach.
110
Later in its brief PE changed its description to design overruns "attributable to
defects in the Government's 35% design, unreasonably protracted approval
processes (e.g., standing seam metal roof), and/or ongoing design changes (e.g.,
the 'shopping list')" (app. br. at 449). We do not understand how the "approval
process" for the SSMR would cause design changes so we disregard it.
122
Id. at 176,260. PE's design claim is also a direct quantification of damages because all
of the costs claimed are design costs just as all the costs claimed in Raytheon were fuel
costs. The fact that PE took responsibility for some of the design costs recorded in its
books and records does not make this a MTCM claim. Therefore, we need not go into
the elements of a MTCM as PE does in its brief111 (app. br. at 447-50). We do however,
have to separate design costs for correcting the Baker design from design costs for the
"shopping list." We generally t1:nderstand from the record the relative complexity of the
design effort to resolve progressive collapse and the "shopping list" which gives us the
ability to estimate relative costs. We conclude that the design for progressive collapse
is far more complex than for the shopping list. We estimate that the design cost for the
shopping list would be about $50,000 and subtract that amount from PE's claim. PE is
entitled to $722,176 for its design impact claim.
Delay and Extended Overhead
We are about to consider the first delay claim. There will be other delay claims and
also constructive acceleration claims. Before we proceed, we·set forth how we will deal .
with delay and constructive acceleration. A delay claim and constructive acceleration
claim are two distinct claims: "A constructive acceleration claim, although arising out of
the same facts as a delay claim, has been held to be a separate claim because it requires
proof of the additional element of an express or implied Government order to overcome
the excusable delay." Gaffny Corp., ASBCA No. 37639 et al. 94-1 BCA 126,522 at
132,012 (citati.on omitted). Damages are calculated differently for each. Delay damages
are based on a daily cost of field overhead multiplied
. .
by. the number of delay days.
DANAC, Inc., ASBCA No. 33394, 97-2 BCA 129,184 at 145,148. Acceleration damages
are the direct costs caused by the acceleration, "Unlike the delay and impact claims,
appellant's claim for acceleration, as finally adjusted, comprises principally extra direct
costs [with burden] that were incurred during the acceleration period." Fischbach &
Moore International Corp., ASBCA No. 18146, 77-1BCA112,300 at 59,241.
Schedule Delay/Extended Site Overhead-Daily Rates
We discussed PE's daily rates in our findings of fact (finding 223). We need not
delve deeply into the accounting information in the record because we rely the AF's
111
If we did it would not affect the outcome.
123
expert, Mr. McGeehin's, adjustment to PE's rates increased three out of four of them
(id.). Accordingly, we will us-e PE's daily rates for delay as follows:
Time Period Daily Rate
13 July 2005 to 31 July 2006 $1,696
1 Aug 2006 to 3 1 Aug 2007 $7,712
1 Sept 2007 to 31 May 2008 $13,548
1 June 2008 to 31 October 2008 $4,688
(Id.) These daily rates do not include mark-up (id.).
Delay in Issuing Foundation NTP 112
The TLF Site Civil/Structural 100% for Construction drawings are dated 17 April
2006 (finding 90). The VQ Site Civil/Structural (100%) are dated 27 April 2006 (id.). The
AF did not issue a limited NTP for foundation work. The unlimited NTP was issued on
10 July 2006 (finding 98). Mr. Evans contends that the 83 days between 18 April 2006 and
10 July 2006 are critical path delays. The AF counters with evidence that PE's designs
were not complete and that CO Brown issued the final NTP as s<;>on as the designs were
complete (gov't br. at 138-39). PE responds in its reply brief that Mr. Evans "researched
the review commerits" and found them minor (app. reply br. at 90). As explained below,
we need not attempt to sort out if the comments were "minor" or not.
r We rely on the actual dates on the drawings. The VQ Site Civil/Structural
(100%) drawings are dated 27 April 2006 (finding 90). That means that the foundation
design work was completed no later than 27 April 2006. We agree with Mr. Evans that
the VQ foundations were on the critical path. We see no reason why the AF could not
have issued a LNTP for the VQ foundations on or about 27 April 2006. There are 74
days between 27 April 2006 and)O July 2006. We give the AF four days in which to
issue the foundation LNTP. Therefore, we hold the AF responsible for 70 days of
excusable compensable delay.
This 70-day delay falls within period one where the daily rate is $1,696.
Therefore the extended overhead is $118,720 (70 x $1,696). We follow DCAA's
method of calculating markup (R4, tab 213 at 39):
112
We were confused in that PE identified this as "design impact" delay (app. br. at
483). Mr. Evans delay analysis Review Period 2 explains this is foundation NTP
delay (R4, tab 3004 at 20) but also as design delay (id. at 21). We think
foundation NTP delay is accurate.
124
Description Audit Determined Rate Amount w/ Markup
Extended Overhead $118,720
Markups
Bond · 0.6375% $757
GL & BR Insurance 0.8316% $987
Subtotal $120,464
Composite G&A 2.8600% $3,445
Expense
Profit 10.0000% $12,046
Total $135,955
Clean Site Delay 113
In June 2006 PE asked the AF for a Certificate of Clean Site but none was
forthcoming (finding 95). In July 2006 PE's subcontractors were working on footings for
the VQ. Because of concerns over environmental contamination in the area where the
swimming pools had been demolished, on 7 July 2006 PE directed its subcontractors to
stop work on the VQ footings (finding 96). The AF issued an unlimited NTP on IO July
2006 (finding 98). 1-14 On 4 August 2006, PE's concerns over VQ site contamination were
resolved and PE lifted its stop work order (finding 100). We find that since this -yvas an ·
area where two swimming pools existed and the AF contracted with another contractor to
demolish the pools, the AF was responsible for ensuring the are~ was not contaminated
with environmental hazards. PE's concern over environmental contamination was
reasonable. We allocate 28 days of delay, from 7 July 2006 to 4 August 2006, to the clean
site delay. The AF kresponsible for this delay. We agree with Mr. Evans that this
foundation work was on the critical path (R4, tab 3004 at 25). Therefore the delay was
excusable and compensable. This delay spans two daily rate periods - 25 days in July at
$1,696/day and 3 days in August at $7,712/day for a total of $65,536 (25 x $1,696 + 3 x
$7,712). We follow DCAA's calculation for markup:
Description Audit Determined Rate Amount w/ Markup
Extended Overhead $65,536,
Markups
Bond 0.6375% $418
' GL & BR Insurance 0.8316% $545
Subtotal $66,499
113
There was also confusion concerning this delay because even though Mr. Evans
discussed the clean site facts (R4, tab 3004 at 26-27), he did not appear to
include it in his schedule analysis (id. at 25-26).
114
It is unclear why PE started work on the footings before the unlimited NTP.
125
Composite G&A · 2.8600% $1,902
Expense -
Profit 10.0000% $6,649
Total $75,050
Earthwork Differing Site Condition Delay
This section consists of two claims. There is the claim for $582,375 in direct
costs (app. br. at 450-55) and the claim for $1,995,993 in delay damages (id. at 483).
We deal with them together. There are three components involved in these two claims:
unsuitable fill, organic material, and asbestos pipe.
Unsuitable Fill ($178,425)
As early as April 2004 PE expressed concern over whether the AF had properly
monitored the demolition contractor "to ensure that select fill was placed in the pool
excavation to avoid 'unforeseen site conditions"' (finding 16). This concern turned out
to be legitimate.
The original SOW in RFP 8234 stated that.site demolition was not required and that
the site was "clean and ready for construction" (finding 19). Amendment No. 2, dated
5 April 2005, deleted these statements (finding 27). Mr. Morrison, drafter of Amendment
No. 2, explained that it was due to the fact that there were electric utilities in the area, bu~
that the fill dirt was still supposed to be clean (finding 27). In a 22 March 2005 memo
listing pre-bid questions and answers, the AF's answer to question No. 8 stated "the site is
clean and ready for construction" but the fill was not compacted (finding 29). The AF's
answer to question No. 13 stated there was no "Geotech report" on the demolished pools
and that bidders should assume the soil content is "at least equivalent to the worst condition
level permitted in the Base Demo 'contract requirements" (finding 29). In questions and
answers sent to bidders on 7 April 2005 the AF's answer to question No. 61 stated the ·
"backfill is clean but not compacted. Use the worst soil boring sample for calculations"
(finding 32). Mr. Temchin and Mr. Radin testified that PE relied on the AF's answers in·
bidding and believed the backfill would be clean and ready for construction. (Finding 34)
We discussed the legal importance of pre-bid questions and answers above in our decision
on structural brick. PE is entitled to rely on these pre-bid questions and answers.
Therefore, notwithstanding Amendment No. 2's removal of the language, "The site is clean
and ready for construction," subsequent answers that the fill dirt was clean did, as
Mr. Temchin testified, put the representation that the fill dirt was clean back in the contract
(finding 34).
In mid-August 2006 test pits were dug in the TLF and VQ areas (finding 103). On
16 August 2006 PE notified the AF that the test pits had uncovered "wood, concrete
rubble, metal, wire, charred debris and other construction debris" that indicated the
demolition contractor had not backfilled with clean material (findings 103-04). On
i
126
22 August 2006 PE stopped work on excavation at the VQ due to the unsuitable material
found in the test pits (finding 104). We find PE was entitled to stop work because that is
what the differing site condition clause mandates. Lean Construction and Engineering
Co., ASBCA No. 58995, 15-1 BCA ,r 36,159 at 176,462 ("The clause requires that such
notice be given promptly and before the conditions are disturbed."). Due to funding issues
"the AF did not direct PE to start removing and disposing of the unsuitable materials until
2 November 2006. The direction imposed a $70,000 price ceiling. (Finding 105) We find
that the AF failed to properly supervise the demolition contractor's work. We find that
before award the AF represented that the soil would be clean. This is a Type 1 differing
site condition in that the AF represented that backfill from the demolitfon would be "clean"
and it was not. PBS&J Constructors, Inc., ASBCA Nos. 57814, 57964, 14-1 BCA
,r 35,680 at 174,654 ("A Type I differing site condition claim is dependent on what is
'indicated' in the contract."). The AF is responsible for any unreimbursed costs (over the
$70,000), of removing the unsuitable material, replacing it with suitable compacted
backfill and the 72 days between 22 August 2006 and 2 November 2006. 115 . We agree this
delayed VQ foundation work that was on the critical path (R4, tab 3004 at 24-25, 30-31).
We also find that this delay was excepted from the release in Mod. 3 (finding 123). It is
excusable compensable delay, however, this 72-day delay runs concurrent with the organic
layer delay discussed below and we account for it below. We accept PE's costs; the AF is
liable for $178,425 to resolve the unsuitable soils problem at the site.
Organic Material ($297,274)
Also on 22 August 2006 PE found organic material in two test pits (finding 107).
PE had PSI perform borings to map out the extent of the organic material (id.). PSI
recommended that the organic layer be removed (finding 108). Even though the organic
layer was about five feet below the elevation of the footings, PE concluded it needed to be
removed because of possible differential settlement (findings 109, 115). Mr. Rola took the
position that the organic layer was deep enough it did not need to be removed (findings
111, 116). CO Brown did not agree with Mr. Rola (finding 111). However, the parties
spent valuable time going back and forth discussing the need to remove the organic layer
because of Mr. Rola' s opposition 116 ( findings 111, 114, 116). By the end of October 2006
PE decided to remove the organic layer without AF permission. We find that the organic
layer was a Type 1117 differing site condition because the geotechnical report did not list
organic matter as a subsoil condition (finding 57) and, in the circumstances here, this
absence should be construed as a representation that there was no such organic material
115
Mr. Evans shows the unsuitable fill delay running from 27 June 2006 to 21 August
2006 (R4, tab 3004 at 31 ). This is incorrect and we think Mr. Evans confused
unsuitable fil with contaminated fill.
116
In an apparent attempt to justify Mr. Ro la's opposition, the AF included a 2014
report in the record from another contractor, Versar, agreeing that it was not
necessary to remove the organic layer (finding 114). We are not persuaded.
117
Organic material could also qualify as a Type II differing site condition.
\
127
present. The fact that Boring B-OlA found "trace amounts of organics'; (id.) is not enough
to put PE on notice of the organic material it found. PE was entitled to rely on the
geotechnical report and associated boring logs that indicated what the subsurface soil
conditions would be. PBS&J, 14-1BCA135,680 at 174,653 (borings are the most
significant indication of subsurface conditions). We also find that PE was the engineer of
record and bore the risk associated with possible differential settlement that may have been
caused by the organic layer. CO Brown recognized PE's risk (finding 111). Accordingly,
it was PE's right to decide to remove the organic layer without interference from the AF,
which it encountered from Mr. Rola. Right or wrong, Mr. Rola did not have the right to
second guess PE that bore the ultimate responsibility for the stability of the VQ. We find
the AF responsible for the cost associated with the organic layer and associated critical
path delay discussed below. We are satisfied that PE reasonably incurred a cost of
$297,274 for dealing with the organic layer and find the AF liable for that amount.
"Transite" Asbestos Pipe ($106,676)
On 3 November 2006 when PE started to remove the organic layer it encountered
"transite" asbestos insulated pipe. PE notified the AF of a differing site condition and
stopped work. (Finding 110) We have determined that while the pipe was shown on
drawings, the fact it was "transite" asbestos pipe was not disclosed (id. at n.48). At AF
direction, PE contracted to have the asbestos pipe removed and the work was completed
by 1 February 2007 (finding 119). This was a 90-day delay from 3 November 2006 to 1
February 2007. PE was then able to restart removal of the organic layer material that
was finished on 28 February 2007 (id.).
