Harry Pepper and Associates, Inc. ( 2021 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of - )
)
Harry Pepper and Associates, Inc. ) ASBCA Nos. 62038, 62039
) 62040, 62042
)
Under Contract No. NNS14AA30T )
APPEARANCES FOR THE APPELLANT: David W. Mockbee, Esq.
D. Wesley Mockbee, Esq.
Judson R. Jones, Esq.
Mockbee Hall & Drake, P.A.
Jackson, MS
APPEARANCES FOR THE GOVERNMENT: Scott W. Barber, Esq.
NASA Chief Trial Attorney
Jeffrey A. Renshaw, Esq.
Shannon A. Sharkey, Esq.
Jennifer L. Rawls, Esq.
Trial Attorneys
Stennis Space Center, MS
OPINION BY ADMINISTRATIVE JUDGE O’CONNELL
Harry Pepper and Associates, Inc. (HPA) appeals final decisions by a contracting
officer from the National Aeronautics and Space Administration (NASA). The Board
conducted a hearing from March 1-12, 2021, at which we heard testimony from
12 witnesses and received into evidence more than 600 exhibits or Rule 4 documents.
Only entitlement is before us. The Board sustains appeal No. 62038 in part, and denies
Nos. 62039, 62040, and 62042.
FINDINGS OF FACT
1. NASA’s Stennis Space Center in Mississippi awarded HPA an indefinite
delivery/indefinite quantity, multiple award construction contract on August 3, 2012 (R4,
tab 1 at 3-4 1). The contract contained various relevant clauses, including G.1, Contract
Administration, and G.2, Technical Direction, which defined the authority of the
contracting officer (CO) and the contracting officer’s representative (COR), respectively
(id. at 11-12). The contract also included Federal Acquisition Regulation (FAR)
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Rule 4 file cites are to the .pdf page number in the electronic file.
52.236-2, DIFFERING SITE CONDITIONS (APR 1984) (the DSC clause), FAR 52.236-
3, SITE INVESTIGATION AND CONDITIONS AFFECTING THE WORK (APR
1984), FAR 52.243-4, CHANGES (JUN 2007), and FAR 52.246-12, INSPECTION OF
CONSTRUCTION (AUG 1996) (R4, tab 1 at 9, 26-27).
2. On January 9, 2014, NASA awarded HPA the above-referenced task order in
the amount of $36,577,459 for the B2 Test Stand Restoration, Work Package 3, which
required HPA to complete the work within 400 days (R4, tab 2 at 2-4).
3. NASA constructed the B2 test stand in the 1960s to test the Saturn V rockets
that carried humans to the Moon during the Apollo program. Work Package 3 is part of a
program that restored and augmented the stand to test the core stage of NASA’s new
Space Launch System (SLS), the cornerstone vehicle for NASA’s Artemis Program that
(it is hoped) will return humans to the Moon in the 2020s. (R4, tab 18 at 7; see
https://www.nasa.gov/sites/default/files/atoms/files/b-2_test_stand_v1.pdf)
4. HPA performed an earlier contract on the B2 test stand referred to as Work
Package 1. Through its work on that contract, HPA had access to the test stand for
15 months prior to award of Work Package 3. (Tr. 6/208-09) In addition, prior to the
submission of bids for the task order, NASA allowed bidders to attend a site visit on
October 22, 2013 (tr. 6/205; ex. G-20).
5. HPA has filed these appeals on behalf of its subcontractor, Quality Iron
Fabricators, Inc. (Quality Iron) and Quality Iron’s sub-subcontractor, River City Erectors,
LLC (River City) (app. supp. R4, tabs 7-8, 142). Neither Quality Iron, nor River City,
attended the pre-bid site visit (tr. 6/205; ex. G-20).
6. The existing test stand structure included a booster support frame, which is
referred to as the “battleship” and is made of heavy steel plates reminiscent of a naval
vessel (tr. 1/48-51, 6/118; R4, tab 5 at 6, tab 18 at 8). The Saturn V rocket was placed in
the interior of the battleship during testing (tr. 6/118). Above the battleship was the main
propulsion test article (MPTA) structure, the top of which is the “corvette,” also in the
naval sense, and made of steel plate like the battleship (tr. 1/46-47, 51, 6/118).
7. The contract required placement of temporary steel track to relocate the MPTA
structure by moving it 20-feet north (R4, tab 18 at 7). HPA had to lift the structure,
which weighed about 1.2 million pounds, place it on the track, carry out the move, and
then remove the track (id. at 7-8; tr. 1/61; app. supp. R4, tab 26).
8. Due to the loads applied during the move, and those to be applied in the future,
the contract also provided for the battleship to be reinforced. To accomplish this, HPA
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had to weld 28 structural steel shapes to the existing steel plates. These steel shapes are
referred to as “WTs” or “split tees” because they are an I-beam that has been cut in half
(forming a tee shape). (R4, tab 18 at 8; tr. 1/85, 237-38, 4/94) As detailed below, a
variety of issues with the WTs form the basis of request for equitable adjustment (REA)
nos. 1 and 4, which are at issue in ASBCA No. 62038.
9. The contract called for the addition of plates (doubler plates) at the bottom of
existing columns in the MPTA structure to carry the increased loads, as well as the thrust
from the core stage engine tests (R4, tab 4 at 17 (S-505), tab 18 at 8; tr. 1/112-13, 4/94).
HPA alleges in REA Nos. 9 and 10 that it performed additional work on these baseplates
(ASBCA Nos. 62039 and 62040).
10. The contract provided for construction of a new SLS Support Tower on top of
the existing structure for testing larger and more powerful rocket engines, as well as an
Access Tower directly on top of the SLS Support Tower. This new structure (described
in the specifications as a “space truss”) was 93-feet tall and more than 300-feet above
grade. (R4, tab 18 at 8; tr. 4/94-95) In REA 12 (ASBCA No. 62042), HPA alleges that it
encountered unexpected thermal movement of the structure above the top of the
battleship during the construction of the SLS structure.
ASBCA No. 62038 (REAs 1 & 4)
11. NASA issued a notice to proceed on February 7, 2014 (R4, tab 3 at 2).
A. REA 4
12. The WTs were 27-feet long, which was only a few inches shorter than the
interior height of the battleship, and weighed 99 pounds per foot (tr. 1/62, 71). To bring
them inside, the contract drawings provided that HPA could cut a 36-inch diameter hole
in the top or bottom plate of the battleship (although the specifications mentioned only
the top plate) (R4, tab 6 at 7, tab 18 at 8).
