Circle, LLC ( 2015 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Circle, LLC ) ASBCA No. 58575)
Under Contract No. W912P8-04-C-0004 )
APPEARANCES FOR THE APPELLANT: Thomas F. Gardner, Esq.
Douglas A. Kewley, Esq.
W. Lee Kohler, Esq.
Gardner & Kewley, APLC
Metairie, LA
APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.
Engineer Chief Trial Attorney
William G. Meiners, Esq.
Engineer Trial Attorney
U.S. Army Engineer District, New Orleans
OPINION BY ADMINISTRATIVE JUDGE SCOTT
ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
AND APPELLANT'S MOTIONS TO STRIKE
Circle, LLC (Circle) appealed under the Contract Disputes Act (CDA), 41 U.S.C.
§§ 7101-7109, from the contracting officer's (CO's) final decision denying its
$1,652,739.64 claim based upon the U.S. Army Corps of Engineers' (Corps') alleged
constructive change to the subject contract involving a canal improvement project in
Louisiana. The parties filed cross-motions for summary judgment on liability. Circle
also moved to strike portions of declarations the Corps submitted and of its statement of
genuine issues of material fact. For the reasons stated below, we deny Circle's motions
and we grant the Corps' cross-motion for summary judgment.
APPELLANT'S MOTIONS TO STRIKE
Preliminarily, we resolve Circle's motion to strike certain paragraphs in declarations
submitted by the Corps. Circle contends that they are inadmissible under FED. R. Crv. P.
56(c)(4) and FED. R. Evro. 602. Rule 56(c)(4) states that:
An affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts
that would be admissible in evidence, and show that the
affiant or declarant is competent to testify on the matters
stated.
FED. R. Evm. 602 states in pertinent part that:
A witness may testify to a matter only if evidence is
introduced sufficient to support a finding that the witness has
personal knowledge of the matter. Evidence to prove
personal knowledge may consist of the witness's own
testimony.
Circle complains about statements such as the declarant has no personal knowledge, no
knowledge, or no recollection of a specific meeting, submittal, submittal rejection, or
direction by the Corps that Circle alleges occurred at the meeting. Circle also contends
that many of the alleged factual disputes in the Corps' Statement of Genuine Issues of
Material Fact should be stricken because they are either based upon inadmissible
averments in the Corps' declarations or upon mere denials, which are insufficient to
defeat summary judgment.
The Corps responds that Circle has misinterpreted the cited Rules and that a
declarant's statement about the declarant's lack of knowledge or recollection of a matter
is a statement necessarily founded upon the declarant' s own personal knowledge. The
Corps asserts that the declarations are in direct response to Circle's allegations that three
of the Corps' declarants attended a specific meeting, referred to by Circle as the
"Expectations Meeting" (app. mot., vol. 2, tab D (hereafter O'Brien aff.) ii 8), at which
two of them required Circle to use a particular computer program for design work. The
Corps contends that the declarations establish that Circle's allegations that the events
occurred are uncorroborated. The Corps cites to several cases, including Thai Hai,
ASBCA No. 53375, 02-2 BCA ii 3 L971, recon. denied, 03-I BCA iJ 32,130, afj"d, Thai
Hai v. Brownlee, 82 F. App'x 226 (Fed. Cir. 2003) (unpublished), in which it alleges that
a witness's lack of recollection was treated as admissible evidence. Circle argues that the
cases are distinguishable.
The Corps also opposes Circle's motion to strike much of its Statement of
Genuine Issues of Material Fact. The Corps contends that the issues are based upon the
documentary record, or upon a lack of documentation to support Circle's claim, in
addition to the Corps' declarations. The Corps cites to FED. R. CIV. P. 56(c)(l)(A) and
(B), which state:
(1) Supporting Factual Positions. A party asserting that a
fact cannot be or is genuinely disputed must support the
assertion by:
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(A) citing to particular parts of materials in the record,
including ... documents, ... affidavits or
declarations, .. .interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish
the absence or presence of a genuine dispute, or that an
adverse party cannot produce admissible evidence to support
the fact.
Circle counters, inter alia, that the lack of documentation is not necessarily relevant
because the Corps has admitted to having lost some records in Hurricane Katrina.
The Federal Rules of Civil Procedure do not apply to the Board as an
administrative tribunal but we may look to them for guidance, particularly in areas our
rules do not specifically address. Thai Hai. 02-2 BCA ii 3 L971 at 157,920. Similarly,
Board Rule IO(c) (addressing hearings) notes the fact that the Federal Rules of Evidence
are not binding upon the Board but they may guide the Board's rulings. Board Rule 7
provides that, in deciding motions for summary judgment, we look to FED. R. C1v. P. 56
for guidance. Regarding the admissibility of proffered evidence, it is up to the Board in
its sound discretion to determine what evidence is admissible and the weight to be given
it. Laguna Construction Co., ASBCA No. 58324, 14-1 BCA ii 35,748 at 174,949
(addressing appellant's motion to strike); see Board Rules IO(c), l l(d), 13(d).
The Corps' declarants include the administrative contracting officer (ACO), who
averred that he was unaware of the alleged Expectations Meeting or of any
documentation about it, and the three Corps employees alleged by Circle to have attended
the meeting. The declarants do not deny that there were meetings with Circle involving
its submittals; they deny knowledge or recollection of a specific meeting on or about the
date alleged by Circle and Circle's contentions as to what occurred at the meeting.
Indeed, one of the two Circle affiants said to have attended the meeting averred that he
did not recall the exact date of the meeting, but he named a date based upon the best of
his recollection (O'Brien aff. iJ 8).
The alleged Expectations Meeting, submittal, submittal rejection, and Corps
direction, and other disputed matters referred to by Circle and the Corps in connection
with Circle's motions to strike, are pertinent to the Board's analysis of Circle's claim.
We deny Circle's motions to strike the disputed portions of the Corps' declarations and of
its Statement of Genuine Issues of Material Fact.
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STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE
SUMMARY JUDGMENT MOTIONS
The parties have submitted affidavits or declarations in support of their motions.
The following facts, derived from those submittals and the proposed facts alleged by the
parties and the portions of the record to which they refer, are undisputed or
uncontroverted unless otherwise indicated.
1. On 15 January 2003 the Corps issued a sealed bid solicitation for Phase 1 of a
Southeast Louisiana (SELA) urban flood control project involving improvements to the
Two Mile Canal in Jefferson Parish, Louisiana (R4, tab 4 at 3). The work included, inter
alia, constructing a concrete flume in the canal. The contractor was required to install a
Temporary Retaining Structure (TRS), consisting of temporary sheet pile, to stabilize the
canal while the flume was being constructed. It was the contractor's responsibility to
design the TRS and select sheet pile capable of satisfying certain minimum performance
criteria in specification section 02252. (R4, tab 1 at 2, ii 1; app. statement of undisputed
facts (AUF) iii\ 2-5; gov't resp. to app's proposed facts (GRF) iii! 2-5)
2. The solicitation and eventual contract contained the following provisions:
a. Federal Acquisition Regulation (FAR) 52.243-4, CHANGES (AUG 1987), which
provides in pertinent part:
(a) The [CO] may, at any time, ... by written order designated
or indicated to be a change order, make changes in the work
within the general scope of the contract, including changes-
( 1) In the specifications (including drawings and designs);
(2) In the method or manner of performance of the work;
(b) Any other written or oral order (which, as used in this
paragraph (b ), includes direction, instruction, interpretation,
or determination) from the [CO] that causes a change shall be
treated as a change order under this clause; provided that the
Contractor gives the [CO] written notice stating
(1) the date, circumstances, and source of the order and
(2) that the Contractor regards the order as a change order.
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(c) Except as provided in this clause, no order, statement, or
conduct of the [CO] shall be treated as a change under this
clause or entitle the Contractor to an equitable adjustment.