Mr. Rola took the position that the asbestos pipe was not a differing site
condition (findings 113, 118). CO Brown disagreed (finding 113). We agree with
CO Brown. We find that the drawings indicating the location of utilities did not identify
the "transite" asbestos pipe. We find that the asbestos insulation is a Type 1 differing
site condition because PE was entitled to rely on the AF's drawings that did not indicate
the presence of asbestos. The AF is responsible for any unreimbursed cost of abatement
of the asbestos insulated pipe and associated delay. . .
PE's scheduling expert, Mr. Evans, found that the delay of the foundation work at
wing A of the VQ that was caused by the unsuitable fill, organic layer and asbestos pipe
was on the critical path (app. br. at 365-68). The AF's scheduling expert, Mr. Ockman,
. used the "time impact analysis" method which is different from the CPM analysis used by
Mr. Evans. We do not comment on the relative merits of these to methodologies because
we understand both to place the foundation work at VQ Wing A on the critical path.
Mr. Ockman, however, assigns responsibility for the contaminated fill (Time Impact No. 5)
and "substandard fill" 118 and asbestos pipe (Time Impact No. 6) to PE because it failed to
118
Mr. Ockman's "substandard fill" refers to the fill improperly placed in thicker·
layers, not the construction debris (R4, tab 1739 at 20).
128
prepare subgrade and locate the asbestos pipe {gov't br. at 323-24). We reject this
allocation of responsibility. Also, we did not see the organic layer in Mr. Ockman's Time
Impact Nos. 5 and 6. We accept PE's costs of $106,676 to deal with the asbestos pipe and
find the AF liable for that amount.
Cumulative Delay/Earthwork
In our findings of fact, we calculated 191 days of critical path delay for unsuitable
fill/organic layer/asbestos pipe from 21 August 2006 to 28 February 2007, deducting nine
days for replacing the improper fill, we have 182 days of delay (finding 121 ). This is
excusable compensable delay. This delay is in daily rate period two where the rate is
$7,712/day. Therefore, the extended overhead for the earthwork delay is $1,403,584
(182 X $7,712)'.
Again we follow DCAA's calculation to markup:
Description · Audit Determined Rate · Amount w/ Markup
Extended Overhead $1,403,584
Markups
Bond 0.6375% $8,948
GL & BR Insurance ·0.8316% $11,672
Subtotal $1,424,204
Composite G&A 2.8600% $40,732
Expense
Profit 10.0000% $142,420
Total $1,607,356
Mod. 3
On 20 March 2007 the parties signed Mod. 3 extending the contract by 171 days to
27 December 2007 and decreased the contract price by $230,337 (finding 124). The
$230,337 was calculated multiplying the liquidated damages daily rate of $1,347.00 (id.)
by the 171-day extensiQn. In our prior section, we found 182 days of excusable delay;
later in this decision we address concurrent delay that extends the delivery period into June
2008, well beyond 27 December 2007. Therefore, liquidated damages were not running
during the 171-day extension in Mod. 3. The release in Mod. 3 was limited by PE' s
extensive reservation of its right to claim the $230,337 and reserved claims associated with
unsuitable fill, organic layer, asbestos pipe, unusually severe weather, NTPs, delay in
approving submittals, and delay in approving roofing (finding 123), Given all of these
exclusions, the release essentially has no effect on PE's claims. Given our decision that
the 171 days was excusable delay, Mod. 3 is no longer valid. We find PE is entitled to the
return of the $230,337, however, PE "adjusted" this amount in its quantum section to
$228,990 and that is the amount we award to PE.
129
High Temperature Hot Water (HTHW) Differing Site Condition Claim ($784,186)
The TLF and VQ were connected to MAFB's HTHW system that required PE to
trench and install new HTHW pipe (findings 22, 127). In so doing, PE contends it ran ·
into various differing site conditions such as underground utilities that were not
disclosed on AF drawings causing it additional time and expense. It also contends that
AF delay pushed the work into winter that also caused additional expense. This
contention is supported by dated pictures of some of the conditions encountered by PE
which indicate that they were discovered in late November to early December 2007
(finding 131).
RFP 8234 included comments stating that "survey base mapping" and "Site Utility
Plan" show utilities (finding 56). However, the 35% drawings do not extend to areas near
East Arnold Ave. where many of the obstacles encountered by PE were located (findings
127, 130-33). From this the AF concludes that it "made no representations in the 35%
drawings included in the RFP regarding existing utilities beyond those depicted" (gov't br.
at 189). According to the AF it cannot be liable for a Type 1 differing site condition
because it did not represent the condition of the site. We disagree. The AF must also
assume responsibility for the representations of utilities on the G-Tab drawings provided
to bidders before award (findings 11, 13, 32, 134), and these G-Tabs, in fact,
misrepresented the utility locations. G-Tab drawings were Auto CAD (electronic) "maps"
showing all utilities. They were provided to all bidders (finding 134). Mr. Morrison
testified that the G-Tab drawings showing the utilities were accurate (finding 32, n.25).
The subject of utilities was addressed in pre-bid questions and answers. In several
answers bidders were told that utilities were shown on "G-Tab" drawings made available
to the bidders (findings 11, 13, 32). Notes on 35% drawings informed bidders that utility
locations are approximate based on "G-TAB MAPPING" (finding 13). Bidders were
warned that "there are a lot of existing utilities along East Arnold gas, phone, water, etc.
(both sides). Extreme care will be required when approaching and crossing east Arnold
with HTHW lines." (Finding 32, #42) When asked about utility demolition, bidders were
told to use "existing documentation and drawings to complete the final designs and project
requirements" (finding 32, #51). When asked if there are any HTHW manholes required,
bidders were told "The DB+ Contractor will need to make this determination" but that two
new manholes would be required (finding 32, #68). These new manholes did not include
manhole #3 5B.
After award of DO 13 on 13 July 2005, PE developed the 100% "for construction"
drawings for the TLF and VQ dated 24 July 2006 (finding 99). We hold that the 100%
drawings embodied the utility locations provided before award on the 35% and G-Tab
drawings. Because the G-Tab drawings are Auto CAD they were not in a useable format
for us to review. We can however, find a proxy for what was in the G-Tabs by
examining the 100% drawings made by PE, which we based on pre-bid information
130
provided by the AF. Therefore, even though produced by PE after award, we use the
100% drawings in our differing site condition analysis because they incorporated pre-
award utility information provided by the AF.
We also consider the post award efforts taken to locate all utilities. Of particular
interest to us are the notes on 100% VQ drawings C-101, C-102, and C-103 that state,
"UNDERGROUND UTILITIES SHOWN HEREON WERE FIELD LOCATED BY
MASTER LOCATORS, INC. BETWEEN 08/23/05 & 08/31/05" (finding 128). The
note on drawing C-107 states, "UTILITY LOCATIONS AND INVERTS ARE BASED
UPON FIELD SURVEY AND BEST AVAILABLE DATA" (finding 129). Neither
party presented evidence to explain Master Locators' activities or the "field survey." We
take this language at face value and conclude that at some time somebody had Master
Locators go to the site to conduct a "field survey" to locate utilities and that information
was incorporated into the 100% drawings. We infer that this field survey·included use of
some device to locate buried utilities such as a magnetometer. We also know that
Mr. Temchin testified that PE was never given the G-Tab drawings of abandoned utilities
(finding 13). The record is insufficiently developed for us to understand what abandoned
utility information was shown on the G-Tab drawings or why the AF would not give
them to PE. We cannot speculate on what these G-Tab drawings show and only point
out that they were withheld. In addition to the Master Locators' field survey and G-Tab
drawings, the AF marked utilities with various colors of paint before issuing a "dig
permit" to PE (finding 130). The drawing notes each have a statement requiring PE to
verify all utility locations before starting construction (findings 128-29). We find that PE
satisfied its obligation to verify utility locations based on the 35% and G-Tab drawings,
the survey by Master Locators, and the AF' s marking of utilities for the dig permit. We
do not know what more/PE could have done. To the extent PE encountered utilities not
shown on the 100% drawings, we find a Type 1 differing site condition.
PE itemized ten differing site conditions. In our findings of fact we found that
100% VQ drawing C-107 showed the storm sewer and telephone lines that PE contends
are differing site conditions (finding 133). Since what is shown in picture DC #3 was also
shown on the drawings, DC #3 is not a differing site condition. We also disagree with PE
on DC #9 relating to the new manhole #35B (finding 131). RFP 8234 directed that the
contractor shall verify and accept the "exact conditions" at the site (findings 11, 13, 20).
The existing manhole #35 is not a differing site condition because it was in plain sight and
Mr. Burdick admitted that it was obvious that it was not big enough to connect the new
HTHW lines (finding 131). Top Painting Co., ASBCA No. 57333, 12-1 BCA ~ 35,020 at .
172,082 ("Visible rust, mold and mildew on the generator housing and AST surfaces when
Top submitted its ·proposal for the contract do not qualify as a DSC under the quoted DSC
clause, because they were neither 'subsurface or latent' nor 'unknown."'). By not looking
at manhole #35, PE assurped the risk that it would be too small to connect its new HTHW
lines (finding 131). Therefore, we sustain differing site conditions #1, #2, #4, #5, #6, #8,
#10 and #11 and deny #3 and #9 (including the cost of manhole #35B). The AF is
responsible for the additional cost caused by the differing site conditions we sustain.
131
PE claims $784,186 for the differing site condition portion of its claim, which we
accept but must reduce to account for our denial of differing site conditions #3 and #9.
PE refers to the October 2014 Rosenfeld Rebuttal report for "full original documentation
of the HTHW pricing." (App. br. at 455; R4, tab 3003 at 130-47) Most of the cost data
does not relate to the specific differing site conditions. As to damages, we conclude from
the pictures and drawings that the manhole work was the most expensive and that we can
treat the remainder of the differing site conditions as similar in impact. Therefore, we
reduce the claimed amount by $150,000 for the manhole DC #9 and reduce the claimed
amount by $50,000 for DC #3 for a total reduction of $200,000. We sustain the HTHW
differing site condition claim in the amount of $584,186 ($784, 186-$200,000).
As for delay, based on the dates on pictures of the differing site conditions they
occurred between late November and early December 2007 (finding 131). This is in
Mr. Evans' Delay Review Period 8 (16 October 2007 to 25 January 2008) (R4, tab 3004 at
43). Mr. Evans contends that during this period the project was delayed 24 calendar days
due to ceiling framing installation, catwalk installation and ceiling paint in Area B in the
VQ (id. at 44). Mr. Evans does identify "HTHW issues" from 14 November to
28 December 2007 but from CPM Figure 16, Review Period 8, As Planned and As-Built
Schedule, the HTHW delay is concurrent with the catwalk delays; Also Mr. Evans does .
not discuss the "HTHW issues" so we do not know if they are solely related to the
differing site conditions. We find that PE failed to prove critical path delays associated
with the HTHW differing site conditions. 119
Triarch Claim ($589,405)
PE claims $589,405 for the "purchase and installation of the Triarch wall
coatings in VQ guest room walls after the Air Force revoked its previous approvals for
using Sherman Williams paint" (app. br. at 222, 231). PE incorrectly centers its
argument on what happened after award. The real question is if RFP 8234 obligated PE
to include the cost of Triarch in the VQ in its bid. As explained below we find it did.
However, we also find liability on the part of the AF for its indecision on what wall
coating it wanted, causing PE to.start applying Sherwin Williams paint in the VQ.
RFP 8234, Specification Section 09911 for TLF required that "Duroplex -
Triarch Industries" and "Plexture - Triarch Industries" be applied to walls and ceilings
of the TLF (finding 41). RFP 8234, Specification Section 09911 for the VQ required
"Duroplex -Triarch Industries" and "Plexture - Triarch Industries" for interior paints 120
119
PE does not appear to claim delay damages for this differing site condition in its.
· claim summary (R4, tab 3149).
120
We disagree with PE's contention that VQ Section 09911 "did not clearly mandate
either paint or Triarch Duroplex" because of the use of the word "paint" (app. br.
132
(finding 42). The 35% drawings included in the RFP required Triarch for the TLF, but
Sherwin Williams paint for the interior of the VQ (finding.43). Therefore there was a
conflict between the 35% drawings and specifications as to the "paint" for the VQ. The
conflict is resolved by the RFP' s order of precedence clause that reads, "In case of a
difference between the drawings and specifications, the specifications shall govern"
(finding 44). Therefore, the Specification Section 09911 requiring Triarch in both
buildings takes precedence over the 35%.drawing (finding 44). Gosselin World Wide
Moving NV, ASBCA No. 55367, 09-2 BCA, 34,242 at 169,235 ("Nonetheless,
appellant is correct that the Order of Precedence clause resolves the inconsistency.").
The oontract requires Triarch in the VQ.
We must also consider the pre-bid actions of the AF and bidders. In a 5 April 2005
response to questions from bidders about the missing CID for the VQ, the AF twice gave
an incorrect answer. The answer was that the VQ CID was attached to Amendment No. 1
.to the RFP - it was not. (Finding 45) .Mr. Hillestad's 12 April 2005 email to bidders states
that the paint specifications are identical and bidders should proceed accordingly
(finding 46). This was a true statement about Section 09911 for both the TLF and VQ, but
not for the VQ 35% drawing DI-401. In his 13 April 2005 internal email, Mr. Hillestad
recognized the conflict between the VQ Section 09911 that required Triarch and the VQ
CID that required Sherwin Williams paint (finding 47). Mr. Hillestad referred to the VQ
CID, but we do not know what he was looking at because the VQ CID was not in RFP
8234 (finding 42). We noted above a similar conflict between the VQ specification and
35% drawing ID-401 that_was in RFP 8234. In an apparent attempt to address this
conflict, Mr. Hillestad wrote his 19 April 2005 email to bidders. This email, however, did
not clarify anything, butrather made matters more confusing in two ways. Armed with the
knowledge of the conflict, rather than providing unambiguous clarification, Mr. Hillestad
imposed a brand name or equal provision that had nothing to do with the conflict between
- VQ Section 09911 ·and drawing ID-401. He ended the email with:
Further clarification should not be required. To th~ extent
mis-information, erroneous, or misleading direction is
contained in the RFP, appropriate corrections shall be
accomplished in the award document(s).