13. During the hearing, there was a sharp difference of opinion between HPA and
NASA with respect to the feasibility of lowering the WTs by crane through holes cut in
the top plate of the battleship. The Quality Iron and River City witnesses testified that
there were too many obstructions inside and above the battleship to do so. (Tr. 1/69-71,
93, 98-99, 225) The HPA witnesses also testified that it was impossible to bring the WTs
in through the bottom (e.g., tr. 1/89-91, 240). NASA believed that both were possible
(e.g., tr. 8/38, 107-08).
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14. The witness whose testimony the Board found most credible on this issue was
Charles Stewart, who was Head of Construction for NASA at Stennis Space Center from
1986 to 2003 (tr. 6/157-58). According to CO Jason Edge, Mr. Stewart knew the B2 test
stand “like the back of his hand” (tr. 7/137). More than a decade after he left NASA,
Mr. Stewart became Head of Field Operations for HPA on this task order, supervising the
field superintendents and subcontractors and coordinating with NASA (tr. 6/124-25).
15. Mr. Stewart characterized lowering the WTs through the top plate by crane as
“doable.” He agreed that there were obstructions in a few places, but testified that HPA
could have worked around them. (Tr. 6/128-29) Mr. Stewart was more concerned with
cutting through the 2.25-inch thick steel plate, which he characterized as “doable ... but
very complicated” because it required “heat stress and a tremendous amount of welding”
(tr. 6/127; R4, tab 6 at 7 (“EXIST 2 1/4 TOP PL”)). Mr. Stewart worked out an alternate
approach that would avoid cutting the holes and which, in his view, saved “a lot of time”
and was less expensive (tr. 6/127-28, 179). River City’s project manager agreed that this
procedure allowed them to work within and above the battleship simultaneously and that
it saved time (tr. 1/105).
16. Consistent with Mr. Stewart’s testimony, HPA submitted request for
information 2 no. 62 (RFI 62) to NASA on April 29, 2014, seeking approval of an
alternate method of bringing the WTs into the battleship due to the concern that heat
generated by cutting an access hole could warp the top plate. Specifically, it proposed to
cut the WTs into three equal-sized pieces (of about 9 feet each) and transport them
through a door on the north side of the test stand and weld them back together when they
were installed. HPA did not justify the procedure by citing obstructions inside or above
the battleship. Nor did it state that this procedure would cost more money or require
additional time. (R4, tab 53b at 3) In fact, the previous day Quality Iron had informed
HPA that there would be no time or cost impact of the change (ex. G-3).
17. NASA’s COR, Brennan Sanders, approved HPA’s proposed method on
May 1, 2014 (R4, tab 53b at 2). NASA (like Mr. Stewart) expected the new procedure to
save money because HPA would no longer have to cut through the top plate (tr. 6/218).
18. One aspect of RFI 62 that would come to light involved the type of weld that
would be used to put the WTs back together once they were inside. The contract required
2
The contract provided that an RFI was “an easy way to document questions and
answers” (R4, tab 18 at 360). But it also provided that an “RFI shall not result in a
cost or schedule impact to the contract”, nor should it “result in a change to the
contract cost, scope, or schedule” (id.).
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HPA to use “complete joint penetration” (CJP) welds to attach the WTs to the battleship
(R4, tab 6 at 7). A CJP weld involves welding two metal pieces together so that they
become one and the load is passed through the members. By contrast, in a partial joint
penetration (PJP) weld, the weld does not go all the way to the back of the material. The
witnesses at the hearing agreed that while a PJP weld is a “good” weld, a CJP weld is
stronger. (Tr. 1/57, 227, 8/33) In RFI 62, HPA proposed to use a PJP welding procedure
at the two seams to rejoin the three WT pieces. (R4, tab 53b at 3) The contract did not
specify a type of weld for rejoining WTs if they had to be cut.
19. COR Sanders did not understand that RFI 62 provided for PJP welds when he
approved it, but, when he realized that it did, he became concerned that the WTs would
not be strong enough (tr. 8/33-34). On July 31, 2014, he issued a revised response to
RFI 62 stating CJP welds were required (R4, tab 53c at 2). By that point, River City had
already performed most of the PJP welds (app. supp. R4, tab 157 at 2-3; tr. 1/88).
Because of this and because NASA directed HPA in the revised RFI response to
“upgrade” the welds, the Board finds that NASA knew that it would cost additional
money to perform this work.
20. After nearly another two months passed, on August 26, 2014, HPA submitted
RFI 62A, proposing that in lieu of upgrading to CJP welds it weld 0.5-inch thick
diamond-shaped plate onto the seams attached by the PJP welds (R4, tab 53e at 3). The
Board finds that RFI 62A was an effort to mitigate HPA’s costs that resulted from the
revised response to RFI 62. NASA approved the procedure with some technical
adjustments on September 4, 2014 (id. at 2).
21. On October 8, 2014, HPA advised NASA that HPA considered NASA’s
revised response to RFI 62 to be a constructive change to the contract and that it had
incurred additional costs and time. HPA stated that at the time of NASA’s revised
response on July 31, 2014, it had already performed 99% of the work. HPA once again
stated that its purpose in submitting RFI 62 had been to prevent warpage in the top plate
of the battleship. (App. supp. R4, tab 157 at 2-3)
22. On October 27, 2014, HPA submitted Field Change Request 3 (FCR) 37 on
behalf of Quality Iron and River City for the work they performed in response to RFI 62
and 62A. HPA requested a total of $118,439 and 17 days. (App. supp. R4, tab 10 at 2)
There does not appear to be a response to this FCR in the record, but on January 11,
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The contract provided that the purpose of FCRs was “to document, track, and
implement changes” and that they could be initiated by anyone associated with the
project (R4, tab 18 at 358).
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2016, HPA submitted REA 4, which increased the amount sought to $148,140.31 (app.
supp. R4, tab 20).
23. In a July 5, 2017 supplement, HPA combined REA 4 with REA 1 (discussed
below) and demanded $2,346,074.77 (app. supp. R4, tab 23(c) at 4). In this supplement,
HPA shifted away from contending that the top plate would warp if River City cut
through it. HPA now contended that NASA’s design was defective because the WTs
could not be lowered through a hole cut in the battleship top plate (id. at 3-4, 8).