(d) If any change under this clause causes an increase or
decrease in the Contractor's cost of, or the time required for,
the performance of any part of the work under this
contract, ... the CO shall make an equitable adjustment ....
However, except for an adjustment based on defective
specifications, no adjustment for any change under paragraph
(b) of this clause shall be made for any costs incurred more
than 20 days before the Contractor gives written notice as
required ....
(e) The Contractor must assert its right to an adjustment under
this clause within 30 days after
... (2) the furnishing of a written notice under paragraph (b) of
this clause, by submitting to the [CO] a written statement
describing the general nature and amount of the proposal,
unless this period is extended by the Government.
(R4, vol. II, app'x at 77-78)
b. Defense Federal Acquisition Regulation Supplement (DFARS) 252.201-7000,
CONTRACTING OFFICER'S REPRESENTATIVE (DEC 1991), which states:
(a) "Definition. Contracting officer's representative" means
an individual designated in accordance with subsection
201.602-2 of the [DFARS] and authorized in writing by the
[CO] to perform specific technical or administrative
functions.
(b) If the [CO] designates a [CO's] representative (COR), the
Contractor will receive a copy of the written designation. It
will specify the extent of the COR's authority to act on behalf
of the [CO]. The COR is not authorized to make any
commitments or changes that will affect price, quality,
quantity, delivery, or any other term or condition of the
contract.
(R4, vol. II, app 'x at 94)
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c. Specification section 00010, Bidding Schedule, Note 2, which states that
"[w]ithin seven (7) days after issuance of the NTP [notice to proceed], the Contractor
shall initiate a meeting to discuss the submittal process with the Area or Resident
Engineer or his authorized representative" (R4, vol. II, app'x at 00010-5).
d. Specification section 02252, TRSs, which states in part:
1.1 SCOPE
This work shall consist of designing, furnishing,
installing, maintaining, and subsequently removing all
[TRSs] required to complete this project. The Contractor
shall be solely responsible for the design, layout,
construction, maintenance, and subsequent removal and
disposal of all elements of the [TRSs].
1.3 SUB MITTALS
Submittals shall be in accordance with Section 01330-
"SUBMITTAL PROCEDURES". No work shall proceed
until the submittals have been reviewed and approved by
the [CO]. ...
( 1) Design calculations.
(2) Shop Drawings .... These shop drawings shall bear
the stamp and signature of the Registered Professional
Engineer. These drawings shall clearly show:
(b) Material grade, weight, length and designation
of steel sheet pile section( s) used.
1.4 DESIGN CALCULATIONS
1.4.1 Design Procedures
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The Contractor shall follow design procedures using the
method of developing soil pressure for estimating the
external forces, set forth in "Steel Sheet Piling Design
Manual" excluding [various methods]. The design
performed by the Contractor must evaluate the overall
stability and sizing of the sheet piling and other structural
elements for the [TRSs]. The Contractor shall use and
rely upon the soil borings, design sheer strength profile(s)
and unit weight data presented in the plans and/or in the
figure(s) attached ... for its design. The structure shall
meet all the requirements of Corps of Engineers Safety
Manual EM 385-1-1 for fall protection and ingress and
egress.
1.4.3 Sheet Pile Wall Design
The design of the sheet pile walls shall be developed
using a method of analysis indicated in paragraph
1.4.1.. ..
(R4, vol. II, app'x at 02252-1 to -2)
3. The parties agree that, as part of Circle's bid preparation, Mr. Minor Hines, a
Circle project manager, prepared a hand sketch depicting Circle's proposed TRS design,
which was based upon the use of AZ18x60 sheet piles (app. mot., vol. 1, attach. A
(hereafter Cavalier aff.), ex. 1, attach. B (hereafter Duong aff.) ii 2; AUF iii! 11, 12; GRF
iii! 11, 12). The government contends that this TRS design did not comply with contract
requirements (GRF ii 12). Mr. Ivy Cavalier, currently a Circle equipment manager, who
assisted in bid preparation in August 2003, states in his affidavit that the sketch was
prepared after Mr. Hines consulted with Mr. J. Michael Dixon, P.E., Circle's engineering
consultant. Mr. Co Duong, a Circle estimator from 1994 to 2006, similarly states in his
affidavit, as does Circle's president, Mr. M. J. Wolfe, Jr. (Cavalier aff. iii! 1-3; Duong
aff. iii! 1, 4, 5; app. mot., vol. 1, tab V, attach. C (hereafter Wolfe aff.) iii! 1, 4, 6; AUF
ii 11) Mr. Dixon died in 2004 (app. mot. at 16). Mr. Hines did not submit an affidavit.
For lack of knowledge, the Corps disputes that the sketch was prepared after consultation
with Mr. Dixon (GRF ii 11).
4. Mr. Cavalier prepared an AutoCad drawing, based upon Mr. Hines' hand
sketch, depicting Circle's planned TRS design, using AZ18x60 sheet piles. On
22 August 2003 Mr. Cavalier faxed a copy of his AutoCad drawing, depicting Circle's
planned TRS design, to Mr. Dixon for his review and approval. On 25 and 26 August
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2003 Mr. Hines faxed to Mr. Dixon solicitation pages containing soil data related to the
project. (Cavalier aff., 5, ex. 2; Duong aff., 7, exs. 3, 4; AUF ,, 13-16; GRF ,, 13-16)
5. Circle contends that "[a]fter performing design calculations to verify Circle's
planned TRS design, Mr. Dixon reported back to Circle that AZ 18x60 sheet piles would
work for the TRS" (AUF, 17). Circle cites to Mr. Cavalier's statement that:
Mr. Dixon performed design calculations based on the [TRS]
depicted in Exhibit No. 2. Mr. Dixon reported back to Circle
that Circle's proposed [TRS], using AZ18x60 sheet piling,
would meet the requirements of project specifications.
(Cavalier aff., 6) Mr. Cavalier does not identify to whom Mr. Dixon reported or when
and there is no contemporaneous documentary evidence of record of Mr. Dixon's
calculations. The Corps disputes Circle's contention on the ground that the Corps has not
seen, and has no knowledge, that Mr. Dixon performed the calculations or that the TRS
design complied with the contract (GRF, 17).
6. Circle contends that, only after consulting with Mr. Dixon, and obtaining his
assurance that a TRS constructed with AZ18x60 sheet piles "would have complied with
the Project specifications," did it base its bid upon the use of those sheet piles (AUF
, 18). The Corps disputes Circle's contention on the ground that it has not seen, and has
no knowledge, of what, if any, consultation occurred between Mr. Dixon and Circle prior
to Circle's decision to use AZ l 8x60 sheet piles for its TRS or that the TRS design
allegedly approved by Mr. Dixon complied with the contract (GRF , 18).
7. Sheet pile cost is based upon a unit price per pound of steel used. Larger sheet
piles are more expensive than smaller ones. (AUF , 20; GRF , 20) On 27 August 2003
Circle received a proposal from Skyline Steel (Skyline) to sell AZ18x60 sheet piles.
Circle prepared its bid for the TRS work based upon the use of AZ 18x60 sheet piles. It
based its material cost estimate upon Skyline's quotation. It based its estimated labor and
equipment costs upon its historical production rates associated with AZ 18x60 sheet piles.
(Duong aff. ,, 12-13, exs. 9-12; AUF ,, 24-26; GRF ,, 24-26)
8. Circle's bid preparation worksheets, bid summary, and pre-construction budget
reflect that its estimated TRS costs included, among other things, purchasing AZ 18 sheet
piles and installing two levels of bracing (Duong aff. ,, 13-15, exs. 9, 10; AUF ,, 27-30;
GRF ,, 27-30).