(Finding 49) This statement makes little sense because, if "mis-information, erroneous, or
misleading direction is contained in the RFP," how could clarification be "accomplished in
the award document(s)," i.e., before award without "further clarification"? In any event
there is nothing in the record that would allow us to interpret it differently - it is just
meaningless for our purposes. Contrary to the last paragraph in the first 19 April 2005
email, Mr. Hillestad did provide "further clarification." He sent another email on the topic
on 19 April 2005 where he clarified that "Triarch or equal product will only be applied to
at 222). We understand that technically Triarch is not traditional paint but this
does not cause the confusion PE suggests.
133
the interior walls of the structures," not the ceilings. The subject of the email, "McGuire -
VQ/TLF - Paint issue" makes it clear that this email applies to both the VQ and TLF.
(Finding 49) Therefore, the last email notified bidders again that Triarch was to be used in
both buildings. Although the AF created confusion by not providing the VQ CID before
award and not unambiguously addressing the issue in the 19 April 2005 emails, thi~
confusion does not change the fact that RFP 8234 required PE to include Triarch for both
the TLF and VQ in its bid. This time, pre-award communications do not change the terms
of the contract as the Q&As did in the structural brick claim.
Finally, PE contends in its brief that it and its subcontractors were misled into ·
including Sherwin Williams paint for the VQ in their bids:
Meanwhile, paragraph 1.4 A in Section 09911 (R4,
tab 89)( 121 1 continued to call for paint. Parsons and its
subcontractor(s) followed that paint specification, although
the specification also named a textured wall covering by
Triarch. (R4, tab 89) Parsons included paint in its bid for
the VQ walls and understood that any "mis-information, or
misleading direction in RFP" would be accomplished later.
(App. br. at 224) PE cites to no evidence in the record supporting its contention that PE
and its subcontractor(s) bids wer~ misled into bidding based on Sherwin Williams
"paint" and not Triarch in the VQ. Also, there are several problems with this argument.
Section 09911, paragraph 1.4 A. does not "continue to call for paint." It specified
"Duroplex - Triarch Industries." (Finding 42) The word "paint" is not used as
narrowly as PE suggests. It is clear that "paint" is used to refer to both Triarch and
Sherwin Williams traditional paint. Also, arguing that PE "understood that any
'mis-information, or misleading direction in ~P' would. be accomplished later" is itself
misleading. The actual language referred to is contained in emails and reads "To the
extent mis-information, erroneous, or misleading direction is contained in the RFP,
appropriate corrections shall be accomplished in the award document(s)" (finding 39).
The words "later" and "in the award document(s)," i.e., at award, are not synonymous.
The fact that in its brief the AF seems to accept PE's statement that it bid Sherwin
Williams paint (gov't br. at 200) does not change the fact that there is no evidence in the
record supporting PE's contention. There is, however, evidence that PE mistakenly
·underbid the YQ finishes using Testino's incomplete bid rather than Pro-Spec's bid
with the complete scope (finding 50). This evidence does not support PE's argument
that it and its subcontractors were misled and, as a result, bid Sherwin Williams paint.
Additionally, we consider the conflict between the VQ specification and the
drawing to be a patent ambiguity. As such, PE had an affirmative obligation to inquire
to the government about it. NVT Technologies, 370 F.3d at 1162 (if the ambiguity fa
121
Section 09911, Rule 4, tab 89 is also included in RFP 8234 (R4, tab 2 at 1154).
134
patent, it triggers a duty to inquire); see also States Roofing Corp. v. Winter, 587 F.3d
1364, 1372 (Fed. Cir. 2009); Triax Pacific, Inc. v. West, 130 F.3d 1469, 1474-75 (Fed.
Cir. 1997). If the government's response to an inquiry does not clear up the ambiguity,
the duty to inquire continues. Phoenix Management, Inc., ASBCA No. 57234, 11-1
BCA 134,734 at 171,005 (Furthermore, when an offeror attempts, but the government's
response fails, to resolve an ambiguous solicitation provision, the offeror has the duty to
continue to seek to resolve that ambiguity.). We see no evidence in this record showing
· that PE clearly inquired in an attempt to clear up this patent ambiguity. Therefore, PE's
interpretation must fail. NVT Technologies, 370 F.3d at 1162 (if an ambiguity is
1
obvious and a bidder fails to inquire with regard to the provision, his interpretation will
fail). PE is not entitled to the cost of purchasing and applying Triarch in the VQ.
Having found that RFP 8234 required the use of Triarch in both buildings does not
end our analysis. After award the AF continued to create confusion over the use of
Sherwin Williams paint in the VQ. The 100% VQ drawing ID401 still specified Sherwin
Williams paint (finding 143). In response to RFI No. 43 the AF added to the confusion
identifying Sherwin Williams paint be used in the VQ (finding 144). CO Brown approved
ASI No. 13, writt.en by PE, on 19 September 2007 identifying Sherwin Williams paint, hot
Triarch, for the VQ (finding 145). After approval of ASI No. 13, PE directed its painting
subcontractor to start applying paint to the walls of the VQ (id.). It was not until
4 February 2008 that CO Brown directed the use ofTriarch and on 15 February 2008
CO Cruz formally rescinded ASI No. 13 and directed that Triarch be used in both the TLF
· and VQ (finding 147). As a result of these actions, the AF is .liable for all costs and critical·
path delays associated with its direction to use Sherwin Williams paint in the VQ.
As far as the costs of applying paint to the VQ we are left without any assistance
from PE. This is because its "claim seeks only the cost overrun associated with changing
VQ walls from paint to Triarch" (app. br. at 458). We carefully read PE's discussion of its
Triarch claim in its brief (id. at 222-30, 457-59). We know that KLM installed Triarch in
the VQ, however, because of PE's approach, there is no information allowing us to estimate
the cost of applying the paint to the VQ. Therefore, although PE is entitled to recover the
costs of applying paint to the VQ, we cannot determine quantum. This problem is caused
by PE's demand that the Board decide both entitlement and quantum.
A total of 149 days elapsed between issuing ASI No. 13 on 19 September 2007 and
rescinding it on 15 February 2008. However, we are only interested in the period from
the start of painting to the rescinding of ASI No. 13. We believe this is an appropriate
period to use for calculation of this delay. According to the Review Period 8 as-built
schedule applying paint to the VQ walls in area B started on 26 January 2008 122 and it
was on the critical path (R4, tab 3004 at 44). PE's 1 February 2008 letter states that at
122
The as-built schedule for Period 9 changes this to "Paint Ceilings Area B" so we do
not know precisely when the wall painting was stopped but painting was on the
critical path and preceded the application of Triarch (R4, tab 3004 at 47).
135
that time painting in the VQ was progressing (finding 146). ASI No. 13 was rescinded on
15 February 2008. There were 20 days b~tween 26 January 2008 and 15 February 2008.
Based on the incomplete record before us, we conclude that the AF is responsible for
these 20 days of critical path delay caused by the AF's direction to apply Sherwin
Williams paint to the VQ.
The 20-day critical path delay between 26 January 2008 and 15 February 2008
falls within period three, Acceleration & Vertical Construction, where the daily rate. was
$13,548 (finding 223). The extended overhead is therefore $270,960 (20 x $13,548).
Again we follow DCAA's calculation to markup:
Description Audit Determined Rate Amount w/ Markup
Extended Overhead $270,960
Markups
Bond 0.6375% $1,727
GL & BR Insurance 0.8316% $2,253
Subtotal $274,940
Composite G&A 2.8600% · $7,863
Expense
Profit 10.0000% $27,494
Total $310,297
Stormwater Detention Pond and Underground Storage ($248,390)1 23
PE contends that the VQ detention pond was properly designed using the
24 November 2003 PSA geotechnical report that located the groundwater at
approximately 5 feet below the bottom of the pond. When the pond failed to drain, ESA '
found that the groundwater had ri~en to within a foot of the bottom of the pond. PE
conten.ds this was a differing site condition that entitles PE to be reimbursed for the
additional cost to construct the underground detention system. (App. br. at 257-59)
The AF spends little time on this issue in its brief and takes the position that the
requirement was a performance specification and that the pond failed to meet the
performance requirements due to poor design (gov't br. at 325-26).
During the development of the 35% drawings the stormwater detention pond was
discussed (findings 14, 51-55). MAFB engineers expressed concerns about standing water
that would attract birds close to the runway (finding 51 ). There was direction from MAFB
that the surface pond be removed from the 35% design (findings 52, 55). However, the AF
decided to leave the surface detention pond in the design due to cost considerations
(finding 55). ·
123
This amount was not identified in quantum section K of PE's brief. The amount
comes from the entitlement section (app. br. at 249).
136
The 3 5% design drawing package, dated 18 May 2004, included drawing C-106,
Storm Drainage and Grading Plan, that showed the stormwater detention basin (pond). A
note on the drawing states that, during the final design phase, a detailed hydraulic
analysis "shall be conducted" and that other options such as underground storage could
be considered (finding 14). We conclude that the AF left the surface pond in the 35%
design, knowing that the MAFB did not allow such ponds (findings 51-5 5).
Accordingly, bidders were entitled to bid based on the surface detention pond shown on
the 35% drawing C-106. Although the drawing note provided that other options could be
considered, there is nothing in the note or contract that required the contractor to provide
other more costly options at no cost to the AF. We also note that we found nothing in the
35% design requiring that the pond drain within a certain period of time. However, PE
seems to agree that the pond was supposed to drain in 72 hours (finding 141) so we find
that the pond was supposed to drain within 72 hours.
PE hired ESA to develop the 100% for construction detention pond design
(finding 139). ESA's design is shown on 190% design For Construction Drawing C-106
and includes a boring log at one site adjacent to the pond (finding 140). It is important to
remember that this boring was done after award of contract 8703. The boring found
groundwater at about 5 feet below the bottom of the pond (id.). This was consistent with
the findings of site boring samples included in PSI's pre-award 24 November 2003
geotechnical report (finding 57). In the fall of 2006 there was a "hundred year storm" and
the pond did not drain (finding 141). ESA determined that the groundwater level was
much higher, about a foot under the bottom of the pond (id.). PE contends this was a
differing site condition for which it is not responsible (app. br. at 258-59). A differing site
cpndition does not apply in this situation because the site condition found after award in
the ESA boring was the same as the site condition _described before award in the PSI
geotechnical report (findings 57, 140). That is, the groundwater was approximately
five feet below the bottom elevation of the pond both before and after award. It was not
until the "hundred year storm" that the groundwater rose to within a foot of the bottom of
the pond apparently preventing the pond from drain1ng properly. The Board has held that
a post award "act of God" such as severe weather is not a differing site condition:
However, "weather occurring during contract performance,
no matter how severe, and other acts of God alone do not
fall within the provisions of the Differing Site Conditions ...
clause." Commercial Contractors Equipment, Inc., ASBCA
No. 52930 et al., 2003-2 BCA ,-( 32,381 at 160,255.
· Moreover, the differing site conditions clause protects a
contractor from undisclosed or unknown site conditions that
predate the contract, not something occurring thereafter.
See John McShain, Inc. v. United States, 375 F.2d 829, 179
. Ct. Cl. 632 (Ct. Cl. 1967) (addressing predecessor changed
137
conditions clause); Commercial Contractors Equipment,
03-2 BCA 132,381 at 160,258.
PBS&J, 14-1 BCA 135,680 at 174,653.
Although PE cannot rely on differing site condition as the cause of the pond's failure
to drain, the fact is that MAFB would not allow a surface pond (findings 52, 54-55, 142).
Also, after the pond failed to drain, the AF took the position that the pond had to drain
"continuously" (finding 142). First, we find that by keeping the surface pond in the design
after being told to remove it by MAFB authorities, the AF assumed the risk that the surface
pond would not be allowed by MAFB after award of the contract: Second, we find that the
AF changed the requirement for a surface pond that would drain in 72 hours to continuous
draining. There is no evidence in the record that continuous draining was either possible or
acceptable to MAFB.
It is true that PE installed the underground system without AF advance approval
(finding 142) but this does not shift liability to PE. It is obvious from this record that
the AF would not agree to pay for the underground system. In its brief, the AF
mentions note 3 on drawing C-106 that suggests "underground detention" as an option
that could be considered during final design (gov't br. at 325; R4, tab 1746, sheet 8).
The AF seems to imply, without arguing, that "underground detention" should b.e a
no-cost option. As we stated above, PE was entitled to base its bid on the 35% design
surface detention pond and there is nothing in the note or in the contract that required
the PE to construc_t a more costly alternative at no additional cost to the AF. The AF
and MAFB put PE in ari impossible position, on one hand the AF specifying the surface
pond and on the other MAFB prohibiting the surface pond. We find that, under these
circumstances, the only reasonable option for PE was to build the underground·
detention system without AF approval and file a claim. The AF is liable for the
additional cost of the underground system.
The underground detention costs are included in PE's buyout claim discussed
below. PE subcontracted with Robert E. Haas, Inc., to construct the underwater
detention system for $248,390 (finding 142). PE claims two different amounts for this
work, $248,390 (app. br. at 244, 256) and $253,015 (id. at 249). The difference is a
change order for $4,625 (id.). However, in support of the change order, PE cites us to a
spreadsheet that is cut off on the left margin so we cannot verify the change order (R4,
tab 3003 at 175). Therefore, we accept the $248,390 as the amount that the AF is liable
for PE's building the underground system. Mr. Evans does not contend that the
underground detention system caused critic·al path delay so we find that there was no
excusable compensable delay associated with the underground system.