Consistent with this, at the hearing the HPA witnesses focused on the alleged
impossibility of lowering the WTs through the top of the battleship due to obstructions
(tr. 1/98-99, 225, 230, 238, 241-46, 3/276-77; app. supp. R4, tabs 179-179c). HPA did
not present any testimony from an outside expert who contradicted Mr. Stewart’s
assessment that the cutting through the top plate was “doable . . . but very complicated”
(tr. 6/127).
24. The parties entered into negotiations that were not successful (tr. 7/59-60). On
August 10, 2018, CO Edge issued unilateral Modification No. 44 (Mod. 44), which
attempted to resolve a number of pending REAs, including REAs 1 and 4. Mod. 44
provided for a payment to HPA of $415,356, as discussed below, pursuant to the DSC
clause. (R4, tab 53m at 2-3)
25. On December 19, 2018, HPA submitted a certified claim that increased the
total amount sought for REA 1 and 4 to $3,103,204.40, which, after subtracting the
amounts paid in Mod. 44, resulted in a net claim of $2,687,848.40, plus a 90-day time
extension (R4, tab 48 at 13). HPA contended that, due to obstructions, the specified
procedure of lowering the WTs through a hole in the top was “unworkable and, as such, a
material misrepresentation” (id. at 6). It alleged that HPA, Quality Iron, and River City
had no way of knowing about the obstructions that prevented lowering the WTs through
the top plate because they had been barred from entering the battleship pre-bid (id. at 3,
6). HPA asserted a variety of theories, including defective specifications, the Changes
clause, NASA’s breach of its duty not to hinder or interfere with HPA’s work, superior
knowledge, differing site conditions, and cardinal change (id. at 8-12).
26. The Board finds the allegation that NASA denied HPA and its subcontractors
access to the interior of the battleship prior to bid to be inaccurate. As we have already
found, Quality Iron and River City did not even attend the pre-bid site visit; HPA, on the
other hand, had been working on the test stand for 15 months (findings 4-5). At the
hearing, HPA did not present testimony from any HPA official who attended the site
visit. COR Sanders, who did attend (ex. 20 at 2), testified credibly that because this task
order provided for work on all levels of the stand, they walked around the entire stand
and the bidders were not prohibited from looking anywhere (tr. 8/24-25). In addition,
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even if River City and Quality Iron were not available on that date, HPA could have
requested badges for them and brought them to the site (id. at 27-28). The Board further
finds that if River City and Quality Iron had inspected the site prior to bid they would
have been aware of at least many of the challenges of bringing the WTs in by crane from
overhead because, for example, two of their witnesses described the battleship as a
“maze” (tr. 1/96, 246).
27. CO Edge issued a final decision on March 27, 2019, denying the claim, that
is, refusing to pay any amounts beyond those paid in Mod. 44 (R4, tab 53). CO Edge
stated in the final decision that NASA had calculated that River City had experienced a
cost saving of $311,002 from not cutting access holes in the top plate (id. at 5).
28. HPA filed a timely appeal on April 15, 2019.
B. REA 1
29. While REA 4 concerned problems that started with getting the WTs inside the
battleship, REA 1 involves difficulties HPA experienced once it got the WTs inside.
30. River City began installing the WTs on June 12, 2014 (R4, tab 53k at 2). The
condition of the interior walls to which the WTs would be welded – and the extent to
which this could have been observed pre-bid – is a matter of dispute. NASA’s main
witness on this topic, COR Sanders, believed that the walls were straight (or plumb)
(tr. 8/97-98). While COR Sanders was generally a credible witness, the Board found the
testimony of Mr. Stewart (HPA’s former head of field operations) to be more
convincing. Mr. Stewart testified that in the “upper reaches” of the battleship, which was
about 28-feet high, “the walls . . . were no longer plumb . . . so you had gaps that [were]
tremendously hard to fill with weld” (tr. 6/127). This impacted the work because River
City, among other things, had to perform additional weld passes to fill the gaps (id.
at 164; app. supp. R4, tab 18 at 45-53 (describing particular welds required by the
conditions)). Mr. Stewart testified that this could not have been discovered on a site visit
even if the contractors had spent more than a day inspecting the test stand. HPA only
discovered the problem when “we got into the battleship, cleaned up lead paint, built
scaffolding, and got lights up there where we could see it” (tr. 6/183).
31. On August 4, 2014, HPA submitted RFI 140, notifying NASA of the problem
and requesting approval of a procedure that would involve cutting the WTs into three
pieces (a confusing request because HPA was already cutting the WTs into three pieces
under RFI 62). COR Sanders approved the procedure two days later, once again adding a
note in bold reminding HPA that it needed to inform the CO if “Any comment resulted in
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a change in cost, scope or schedule. . .” (App. supp. R4, tab 65 at 2-4) HPA did not
inform the CO at this time of any increase in cost, scope, or schedule.
32. By the time that HPA submitted RFI 140, it had completed or was close to
finishing installation of the WTs because the record reflects that it was able to move the
MPTA structure on August 8, 2014, which could only take place after the WTs had been
installed (ex. G-22; see finding 21).
33. A second issue in REA 1 involves the relocation of five WTs after River City
installed them. On April 22, 2014, COR Sanders provided HPA with revised drawings
that changed the location of the WTs (R4, tab 53h). In June, River City nevertheless
began installing the WTs in the original locations; when this was discovered they had to
be moved to the updated locations. Credible testimony established that HPA simply
failed to inform the subcontractors of the location change. (Tr. 5/183, 8/124-25)
34. On June 29, 2015, HPA submitted REA 1 seeking $1,198,516.24 (app. supp.
R4, tab 18). This amount included $763,527 for the subcontractors due to the out-of-
plumb conditions and $142,571.45 for subcontractors for the WT relocation, with the
remainder being overhead and profit for HPA (id. at 5, 7, 17).
35. As stated above, on July 5, 2017, HPA combined REA 4 with REA 1 and
requested $2,346,074.77 (app. supp. R4, tab 23(c) at 4). With respect to RFI 140, the
REA supplement clarified that the increased costs were necessary because “no welding of
the split tees to the existing walls could be made without extensive repeated efforts of
placing the WT against the wavy wall then profiling, trimming and grinding the WTs
usually three (3) times before the WTs could be welded to the wavy wall” (id. at 8, see id.
at 53). With respect to relocation of the WTs, HPA admitted that it had received the
changed locations before installing them in the original locations but it contended that it
was bound to do so until it received a contract modification (id. at 58-59).