9. On 6 October 2003 Circle submitted its project bid in the amount of
$12,075,806.13. The portion of the price attributable to the TRS scope of work was
$2,456,773.99. Circle's estimated cost (excluding markup) for the TRS work, as
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reflected in its bid worksheets and pre-construction budget, was $2,305,468.99. (Duong
aff. 't!'t! 13-15; Wolfe aff. 't! 7; AUF 't!'t! 32-34; GRF 't!'t! 32-34)
10. On 22 October 2003 the Corps awarded the contract to Circle (R4, tab 5).
Circle then negotiated further with Skyline for the TRS sheet piles. Mr. Matt O'Brien, a
Circle project manager from 2003 to 2013, states that he requested 58-foot sheet pile as a
ruse, knowing that Skyline would provide stock-length 60-foot pile for the price of the
shorter ones, rather than custom fabricate. Circle received a revised proposal from
Skyline for AZ18x58 sheet pile and ordered it on 7 November 2003. (App. supp. R4,
tabs 7, 8; O'Brien aff. 't!'il 4, 7; AUF 't!'il 36-38, 41-42; GRF 't!'il 36-37, 41-42) Circle has
not provided evidence of whether Skyline actually delivered 60-foot pile. The Corps
disputes the "ruse" claim for lack of knowledge or information (GRF 't! 38).
11. On 3 November 2003 Circle acknowledged receipt of the CO's 22 October
2003 letter to Mr. Steve Hinkamp, resident engineer for the Corps' Southeast
Louisiana-Jefferson Parish Resident Office (SELA-J), appointing him as the contract's
ACO. The letter advised that the authority was not redelegable; as ACO, Mr. Hinkamp
could modify construction contracts within the contract scope under the Changes and
other named clauses provided that no individual contract action under the clauses could
exceed $100,000; and he was to record all actions he took in administering the contract,
in accordance with applicable regulations. (R4, tab 8 at 5-6; gov't mot. and opp'n, tab D
(hereafter Hinkamp dee!.) 't!'il 1, 2)
12. On 5 November 2003 Circle and the Corps held a submittals meeting, per
contract section 00010, Bidding Schedule, Note 2, to discuss the submittal process. The
Corps informed Circle that additional submittal meetings could be arranged at its
discretion to expedite the submittal review process for certain work components,
including the TRS. (R4, vol. II, app'x at 00010-5; app. supp. R4, tabs 30, 31)
13. The Corps held the Pre-Construction Conference on 18 November 2003.
ACO Hinkamp avers in his declaration that, at the meeting, he informed Circle that the
only two persons authorized to make changes to the contract were the CO and himself as
ACO and that, if Circle believed that any instructions given to it by any other person
constituted a change to the contract, the matter should be brought to his attention. (R4,
tab 9; Hinkamp dee!. 't! 3, ex. 1; AUF 't! 43; GRF 't! 43) Mr. Hinkamp's 12 January 2004
minutes of the pre-construction conference state:
I pointed out that Diane Pecoul is the [CO], and that I
am the [ACO] and SELA Resident Engineer. Ms. Pecoul and
myself are the only two people who have the authority to
make changes to the contract. Instructions given to you by
anyone else should be brought to my attention if you consider
them to be a change to the contract.
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(R4, tab 9 at 6) The minutes record that Messrs. O'Brien, Duong and others attended for
Circle. On 15 January 2004 Mr. O'Brien signed an acknowledgment to the Corps that he
concurred with the minutes, without exception. (R4, tab 9 at 2, 12) Circle agrees with
the foregoing (app. resp. to gov't proposed additional facts (ARF), iii! 129-31).
14. Mr. O'Brien avers in his affidavit:
8. After the Pre-Construction Conference, which was
held on November 18, 2003, I took the Corps'
recommendation and scheduled an informal meeting with the
Corps to discuss the Corps' expectations regarding the TRS
submittals process ("Expectations Meeting"). I do not recall
the exact date on which the Expectations Meeting occurred.
However, to the best of my recollection, the Expectations
Meeting occurred on the Thursday following the
Pre-Construction Conference, i.e., November 20, 2003.
9. On or about November 20, 2003, I attended the
Expectations Meeting with the Corps to informally discuss
the Corps' expectations regarding the TRS submittals.
The Expectations Meeting was held in the morning at the
SELA offices in the Joseph Yenni Building in Harahan,
Louisiana. Mr. Co Duong and Mr. J. Michael Dixon also
attended the Expectations Meeting on behalf of Circle.
Mr. Robert Guillot, Mr. Frederick Young and Mr. Shung
Chiu attended the Expectations Meeting on behalf of the
Corps.
10. Mr. Dixon brought with him to the Expectations
Meeting copies of his TRS design and his TRS hand
calculations. Mr. Dixon's TRS design was based on the use
of AZ l 8x60 sheet piles and two levels of bracing. Mr. Dixon
presented copies of his TRS design and hand calculations to
Mr. Young and Mr. Chiu.
11. During the Expectations Meeting, Mr. Young and
Mr. Chiu reviewed and discussed Mr. Dixon's original TRS
design and hand calculations. However Mr. Young and
Mr. Chiu refused to accept Mr. Dixon's original TRS design
and hand calculations for an official review.
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12. During the Expectations Meeting, Mr. Young and
Mr. Chiu advised Circle that Circle would need to submit new
TRS calculations which had to be performed using the Corps'
proprietary CWALSHT software program. Mr. Young and
Mr. Chiu explained that the TRS design calculations needed
to be performed using CWALSHT because the Corps
intended to use CWAL SHT to conduct its review of Circle's
TRS design calculations.
Mr. O'Brien does not allege that the CO or the ACO was present at the alleged
Expectations Meeting or at any other meeting at which any Corps employee is said to
have instructed Circle that its TRS calculations must be performed using CWALSHT.
15. Mr. Duong avers in his affidavit:
16. On or about November 20, 2003, I attended a
meeting with the Corps to discuss the Corps' expectations
regarding Circle's TRS submittals ("'Expectations Meeting").
The Expectations Meeting was held in the morning at the
SELA offices in the Joseph Yenni Building in Harahan,
Louisiana. Mr. Matt O'Brien and Mr. J. Michael Dixon also
attended the Expectations Meeting on behalf of Circle.
Mr. Robert Guillot, Mr. Frederick Young and Mr. Shung
Chiu attended the Expectations Meeting on behalf of the
Corps.
17. Mr. Dixon brought with him to the Expectations
Meeting copies of his TRS design and his TRS hand
calculations. Mr. Dixon's TRS design was based on the use
of AZ18x60 sheet piles. Mr. Dixon presented copies [of] his
TRS design and hand calculations to Mr. Guillot, Mr. Young
and Mr. Chiu. Mr. Guillot, Mr. Young and Mr. Chiu refused
to accept Mr. Dixon's TRS design and hand calculations for
an official review. Mr. Guillot, Mr. Young and Mr. Chiu
advised that Circle would need to submit new TRS
calculations.
Mr. Duong does not allege that the CO or the ACO was present at the alleged
Expectations Meeting or at any other meeting at which any Corps employee is said to
have instructed Circle that its TRS calculations must be performed using CWALSHT.
Mr. Duong does not allege that any of the Corps personnel attending the meeting
instructed or directed the contractor or its design consultant that Circle must use the
Corps' CWALSHT program for its TRS design.
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16. ACO Hinkamp avers in his declaration:
4. I have no knowledge or recollection of an
"expectations meeting" that is alleged to have occurred on or
about November 20, 2003 between representatives of Circle
and the [Corps], nor am I aware of any documentation
indicating that such a meeting did take place.
5. I am aware of allegations made by Circle that, at a
meeting on or about November 20, 2003, two Corps
employees, Frederick Young and Shung Chiu, structural
engineer and geotechnical engineer, respectively, instructed
or directed Circle that it was required to use the CWALSHT
computer program to design its [TRS].