138
Balance of Construction ($20,676,990) 124
This claim is comprised of six separate elements: Subcontractor Buyout Overruns
($4,068,798); Subcontract Change Orders ($5,672,525); Miscellaneous Construction Costs
Credits ($800,506); Extra Work Coded During Project ($2,593,064); Jobsite
Overhead/Constructive Acceleration/General Conditions ($4,614,438); and Added Costs
Due to Rejection of "Structural Brick" design ($1,906,401 ). 125 There is also a 29-day delay
claim. We consider each of these below.
Subcontractor Buyout Overruns ($4,068, 798)
Subcontractor "buyout" is when PE and its subcontractors agree to final negotiated
fixed-price subcontracts (finding 163). PE's EPR.recognized risks in quality of
subcontractor pricing, material price escalation, price to buyout and managing scope of
completion (finding 58). Prior to submitting its proposal PE planned to require its
subcontractors to holcl their bid open for 120 days and that "volatile materials such as
concrete and steel" would be purchased within the 120 days and stored either on site or in
bonded and insured warehouses (id.). We find that PE knew about material price escalation
before submitting its bid·. PE's bid was based on subcontract prices that were not
"indefinite" and most subcontractors said if costs increased they would pass the costs on to
PE (finding 163). There is no explanation why PE accepted bids with this condition
imposed. PE could have insi~ted on firm bids and allowed the subcontractors. to price the
risk. PE's initial schedule indicated PE planned to complete all buyouts by 3 November
2005 (finding 70). PE argues it could not adhere to this schedule because of various delays.
PE's buyout overrun claims are generally based on the difference between subcontractor's
bids and the actual final negotiated subcontract prices (finding 164). These are therefore,
total cost claims 126 that are disfavored by courts. Custom Blending & Packaging; Inc.,
ASBCA No. 49819, 00-2 BCA i131,083 at 153,479 ("The total cost method is a disfavored
means of measuring a contractor's recovery."). We consider the subcontractors' warning
that future increased costs will be "passed on" to PE both inconsistent with fixed-price
contracting and an incentive to PE to "buy-out" the subcontracts as soon as possible.
A contractor is entitled to recover for cost escalation if it can prove that
government-caused delay pushed performance into a time when costs had escalated.
ADT Construction Group, Inc. by Timothy S. Cory, Chapter 7 Trustee, ASBCA
No. 57322, 15-1BCAi135,893 at 175,470-71. However, liability for escalation caused
by government caused delay is different from escalation caused by a contractor's failure
to lock in fixed-priced contracts (buyout) in a timely manner.
124
This amount includes mark-up (app. br. at 234).
125
These amounts do not include mark-up.
126
We do not consider this inconsistent with our determination in the design impact
claim discussed above that the claim was not a MTC claim.
139
An earlier ADT case dealt with a "buyout" scenario similar to PE's. See ADT
Construction Group, Inc. by Timothy S. Cory, Chapter 7 Trustee, ASBCA No. 55358,
13 BCA 'if 35,307. 127 This ADT case involved the default of a firm:.fixed-price
design-build contract. Id. at 173,291. ADT argued that, due to government-caused
delay "it was not able to finalize subcontracts in April 2004 but had to wait until late
2004 when costs had risen considerably in southern Nevada." Id. at 173,300. ADT
contended it was not able to finalize its subcontracts until it received an approved design ·
in the latter part of 2004. The increased costs at buyout caused ADT to default. The
Board denied ADT's appeal. The Board identified "two fundamental questions" in
ADT: "The first is whether ADT really had to wait until November and December 2004
to buyout' its subcontractors. If it did, the second question is whether that delay
increased the cost of the subcontracts, and, if so, to what extent. Appellant has not
convinced us that the timing of its subcontracting was solely the result of government
actions or that its quantification of the claimed increase in costs is defensible." ADT,
13 BCA ~ 35,307 at 173,320. We focus on the first question, whether PE really had to
wait to enforce buyout on its subcontractors. In ADT, we found that the contractor had
not proven that it had to wait as long as it did to buyout subcontractors:
Based on the record before us, we believe that costs
were increasing in southern Nevada in 2004. We also
accept the argument that subcontracting before design:
approval would have left appellant with some uncertainties,
but it also included inherent risks it should have '1
contemplated at time of bid. What we are doubtful about is
the extent to which it can be said either that appellant was
unaware of the apparently rapidly rising costs. Bayou
Culvert Mfg., Inc., AGBCA No. 400, 76-1 BCA ~ 11,796 at
56,306 ('"A ·contractor is charged with knowledge of the
state of his industry at any given time."'), or that there was
no alternative to entering into subcontracts when it did.
ADT's May 2003 price and technical proposal listed
··named" construction subcontractors and noted that
appellant had entered into agreements with them (finding 3).
While we understand that the price of those subcontracts
may not have been finalized, appellant knew, to some
extent, early on who it was going to contract with and what
those subcontractors were going to do. We see nothing in
the record that demonstrates ADT could not have
subcontracted earlier than it did or even moved toward more
fixed arrangements with its proposed subcontractors. Cf
Yankee Telecommunication Laboratories, Inc., ASBCA
127
Neither party discussed ADT in their briefs.
140
No. 25240 et al., 85-1 BCA 117,786 at 88,873 ("The
'notion that a bidder has no responsibility to obtain firm
commitments before bidding is not tenable."').
Id. at 173,321. PE had a design-build contract, just as ADT, and we reach the same result.
Inherent in the Board's decision was the recognition that ADT's contract was
firm-fixed-price as is PE's. Lakeshore Engineering Services, Inc. v. United States, 748
F.3d 1341, 1347 (Fed. Cir. 2014) ("The essence of a firm fixed-price contract is that the
contractor, not the government assumes the risk of unexpected costs."). In
Commissioning Solutions Global, LLC, ASBCA Nos. 57429, 57494, 13 BCA 135,355we stated:
The fixed-price nature of the PO provisions supports
the CO's refusal to increase the PO price. See Naughton
Energy, Inc., ASBCA No. 33044, 88-2 BCA 120,800 at
105,073 (contractor bears the risk of fluctuating marketplace
prices in a fixed-price type contract); Nedlog Co., ASBCA
No. 26034, 82-1BCA115,519 at 76,986 (risk of greatly
increased costs, unanticipated and unprovided for in the
contract price, is on the contractor in a fixed-price contract).
Id. at 173,531. PE competed for and \,Von a finn-fixed-price contract where only 35% of
the design was completed. The trial judge asked Mr. Rusing, the AF design-build
expert (tr. 18/112), how such a contract could be priced. Mr. Rusing testified that prime
contractors try to deal with subcontractors that are familiar with design-build and give
them as much information on the structure and systems as possible and then have them
involved in the development of the 100% design (tr. 18/13 8-39). From our perspective
agreeing to a fixed-price construction contract based on only a 35% design has to carry
significant risk.
In its brief PE explains "The primary reasons why Appellant seeks reimbursement
for these [buyout] overruns" are the delays caused by the structural brick matter,
foundation NTP, differing site conditions (unsuitable fill, organic layer, and asbestos pipe),
the "shopping list," government design changes, government funding shortfalls, and price
escalation due to Hurricane Katrina and the "hot Chinese construction market demand"
(app. br. at 235-36, 242).
We consider competition from China first. In 4.DT the Board imposed an
obligation on ADT to know about the price escalation in Nevada at the time and deal
with it. Just as in ADT, PE put on no persuasive evidence to support a·finding that
competition for materials ·from China was not foreseeable before 27 April 2005 when
PE submitted its bid. Incleed, as early as March 2005 PE identified "price escalation of
materials prior to buy-out" as a risk in its EPR (finding 58). PE planned to require.
141
I
subcontractors to leave their bids open for 120 days during which time "volatile
materials such as concrete and steel" would be purchased and stored for future use (id.).
Also, Mr. Rusing documented in his expert report that in 2004 to 2005 the construction
industry experienced extreme escalation in material and labor costs (finding 166). We
find that PE knew about price escalation before it submitted its bid and should have
dealt with it.
Concerning Hurricane Katrina, the AF makes a good point in its reply brief.
DO 13 was awarded on 13 July 2005 and Hurricane Katrina occurred less than two
months later (gov't br: at 475). The adverse effects of Katrina occurred well before any
delays were experienced on the contract. Also Hurricane Katrina was an unforeseeable
Act of God. The AF is not liable for price escalation caused by Katrina. Maggie's
Landscaping, Inc., ASBCA Nos. 52462, 52463, 04-2 BCA il 32,647 at 161,565
(government not liable for unforeseen circumstances such as an Act of God); E. W
Jackson Contracting Co., ASBCA No. 7267, 1962 BCA il 3325 at 17,133 ("It is a well
settled principle of law that neither party is responsible to the other for damages
occasioned as a result of an Act of God, unless such obligation is expressly assumed.").
Concerning the structur.al brick portion of the delay, PE failed to prove that this
delay somehow prevented it from buying out its subcontracts in 2006.
Buyout should be dependent on the state of completion of design not actual
construction. Mr. Temchin testified that the earthwork delays had "a significant
negative effect in our ability to buy-out the packages" and that PE could not buyout
subcontracts until a final schedule was agreed to, "Without the schedule, we couldn't
lock in the contract" (finding 166). This testimony contradicts his earlier testimony that
what was needed for buyout was the 100% design, he m.ade no mention of a final
schedule (finding 163). We agree with his earlier testimony. We disagree that a final
schedule is needed, because changes in schedule are almost inevitable in construction
contracts and .increased costs may be dealt with under the changes clause. Also, the
chronology of the design work does not support PE's position. The 65% drawings are
dated 14 November 2005 and include the 100% civil/structural design (finding 165).
Therefore, by November 2005 PE should have bought out all of its contractors involved
in horizontal work. The delay associated with clean site (contaminated soil) started on
7 July 2006 (finding 96). The unsuitable fill was not discovered until mid-August 2006
starting the earthwork delays (findings 103-04). · Therefore, these delays did not affect
buyout of the contractors performing "civil/structural" work that could have been
bought out on or before 128 14 November 2005. PE was able to buyout "Giberson 2" on
31 October 2005 for "earthwork, underground utilities, storm, site concrete, parking lot
subgrade, landscaping, and site furnishings," but there are only two other buyouts in
128
We say before because the subcontractors responsible for that work should have
been working with PE in developing the drawings.
142
2005 (finding 164). PE should have dealt with all of its subcontractors as it did with
Giberson 2.
The 95% drawings for vertical work are dated 17 May 2006 before the stop-work
orders associated with clean site and unsuitable fill (findings 96, 103-04; 165). Since
the subcontractors were supposed to be assisting PE in the design there is no evidence
that buyouts could not have been.completed before the finalization of the 95% desi"gn in
May 2006. The 100% drawings are dated 24 July 2006 (finding 99) only a couple
weeks after the clean site stop work order. We do not agree that PE could not have
bought out all of its subcontractors on or before when the 100% designs were completed
on 24 July 2006. Indeed, 20 out of the 45 buyouts were completed before the end of
2006 and 25 occurred in 2007 and 2008 (finding 164). The timing of the earthwork
delays post-dates the time when we believe PE should have bought-out its
subcontractors. PE did not address this timing problem in its testimony or briefs.
Essentially, waiting to buyout subcontractors reduces risk to the subcontractors and
increases risk to PE, not the AF. It essentially creates what is analogous to cost
contracts with PE's subcontractors.
In conclusion, PE represented itself as having experience in design-build
contracting. PE signed a fixed-price contract with only 35%.of the design completed.
We have 65% drawings dated 14 November 2005 and 95% drawings dated 17 May
2006, before the first indication of earthwork delays, and no evidence why buyout could
not have been completed in this time frame. PE's buyout activity lasted until October
2008 (finding 164). We have found that escalation problem caused by competition for
materials from China was foreseeable and escalation caused by Hurricane Katrina was
an Act of God for which the AF is not liable. We do not agree there was no alternative
to PE's buying out subcontracts when it did. ADT, 13.BCA, 35,307 at 173,320. Based
on this conclusion, we need not address PE's other items of delay: the shopping list, AF
funding shortfalls, AF design changes, and foundation NTP. This record simply does
not support PE's argument that it acted in a prudent manner and the AF should be liable
for its buyout overruns. Essentially, PE lost control of its subcontractors and that is not
the AF's responsibility. PE's buyout claim is denied except for the stormwater
detention matter discussed above.
Subcontract Change Orders ($5,672,525)
Since PE chose not to introduce testimony on each of these 118 cb,ange orders
due to time constraints at the hearing, this aspect of its claim is essentially a record
· submission. PE argues that "its analytical breakdown of the change orders (by cause),
accompanied by supporting testimony of Jordan Rosenfeld and Dick Cardinale et al.,
should be sufficient to establish a prima facie case that the change orders have been
properly sorted by their underlying causes, shifting the burden to the Air Force to
challenge the contractor's summary" (app. bL at 264). We disagree. Without knowing
precisely how Mr. Rosenfeld and Mr. Cardinale arrived at their allocation of liability to
143
the government for each of the 118 change orders, we would have to "take their word
for it" that their allocations are correct. This we will not do. The "suppo_rting
testimony" is helpful in some cases but not nearly enough to shift the burden of proof.
PE's approach to these 118 change orders assumed considerable risk that we would
have unanswered questions resulting in our finding of failure of proof (FOP) for many
of the change orders. Each change order must stand on its own and we decided if the
record, such as it is, supported PE's allocation of responsibility. We reviewed each of
the 118 change orders and presented our results in tabular format (finding 168). Our
findings corroborate our conclusion that Mr. Rosenfeld's and Mr. Cardinale's allocation
of responsibility was not always self-evident. Based on· our analysis of individual
change orders we found that PE is entitled to $2,009,426 for its change order claim (id.).