36. As stated above, after unsuccessful negotiations, on August 10, 2018,
CO Edge issued Mod. 44, which attempted to resolve a number of pending REAs, citing
the DSC clause (R4, tab 53m at 2-3). CO Edge calculated that HPA was entitled to
$435,978, for additional welding and trimming costs due to the out-of-plumb walls
described in REA 1 and $179,378, for REA 4, but that NASA was entitled to a credit of
$200,000 because HPA did not have to cut 14 holes in the top plate, resulting in a net
amount due HPA of $415,356 (id. at 3).
37. The CO’s March 27, 2019, final decision did not award HPA any
additional money for the REA 1 work beyond that granted in Mod. 44. With respect to
the out-of-plum walls, CO Edge admitted that it was possible that they were out-of-plum
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beyond 5/16,” which he identified as the allowable tolerance under the contract.
However, he stated that NASA could no longer determine the extent to which the walls
were out of plumb, nor could it determine if the WTs had been within tolerances (or
warped) because HPA had performed the work before it notified NASA of a differing site
condition. (R4, tab 53 at 5-6)
DECISION – ASBCA No. 62038The Board’s review of HPA’s claims is de novo and we are not bound by
CO Edge’s determination in Mod. 44 that there was a DSC. Wilner v. United States,
24 F.3d 1397, 1401 (Fed. Cir. 1994) (en banc). The Board will address each of the four
discrete issues in this appeal.
A. Bringing the WTs into the Battleship
While HPA has raised numerous legal theories, HPA’s claim for bringing the WTs
into the battleship fails on the facts. HPA signed up to do a project that specified that the
WTs could be brought into the battleship by cutting holes in the 2.25-inch steel plate.
HPA (or River City) had second thoughts about this “very complicated” procedure and
proposed an alternative that it believed would save time and money. (Findings 15-16)
Apparently, this did not work out as well as HPA/River City intended. But NASA bears
no responsibility for cooperating with the contractor and approving an alternative
approach, particularly where the contractor failed to inform the CO up front that it would
cost more time and money (finding 16).
The Board also finds that HPA’s contention that obstructions made it impossible
to bring the WTs in through the top is not believable in light of the testimony of HPA’s
director of field operations (Mr. Stewart) that it was “doable” (finding 15). To be sure,
other HPA witnesses strongly disagreed, describing the battleship as a “maze” due to the
number of obstructions (finding 26). But this simply left the Board wondering why, if
there were so many obstructions, HPA had not noticed them prior to bid.
HPA attempted to illustrate the obstructions through contract drawings S-101,
S-102, and S-105, and then creating an overlay of one drawing on top of the other
(app. supp. R4, tab 179-179c; tr. 1/95-96). But these drawings contain dates in
September 2013, several months before contract award. Reasonable diligence prior to
bid would have made HPA and its subcontractors aware of any difficulties illustrated
by these drawings.
The contract incorporated FAR 52.236-3, Site Investigation and Conditions
Affecting the Work (finding 1), which provided in relevant part:
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The Contractor also acknowledges that it has satisfied itself as
to the character, quality, and quantity of surface and
subsurface materials or obstacles to be encountered insofar as
this information is reasonably ascertainable from an
inspection of the site . . . as well as from the drawings and
specifications made a part of this contract. Any failure of the
Contractor to take the actions described and acknowledged in
this paragraph will not relieve the Contractor from
responsibility for estimating properly the difficulty and cost
of successfully performing the work, or for proceeding to
successfully perform the work without additional expense to
the Government.
(Emphasis added) “It is well-settled that a contractor is charged with knowledge of the
conditions that a pre-bid site visit would have revealed.” H.B. Mac, Inc. v. United States,
153 F.3d 1338, 1346 (Fed. Cir. 1998). Thus, even if we believed HPA’s contention that
it was impossible to bring the WTs in through the top plate, it would still not be entitled
to recover because one could not miss a “maze” on a reasonably diligent site visit or
review of the drawings.
B. Changing the Welds from PJP to CJP after HPA rejoined the WTs
A different problem is presented by NASA’s belated prohibition of PJP welds on
the seams of the rejoined WTs in its revised response to RFI 62. The contract does not
specify the type of weld to be used if the WTs have to be cut and then rejoined, but the
contract required NASA to respond to RFIs within five working days (finding 18; R4,
tab 18 at 360). While NASA’s original response was timely, its revised response nearly
three months later was not (findings 16-19). HPA relied on the original response and
installed most of the WTs with PJP welds at the seams (finding 19). It is clear that if
NASA had reviewed RFI 62 carefully this would not have happened because the RFI
clearly stated that HPA intended to use PJP welds.
NASA addresses ASBCA No. 62038 at pages 15 to 42 of its opening brief. While
it discusses at considerable length the reasonableness of HPA’s site investigation, the
feasibility of bringing the WTs in through the top of the battleship, the condition of the
interior battleship walls, and the reasons why HPA had to relocate WTs that had already
been installed, it is relatively quiet on its revised response to RFI 62. NASA does not
contend that COR Sanders lacked authority to respond to RFI 62 or to revise its response.
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NASA’s sole contention seems to be that WTs rejoined with PJP welds are not as
“solid” as those with CJP welds (gov’t br. at 29 (PFF 22 4)). This would be more relevant
if NASA had denied RFI 62 at the outset but it does not even begin to address the
contractual requirement that it respond to RFIs within five days, and the effect of
changing its response nearly three months later when HPA/River City had already
performed most of the work. The Board holds that it was unreasonable for NASA not to
review RFI 62 carefully and that it was unreasonable for it to wait nearly three months to
change its response. The government is liable when it unreasonably fails to issue
approvals or delays in taking actions required by the contract. See, e.g., Law v. United
States, 195 Ct. Cl. 370, 397-99 (1971) (government caused delay by failing to act on shop
drawings and waiting too long to make permitted changes.); cf. Relyant LLC, ASBCA
No. 59809, 18-1 BCA ¶ 37,085 at 180,539 (unreasonable delay in government response
to request to modify contract constituted a breach of duty of good faith and fair dealing
under the circumstances).
Finally, in the introduction to its brief, NASA references its motion for summary
judgment in which it contended that HPA failed to provide NASA timely notice under the
Changes or DSC clauses that the work would entail additional costs, but it does not
develop this argument in its post-hearing brief. In any event, the Board disagrees. As we
observed on the parties’ cross motions for summary judgment, while notice requirements
are enforceable, there are a variety of exceptions, including actual or constructive notice
of the conditions encountered. Harry Pepper & Assocs., Inc., ASBCA No. 62038 et al.,
21-1 BCA ¶ 37,760 at 183,300. In this appeal, it is inconceivable that NASA did not
know, when it issued the revised response to RFI 62 nearly three months later, that HPA
had installed most or all of the WTs. Thus, it knew that changing the welds would
require extra work (finding 19).