6. I have no personal knowledge that Frederick Young
or Shung Chiu instructed or directed Circle that it was
required to use the CWALSHT computer program to design
its TRS. Additionally, no employee of the [Corps] has ever
informed me that such direction or instruction was ever given
to Circle by Mr. Young or Mr. Chiu.
7. The only persons who had authority to modify the
terms of [the subject contract] were [the CO and the ACO].
Neither Frederick Young, Shung Chiu, nor Robert Guillot,
who is also alleged to have attended the purported meeting of
November 20, 2003, had any authority whatsoever to modify
the terms and conditions of [the subject contract]. In
particular, neither Frederick Young, Shung Chiu, nor
Robert Guillot had any authority to instruct or direct Circle
that it was required to use the CWALSHT computer program
to design its TRS.
8. The first time I became aware of the allegations that
Corps employees had instructed or directed Circle that it was
required to use the CWALSHT computer program to design
its TRS was when Circle submitted its Request for Equitable
Adjustment ("REA"), dated April 13, 2009 ....
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10. The contractor was required to provide all
submittals to my attention at the government's resident office
(SELA-J), on ENG Form 4025. The SELA-J Office would
distribute the submittal to the appropriate review parties (in-
house and/or A-E design office as well as to Jefferson Parish,
the local sponsor). Review comments from appropriate
offices would be consolidated by the SELA-J Resident Office
and a signed response would be returned by the ACO to the
Contractor on the same ENG Form 4025. The contractual
requirements for submittal procedures are set forth in Section
013 30 of the contract, entitled "Submittal Procedures".
11. Frederick Young and Shung Chiu were Corps
employees and engineers whose duties included reviewing
and providing comments on TRS submittals provided by
Circle. Mr. Young and Mr. Chiu provided comments and
made recommendations to me whether to approve or reject
TRS submittals, but they had no authority themselves to
approve or reject submittals. Only the [CO] and [ACO] had
authority to approve or reject submittals.
12. Under the process set forth in the contract, and as
discussed at the submittals meeting of November 5, 2003, all
official submittals were required to be submitted on ENG
Form 4025 and the signed response by the ACO was required
to be returned to the Contractor on this same ENG Form
4025. This process is established so that the Contractor
receives only one official response from a properly
designated government official, in this case, the ACO.
Circle generally agrees with Mr. Hinkamp's statements in his declaration concerning the
submittal process. It alleges that the ACO authorized it to meet directly with the
Engineering Division to expedite the TRS design and submittal review. (ARF ~ 137)
17. Mr. Guillot, a Corps employee assigned to the SELA Urban Flood Protection
Resident Office during the project, who oversaw the work of the project engineer and
construction inspectors on several drainage improvement projects (gov't mot. and opp'n,
tab E (hereafter Guillot decl.) ~~ 1-3), avers in his declaration:
4. While I did attend meetings related to the [TRS] for
[the subject contract], I have no recollection of attending a
TRS meeting on or about November 20, 2003.
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5. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that either
Frederick Young or Shung Chiu rejected a TRS submittal
informally provided by Circle.
6. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that either
Frederick Young or Shung Chiu instructed or directed Circle
that it was required to use the CWALSHT computer program
to design its TRS.
7. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that either
Frederick Young or Shung Chiu instructed or directed Circle
that if it did not use the CWALSHT computer program to
design its TRS, its TRS submittal would be rejected.
8. Neither I, nor Frederick Young, nor Shung Chiu
had authority to modify [the subject contract].
9. Neither I, nor Frederick Young, nor Shung Chiu
had authority to approve or [reject] submittals under [the
subject contract].
18. Mr. Young, a Corps structural engineer until 2006, who was assigned to
review the structural design aspects of Circle's TRS submittals (gov't mot. and opp'n,
tab F (hereafter Young decl.) iii! 2, 3), avers in his declaration:
4. While I did attend meetings related to the [TRS] for
[the subject contract], I do not recall attending a TRS meeting
on or about November 20, 2003.
5. I do not recall that, at a meeting on or about
November 20, 2003, Mr. Michael Dixon, P.E., informally
submitted a TRS design using ... AZ 18 sheet pilings to me.
6. With regard to the TRS meetings that I did attend,
I have no recollection that I, Shung Chiu or anyone else ever
rejected a TRS submittal informally provided by Circle on
November 20, 2003.
7. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that I or anyone else
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instructed or directed Circle that it was required to use the
CWALSHT computer program to design its TRS.
8. With regard to the TRS meetings that I did attend,
I never instructed or directed Circle that if it did not use the
CWALSHT computer program to design its TRS, its TRS
submittal would be rejected.
9. I never had authority to modify [the subject
contract].
10. My role in the submittals process for [the subject
contract] was to review TRS submittals on behalf of my
office, make comments, and forward those comments to
higher authority.
11. I did not have authority to approve or reject
submittals under [the subject contract].
19. Mr. Chiu, a Corps geotechnical engineer until his retirement in 2012, assigned
to review the geotechnical design aspects of Circle's TRS submittals (gov't mot. and
opp'n, tab G (hereafter Chiu decl.) iii! 1-3 ), avers in his declaration:
4. While I did attend meetings related to the [TRS] for
[the subject contract], I have no recollection of attending a
TRS meeting on or about November 20, 2003.
5. I have no recollection that, at a meeting on or about
November 20, 2003, Mr. Michael Dixon, P.E., informally
submitted a TRS design to me or Frederick Young that
allowed for the use of AZ 18 sheet pilings.
6. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that I, Frederick Young
or anyone else ever rejected a TRS submittal informally
provided by Circle.
7. With regard to the TRS meetings that I did attend,
I have no knowledge or recollection that I, Frederick Young
or anyone else instructed or directed Circle that it was
required to use the CWALSHT computer program to design
its TRS.
15
8. With regard to the TRS meetings that I did attend, I
have no knowledge or recollection that I, Frederick Young or
anyone else instructed or directed Circle that if it did not use
the CWALSHT computer program to design its TRS, its TRS
submittal would be rejected.
9. Neither I nor Frederick Young had authority to
modify [the subject contract].
10. My role in the submittals process for [the subject
contract] was to review TRS submittals on behalf of my
office, make comments, and forward those comments to
higher authority.
11. Neither I nor Frederick Young had authority to
approve or reject submittals under [the subject contract].
20. The Corps agrees that, after the pre-construction conference, meetings with
Circle to discuss its TRS submittals occurred (see AUF 144; GRF 144). However, it
disputes that: (a) a TRS submittals Expectations Meeting occurred on or about
20 November 2003 and the personnel named by Circle attended; (b) Mr. Dixon brought
copies of the TRS design submittal package, including his calculations performed by
hand, and he provided the package to the Corps' technical advisors; (c) Mr. Dixon's TRS
design used AZ18x60 sheet piles and two levels of bracing; (d) during the meeting Circle
and the Corps informally reviewed Mr. Dixon's TRS design, his calculations and
assumptions, and the Corps became aware that Circle had based its bid price upon AZ 18
sheet piling and that its design included two levels of bracing; and (e) during the meeting
the Corps refused to accept Circle's TRS design submittal for an official review and
instructed it and Mr. Dixon to perform new TRS calculations using only the Corps'
proprietary CWALSHT software program, which the Corps intended to use to review the
TRS design and Mr. Dixon's calculations (Hinkamp decl. 114-6, 8; Guillot decl. 1i! 4-7;
Young decl. 1i! 4-8; Chiu decl. iii! 4-8; gov't mot. and opp'n, ex. 5 at 5 (app. resp. to
interrog. No. 2d.); AUF iii! 45-56; GRF iii! 45-56).