To that we add markups:
Description. Audit Determined Rate Amount w/Markup
Overhead/General Cond. $2,009,426
Markups
Bond 0.6375% $12,810
GL & BR Insurance 0.8316% $16,710
Subtotal $2,038,946
Composite G&A 2.86% $58,314
Profit 10.00% $203,895
Total $2,301,155
Miscellaneous Construction Cost Credits ($800,506)
In this section PE explains several credits that it gave to the AF. Since these
credits have apparently already been applied (app. br. at 234) we need not address this
matter further.
Extra Work Coded During Project ($2,593,064)
PE's cryptic argument presented very little documentary or testimonial support
for this aspect of its claim (app. br. at 313-17). Nevertheless, we find that the AF
effectively conceded the matter in its ·brief. Therefore, we accept the fact that PE
accurately captured its costs for these cost codes. We briefly address entitlement in
each claim category below.
Claim Preparation ($1,840,112)
PE argues it is entitled to recover what it characterizes as "claim prepration
costs" because they were incurred before its "claim was certified and submitted to the
Contracting Officer on June 29, 2012" (app. br. at 314). The date of certification is
144
hardly the determining factor. Virtually all claim preparation costs are incurred before·
certification. The inquiry is:
In considering such claims, the Federal Circuit directed the
Board to examine the objective reason why the contractor
incurred the cost. If the contractor incurred the cost for the
purpose of materially furthering the negotiation process, the
cost normally is allowable under FAR 31.205-33 as a
contract administration cost even if the negotiation
ultimately fails. On the other hand, if the cost is incurred to
promote the prosecution of a claim, then the costs are
unallowable.
Vistas Construction of Illinois, Inc., ASBCA No. 58479 et al., 16-1 BCA ,-r 36,236 at
176,797. PE's "proof' that it is entitled to these costs is "[t]he reasonableness of those
costs was never challenged in this appeal, and their award is authorized pursuant to
FAR 31.205-33" (app. br. at 314). PE adds nothing more in its page long quantum
argument, effectively referring back to its entitlement section quoted above (id. at 473-7 4 ).
PE totally failed to meet its burden of proof that this "claim" cost was incurred "for the
purpose of materially furthering the negotiation process." This claim is denied. ·
Response to Cure Notices ($71,015)
The record contains two cure notices issued on 9 August 2006 and 3 1 May 2007
(findings 101, 126). The first notice listed seven deficiencies: failure to develop a
project schedule, lack of cut and fill calculations, lack of sufficient labor, lack of
responsiveness relating to TLF subsurface conditions, design deficiencies relating to
parking lot, failure to give notice of steel delays, and failure to provide pricing for the
changes to be incorporated into the design, i.e., the "shopping list" (finding 101 ). The
second cure notice listed three deficiencies: failure to provide a proposal as outlined in
the RFP, dated 1 November 2006, for Shopping List Items, delays in the schedule, and
failure to ensure timely delivery of the steel trusses for the VQ (finding 126).
As is the case with most cure notices the contractor is warned that the
government considers the failure to comply with the tern1s of the contract to be a
.condition that is endangering performance of the contract. The problem with these cure
notices is that the ''shopping list" was not a tenn of the contract. The AF had no valid
reason to include the shopping list in the cure notices. It was an inappropriate use of a
cure notice to coerce a contractor to do something that is not requin:d by the contract.
We sustain PE's claim, but only for that portion of the amount claimed that relates to
the shopping list.
Unfortunately, PE gives us no help in estimating a reasonable amount caused by the
shopping list. The only support for this claim provided by PE was reference to a summary
145 ·
at Rule 4, tab 3146. This is a one-page summary tharis identical to that in PE' s brief (app.
br. at 314 ). Rule 4 tab 3146 directs us to Note 8, Sutor Schedule 5-1 b, which is
/Mr. Rosenfeld' s 10 October 2014 Rebuttal Report. When we go to the report we find
Schedule 5-1 {R4, tab 3003 at 170). Although PE provides us no assistance, we tried to fill
in the blanks by going page by page through Schedule 5-1 and could not find Schedule 5:-1 b
or Note 8. We have done more than called for given it is PE's burden of proof. Although
we found entitlement above, we are unable to determine quantum, and thus make no award.
Delays in Issuance of NTPs ($63,021)
Although we found that there was no requirement for the AF to issue a design
NTP, it in factissued one on 25 July 2005 with an effective date of 13 July 2005
(finding 68). The AF issued a LNTP for earthwork on 27 March 2006 (finding 89).
The next LNTP was issued on 6 June 2006 for work affecting underground utilities and
various site work not including foundations (finding 94). The unlimited NTP was
issued on 10 July 2006 (finding 98). PE argues that this unlimited NTP should have
been issued in April 2006 when the 95% design drawings were finalized. We have
already found tb.at PE is entitled to 70 days of compensable delay in issuing the LNTP
for the VQ foundation work (see pages 198-99). PE fails to explain its position nor
does it cite to any documentary or testimonial evidence in the record in support of this
additional NTP claim. PE failed to meet its burden of proof on this aspect of its claim.
This NTP claim is denied.
Tiger Team Recovery Efforts ($230,342)
While we found that there was constructive acceleration and are willing to
compensate PE for associated costs, PE failed to develop the record sufficiently for the
Board to find that the "Tiger Team" costs were caused by the acceleration. PE only
refers to "Tiger Team" in two pages of its brief, pages· 314 and 473; without any
analysis supported by proof. PE failed to meet its burden of proof for this aspect of its
claim. This Tiger Team claim is denied.
Increase Mgmt. ofAcceleration-($107,181)
Having found constructive acceleration, and there being no AF response to this
claim we will accept PE's characterization of these costs. We find that the AF is liable
for the $107,181 cost caused by acceleration. We add burden:
Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $107,181
Markups
Bond 0.6375% $683
GL & BR Insurance 0.8316% $891
Subtotal $108,755
146
Composite G&A 2.86% $3,110
Profit 10.00% $10,876
Total $122,741
Preparation of Revisions to REAs ($51,697)
This REA claim is similar to the "claim" costs denied above. In AEI Pacific,
Inc., ASBCA No. 53806, 08-1 BCA ~ 33,792, we discussed REA preparation costs:
The costs of professional and consultant services are
unallowable if they are incurred in connection with the
prosecution of a claim against the government.
FAR 3 1.2 0 5-47(f)( 1). In making this determination, we
look to see whether the costs were incurred "for the genuine
purpose of materially furthering the negotiation process."
Bill Strong Enterprises, Inc. v. Shannon, 49 F .3 d 1541, 15 50
(Fed. Cir. 1995), overruled in part on other grounds by
Reflectone; Inc. v. Dalton-, 60 F.3d 1572 (Fed. Cir. 1995).
Id. at 167,284. In AEiwe decided that because the "REA was submitted long after AEI
had ceased work on the .contract and AEI has not pointed to any on-going negotiation
process between the parties which would require such services" AEI' s REA preparation
costs were unallowable. Id. We follow this logic here. PE's REA's were submitted on
24 December 2008 after BOD (R4, tabs 1536-38). They deal with "Maladministration
of the Closure Inspection Process" (R4, tab 1536), "Tri-Arch Paint" (R4, tab 1537) and
"Differing Site Conditions along the High Temperature Hot Water Pipeline Alignment"
(R4," tab 1538). We denied PE's claim for the cost ofTriarch, so those REA costs
would notbe recoverable. We agreed with PE's claims relating to the HTHW differing
site conditions and closure inspection process. However, PE failed to put on any -
evidence that meets the criteria of AEI, that there was an "on-going negotiation process
between the parties which would require such services." Therefore, PE failed to meet
its burden of proof. This REA claim is denied.
Extra Warranty Work ($154,918)
PE fails to provide any details of what this work was, nor does it cite to any
documentary or testimonial evidence supporting this cla:im. PE failed to meet its burden
of proof. This extra warranty work claim is denied.
Response to Noise Level Concerns ($72,500)
The contract required PE to provide vibration isolation foi;- mechanical room
equipment (finding 178). The contract does not specify a measurable noise level for the
guest rooms. Mr. Rola seems to be the only person asserting that the noise level in the
147
TLF guest room above the mechanical room was unacceptable (finding 179). However,
there is no credible, objective proof that such was the case. Mr. Kissler's statement that
PE's contract did not require it to insulate the mechanical room was correct - all that is
required is '•vibration isolation" for the equipment (findings 178-79). There is no
allegation that PE did not provide vibration isolation for the equipment in the mechanical
room. Ultimately, the AF conceded that there was no noise problem above the
mechanical room (finding 179). We find Mr. Rola's· cone.ems were unjustified. The AF
is liable for the $72,500 incurred by PE in attempting to placate Mr. Rola. We apply
markup:
Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $72,500
Markups
Bond 0.6375% $462
GL & BR Insurance 0.8316% $603
Subtotal $73,565
Composite G&A 2.86% $2,104
Profit 10.00% $7,357
Total $83,026
Miscellaneous Other Work ($2,280)
PE fails to provide any details of what this work was, nor does it cite to any
documentary or testimonial evidence supporting this claim. PE failed to meet its burden
of proof. This claim is denied.
Jobsite Overhead/ConstructiveAcceleration/General Conditions ($4,614,438)
PE characterized this claim as "increased general condition costs" (app. br. at
474-75), however, we consider only increased general condition costs caused by
constructive acceleration. Constructive acceleration occurs when the government
requires a contractor to adhere to a performance schedule even though the contractor is
entitled to an extension due to excusable delay. Fraser Construction Co. v. United
States, 384 F.3d 1354, 1361 (Fed. Cir. 2004). There are generally five elements of
acceleration:
( 1) [T]hat the contractor encountered a delay that is
excusable under the contract; (2) that the contractor made a
timely and sufficient request for an extension of the contract
schedule; (3) that the government denied the contractor's
request for an extension or failed to act on it within a
reasonable time; (4) that the government insisted on
· completion of the contract within a period shorter than the
148
period to which the contractor would be entitled by taking
into account the period of excusable delay, after which the
contractor notified the government thatit regarded the
alleged order to accelerate as a constructive change in the
contract; and (5) that the contractor was required to expend
extra resources to compensate for the lost time and remain
on schedule.
Id. In Fraser, the court cited Norair Eng'g Corp. v. United States, 666 F.2d 546, 548 (Ct.
Cl. 1981 ), that compressed "these five requirements into three essential elements-
excusable delay, an order to accelerate, and acceleration with attendant costs." Fraser, 384
F.3d at 1362. An "order to accelerate" is satisfied by the imposition or threat to impose
liquidated damages. States Roofing Corporation, ASBCA No. 54860 et al., I 0-1 BCA
, 34,356 at 169,665 (quoting Norair, 666 F.2d at 549) (An order to accelerate "need not be
couched in terms of a specific command. A request to accelerate, or even an expression of
concern about lagging progress, may have the same effect as an order."); Norair, 666 F.2d
at 549 ("In short, while the Government recognized that some delays were validly
excusable; it did not say which, and left it very clear that it disagreed with plaintiff as to the
amount; therefore, plaintiff could have been required to accelerate work beyond what it
thought was the proper rate (allowing for excusable delays) to avoid the risk of liquidated
damages."); Fischbach & Moore Int'! Corp., ASBCA No. 18146, 77-1 BCA, 12,300 at
59,228. We apply the three element test herein.
The AF extended the period of performance from 9 July 2007 to 27 December 2007
by Mod. 3 (finding 124). In our decision above, we found a cumulative excusable/concurrent
delay of 332 days (70 days for horizontal NTP, 28 days for cleari site concerns, 182 days for
unsuitable fill, organic material and asbestos pipe, and 20 days for Sherwin Williams paint
application in the VQ, and 32 days 129 of critical concurrent delay for SSNIR/Truss). The 332
days runs concurrently with the 171 days in Mod. 3 so we use 9 July 2007 as the starting
point in this analysis. The government may contend that, because of Mod 3's extension of·
time to perform, the acceleration only occurred after 27 December 2007. However, Mod 3
imposed de facto liquidated damages through the credit it required of PE. Therefore, PE was
entitled to 332 days excusable delay starting from 9 July 2007 for a delivery date of 5 June
2008. The first element is satisfied. The AF refused to extend the 27 December 2007
delivery date and informed PE that liquidated damages would commence on 28 December
2007 (finding 162). The second element is satisfied. PE claims $4,614,438 in direct costs it
incurred due to the acceleration. The third element is satisfied. We find that PE is entitled to
recover an amount for increased jobsite overhead/general condition costs caused by
constructive acceleration.
The $4,614,438 is made up of fourteen costs (three labor and eleven non-labor)
resulting from "[t]he ripple effect of multiple delays and impacts [which] forced Parsons to
129
See pages 153-54 ofthis decision.
149
resequence, accelerate, and incur project management and administration costs far
exceeding those reasonably anticipated at bid time" (app. br. at 474). We will not repeat
the list here. The primary evidence supporting this claim are Rule 4, tab 3148, and PE's
hearing exhibit 19. Rule 4, tab 3148, consist~ of a summary sheet, twelve sheets of
accounting data and two graphs showing man hours and employees from 2005 to 2008.