The Board holds that HPA is entitled to recover for the additional costs of
installing the diamond-shaped pieces on the WT seams. The Board remands to the
parties for determination of quantum.
The Out-of-Plumb Battleship Walls
The DSC clause (finding 1) provided that:
(a) The Contractor shall promptly, and before the conditions
are disturbed, give a written notice to the Contracting Officer
of (1) subsurface or latent physical conditions at the site
which differ materially from those indicated in this contract,
4
“PFF” refers to a proposed finding of fact within the brief.
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or (2) unknown physical conditions at the site, of an unusual
nature, which differ materially from those ordinarily
encountered and generally recognized as inhering in work of
the character provided for in the contract.
....
(c) No request by the Contractor for an equitable adjustment
to the contract under this clause shall be allowed, unless the
Contractor has given the written notice required . . . .
FAR 52.236-2.
“A Type I [DSC claim] arises when the conditions encountered differ from what
was indicated in the contract documents. 5” Renda Marine, Inc. v. United States, 509 F.3d
1372, 1376 (Fed. Cir. 2007). To prevail on a Type I DSC claim, a contractor must prove
that: (1) “a reasonable contractor reading the contract documents as a whole would
interpret them as making a representation as to the site conditions”; (2) “the actual site
conditions were not reasonably foreseeable to the contractor, with the information
available to the particular contractor outside the contract documents, i.e., that the
contractor ‘reasonably relied’ on the representations” (3) the “contractor in fact relied on
the contract representation”; and (4) “the conditions differed materially from
those represented and . . . the contractor suffered damages as a result . . . .” Int’l Tech.
Corp. v. Winter, 523 F.3d 1341, 1348–49 (Fed. Cir. 2008) (citations omitted).
In its brief, NASA contends that it did not represent that the battleship walls would
be straight because the drawings show the battleship walls with dashed lines (gov’t br.
at 31). While it is true that the drawings use dashed lines, NASA does not cite any
witness testimony stating the conclusion we should draw from this. In any event, the
actions of the contracting officer during performance indicate that both parties
understood that the walls would be generally straight, within a tolerance of 1/16” every
4-feet based on a note on the drawings and the American Institute of Steel Construction
and the American Society for Testing of Materials standards incorporated in the contract
(finding 37; app. supp. R4, tab 143 at 6 (citing R4, tab 6 at 3, structural steel note 6); R4,
tab 18 at 113; app. supp. R4, tab 3 at 76-77; app. reply at 5, ¶ 6). This would be
consistent with the norm for any structure, namely, that the walls will generally be
straight up and down but that there may be small imperfections.
5
A Type II differing site condition arises when the conditions encountered are of an
unusual nature and differ materially from those normally encountered in the kind
of work contemplated by the contract. Renda Marine, 509 F.3d at 1376.
12
The Board has found that the condition of the walls differed from those
represented, that HPA could not have discovered this condition pre-bid, and that it relied
on the straightness of the walls for the number of weld passes and other work it would
have to do to install the WTs (finding 30).
NASA relies most heavily on its notice defense. As stated above, the DSC clause
required HPA to notify the CO “promptly, and before the conditions are disturbed . . . .”
While such notice provisions are enforceable, precedent recognizes various
exceptions, including lack of prejudice to the government. Schnip Building Co. v. United
States, 645 F.2d 950, 959-60 (Ct. Cl. 1981). The government bears the burden of
demonstrating prejudice. A.R. Mack Construction Co., Inc., ASBCA No. 50035, 01-2
BCA ¶ 31,593 at 156,139-40.
HPA clearly submitted RFI 140 too late because it had already installed almost all
of the WTs (finding 32). The Board would hold that HPA’s claim is barred due to lack
of notice if NASA had examined the conditions when it received notice but found that
the conditions could no longer be verified. But the record indicates that because
COR Sanders believed that the walls were not warped, he does not appear to have made
any effort to verify HPA’s representations. On cross-examination he was defensive
when pressed by HPA’s attorney:
Q Where are your measurements of the wall that show that
it’s [not] warped?
A I don’t have any measurements of the wall, sir.
Q You’ve had years to do that, haven’t you?
A Yes, if I was inclined to do that. I don’t see a need to do
that and what that would do for me.
Q Well, it might give you some evidence of what you say that
is, frankly, contrary to what your contracting officer has
decided? 6
A Right, yes, sir. And you can go look at the wall and tell it’s
straight, and you can walk outside and see the sky is blue, and
you don’t have to measure it to know that it’s blue.
6
This was an apparent reference to the CO stating in Mod. 44 that there was a DSC and
paying HPA money for the issue (findings 24, 36).
13
(Tr. 9/148-49) COR Sanders admitted that the walls between the WTs are still visible
(id. at 152). It seems unlikely that the only place that the walls were warped were also
the exact spots where the WTs were installed. Thus, if NASA had measured the walls or
otherwise investigated and found that they were within tolerances, this likely would have
been enough to defeat HPA’s claim. But because NASA did not attempt to verify the
conditions, it cannot demonstrate prejudice.
NASA also contends that it was “severely prejudiced” because HPA denied
Quality Iron’s claim for the wall condition based on the notice requirements in the
HPA-NASA contract, as well as the HPA - Quality Iron subcontract, which NASA
presents as dispositive by itself (gov’t br. at 26 (PFF 18 (citing ex. 9))). Despite this
initial denial, HPA eventually agreed to present the claim to NASA. The initial denial
does not affect our analysis of the merits of the DSC or the lack of prejudice to NASA.
Moreover, the government cannot rely on the terms of a subcontract. Whether HPA is
entitled to additional money is determined by the prime contract, not provisions in the
subcontract concerning how the subcontractor must present its claim to HPA. See
Kellogg Brown & Root Servs., Inc. v. Sec’y of the Army, 973 F.3d 1366, 1370-71 (Fed.
Cir. 2020).
HPA is entitled to recover for a DSC concerning the condition of the battleship
walls. The Board remands to the parties for determination of quantum.
C. Relocating Five Installed WTs
HPA does not dispute NASA’s contention that River City installed the WTs in the
original location even though NASA had provided new locations about two months
before installation began (finding 33). Our finding that HPA simply failed to tell the
subcontractors of the location change (id.) is dispositive of this issue.