21. Circle has not controverted the Corps' asserted fact that no documentary
evidence exists to corroborate Circle's statement that an "Expectations Meeting"
occurred on or about 20 November 2003. Although Circle deems the point to be
irrelevant, it "agrees that it has been unable to locate any contemporaneous
documentation to corroborate the affidavit testimony of Matt O'Brien and Co Duong that
the Expectations Meeting occurred." (ARF iJ 116)
22. Circle acknowledges the following of the Corps' asserted facts, although it
deems them irrelevant: (a) no Corps representative whom Circle alleges to have attended
16
an Expectations Meeting on or about 20 November 2003 recalls having attended such a
meeting and Circle has no information with which to dispute their professed lack of
recollection (but Circle asserts that Messrs. O'Brien's and Duong's affidavit testimony
establishes that the Corps personnel were there) (ARF if 117); (b) Circle does not have
proposed TRS design documents, including calculations and Mr. Dixon's original pre-bid
design, said to have been submitted by him to the Corps in November 2003 (gov't mot.
and opp'n, ex. 6 at 4 (app. resp. to doc. prod. req. No. 20); ARF if 118); and (c) Circle has
no documentation to confirm that Mr. Dixon's original TRS design was provided to the
Corps personnel at the alleged Expectations Meeting (gov't mot. and opp'n, ex. 6 at 3
(app. resp. to interrog. No. 13(e)); ARF if 135).
23. Circle contends that it is irrelevant (ARF if 122), but it admits that Mr. Duong:
[R]ecalls that the Corps rejected Mr. Dixon's hand
calculations which were brought to the Expectations Meeting,
but has no recollection of the reason the Corps rejected
Dixon's hand calculations. Mr. Duong also has no
recollection of the discussion of the use of CWALSHT
software during the Expectations Meeting.
(Gov't mot. and opp'n, ex. 5 at 5 (app. resp. to interrog. No. 2d.))
24. Subject to an objection that it is a conclusory statement of law, Circle admits
that Messrs. Young, Chiu and Guillot were not given express authority under the contract
to modify it. However, Circle contends that Messrs. Young and Chiu "'were cloaked with
implied authority to effect constructive changes to the Contract." (ARF if 128) Circle
also "admits that Mr. Young and Mr. Chiu did not have express authority under the
contract to approve or reject Circle's TRS submittals" (ARF if 138). However, Circle
contends that the Corps' Engineering Division made the ultimate determination whether
Circle's TRS submittals complied with project specifications and the ACO was merely a
conduit for delivering the Division's comments to Circle (id.). The Corps replies that the
authority matter is not a conclusory legal statement but is based upon the factual record
(gov't reply to app. resp. to gov't proposed additional facts if 128).
25. CWALSHT is a proprietary software program created and owned by the
Corps. It is intended to be used to perform the design and analysis of a cantilevered
(unbraced) or anchored (single-braced) sheet pile retaining wall. It is not intended to be
used to perform the design and analysis of a sheet pile retaining wall with multiple levels
of bracing. (AUF iii! 57-59; GRF iii! 57-59)
26. On 1 and 2 December 2003 Mr. Dixon performed TRS design calculations,
relying exclusively upon CWALSHT, including for construction stages that had two
braces in the TRS (O'Brien aff., ex. 4; AUF iii! 61-64; GRF iii! 61-64). Circle contends
17
that these CWALSHT-based calculations determined controlling maximum moments that
greatly exceeded the capacity of the AZ 18 sheet piles contained in its original TRS
design and required it to use AZ26x66 sheet piling. The Corps does not dispute this but it
denies that evidence exists to establish that Circle's alleged original TRS design complied
with contract requirements. (AUF if 65; GRF if 65)
27. On 4 December 2003 Circle issued a revised purchase order to Skyline for
AZ26x66 sheet piling (O'Brien aff., ex. 6; AUF iii! 67-68; GRF iii! 67-68).
28. Circle states that, on 23 December 2003, Mr. Dixon's new TRS design and
CWALSHT-based TRS calculations were part ofTRS Submittal No. M14 (O'Brien aff.,
ex. 7; AUF if 69). The Corps disputes this on the ground that the document is unsigned
and the record reflects that the date of Circle's first TRS submittal, No. M14, was
13 January 2004 (R4, tab 11; Hinkamp decl. if 13; Guillot decl. if 11; GRF if 69).
29. A TRS submittal meeting occurred on 30 December 2003. The Corps
disagrees with Circle's characterization of any documents presented at the meeting as a
"submittal." (R4, tab 1 at 5, if 8 n.4, tab 10; AUF if 70; GRF if 70) The Corps agrees that,
during the 30 December 2003 submittal discussion, it never advised Mr. Dixon that he
should not have used CWALSHT to perform calculations for construction stages that
included two levels of bracing in the TRS or that the use of CWALSHT to analyze a
multi-braced TRS would calculate incorrect, materially greater moments on the TRS than
would have been calculated using the methods authorized by the specifications. The
Corps notes its continuing disagreement with any implication that use of CWALSHT to
design the TRS was not permitted by the contract. (AUF if 72; GRF if 72)
30. On 31 December 2003 Mr. Dixon performed design calculations, using
CWALSHT, to address comments by the Corps during the 30 December 2003 meeting.
He used CWALSHT for all new TRS design calculations, including for stages that
included two levels of bracing in the TRS, and identified the maximum moment on the
sheet pile for each construction stage. (O'Brien aff., ex. 11 at 15311; AUF iii! 73-76;
GRF iii! 73-76)
31. Circle contends that Mr. Dixon's 31 December 2003 revised TRS design and
CWALSHT-based design calculations again determined controlling maximum moments
that greatly exceeded the moment capacity of the AZ 18 sheet piles contained in its
original TRS design. The Corps disputes any implication that Circle's alleged original
design complied with contract requirements, stating that it has never seen that TRS
design and cannot comment upon its content. (AUF if 77; GRF if 77)
32. A TRS design meeting was held on 13 January 2004 (AUF if 79; GRF if 79).
The parties dispute whether Circle's TRS Submittal No. M14, submitted and discussed at
the meeting, was a supplemental submittal or the first TRS submittal received by the
18
Corps (AUF ,, 78-81; GRF ,, 78-81). On 30 January 2014 the Corps rejected TRS
Submittal No. M14, with comments and instructions to re-submit (O'Brien aff., ex. 16;
AUF, 83; GRF, 83). The Corps agrees that it never advised Mr. Dixon, including when
it eventually approved Circle's submittal, that he should not have used CWALSHT to
perform calculations for construction stages that had two levels of bracing in the TRS or
that the use of CWALSHT to analyze a multi-braced TRS would calculate incorrect,
materially greater moments on the TRS than would have been calculated using the
methods authorized by the specifications. (AUF ,, 82, 84, 93; GRF ,, 82, 84, 93)
33. On 26 and 27 February 2004, using CWALSHT, Mr. Dixon performed new
TRS calculations to support the revisions to his TRS design prompted by the Corps'
comments upon TRS Submittal No. M14. He included calculations for three construction
stages at two different locations in the canal and for the maximum moment on the sheet
pile at each construction stage. At each location, the calculations for Stages 2 and 3
involved construction stages that included two levels of bracing in the TRS. Mr. Dixon's
TRS design and calculations also determined a controlling maximum moment that
exceeded the capacity of an AZ 18 sheet pile. His calculations were part of Circle's TRS
Submittal No. Ml4A, submitted on 2 March 2004. (O'Brien aff., exs. 19, 20; AUF ,,
85-90; GRF ,, 85-90) On 24 March 2004 the Corps approved submittal No. Ml4A, with
exceptions (O'Brien aff., ex. 21; AUF, 92; GRF, 92).