Hearing exhibit 19 is an overall claim summary that includes pages supporting this claim
cited by PE in its brief. We held above that PE is entitled to recover increased costs
incurred due to the constructive acceleration. The data shown in Rule 4, tab 3148 and
hearing exhibit 19 and our finding of constructive acceleration proves that PE suffered
damage. The $4,614,438 130 is made up of$3,124,000 in labor costs and $1,490,438 in
non-labor costs (app. br. at 475). We deal with the labor costs first. We rely on one chart
in Rule 4, tab 3148 at 14 that shows staffing hours by date. We only allow PE to recover
for the costs incurred during the acceleration period. PE identified the acceleration period
as from 1 September 2007 to 31 May 2008 (app. br. at 482). The acceleration period is
indk:ated at the bottom of the chart. The chart shows the highest labor hours during the
acceleration period. We estimate from the chart that two thirds of the labor was caused by
the acceleration. 131 Therefore, we believe a fair and reasonable estimate of the labor costs
during the acceleration period is two thirds of the claimed labor costs or $2,080,584
(.666 x $3,124,000). As for the non-labor costs we do not have a chart or anything else to
assist us is determining fair and reasonable estimate of increased cost incurred during the
. acceleration period. However the acceleration period included winter months. It is clear
to us that the excusable delay caused PE to perform work during winter that it had planned
to perform in milder months. Mr. Cardinale testified about heaters "all over both
facilities" and scaffolding, tenting and equipment used to heat the buildings so work would
proceed (tr. 5/154). Therefore, we deny the non-labor costs except for the winter heat cost
of $493,196. The total amount we allow for jobsite overhead/general conditions is
$2,573,780 ($2,080,584 + $493,196). We apply the standard markups 132 to this amount as
follows:
Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $2,573,780
Markups
Bond 0.6375% $16,408
GL & BR Insurance 0.8316% $21,404
Subtotal $2,611,592
Composite G&A · 2.86% $74,692
Profit 10.00% $261,159
Total $2,947,443
130
PE states· that this amount is "excluding markups" (app. br. at 474).
131
If PE believes we have misinterpreted this data, it is because PE failed to adequately
explain it to us in its brief.
132
PE states that the claimed amount for jobsite overhead excluded markups (app. br. at 474).
150
Added Costs Due to Rejection of "Structural Brick" Design ($1,906,401)
Earlier in this decision we found that the AF was liable for the additional cost of
design and construction required to make the VQ resist progressive collapse. We found
the AF liable for $722,176 in design costs relating to progressive collapse. In its brief for·
this part of the claim PE stated its "structural engineers [had] to develop a series of costly
changes to other parts of the VQ building to support the (unnecessarily) heavy structure
against potential progressive collapse" (app. br. at 323). These construction costs are what
we found the AF liable f@, but we have yet to arrive at quantum. Rather than tracking
these construction costs directly, PE chose to quantify this claim with Mr. Tengler's
6 October 2014 estimate of cost savings for using the structural brick in place of the double
wall design (app. br. at 3223; R4, tab 3154). Mr. Tengler used the "RSMeans data base"
and took out "quantities of impacted work and applying time savings that would have been
realized" (tr. 4/98). We see no logical relationship between such an estimate of cost
savings and the actual increased cost of construction solely attributed to what was needed
to modify the VQ to resist progressive collapse. We note that the cost savings occasioned
by the change to structural brick addressed more than just progressive collapse
(finding 78). Mr. Bennett testified thatthe structural brick design change was intended in
part to address progressive collapse (finding 73). PE proved itself capable of tracking
costs for differing site conditions (unsuitable fill, organic layer, asbestos pipe and HTHW
installation problems) all of which occurred before the structural modifications to the VQ.
We do not understand why PE did not do the same for progressive collapse. We do not
accept Mr. Tengler's estimate of $1,906,401 as an accurate quantification of the additional
construction costs required to make the VQ resistant to progressive collapse. We agree
that PE is entitled to recover these construction costs, but it is PE's burden to prove the
amount. Mr. Tengler's estimate does not meet that burden. We have sustained entitlement
but deny the quantum claim based on Mr. Tengler's cost savings estimate of $1,906,401.
We are unable to calculate the amount PE is entitled to. This is another situation caused by
PE's insistence that we decide entitlement and quantum, while failing to present adequate
evidence on quantum.
Balance of Construction Delay
PE claims $449,943 for a 29-day delay in its quantum section discussing its
"Balance of Construction Phase" (app. br. at 483 ). PE failed to cite us to the location of its
discussion of this 29-day delay in its entitlement section. However, we were able to find it
in PE's analysis of its delay "Review Periods.'; 133 Apparently the 29 days is made up of
21 days in Review Period 7 (app. br. at 372-73 ), and 8 days in Review Period 8 (id. at
373.-75). The 21-day delay was "due to late installation of the standing seam metal roof'
(R4, tab 3004 at 43). The delay is depicted in Mr. Evans' Figure 15, Review Period 7
133
These Review Periods correspond to Mr. Evans' expert report (R4, tab 3004).
151
As-Planned and As-Built Schedule (id. at 42). Mr. Evans' expert report attributes this
21-day delay to a labor shortage caused by the delay in approval of the SSMR:
The Air Force apparently failed to consider the criticality of
the material approval and how it impacted the planning
efforts of Parsons and its metal roof subcontractor,·
Warburton's, Inc. When the submittal was approved on
April 19, 2007, Warburton's craft labor was already
committed to other projects, and labor availability for
McGuire AFB became an issue. Warburton' s personnel
stated in an interview that the uncertainty connected to the
· Air Force's approval of the submittal led to the labor
availability issue.
(R4, tab 3004 at 40) Mr. Evans contends that because of the labor shortage, Warburton's
crew had to complete the TLF before moving to the VQ (id. at 40-41). In his testimony,
Mr. Evans adds "getting material" as a reason for the 21-day delay (tr. 8/74-75). The ·
problem with the evidence supporting the 21-day delay is that Mr. Evans' report and ·
testimony is based on only one interview 134 and is therefore hearsay.· Hearsay evidence is
admissible before the Board and can be a permissible basis for expert opinion, but where
(as here) it has little or no corroborating or indicia of trustworthiness, it is entitled to little,
if any, weight. PE directs us to no contemporaneous documents or sworn testimony from
Warburton or anyone else to support the assertion that the delay in approving the SSMR
caused the labor shortage and that labor from some other source could not be brought in to
work on the VQ. 135 Mr. Evans may be correct in his conclusion, but PE does not meet its
burden of proof with the evidence presented. We deny the claim for the 21-day delay.
With respect to the remaining 8-day delay, Mr. Evans attributes it to the removal of
the catwalk in VQ wing A and redesign of the catwalks in wings Band C caused by
design changes needed to correct the VQ design to resist progressive collapse (app. br. at
374; R4, tab 3004 at 45). In our decision above we found the AF responsible for "the
additional cost of design and construction required to make the Baker 35% design resist
progressive collapse." This would include compensable delay. Unlike the 21-day delay
discussed above, there is record evidence supporting the 8-day delay. In her testimony,
CO Brown agreed that "in the 35 percent design, the shear walls in the different floors
didn't line up and they had to be moved in order to carry the loads down and meet the
progressive'collapse requirements" (tr. 12/109). In his testimony Mr. Rosenfeld agreed
that the catwalks had to be "redesigned when all that HV AC ducting had to be rerouted
into the attic in an effort to repair problems with the 35 percent design" (tr. 10/105).
134
In Appendix C to his expert report, Mr. Evans lists subcontractors interviewed. One
individual, Mr. Ken Francom, Warburton's SSMR subcontractor, is listed but that is
all, no affidavit or even contemporaneous notes of the interview (R4, tab 3004 at 68).
135
If there is such evidence in the voluminous record PE did not show it to us.
152
However, we ran across a stumbling block when we looked at other evidence. PE's brief
stated, "The redesign [of catwalks] was processed through RFI 24 7 (R4, tab 400) in the
late summer and fall of 2007" (app. br. at 374). When we looked at RFI 247 we noticed it
predicted a cost savings stating, "it is our intention to provide the government with a credit
commensurate with the reduction in scope requested (R4, tab 400 at 1). A cost savings
change does not preclude a claim for delay damages associated with that change.
However, the catwalk re-design was discussed in a 25 October 2007 coordination meeting
where the following comment was entered in the meeting minutes:
Update 10/25: Chuck corrected last week's statement and
explained that with the concept approval in hand, Parsons·
has completed the SOW and it is presently out/or bid. Shop
drawings will be the responsibility ofsuccessful bidder and
once in hand they will be submitted to the Gov for approval.
This is no longer on the Critical Path due to the reduction
in scope.
(R4, tab 401 at 2) (Bold added) For delay to be compensable, it must be on the critical
path. States Roofing, 10-1 BCA ~ 34,356 at 169,661 (citations omitted) (In order to
establish entitlement to delay damages, a contractor must demonstrate the extent of the
delay, the causal link between the government's alleged wrongful actions and the delay
and the resulting injury. The delay normally must be to work on the critical path, the
only work that affects overall completion of the contract work.). Since Mr. Evans did
not address the comment in the contemporaneous notes that the catwalk was no longer
on the critical path we are left with an unrefuted challenge to his allegation. Moreover,·
Mr. Evans' report gives no reason to believe that the catwalk activity was on the critical
path. Accordingly, we must deny PE's claim for the 8 days of compensable delay
·associated with the catwalks.
HTHWHeat
While PE discusses this topic in its entitlement section, it does not include a
specific dollar amount and also does not have a separate section for HTHW heat in its
quantum section. The lack of a discussion in the quantum section is confusing. We
briefly comment on this topic below, but we conclude that the damages for "HTHW
Heat" must be included in other claims.
The contract is silent on PE's use of the HTHW to heat the buildings
(findings 137-38). In any event, regardless of any contractual obligation to allow PE to
use HTHW for heat, we agree that delays for which the AF is responsible pushed work
into winter and the AF is liable for heating required for work to proceed. In the
subcontractor change order and acceleration claims we agreed with claims involving
enclosure of the buildings and provision of temporary heat.
153
Standing Seam Metal Roof (SSMR) Approval Delay/Roof Truss Delay
PE experienced a delay caused by a conflict between VQ roof truss design and an
elevator shaft design (finding 125). PE estimated a potential delay in the 27 December
2007 delivery date ranging from 12 work days to 5 weeks (id.). A total of 1 year, 2 months
and 19 days elapsed between the first SSMR S1Jbmittal on 16 February 2006 (finding 151)
and final approval on 7 May 2007 (finding 156). Although other issues were discussed,
we find that the primary cause of the SSMR approval delay was the AF's continued
insistence that "oil canning" be eliminated. The requirement that oil canning be eliminated
was modified to "seriously minimized" by Amendment No. 1 to RFP 8234, dated 24
March 2005, because it was acknowledged that it is inherent in the product and eliminating
oil canning was impossible (finding 150). Therefore, we find that the AF's persistent
insistence that oil canning be eliminated, even 'after Amendment No. 1 (findings 150-56),
was unreasonable and the AF is responsible for the critical path delay associated therewith. ·
According to PE's scheduling expert only a small portion of the elapsed time between the
first SSMR submittal on 16 February 2006 and final approval on 7 May 2007 was on the
critical path. We rely on Mr. Evans' CPM analysis where he identifies 32 days of
concurrent delay caused by the SSMR and roof trusses in Review Period 6 (R4, tab 3004 at
3 8). In its brief PE states, "Exponent ultimately classified the truss and roof delays as
concurrent (R4, tab 3004 at 38), so that Parsons would have no right to delay damages but
the Air Force would have no right to assess liquidated delay damages for the 32 days at
issue in review period 6" (app. br. at 372; tr. 8/71). We adopt that view and extend the
performance period by 32 non-compensable days.
Exterior Insulation & Finish Systems (EIFS)1 36
PE claims that the AF was responsible f~r the delay associated with the use of
EIFS. In its brief PE states:
Parsons incurred significant extra expenses when it
had to install EIFS in cold winter conditions that would and
should have been avoided. The delays to the EIFS decision
delayed the start of scaffolding, which further delayed site
grading and landscaping around the building. Ultimately
Parsons also incurred months of costs for its architect of
record and other staff to debate the EIFS solution that was
ultimately accepted.
(App. br. at 312-13) (Citation omitted)
We see several problems with PE's argument. First, this entire string of events was
caused by two errors made by PE. ASI No. 8 corrected the 100% design that incorrectly
136
There was almost no discussion of this issue at the hearing.
154
required the installation of stucco over rigid insulation (finding 158). However, ASI No. 8
also contained an error relating to the window clearance (finding 160). Contributing to the
problem is Mr. Bennett's belief that RFP 8234 took precedence over the approved 100%
design developed by PE - it does not. Also, we disagree that the inherent nature of the
design-build contract gives PE the right to make unilateral changes to the final AF approved
100% for construction design. 137 The entire EIFS matter is simply the correction of two
mistakes by PE. We deny PE's claim relating to the use ofEIFS.
Project Closeout
PE claims $222,416 in direct costs (app. br. at 478) and $80,532 for 15 days of
compensable delay (id. at 483) as a result of what it contends was an unreasonably long
closeout inspection to reach BOD on 11 September 2008. 138
The PMP notified PE that "[ a]s minimum" seven AF organizations would "participate
in all final acceptance inspections." PE also knew it was responsible for providing
"sufficient advance notice for maximum participation by interested parties." _(Finding 67)
PE was required to conduct both pre-final and final inspections (finding 183}. The contract
sets up a procedure that envisions the final inspection concentrating on the pre-final
inspection results, "The [final] inspection shall concentrate on the items identified at the
pre-final inspection and recorded in the pre-final report" (finding 183). We conclude from
the record that the procedure envisioned by the contract involved a limited number of joint
inspections conducted by PE and the AF. What actually occurred was nothing like what the
contract envisioned.
PE submitted its 14-day notice of pre-final inspection, and associated 1440 item
punch list, for the TLF on 27 April 2008 (finding 185). PE had intended to provide the
notice for both the TLF and VQ, but the TLF was ready before the VQ and PE wanted
to end liquidated damages on the TLF (id.). CO Brown explained she would not accept
the notice because the inspections of the TLF and VQ had to occur together in order to
minimize AF travel expenses (finding 187).
PE submitted the 14-day notice of pre-final inspection for the VQ on 5 May 2008
(finding 188). CO Brown explained she would not accept the notice because of a
"cursory site tour" by AFCEE personnel (id.). There also seems to have been some
confusion on CO Brown's part about when SOW paragraph 3.2.2.2.2 required that the
Commissioning Final Report, the Test and Balance (TAB) Report be provided (id.).