HPA contends, however, that until the CO issued a modification it was bound to
install the WTs in the original location (HPA reply at 5, ¶ 5). The Board disagrees.
Under clause G.2, Technical Direction, the COR was authorized to provide directives to
the contractor that approve “approaches, solutions, designs, or refinements” (finding 1;
R4, tab 1 at 11). The apparently minor changes in the final locations for the WTs would
be a solution, design, or refinement that this clause contemplates. If HPA had any
doubts, it should have brought the issue to the attention of the CO, as also provided for in
clause G.2, rather than installing the WTs in a location that it knew was wrong.
14
ADDITIONAL FINDINGS OF FACT ASBCA Nos. 62039 AND 62040
38. As stated on Drawing S-505, Note 2, the existing base plates at the bottom of
the MPTA columns were “too thin” and needed to be thickened before the MPTA
structure could be moved. On top of the existing plates, HPA was to install 2.5”
thick A36 steel plates (a 36,000 PSI grade of material (tr. 4/28)) “cut to fit the columns,
with 1 1/2” diameter holes drilled in them and edge preparations for CJP and PJP welds
as indicated . . . .” (R4, tab 4 at 17).
39. The existing plates are referred to as “gusset plates” (id. at 17, n.6; tr. 1/72).
The columns and the plates were perpendicular and were joined at the 90-degree angle
with welds referred to as fillet welds (tr. 2/132; app. supp. R4, tab 29(b) at 9).
40. Drawing S-505, Flag Note 3 (a note referring to a flagged area on the
drawing), provided that the contractor was to “cope and bevel around existing column
flanges and fillet welds as required for base [plate] installation.” On this same drawing,
Note 6 provided that “Parts of existing gusset plates and parts of some welds will need to
be partially removed . . . to allow proper fit up and welding.” (R4, tab 4 at 17) As
discussed below, HPA contends that these notes are contradictory, but it did not seek
clarification from NASA prior to bid.
41. HPA retained Bell Steel Company (Bell Steel) to fabricate the steel plates.
Bell Steel prepared shop drawings 7 that HPA submitted to NASA for approval, and
which contained comments between Bell Steel and HPA. There is nothing on the shop
drawings that indicated any confusion about the requirements of Drawing S-505 and, in
fact, one of the comments (apparently from HPA) specifically indicated awareness of
Note 6. (R4, tab 110 at 11-12; tr. 8/130-32)
42. Despite Note 6, HPA (or more specifically, River City) contends that NASA
refused to allow HPA to remove the existing fillet welds. At the hearing, River City
project manager Brian Ditty testified that someone with NASA (whom he did not
identify) told him at a meeting that River City could not remove the existing welds.
Mr. Ditty testified that personnel from both HPA and Quality Iron were also at the
meeting, but no other witness testified that he was present at such a meeting and heard
7
The contract incorporated FAR 52.236-21, SPECIFICATIONS AND DRAWINGS
FOR CONSTRUCTION (FEB 1997) (R4, tab 1 at 27). FAR 52.236-21(d) defined
shop drawings as: “drawings, submitted to the Government by the Contractor . . .
showing in detail (1) the proposed fabrication and assembly of structural elements
and (2) the installation (i.e., fit, and attachment details) of materials or
equipment.”
15
this direction. (Tr. 1/202-03) Notably, HPA’s Certified Welding Inspector (CWI),
Robert Mader, testified that he was not aware of any direction from NASA to leave the
existing welds in place (tr. 7/265).
43. HPA does not allege that the CO gave this direction to River City. There is
nothing in writing that documents this alleged direction, and HPA did not inform the CO
that a lower level person had barred HPA from performing work authorized by the
contract, or that this instruction would cause an increase in costs that it would later allege
exceeds $1 million. The Board sees no benefit to NASA from leaving the welds in place
in their entirety and thus no motivation to demand that they remain.
44. Based on the weight of the evidence, the Board finds that no one from NASA
– and certainly not the CO – told HPA or River City that the existing welds could not be
removed. This leads to the question of why, if no such direction was given, would River
City forgo removal of the welds. The Board finds that, like the REA 4 decision not to
bring the WTs in through a hole in the top, this likely was a gamble by River City that
it could save money if it did not take the time to remove the existing welds (tr. 7/265,
273-74). Like REA 4, NASA cooperated with HPA’s attempt to avoid removing the
welds, only to get blamed by HPA later on.
45. In support of its contentions, HPA draws our attention to RFIs 146 and 146A
(one of which may be misdated but we find that HPA submitted both and received
answers in August 2014). In RFI 146, HPA stated, in part, “Existing conditions, in the
form of welds on W14 columns for MPTA, prevent the 2 1/2” thick plates from achieving
proper CJP weld . . . .” and requested that NASA advise how it should proceed (app.
supp. R4, tab 34c(9) at 3). The Board finds that HPA represented in this RFI that existing
conditions prevented removal of the welds, but that is not the same thing as confirming a
direction from NASA to retain the welds. Moreover, as we will describe below, the
existing conditions did not prevent removal of the welds and River City or Quality Iron
would eventually remove the existing welds in 2015.
46. HPA also directs our attention to NASA’s response to RFI 146, which
contains three sketches prepared by NASA’s structural steel designer to address leaving
the welds in place. The sketches refer to a weld identified as “Weld 3.” The third sketch
contains the following sentence relied upon by HPA: “Placing Weld 3 along the inside of
the flanges and along the web requires dealing with the existing column to base plate
weld staying, a large chamfer 8 is needed on the edge of the new plate . . . .” (App. supp.
R4, tab 34c(9) at 6). While this again references at least some welds staying, it does not
document that this direction came from NASA and merely repeats the representation
8
“Chamfer” is synonymous with bevel (tr.1/125).
16
made by HPA in the RFI. Moreover, when these sketches define Weld 3, the designer
also refers to areas where the existing fillet welds are to be removed, which contradicts
the alleged proscription of weld removal (id. at 4). The Board finds that, on the whole,
this RFI does not support the finding of a NASA direction not to remove the existing
welds and, at most, reflects NASA’s cooperation with leaving some of them in place.