34. Circle alleges that the Corps' instruction that it use CWALSHT necessitated
its use of AZ26x66 sheet piles, which were longer, thicker, heavier and more expensive
than AZ l 8x60 sheet piles, and required more time to drive and remove than it had
estimated in its bid. The Corps denies any such instruction and disputes the extra time
claim based upon lack of knowledge. (Hinkamp decl. ,, 6, 7; Guillot decl. ,, 6, 7;
Young decl. ,, 7, 8; Chiu decl. ,, 7, 8; AUF ,, 94-96; GRF ,, 94-96)
35. By letter to ACO Hinkamp of 14 October 2004, Circle challenged a
"conservative" vibration threshold in the specifications said to have caused it to upgrade
its vibratory hammer. It also stated that it was "experiencing a very delayed process in
removing [the TRS] sheet pile." (R4, tab 14 at 1) Circle alleged:
In addition to the capital outlay for new equipment, we will
continue to encounter the additional costs associated with
slowed production. The successful hammer referenced
above, will remove the sheeting, but at a much slower pace
than originally anticipated, as the approved wall thickness and
length of steel sheet pile drastically exceeds our bid day
intent.
Circle ... and their TRS design consultant contend that
demands to achieve approved TRS design exceeded the
19
requirements of specification section 02252 expressly Steel
Sheet Pile Design Manual, November 1987.
(Id. at 2) Circle noted that it expected to receive equitable restitution and reserved its
right to file a claim. It also suggested that, to prevent further delays, damages and
impacts, the TRS design presently approved might be re-evaluated by the Corps' chief
design engineer. (Id.) Circle contends that this satisfied the Changes clause's notice
requirements concerning alleged contract changes (see R4, tab 17; app. mot. at 20-23).
36. The project was completed on 7 July 2007 (AUF if 98; GRF if 98).
3 7. On 13 April 2009 Circle submitted an REA to the ACO in the amount of
$1,652, 740, alleging that Corps structural review criteria exceeded specification
requirements, causing extra costs for additional and heavier materials, and additional
equipment and labor to install and remove the TRS. Circle included a 3 April 2009
report by Grecon Construction Engineers, Inc. (Grecon), which concluded that the Corps
required the use of the wrong calculation method, CWALSHT, which applies to anchored
structures, not braced structures. Grecon stated that this reduced the limits of the stress
allowed by the specifications, causing the sheet pile used for the TRS to be longer than
required by the specifications, with a greater section modulus than could have been
anticipated at the time of bid. (R4, tab 17)
38. On or about 14 July 2009, the CO denied the REA, stating that Corps records
showed that Circle had ordered 66-foot long AZ26 sheet piles prior to providing any TRS
submittal. Also, its first submittal included calculations by Mr. Dixon dated 1 December
2003, nearly a month before the first TRS meeting, in which he had recommended
66-foot long AZ26 sheet pile based upon a design using CWALSHT. The CO contended
that this was contrary to Circle's contention that it was forced into using that sheet pile.
The CO also disagreed with most ofGrecon's assertions. (R4, tab 18)
39. In a 5 August 2009 letter to the CO, Circle stated that it was not until its
engineer's 8 January 2004 calculations implementing the 30 December 2003 meeting
requirements that it was determined that an enhanced modulus and length would be
required and Circle revised its sheet pile order (R4, tab 19). By letter to Circle on or
about 21August2009, and subsequently, the CO requested documentation and a
summary of how and when Circle's design changed based upon discussion with the
Corps (R4, tabs 20-22). On 18 June 2010 Circle provided the Corps with records that it
had originally placed an order for AZ 18 sheet piles with Skyline and had later requested
AZ26 sheet piles (O'Brien aff. if 41, ex. 29; AUF if 103; GRF if 103).
40. During a 21 July 2010 meeting with the Corps to discuss the REA, Circle
advised that, due to Mr. Dixon's death, its original TRS design and hand calculations were
no longer available (R4, tab 23; O'Brien aff. if 42; AUF iii! 104-05; GRF iii! 104-05). The
20
Corps asked it for calculations supporting its contention that, had it used calculations
similar to those it had submitted on past Corps projects, not using CWALSHT, it would not
have had to upsize the sheet pile from AZ l 8x60 to AZ26x66. The Corps suggested that the
calculations should be available because the REA was based upon this contention and
Grecon had referred to the calculations. (R4, tab 23)
41. The Corps agrees with Circle's statements that, on 13 September 2011, the
Corps approved Circle's TRS design and calculations on the Two Mile Canal, Phase II
project, which involved a separate canal reach, abutting that involved in this appeal.
Circle's design for Phase II used AZ18x60 sheet piles for the TRS. The CO was the
same one who denied Circle's claim at issue here and the ACO was again Mr. Hinkamp.
(AUF ~~ 107-10; GRF ~~ 107-10) However, the Corps states that it:
[D]isputes the implication that, because Circle's TRS design
using AZ 18 sheet pilings was approved on a different project,
8 years later, and at a different location along the same canal,
Circle should have been allowed to construct its TRS for the
subject project using AZ18 sheet pilings. The first TRS
design that Circle submitted to the Corps for review on the
instant contract did not propose the use of AZ 18 sheet pilings,
but AZ26 sheet pilings.... Further, differing soil conditions
and differing requirements at different locations along the
canal could easily explain why a TRS constructed of AZ 18
sheet pilings would be acceptable at one location, but not
another. [Citations omitted]
(GRF ~ 108; see also Hink.amp decl. ~~ 13, 14; Guillot decl. ~ 11)
42. Circle and the Corps exchanged correspondence concerning Grecon's
calculations and Circle's REA from December 2010 to 2012 (R4, tabs 24-28). By letter
to Circle dated 23 January 2012, 1 which she characterized as in response to Circle's
request for reconsideration of its REA, the CO asserted:
After reviewing numerous documents, submittals and
discussions with the Government and AIE employees, I found
no evidence indicating that you were forced into using the
Government's program. Further, Circle claimed it bid the job
based on another method besides CWALSHT, although no
partial calculations were ever provided to support this claim.
1
As with other Corps correspondence, there is no clear date on the Board's copy of this
letter, but the Corps' index to its Rule 4 file and Circle's 24 February 2012
response to the letter (R4, tab 28) indicate that it was dated 23 January 2012.
21
I allowed you to complete a design as you originally intended
to support the contention that the sheet pile could have been
lighter and shorter.
On December 21, 2010 you submitted your design.
While the design methodology was supported by the contract
specifications, the submittal contained errors and did not
properly factor the soil strength. When these corrections
were made, your originally intended design did not result in a
shorter or lighter sheet pile section. On April 21, 2011 you
were notified of these findings.
On November 17, 2011, rather than correcting the
December 21, 2010 design; you submitted another design
method.... I believe the Government has been quite liberal in
allowing you to resubmit a different design methodology even
[though] there is no evidence to suggest that you were forced to
use CWALSHT .... At this point in time, it is not reasonable to
believe that the latest iteration of your design method .. .is the
one which you intended to use over eight years ago.
(R4, tab 27) The CO denied Circle's request for reconsideration (id.).
43. By letter of 24 February 2012, Circle disputed the CO's determinations and
sought a final decision. On 20 June 2012, Circle submitted a certification that contained
the elements required by the CDA. (R4, tabs 3, 28-29) On 29 November 2012 the CO
issued her final decision denying Circle's claim for $1,652,739.64. The CO asserted that:
1. ... The flaw in your argument is that no Government
representative directed you, or your design consultant, to use the
CWALSHT program. At the pre-submittal meetings attended
by your design consultant, it is entirely possible that a
Government representative advised both you and your design
consultant that the CWALSHT program was available to help a
contractor prepare a design that incorporated steel sheet pile.