Liquidated damages (LDs) started on 28 December 2007, the day after the
completion date set in Mod. 3 (finding 162). Since PE was incurring LDs as of
137
This is different from our decision that PE had the right to unilaterally make changes
to the 35% design ..
138
The amounts include markups (app. br. at 478, 483).
155
28 December 2007, we find that time was of the essence. AmerescoSolutions, Inc.,
ASBCA No. 56811, 10-2 BCA ~I 34,606 at 170,549 (construction contracts generally
contain a liquidated damages provision, and the assessment of such damages indicates time
is of the essence); Keith Crawford & Associates, ASBCA No. 46893, 95-1BCA127,388
at 136,519 (time is of the essence in a government contract when, as here, it contains a
fixed date for performance and provides for the assessment of liquidated damages if the
fixed date is exceeded); Maysons Piping Contractors. Inc., ASBCA Nos. 28446, 29036,
86-1 BCA ~ 18,626 at 93,595 (the imposition of liquidated damages is evidence of the
government's intent to hold appellant liable for its delayed performance under the contract,
i.e., time is of the essence). We conclude that the finding that "'time is of the essence" is a
two-way street. We see no reason why the government cannot be held accountable for
failure to act in a timely manner when time is of the essence. It is clear according to the
PMP that seven or more AF organizations had the right to participate in the final
acceptance inspections (finding 67). However, it is also clear to us that since time was of
the essence, the AF had an affirmative obligation to marshal its organizations and have all
interested parties conduct whatever inspection they desire without delay. To the contrary,
the record indicates that the AF had absolutely no sense of urgency, whatsoever, in regard
to completing closeout and ending LDs. There is nothing in the contract that requires that
closeout inspections must wait until both the TLF and VQ are ready. The TLF and the VQ
were listed in separate contract CLINs (finding 65). Under the~e circumstances it would
have been appropriate to apportion the LDs between the TLF and VQ and deal with TLF
BOD first, separate from the VQ. We did so under similar circumstances in Dick Pacifzc
Construction; Co., ASBCA No. 57675 et al., 16-1 BCA ~ 36,196 at 176,638.
The demand that both the TLF and VQ be available at the same time violated time
being of the essence. The AF's 28 inspections violated time being of the essence (finding
189). The AF's inspection delay in order to minimize travel expenses violated time being of
the essence (finding 187). CO Brown's delay based on an unexplained "cursory site tour"
violated time being of the essence (finding 188). Mr. Williams statement that because the
furniture was not yet delivered "there is no rush to accomplish the pre-final on the TLF"
violated time being of the essence (finding 186). Mr. Ro la's concerns over mechanical room ,-
noise was not based on contract requirements·, was unreasonable and violated time being of
the ·essence (findings 194, 196). Fluctuating numerous punch lists violated time being of the
essence (findings 190-92, 198). We will not hold PE liable for delay and liquidated damages
for the time while it awaited inspection when the AF had no concern over the time it took to
complete contract closeout when LDs were accruing.
Fourteen days from 27 April 2008 was a Sunday so the first working day was
Monday 12 May 2008. The AF could have started pre-final at the TLF on that day ..
Fourteen days from 5 May 2008 was Monday 19 May 2008. The AF could have started
pre-final at the VQ on that day. The parties agree that BOD is 11 September 2008
(finding 197). We accept Mr. Cardinale's assessment that there had been 28 separate
inspections during that time (finding 189). We accept PE's chronology of inspections and
punch lists (findings 192, 198). We take into consideration Mr. Rothwell's opinion that, if
156
everything was coordinated, the AF team should be able to complete an inspection in
"approximately a week" (finding 189). We also recognize that PE does not quarrel with
the individual punch list items. but rather the excessive time taken during all the
inspections by various AF entities from various locations across the country (finding 198;
app. br. at 336). We find that the time it took for the AF to complete its inspections and
reach BOD was unreasonable and violated its obligation imposed by time being of the
essence. A&D Fire Protection, Inc., ASBCA Nos. 53 I 03, 53838, 02-2 BCA 132,053 at
158,448 (work required by over-zealous inspectors in multiple punch lists is compensable);
HG. Reynolds Co., ASBCA No. 42351 et al., 93-2 BCA 125,797 at 128,375 (citation
omitted) ("The Government is entitled to conduct a strict and intensive inspection to
ensure that it is getting what it is entitled to under a construction contract. However, if as
in the matter before us. the contractor's work is subject to multiple inspections to differing
standards by different officials, an equitable adjustment should be granted for any delay or
increased costs occasioned thereby."); Hull-Hazard, Inc., ASBCA No. 34645, 90-3 BCA
~ 23,173 at 116,306 (quoting WF. Kilbride Constr., Inc., ASBCA No. 19484. 76-1 BCA
~ 11,726 at 55,884) ("'[I]f inspection procedures are confusing and vacillating, and the
contractor's work is subjected to multiple inspections to differing standards by different
officials, an equitable adjustment should be granted under the Changes clause for any
delay or increased costs.").
PE accepts that the '"reasonably allowed duration of the close out" was "April
through June 2008" (app·. br. at 478). However, we found above that closeout
inspections could have started on 12 May 2008 for the TLF and 19 May 6008 for the_
VQ. Therefore we conclude that the closeout should have rim from mid-May 2008
through June 2008. This means that BOD should have occurred at the end of June
2008. PE claims $222,4 I 6 for "general overhead and direct charged costs commencing
in July 2008 through final completion in September" (id.). We accept this amount as
reasonable. The AF is liable for $222,416 in direct costs for failing to complete
closeout in a timely manner.
Now we deal with PE's claim for closeout compensable delay. The first problem
we encounter relates to dates. Based on our 332 days of excusable delay the delivery date
was 5 June 2008. One could argue that LDs could start on 6 June 2008 unless PE proves
more excusable delay. Since PE agrees that BOD should have occurred by 30 June 2008,
'arguably PE could be liable for LDs from 5 June 2008 to 30 June 2008. However, since
BOD in fact occurred on 11 September 2008, arguably there could be 72 days of excusable
delay from 1 July 2008 through 11 September 2008. PE asks for 15 days of delay. None
of this was litigated or briefed and we do not attempt to sort it out.
PE's brief only adds to the confusion. In its Quantum section, PE clearly claims
$80,532 for 15 days of compensable delay (app. br. at 483). In its entitlement section PE
states; ''At trial, however, Dick Cardinale explained that the final Test-and-Balance [TAB]
and commissioning reports should properly be treated as conditions to final acceptance and
not preconditions to BOD" (app'. br. at 345). PE then said, ''Based on this unchallenged
157
evidence, Mark Evans revised his analysis by re-characterizing 15 days of concurrent
delay as AF delay. (Tr. 8/92:3-10)." (Id.) However, we look at Exponent's expert report
and see 16 days delay allocated to PE and 15 days of delay allocated to the AF and they do
not appear to be concurrent (R4, tab 3004 at 49-50). Later in the entitlement section PE
writes, "Under this revised allocation of delays, Parsons believes that Table 14 in the
Exponent report (R4, tab 3004 at 50) should be revised so that only 4 days are allocated to
Parsons, while the remaining 27 days are allocated to the Air Force in review period 1O"
(app. br. at 379-80). From this we gather that maybe PE should be claiming for 27 days of
compensable delay. We are not, however, responsible for figuring out what PE might have
claimed.
In any event, we also see contemporaneous documents establishing that, at the time,
both parties believed that the TAB, and Commissioning reports were pre-conditions to
BOD. PE developed a schedule that clearly showed this (finding 184). Paragraph
3.2.2.2.2 Delivery/Warranty states that all inspections and commissioning requirements
will be completed before final inspection (finding 183). The as-planned and as-built CPM
schedules shown in Exponent's report show TAB and Commissioning reports delivered
before BOD (R4, tab 3004 at 49). Therefore, the record does not support Mr. Cardinale's
testimony to the contrary. The confusion in the record, particularly PE's argument in its
brief that the 15 days was previously considered by its expert to be concurrent delay (app.
br. at 345, 377), causes us only more confusion. It is PE's burden to prove this delay claim
in a clear and unambiguous manner. PE failed in this regard. We deny PE's claim for
compensable closeout delay.
Design Notice to Proceed (NTP)
PE contends that it is entitled to a 14-day delay in issuing the design NTP (app. br. at
362). We disagree. First, there was no requirement for a design NTP (finding 68). Second
the NTP issued on 25 July 2005 stated that its effective date was the date of DO 13 which
was 13 July 2005 (finding 68). Third, Mr. Binks signed the 25 July 2006 NTP
acknowledging receipt and we find Mr. Hillestad's testimony that PE agreed with the
effective date credible (finding 68). PE is not entitled to a 14-day delay in the design NTP.
Submittals
PE attributes delay to the AF in approving its submittals. However, PE's analysis
is fundamentally flawed. PE contends that submittals have to be processed within
14 calendar days (app. br. at 133). PE relies on a document at the very end ofRFP 8234,
SOW Attachment Sb, Section 01300 Submittals, Paragraph 3.02 Timing of Submittals,
paragraph B, "Allow 14 calendar days for review by the Government of each submittal
item" (id.; R4, tab 2 at 1787). We, however, rely on Section O1330 - Submittal
Procedures. This specification provides that submittals first go to the QC -Manager and
allows 15 working days for approval. If the submittal requires CO approval, the CO has an
. additional 20.working days from receipt to approve the submittal. This procedure applies
158
to resubmittals. (Finding 21) Therefore, the submittal approval requirement, without
resubmittal, ranges from 15 working days to at least 3 5 working days or seven weeks
depending on who approves the submittal. Because PE used the incorrect approval times
and the lack of testimony on the details of each submittal, including resubmittals, PE failed
to meet its burden of proof on all of its submittal delay arguments.
Schedule De lay/Extended Overhead ($3, 184,150)
We addressed the individual components of this claim earlier in this decision.
The results are reflected in the table below:
(
Claim I PE Days PE Amount Decision Decision
Days Amount
NTP Delay[ 14o1 83 $161,194 70 $135,955
Clean Site Delay Included in 28 $75,055
earthwork
Earthwork Differing 226 . $1,995,993 182 $1,607,356
Site Conditions
Triarch (paint) 32 $496,488 20 $310,297
Balance of Constr. 29 $449,943 0 0
Closeout 15 . $80,532 0 0
Total $3,184,150 Total $2, 128,663( 141 1
Incomplete Wage Determination & OSI Investigation ($393,195)
We have carefully read PE's 37 pages of unnumbered facts in its initial brief, the
AF's 277 PFFs in 42 pages in its brief and PE's 17 pages of reply brief- all devoted to
the DBA compliance and OSI Investigation issues. ·we conclude that we need not
attempt to delve into this aspect of the appeal in anywhere near that level of detail.
There are three distinct parts of the original claim: {l) Omissions of wage
classifications in WD NJ20030002; (2) the AF's review of PE's payrolls 142 ; and (3) the OSI
investigation. W~ deal with the OSI investigation first. PE invites us to find a link between
the investigation and the AF's review of PE's payrolls, "It is of course difficult to prove
what was in the minds of AFCEE or the OSI investigators, but we believe the evidence
permits the Board to infer a relationship between those activities" (app. reply br. at 206).
PE's argument seems to be that the payroll reviews and investigation were in retaliation for
PE's notice that it was going to submit a multi-million dollar claim. However, Ms. Hom's ·
testimony and the ROI persuade us that the investigation was initiated by the OSI as a result
140
PE identifies this as Design Impact.
141
This amount has already been added into the recovery and should not be added again.
142
· As noted in footnote 1, the AF payroll review claim is dealt with in anothet decision
issued simultaneously.
159
of information provided by non-government confidential sources and not the AF (findings
208-09). PE h~s not proven that the AF is in any way responsible for the OSI investigation
or that it should be liable for PE's costs to defend itself against the OSI investigation. That
aspect of this claim is denied.
Next we deal with the WD omissions. The AF first noticed payroll classifications
that were not on WD NJ20030002 in early 2008 (finding 204). This fact is perplexing to us
because all of the workers on this project were getting paid. Each-worker was supposed to
be paid a wage identified in the WD. This information was needed for PE and its
subcontractors to bid on the contract or at a minimum perform the contract. We do not see
· · how either PE or its subcontractors could miss the fact that classifications needed to
perform the work were not in WD NJ20030002. As a result of payroll reviews in 2008 the
AF notified PE that classifications for carpenter, plumber, journeyman and pipefitter were
in payrolls but not in WD NJ20030002 (finding 205). Eventually letters of inadvertence
were issued for bricklayers, stonemasons, marble masons, cement masons, plasters, tile
layers, terrazzo workers, elevator mechanics, carpenters, insulators, millwrights, soft floor
layers, and drywall finishers/tapers (finding 207).
-We start by looking· at the FAR to see if it benefits contractors. PE argues that the
AF violated FAR 22.404-3 that required the AF to "[i]mmediately upon receipt" review
wage determinations and inform DOL of any changes needed to correct errors (app. br. at
386-87). We agree that this regulation benefits PE and its subcontractors because it is
supposed to ensure that they know what wages to use in establishing their bids and
performing the contract. We also agree that the AF did not catch the omissions in the WD
and arguably violated the regulation. This situation is, however, much different than was
the case with the payroll reviews because PE and its subcontractors were in a better
position to catch these omissions than the AF. It was PE and its subcontractors who knew
what types of workers would be used, not the AF. We also consider that DCAA in its
audit noted that DOL DBA rates are posted onDOL's website and were easily accessible
to PE (R4, tab 213 at 34). We are not going to hold the AF liable for this part of the claim
because PE and its subcontractors were in the best position to see this omission, should
have identified the omissions very early either in bidding or the creation of their payrolls
and notified the AF of the omission. We see no harm to PE and deny this claim.