47. Both parties pursue an in depth discussion of specific types of CJP welds,
welding techniques, the meaning of welding symbols on construction drawings, and
whether or not the sketches attached to NASA’s response to RFI 146 would have resulted
in proper CJP welds if HPA had followed them precisely, but because we find that HPA
has not proven that NASA ever directed HPA not to remove the existing welds, or that
existing conditions prevented removal of the welds, the Board need not delve into this. 9
48. Drawing S-505, Note 5, provided that “CJP and PJP welds require 100%
[ultrasonic testing] with a written report for the NASA COR” (R4, tab 4 at 17). Because
the existing welds would now remain in place, HPA took the position that it was no
longer feasible to test the welds using ultrasonic testing (UT). HPA submitted RFI 146A
requesting that NASA waive the requirement and suggested “performing the welds under
the supervision of NASA’s CWI or designated representative ...” COR Sanders approved
this, stating “[c]ontinuous visual inspection should be conclusive” but he did not state
that NASA would be providing a CWI (App. supp. R4, tab 34c(9) at 7). The parties
executed bilateral Mod. 2 in October 2014, providing NASA a credit of $2,136.77 for
omitting the UT test requirement (R4, tab 54h at 4).
49. A question that would later emerge from RFI 146A was the meaning of the
phrase “NASA’s CWI or designated representative” (R4, tab 34c(9) at 7). The contract,
in a section entitled “Structural Steel Welding” barred HPA from welding until it had
submitted, among other things, inspectors for approval by the COR (R4, tab 18 at 114).
The necessary inspectors included one with a CWI certification (id. at 117).
9
The Board finds, however, that River City did not follow the sketches even though it
knew that the resulting welds would be inadequate. While the parties dispute
whether the sketch attached to NASA’s response to RFI 146 (app. supp. R4,
tab 34c(9) at 6) contained two options or two steps to achieve a CJP weld, the
Board reads the sketch as requiring two steps, primarily because it states at the top
“STEPS IN EDGE PREP ON MPTA DOUBLER BASE PLATES FOR WELDS”
(id.). River City did only the work on the top half of the sketch even though
Mr. Ditty knew it would not result in a CJP weld. When asked why he did not
alert NASA or the designer to this concern he testified that “it’s kind of like
questioning your father when you question the engineer of record.” (Tr. 1/125-26)
17
50. During the project, HPA provided Robert Mader, who was employed by
another subcontractor, Mandina’s Inspection, as its CWI (tr. 7/201). This did not change
when River City performed the baseplate work following RFI 146A, and no one from
HPA appears to have questioned why NASA did not have its own CWI at the site. In any
event, under clause G.1 (finding 1), the CO is “the only person authorized to approve
changes or modify any of the requirements under this contract . . . .” Thus, when he
issued the response to RFI 146A, COR Sanders did not have the authority to obligate
NASA to hire its own CWI. 10
51. This story might have ended here if not for an extraordinary event. On
Friday, March 6, 2015, months after the baseplate work had been completed, a former
River City employee notified NASA that he had essentially sabotaged three welds by
placing a filler material (in this case bolts) in the welds, which is known as “slugging” the
welds. The obvious result of this is that it weakens the weld and potentially threatens the
integrity of the structure. NASA met with HPA, Quality Iron, and River City the
following Monday to discuss the allegation. (Tr. 6/23, 7/240; R4, tab 55j) After the
meeting, HPA informed Quality Iron that it had agreed with NASA “that further testing,
either by x-ray or some other method, needed to be performed . . . .” (R4, tab 55j).
52. On March 9, 2015, HPA also issued a stop work order (Non-Compliance
Notice No. 11) to Quality Iron for “improper welds and failure to provide proper Quality
Control of the welding . . . .” The Non-Compliance Notice required Quality Iron to
submit a written corrective action by close of business the following day. (R4, tab 47r)
On March 10, 2015, HPA notified Quality Iron that if the slugging allegation proved to
be true HPA intended to hold Quality Iron responsible for all costs of investigating and
correcting deficient work (R4, tab 55j).
53. On March 18, 2015, HPA wrote to Quality Iron stating:
Based upon the performance of RCE to date and the recent
discovery of MPTA base plate welds being intentionally
improperly performed it is apparent that QIF’s subcontractor,
RCE, does not have supervisory or quality control personnel
on the project that can ensure that work is performed
according to the requirements of the contract. If RCE's
current on site management and quality control are allowed to
10
S-505, Note 4 also provided that “[t]he base plate thickening process requires full time
inspection by NASA” (R4, tab 4 at 17). NASA performed this inspection by a
combination of spot inspections by welding inspectors who worked for a separate
contractor and construction managers who walked the site (tr. 9/169-70).
18
continue HPA has no reason to believe the situation will
change.
HPA concluded the letter by demanding the removal of Brian Ditty and another River
City employee. (R4, tab 54a)
54. On March 19, 2015, HPA notified NASA by email that it intended to submit a
corrective action plan that would include the reinstatement of UT testing. The plan
would “include completely removing and replacing the reinforcing plates and welds on
the columns which are considered to have major defects” and “removal and replacement
of weld [sic] with minor defects as identified by UT inspection and recommended by
CWI” (R4, tab 55o).
55. On March 24, 2015, Quality Iron submitted to HPA a corrective action plan.
The plan included a provision for UT inspection to determine which welds needed to be
repaired (R4, tab 47v at 14-15). As a result of the inspections, the parties agree that HPA
ultimately found two slugged welds and lesser defects at a number of baseplates (app. br.
at 20) (PFF 64); app. reply at 8; gov’t br. at 49-50 (PFF 7)).
56. HPA now contends that NASA forced HPA to do the UT inspections and that
“everyone knew” the welds would not pass UT inspections due to the fillet welds that had
remained in place (app. reply at 2, 17). But there is no contemporaneous documentation
demonstrating that NASA forced this procedure on HPA or that HPA or its
subcontractors contended that another procedure was more appropriate.
57. Also in March of 2015, John Phillips became Quality Iron’s senior project
manager (tr. 2/125). Mr. Phillips soon became aware of problems with the welds. He
could not understand why River City had left the fillet welds in place because they
prevented successful completion of a CJP weld. (Tr. 2/142-43) He asked Mr. Ditty,
River City’s project manager, about this. Mr. Ditty stated that he had left the welds in
place because NASA had instructed him to leave them in place. (Id. at 145) This seems
to be the origin of the story that NASA barred removal of the existing welds.
58. Mr. Phillips agreed that the project had been designed correctly and that the
problem was the alleged direction not to remove the existing welds (tr. 3/16-17). HPA
fixed plates that failed UT inspections (discovered while implementing the corrective
action plan) by ripping out the work and performing it per the original design on Drawing
S-505, including partial removal of the existing welds (id. at 29-31).