However, I have found no evidence to suggest that a
Government representative directed you or your design
consultant to use the CWALSHT program [let] alone use it in
lieu of the methodology specified in Section 02252, paragraph
1.4.1 of the Contract specifications. To the extent your design
consultant elected to use the CWALSHT program as a design
aid, I find that his choice was entirely voluntary.
22
2. Even if a Government representative had directed Circle, or
its design consultant, to use the CWALSHT program, the
individual had no authority to direct a change to the contract
specifications.
(R4, tab 1 at 10) Circle timely appealed to the Board on 25 February 2013.
44. In January 2014 Circle engaged Mr. Peter Bowlin, a professional engineer
employed by Ragland Aderman & Associates, Structural Engineering, to recreate the
TRS design and hand calculations prepared by Mr. Dixon. The purpose was to
demonstrate that a TRS complying with project specifications could have been
constructed using AZl 8x60 sheet pile, which Circle alleges it had originally planned to
use to construct the TRS. Mr. Bowlin prepared a report dated 25 July 2014, which Circle
submitted to the Corps on or about 25 September 2014. (App. mot., vol. 3, tab E, iii! 1-4,
ex. l; AUF iii! 112-14; GRF iii! 112-14) Circle contends that the report's calculations
demonstrate that a contract-compliant TRS could have been constructed using AZ l 8x60
sheet piles. The Corps disagrees and alleges that, regardless, they were presented over
ten years after Circle's obligation to provide a contract-compliant TRS submittal and they
are not relevant to the TRS design it submitted in 2003 or 2004, which had different
jobsite conditions, nor to the design upon which it had based its bid. (See Hinkamp decl.
i! 14; AUF i! 114; GRF i! 114)
DISCUSSION 2
The Parties' Positions
Circle contends that the Corps constructively changed the contract when its
engineers Young and Chiu allegedly summarily rejected Circle's AZ18x60 TRS design,
2
The Board perceived a potential timeliness issue regarding Circle's claim. Although
the court held in Sikorsky Aircraft Corp. v. United States, 773 F.3d 1315 (Fed.
Cir. 2014), that the CDA's six-year statute of limitations, 41 U.S.C.
§ 7103(a)(4)(A), is not jurisdictional, failure to meet a statute of limitations
remains an affirmative defense. See FED. R. CIV. P. 8(c). Board Rule 6(b) calls
for the government to set forth any affirmative defenses in its answer to the
complaint. Although the Corps contends, and Circle disputes, that Circle did not
comply with the notice requirements of the Changes clause and took over five
years to notify the Corps of its alleged constructive contract change, the Corps has
not alleged that Circle's claim to the CO was time-barred under the CDA. The
Corps did not assert this affirmative defense in its answer or in response to
Circle's summary judgment motion and has waived it. See, e.g., Diversey Lever,
Inc. v. Ecolab, Inc., 191F.3d1350, 1353 (Fed. Cir. 1999).
23
even though it complied with the specifications, solely because it had not used the Corps'
CWALSHT software. Circle alleges that the engineers ordered it to submit new TRS
design calculations using only CWALSHT, contrary to its plan to use hand calculations;
this order impermissibly limited its options by prohibiting it from using other design
methods allowed by the specifications; and it misrepresented that CWALSHT could be
used to design a TRS that had multiple levels of bracing.
The Corps contends that it is entitled to summary judgment on either of two
grounds. First, even assuming, for the sole purpose of the Corps' motion, that two Corps
employees directed or instructed Circle to use the CWALSHT computer program (which
the Corps "vigorously denies" (gov't cross-mot. at 3)), there was no constructive change
to the contract because they lacked express or implied authority to modify it and their
actions were not ratified by anyone who had such authority. Secondly, Circle must
demonstrate that it had a contract-compliant TRS design that would have allowed it to
construct the TRS with AZ 18 sheet piles. There is no credible evidence to establish this.
Moreover, Circle cannot prove that the alleged Corps action was the cause of its decision
to construct the TRS with more costly AZ26 sheet piles.
In opposing Circle's motion for summary judgment, the Corps contends that,
contrary to the requirements of the Changes clause, Circle did not provide timely notice
of the alleged constructive change, and that most of the material facts necessary to
support Circle's claim are in genuine dispute.
In its opposition to the Corps' cross-motion, on the authority issue, Circle alleges
that an integral part of the duty assigned to the Corps' two technical personnel, to review
Circle's TRS design submittals, included giving instructions and directions to Circle
about its design. Thus, they had the implied authority to do so. Their erroneous
CWALSHT directions, which were binding upon the Corps, required thicker and longer
sheet piles than Circle had intended and were a constructive contract change. Circle
concedes that it does not allege ratification (Circle's reply in support of its objects. and
mots. to strike, at 3). Regarding the Corps' second contention, Circle alleges that it has
demonstrated the viability of its AZ18 sheet piling design through its consultant's
re-creation of Mr. Dixon's original design and because the Corps subsequently allowed
the design on other project work.
The Corps replies that Circle has admitted that the employees who allegedly
instructed it to use CWALSHT to design its TRS did not have the express authority to do
so (see SOF ~ 24; ARF ~ 128), and there is no genuine issue that they lacked implied
authority to modify the contract. Circle was directly notified that they lacked such
authority at the outset of the contract. Lastly, the Corps expands upon its secondary
contention that Circle has not produced a contemporaneous TRS design using AZ 18 sheet
piles, not based upon the CWALSHT program, that complied with the contract
specifications.
24
Summary Judgment Standards
Summary judgment is appropriate only when there are no genuine issues of
material fact and the movant is entitled to judgment as a matter of law. We resolve any
significant doubt over factual issues, and draw all reasonable inferences, in favor of the
party opposing summary judgment. Cross-motions do not necessarily mean that
summary judgment is appropriate. We evaluate each motion on its own merits. Mingus
Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed. Cir. 1987); Free &
Ben, Inc., ASBCA No. 56129, 09-1BCA~34,127 at 168,743. We do not resolve factual
disputes but ascertain whether there is a genuine issue of material fact, which is one that
might affect the outcome of the case. There is a genuine issue of material fact ifthe
evidence is such that a reasonable fact finder could find in favor of the nonmovant.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477
U.S. 317, 323-25 ( 1986); MIC/CCS, Joint Venture, ASBCA No. 58023. 14-1 BCA
~[ 35,678 at 174,636; Free & Ben, 09-1 BCA ~] 34,127 at 168,742. Mere denials or
conclusory statements are insufficient to defeat summary judgment. Mingus
Constructors, 812 F .2d at 1390-91.
Appellant's Motion for Partial Summary Judgment
Circle moves for summary judgment that a compensable constructive contract
change occurred when Corps engineers Young and Chiu allegedly erroneously ordered it
to use the Corps' CWALSHT program to design the TRS. which Circle had not intended
to do, the contract did not require, and which misrepresented that the program was
appropriate for the design work. A constructive change occurs when a contractor
performs work beyond the contract requirements, without a formal order under the
Changes clause, due either to an express or implied informal order from an authorized
government official or to government fault. Bell/Heery v. United States, 739 F.3d 1324,
1335 (Fed. Cir. 2014); International Data Products Corp. v. United States, 492 F.3d
1317, 1325 (Fed. Cir. 2007); Versar, Inc., ASBCA No. 56857 et al., 12-1BCA~35,025
at 172, 122. To meet its burden to prove that it was subject to a constructive contract
change on the basis it alleges, Circle must establish that:
( 1) [I]t was compelled by the government to perform work
that was not required by the terms of the contract; (2) the
person directing the change had contractual authority
unilaterally to alter the contractor's duties under the contract;
(3) the contractor's performance requirements were enlarged;
and (4) the additional work was not volunteered. but was
directed by a government of1icer.