Subcontractor Change Order Price Escalation ($290,634)
According to PE, this claim "represents the additional cost incurred by Parsons on
subcontractor change orders because the work was performed in a period significantly
later than anticipated due to Government-caused delays. The calculation is being applied
only to the subcontractor change orders that are considered to be the responsibility of ·
Parsons." (App. br. at 486) (Citation omitted) In our earlier denial of PE's buyout claim
we explained why PE was not entitled to escalation due to competition from China and
Hurricane Katrina. The same logic applies here. Also, PE fails to explain why the AF
should be liable for escalation based on change orders that it admits are the responsibility
160
of PE. Additionally, this claim was not well developed in the entitlement secti,on of PE's
brief. PE has not met its burden of proof and we deny this claim.
Unpaid Contract Balance ($347,526)
The AF extended the period of performance twice, 126 days in Mod. 2 and 171
days in Mod: 3) (findings 92, 124 ). The contractual delivery date after Mod. 3 was
27 December 2007 (finding 124). PE was assessed liquidated damages from 28 December
2007 (finding 162). The $347,5_26 is the total amount of liquidated damages assessed from
28 December 2007 to BOD on 11 September 2008, a total of258 days at $1,347 per day.
We found a total of332 days of excusable compensable delay (NTP 70, Clean
Site 28, Earthwork 182, Paint 20) plus 32 days of critical concurrent delay ·
(SSlVIR/Truss). The delivery date in effect when the majority of th~se days occurred
was 9 July 2007, established in Mod. 2 (finding 92). Therefore, we run the 332 days
from 9 July 2007 for a delivery date of 5 June 2008. In our decision on contract
closeout we agreed with PE that BOD (substantial completion) should have occurred no
later than end of June 2008; We commented earlier that we would have accepted an
earlier BOD date. Liquidated damages may not be assessed after BOD, notwithstanding
remaining punch list items. Dick Pacific, 16-1 BCA ,r 36,196 at 176,636-37. Therefore,
the AF had no right to assess liquidated damages and the $347,526 must be returned.
We sustain the contract balance claim in this amount.
CDA Jurisdiction/Interest
One final matter that requires addressing is the source of our jurisdiction to
consider this appeal since the government agency with which Parsons contracted, the
Air Force Services Agency, is a non-appropriated funds instrumentality (NAFI). Until
recently, the source of our jurisdiction to entertain appeals involving NAFis was not the
CDA, but the portion of our charter that allowed us to consider appeals to which the
· parties had contractually agreed to the Board's authority to resolve their disputes. See,
e.g., Computer Valley International, Ltd., A_SBCA Nos. 39658, 40496, 94-1 BCA
,r 26,297 at 130,796; D 'Tel Communications, ASBCA No. 50093, 97-1 BCA ,r 29,251 at
145,504. This was consistent with "the NAFI doctrine," controlling law from the
United States Court of Appeals for the Federal Circuit (the Federal Circuit) that held
that the CDA did not grant the Court ofFederalClaims or the Boards of Contract
Appeals jurisdiction over matters involving NAFis (and neither did the Tucker Act).,
See, e.g., Furash & Co. v. United States, 252 F.3d 1336, 1342-44 (Fed. Cir. 2001). An
important consequence of the lack of CDA jurisdiction is that we had no basis to award
interest in appeals involving NAFis.
The continued viability of the NAFI doctrine with respect to appeals brought
pursuant to the ,CDA was called into question by the recent en bane decision of the
Federal Circuit in Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en bane). In
161
Slattery, the Federal Circuit concluded that the NAFI doctrine no longer applied to
lawsuits brought in the Court of Federal Claims pursuant to the Tucker Act. 635 F.3d at
1321. It has since been argued that the same logic that dictated the end of the NAFI
doctrine for Tucker Act suits should also apply to suits and appeals brought pursuant to
the CDA, notably, in the Federal Circuit appeal of Minesen Co. v. McHugh, 671 F.3d
1332 (Fed. Cir. 2012). In Minesen, however, the Federal Circuit "decline[d] to decide the
issue" because it was a "complex" matter that did not need to be addressed due to the
circumstances in that case. 671 F.3d at 1337. There was.a dissent in Minesen, which
approached the appeal in a manner that required resolution of the question of whether the
CDA was applicable and which found that Slattery ended the NAFI doctrine as applied to
the CDA. See 671 F.3d at 1345 (Bryson, J., dissenting). There has been no further
guidance from the Federal Circuit and we have not yet decided this question of law,
ourselves, though we have recognized its pendency. See CP ofBozeman, Inc., ASBCA
No. 58491, 15-1BCA136,035 at 176,013; Harry Richardson, ASBCA No. 57582, 12-1 .
BCA 134,902 at 171,618. In the appeal before us here, however, the issue must be
addressed and, as will be seen, we are of the opinion that the reasoning in Slattery
compels us to conclude that the CDA applies to NAFis, such as the one here.
Until Slattery, the foundational underpinning of the NAFI doctrine - as applied to
both the Tucker Act and the CDA - was that the law required payments for breaches of
contract to be paid by appropriated funds and that NAFis did not have access to such
funds. See, e.g., United States v. General Elec. Corp., 727 F.2d 1567, 1570 (Fed. Cir.
1984); Furash, 252 F.3d at 1342; Pacrim Pizza Co. v. Pirie, 304 F.3d l291 (Fed. Cir.
2002). The Federal Circuit in Furash further explained that Congress intended the NAFI
doctrine to apply "in the same fashion to the CDA as it does to the Tucker Act." 252 F.3d
at 1343. In Pacrim Pizza, the Federal Circuit emphasized that the decision in Furash,
extending the NAFI doctrine to the CDA, rested largely upon the CDA's enumerating
certain NAFis to which the CDA applied and therefore implying that the CDA did not
apply to non-enumerated NAFis. 304 F.3d at 1293. Slattery changed all that.
In Slattery, a Tucker Act case, the Federal Circuit's revisiting of the NAFI doctrine,
inter alia, rejected the notion that Congressional enumeration of some NAFis as being
excepted from the NAFI doctrine meant that non-enumerated NAFis were thus subject to it.
635 F.3d at 1313-14. In large part, because the enumerated/non-enumerated distinction was
critical to finding Congressional intent to limit Tucker Act jurisdiction, 63 5 F .3 d at 1311,
and because the Federal Circuit held that, without an explicit withholding of jurisdiction by
Congress, there would be Tucker Act jurisdiction over contracts entered on behalf of the
United States, the court determined that the NAFI doctrine was no longer applicable to
. cases brought pursuant to the Tucker Act. Id. at 1320-21.
Since, as discussed above, the application of the NAFI doctrine to the CDA
largely piggybacked on the numerated/non-enumerated distinction shared by both the
CDA and the Tucker Act, the Federal Circuit's rejection of that distinction in Slattery
leads us to the conclusion that there remains no basjs for continuing to apply the NAFI
162
doctrine to CDA appeals. 143 This is the logic that underlies the relevant portion of
Judge Bryson's dissent in Minesen, see 671 F.3d at 1343-44, and we find it persuasive.
To be sure, we recognize that Judge Bryson's dissent was a dissent, but the majority in
Minesen did not reject this portion of its logic; it just never needed to address it. The
government argues that the Minesen majority declined to overrule its prior cases
applying the NAFI doctrine to the CDA, meaning that such cases were still controlling
(gov't supp. reply br. at 2), but the government makes too much of the Minesen
majority's inaction: it did not decide to leave the old precedent in place, it merely took
no action on the NAFI doctrine at all. See 671 F .3d at 1336. Moreover, the Slattery
court expressly overruled the relevant portion of Kyer v. United States, 369 F.2d 714(Ct. Cl. 1966) and the s·ubsequent cases which relied upon Kyer, upon which the NAFI
doctrine was founded. Slattery, 635 F.3d at 1320. Furash, which applied the NAFI
doctrine to CDA appeals, is just such a case, see Slattery, 671 F.3d at 1310, making it
arguable that the Federal Circuit directly overruled it in Slattery. In the end, we
conclude that eliminating the NAFI doctrine's application to CDA appeals shows
greater fidelity to the Federal Circuit's direction in Slattery than allowing it to remain,
and nothing in Minesen requires a different outcome or suggests otherwise.
As a final consideration, we note that we can discern no good reason for agencies
relying on directly appropriated-funds to be subject to CDA interest when those that are
NAFis are not. To that end, we have less reason to believe that Congress intended the
rules to differ between NAFis and other government agencies, and we have less reason
to believe that this decision would be in any way contrary.to public policy.
This appeal is within our CDA jurisdiction, and as a consequence, PE is entitled
to CDA interest, which runs at the statutory rate from the time that it submitted its
claims.
143
We understand that in other venues, the government has argued that a distinction
between the language in the Tucker Act, applying it to contracts "with the United
States," and the language in the CDA, applying it to contracts "with executive
agencies" constituted an additional reason to treat NAFis differently under the
CDA than under the Tucker Act. The government has not made that argument
here. Moreover, none of the Federal Circuit cases applying the NAFI doctrine to
the CDA relied upon that distinction. Post Slattery, we will not search for new
bases to keep the NAFI doctrine alive that were never before a basis for that
. doctrine. Moreover, the distinction in statutory language is a distinction that we
find to be one without a difference here.
163
CONCLUSION
For the reasons stated in this decision, we sustain in the total amount of $10,519,082
and deny the rest of PE's claims. CDA interest shall run from 29 June 2012, the date of PE's.
claim.
Dated: September 5, 2018
CRAIG S.
Administr ive Judge
Armed Services Board
of Contract Appeals
I concur in result (see separate opinion) . I concur in result (and join in
Judge Shackleford's opinion)
~ /
RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
· Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
164
OPINION BY AOMINISTRATIVE JUDGE SHACKLEFORD
CONCURRING IN RESULT
We agree with the amounts awarded in the opinion by Judge Clarke and thus to
that extent we concur in the result. We differ, however, over the role that FAR 31.201-2
plays in proving damages and Judge Clarke_'s interpretation of this provision.
Generally, with respect to the costs it claimed, appellant stated in its post-hearing
brief as follows:_
Once the costs have been shown to have been
incurred, the issue becomes_ whether the contractor's
claimed costs are allowable. FAR 31.201-2 states that the
costs are allowable if they comply with the following
requirements: reasonableness, allocability, and consistency
with the cost accounting standards (CAS) or generally
accepted accounting principles, the terms of the contract and
any limitations set forth in FAR 31.2 (especially the cost
principles at 31.205). We shall address each of these
requirements as it applies to this appeal.
(App. br. at 427) Thereafter appellant sought to show how the evidence met each of those
requirements (id. at 427-31).
The government placed less reliance upon FAR 31.201-2, citing traditional Board
and court precedent as follows:
The contractor has the burden to show that its claimed
costs were incurred as a result.of, or were caused by the
Government's changes. [Citations omitted.] This
causation requirement is similar to that recognized under
the well settled law of damages: "Recoverable damages
cannot be proved by a naked claim for a return of costs
even when they are verified. The costs must be tied in to
fault on defendant's part." River Construction
Corporation v. United States, 159 Ct. Cl. 254, 270 ( 1962).
(Gov't br. at 466) (citing Stewart & Stevenson Services, Inc., ASBCA No. 43631, 98-1
BCA 'tl 29,653 at 146,925, affirming 97-2 BCA 'tl 29,252).
While vye do not contend here that FAR 31.201-2 never has a place in an analysis of a
monetary claim based upon a change ( directed or constructive), or a differing site condition, or
a ciaim for delay damages, or breach damages, we believe that Judge Clarke's total reliance on
that provision as the basis for proof of damages was unnecessary and was inconsistent with our
establishe~ case law and that of our appellate court.
165
More particularly, we take great issue with that portion of the damages analysis
which leads up to the conclusion that PE has satisfied its burden to prove its claimed costs
were reasonable when the government challenged all costs hut failed to challenge the
reasonableness of any specific cost in the claim, stating "Such a blanket challenge to all·
costs is insufficient to satisfy FAR 3 l.201-3(a)." This finding has no place in our analysis
of the damages, as the reasonableness of the amounts is appellant's burden to show,
unaided by the government's failure to challenge the reasonableness of specific costs.
Once a CO's final decision is appealed to this Board, the parties start with a clean
slate and the contractor bears the burden of proving liability and damages de nova.
Wilner v. United States, 24 F.3d 1397, 1401-02 (Fed. Cir. 1994) (en bane). Further,
"[t]he claimant bears the burden of proving the fact ofloss with certainty, as well as the
burden of proving the amount of loss with sufficient certainty so that the determination
of the amount of damages will be more than mere speculation.'·' Lisbon Contractors,
Inc. v. United States, 828 F.2d 759, 767 (Fed. Cir. 1987) (quoting Willems Indus., Inc.,
v. United States, 295 F.2d 822, 831 (Ct. Cl. 1961)).
Notwithstanding FAR 31.201-2 and -3, which directs how COs and the DCAA
should evaluate costs, our review of the record leads us to conclude that for the damages
awarded by Judge Clarke, appellant proved liability on the part of the government,
proved the costs were incurred and were reasonable with "sufficient certainty" such that
the amount of damages awarded is "more than mere speculation." There was no
requirement nor need to follow FAR 31.201 to evaluate this claim and thus, we concur
in the result but not the analysis.
Dated: September 5, 2018
RICHARD SHACKLEFORD
Administrative Judge
Acting Chairman
Armed Services Board
· of Contract Appeals
I concur
J.DOlJTy
Administrative Judge
Vice Chairman
Arpied Services Board
of Contract Appeals
166
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 58634, Appeal of Parsons
Evergreene, LLC, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
.. Board of Contract Appeals
167