25
Mountain Chief Management Services, Inc., ASBCA No. 58725, 15-1 BCA il 35,831 at
175,201 (quoting Northrop Grumman Systems Corp. Space Systems Division, ASBCA
No. 54774, 10-2 BCA i! 34,517 at 170,242-43 ).
As our Statement of Facts reflects, there are numerous genuine issues of material
fact that preclude summary judgment in Circle's favor (see, e.g., SOF iii! 20-24). The key
question of whether Corps engineers Young and Chiu directed or instructed Circle, at an
Expectations Meeting, or at any time, that it must use the CWALSHT design program to
design its TRS is strongly disputed. Circle's related contention that Messrs. Young and
Chiu constructively changed the contract by misrepresenting the appropriateness of
CWALSHT for Circle's design needs is inherently fact-based and disputed.
While the CO suggested in her final decision that, at pre-submittal meetings, it
was possible that a government representative advised Circle and its design consultant
that the CWALSHT program was available to help prepare a design that incorporated
steel sheet pile, she also stated that she had found no evidence to suggest that a
government representative directed the use ofCWALSHT (SOF ii 43, see also SOF
ii 42). ACO Hinkamp and Messrs. Guillot, Young and Chiu, have declared that they have
no knowledge or recollection of any such direction (SOF ilil 16-19). Even if those
declarations were discounted, as Circle urges. and even if Messrs. Chiu and Young had
purported to issue the direction Circle assigns to them, at the claimed Expectations
Meeting or otherwise, the record establishes. and Circle concedes, that they did not have
the express authority to do so (SOF i1,-i 19-2 L 24, 43 ).
Further, Circle's broad contentions about the engineers' implied authority lack
evidentiary support. None of Circle's affiants aver that the engineers had such implied
authority in their experience and, although discovery has occurred, Circle offers no
material documentation to support its implied authority allegations. Circle cites to
ACO Hinkamp's declaration concerning the submittal process for its proposition that he
"merely acted as a conduit for delivering the Engineering Division's comments to Circle"
(ARF ii 138). However, the declaration does not suggest that the engineers had implied
authority to approve or reject Circle's submittals, let alone to direct Circle's design
process. To the contrary, the ACO declared that Messrs. Young and Chiu "had no
authority themselves to approve or reject submittals. Only the [CO] and [ACO] had
authority to approve or reject submittals" and "[t]his process is established so that the
Contractor receives only one official response from a properly designated government
official, in this case, the ACO." (SOF ii 16, Hinkamp decl. iiii 11, 12)
Even Mr. O'Brien, the only Circle affiant who claims the direction to use
CWALSHT occurred, describes the alleged Expectations Meeting as "informal" (SOF
ii 14, O'Brien aff. iiii 8, 9). As Circle admits, Mr. Duong, the other testifying attendee
from Circle, has no recollection concerning any discussion about the use of CWALSHT
software during the Expectations Meeting (SOF iiii 15, 23).
26
Circle acknowledges receipt of the CO's letter to ACO Hinkamp at the contract's
outset advising that the ACO could modify construction contracts under the Changes and
other clauses up to $100,000 but that the authority was not redelegable (SOF ~ 11).
Circle also agrees that the ACO advised it at the pre-construction conference that only the
ACO and the CO were authorized to make changes to the contract (SOF ~ 13 ).
The Board addressed the question of constructive changes and contracting
authority in ECC, International, ASBCA No. 55781, 13 BCA ~ 35,207, where the
contractor contended that the government's construction representative/project engineer
and its CO Rs had issued directives, including wrongful rejection of submittals, causing
compensable changes. Citing Winter v. Cath-dr!Balti Joint Venture, 497 F.3d 1339 (Fed.
Cir. 2007), the Board held that, even if events had occurred as the contractor described
them, and that they could otherwise constitute constructive contract changes, it was
barred from recovery because none of the officials alleged to have changed the contract's
requirements were authorized to modify it. 13 BCA ~ 35,207 at 172,738; see also States
Roofing Corp., ASBCA Nos. 55500, 55503, 09-1 BCA ,-; 34,036 at 168,348 (appeal
dismissed 333 F. App'x 526 (2009), to the same effect. The same is true here.
In Cath, the facts supporting a delegation of authority to modify the contract to a
government representative other than the CO - in that case, the Navy's Resident Officer
in Charge of Contracts (RO ICC), who was also the Project Manager - were much
stronger than here, where the individuals alleged to have had implied contract authority
were engineers. Nonetheless, the court held that, "[b ]ecause the contract explicitly
reserved authority to modify the contract to the [CO], the ROICC did not have actual
express or implied authority to direct the contractor to perform compensable contract
changes.'' Cath, 497 F .3d at 1341. The court elaborated that:
To demonstrate entitlement to an equitable adjustment, Cath
must prove that the contract was modified by someone with
actual authority. Where a party contracts with the
government, apparent authority of the government's agent to
modify the contract is not sufficient; an agent must have
actual authority to bind the government. Such actual
authority may be express or implied from the authority
granted to that agent.
Id. at 1344 (citation omitted). The court pointed to the Changes and other clauses
reserving authority to the CO to bind the government to contract modifications. Also,
among other regulations, the court cited to 48 C.F .R. § 43.102(a) ("Only [COs] acting
within the scope of their authority are empowered to execute contract modifications on
behalf of the Government."). It also referred to the contract's DFARS 252.201-7000
clause, included in the instant contract as welt which provides that a COR '"is not
27
authorized to make any commitments or changes that will affect price, quality, quantity,
delivery, or any other term or condition of the contract" (SOF ~ 2b.).
Regarding the question of implied authority, the court stated that the Navy had
some blame for contract confusion and the contractor had dutifully complied with the
Navy's directions for day-to-day contract administration, but the court concluded:
The problem is that these Navy directives contradicted the
clear language of the contract and it is the contract which
governs. The law and the unambiguous contract terms
compel the result that we reach.
Authority to bind the government may be implied
when it is an integral part of the duties assigned to the
particular government employee .... Here, the ROICC could
not have had the implicit authority to authorize contract
modifications because the contract language and the
government regulation it incorporates by reference explicitly
state that only the [CO] had the authority to modify the
contract. Modifying the contract could not be '·considered to
be an integral part of [the RO ICC project manager's] duties"
when the contract explicitly and exclusively assigns this duty
to the CO. We cannot conclude that the [ROICC project
manager] had implied authority to direct changes in the
contract in contravention of the unambiguous contract
language.
Cath, 497 F.3d at 1346 (citations omitted). Cath controls here.
In sum, Circle has not proved, as a matter of fact or law, that engineers Young and
Chiu had the implied authority to direct it to use the CWALSHT design program, or to
issue the other alleged directives, even if they had attempted to do so. Accordingly, we
deny Circle's motion for partial summary judgment on liability.
The Government's Motion for Summary Judgment
On the other hand, the foregoing establishes that there is no genuine issue of
material fact that the Corps· engineers lacked the authority, express or implied, to modify
Circle's contract. Circle has conceded that they lacked the express authority to do so and
that it was notified that no one, other than the CO and the ACO (up to a point). had the
authority to change the contract. Circle's contentions that the engineers were cloaked
with implied authority are conclusory and unsupported by material evidence. They do
not rise to the level of a genuine issue of material fact.
28
Again, Cath controls and the Corps is entitled to judgment as a matter of law.
Accordingly, we grant the Corps' motion for summary judgment. 3
DECISION
We deny Circle's motions to strike and for partial summary judgment and we
grant the government's cross-motion for summary judgment. The appeal is denied.
Dated: 1July2015
c
oministrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
1~1,~ 11\
MARK N. STEMPLER /
Administrative Judge
I RI~KLEFORD
Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
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. 58575, Appeal of Circle,
LLC, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
3
In view of our disposition, we do not reach the Corps' contention that Circle failed to
comply with the notice provisions of the Changes clause.
29