59. On December 19, 2018, HPA submitted a certified claim for $1,127,909.37
and a 29-day time extension for what is referred to as the REA 9 work (the work
19
emanating from the alleged NASA direction to leave the existing fillet welds in place)
based on theories of defective specifications, constructive changes, differing site
conditions, breach of the duty not to delay, hinder or interfere with the contractor, and
cardinal change (R4, tab 49 at 3-11)
60. On this same date, December 19, 2018, HPA submitted a certified claim for
$4,281,841.69 and a 39-day time extension for what is referred to as the REA 10 work
(ripping out the original work after the slugged welds were discovered and reinstalling
per the original design) due to defective design, inadequate inspections, constructive
changes, inadequate inspections, and breach of the duty not to delay, hinder or interfere
with the contractor, and cardinal change (R4, tab 50 at 3-13).
61. CO Edge denied both claims in decisions dated March 27, 2019 (R4, tabs 54-
55). HPA thereafter filed timely appeals. The Board docketed the REA 9 appeal as
No. 62039 and the REA 10 appeal as No. 62040.
DECISION - ASBCA Nos. 62039 AND 62040
When the language of a contract is unambiguous, it must be given its “plain and
ordinary” meaning and the Board may not look to extrinsic evidence to interpret its
provisions. TEG-Paradigm Envtl., Inc. v. United States, 465 F.3d 1329, 1338 (Fed. Cir.
2006) (citing Coast Federal Bank, FSB v. United States, 323 F.3d 1035, 1040 (Fed. Cir.
2003) (en banc)). The Board must interpret the contract as a whole so as to
harmonize and give reasonable meaning to all of its parts. NVT Techs., Inc. v. United
States, 370 F.3d 1153, 1159 (Fed. Cir. 2004). Contract provisions should not “be
construed as being in conflict with [one] another unless no other reasonable interpretation
is possible.” Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl. 1965).
As stated above, HPA contends that Drawing S-505 is contradictory because Flag
Note 3 provides for the contractor to “bevel around existing . . . fillet welds” while Note 6
provided that “parts of some welds will need to be partially removed . . . to allow proper
fit up and welding” (finding 40). The Board disagrees because it is possible to reconcile
the two notes. The Board concludes that reasonable meaning can be given to both notes
by interpreting them to mean that the fillet welds generally would remain but that HPA
could partially remove them as necessary to allow proper fit up and welding.
Even if the Board were to consider extrinsic evidence, HPA fares no better. As we
have found, the back and forth between HPA and the base plate fabricator prior to the
commencement of work demonstrates that HPA was well aware of Note 6 and did not
express any confusion about partial removal of welds. HPA also did not inquire about it
prior to bid. (Findings 40-41).
20
But this issue is not entirely resolved by these rules of construction. HPA’s
principal contention is that River City did raise this issue and sought clarification from
NASA. HPA has failed to convince the Board that this occurred due to both the lack of
contemporaneous documentation and the lack of any other witness from NASA, HPA,
Quality Iron, or River City who was present at the meeting where the unnamed NASA
employee gave the direction to leave the welds in place, and the absence of any benefit to
NASA in doing so (findings 42-43). But even if the Board assumed that this
conversation did take place, HPA does not contend that it was the CO who gave the
direction. Given how clearly Note 6 authorizes partial weld removal, and HPA’s
contention that rescinding this authority resulted in more than $1 million in extra costs,
this was not an appropriate topic for discussion with a lower level NASA employee at a
meeting, at least without confirming the direction with the CO. As we have already
explained, only the CO has the authority to change the contract.
HPA’s claim for REA 9 work fails because everything followed from River City’s
decision not to remove the existing fillet welds. HPA’s REA 9 claim confirms that if
River City had removed parts of the fillet welds “then none of this extra work would have
been required” (R4, tab 49 at 3). While the record is not crystal clear as to why River
City did this, the most likely explanation is that River City thought that it would be
quicker and less expensive to leave them in place (finding 44). When John Phillips
became senior project manager in March 2015 (after the base plate work had been
completed), he realized that this had been an unwise decision (finding 57). NASA bears
no responsibility for any of this.
Similarly, REA 10 also fails, at least in part, because it stems from the initial
decision not to remove the fillet welds. As Mr. Phillips testified, HPA eventually did the
work as provided on Drawing S-505, but it had to first rip out much of the work that it
had done (finding 58). HPA confirms in its REA 10 claim that if the fillet welds had
been removed when it first did the work “all of the welds would have passed except for
the two (2) where a bolt was placed in the weld . . . .” (R4, tab 50 at 7). Thus, if River
City had simply done the work as designed from the start, none of this additional work
would have been necessary.
REA 10 also fails because it was River City that hired the welder who slugged the
welds (finding 51). It was HPA, Quality Iron, and River City that failed to supervise him
properly so that he could not slug the welds. But for the slugged welds, the problems
with the other welds likely would not even have been discovered (findings 51-55).
The Board rejects HPA’s contention that NASA bears some responsibility because
if it had provided the CWI it supposedly agreed to provide in its response to RFI 146A,
then the slugged welds would never have occurred. The Board disagrees. While the
21
phrase in HPA’s RFI, “NASA’s CWI or designated representative,” is ambiguous,
context is important. Specifically, as we have found: (1) the contract required only HPA
to provide a CWI; (2) HPA retained Robert Mader (through a subcontractor) as its CWI;
(3) NASA did not state in its response to RFI 146 that it would provide its own CWI;
(4) no one at the time questioned why there was no NASA CWI at the project; (5) NASA
had no incentive to hire a CWI because the contract did not require it to hire a CWI and
HPA did not offer NASA any credit to offset the costs of hiring a CWI; (6) an RFI is not
the proper way to change the contract; and (7) the COR who responded to the RFI did not
have the authority to change the contract (findings 16, 49-50). In these circumstances,
the Board concludes that the most reasonable interpretation of “NASA’s CWI or
designated representative” is that it simply referred to Robert Mader. Finally, the Board
also observes that because Mr. Mader was unable to prevent the slugged welds or welds
with lesser deficiencies, the effect, if any, of NASA adding its own CWI is speculative.
The contract included FAR 52.246-12, Inspection of Construction (finding 1).
This is a lengthy clause that repeatedly provides that the contractor is responsible for
inspecting the work, that it is responsible for remedying defective work, and that to the
extent that NASA performs its own inspections, those inspections are for its own benefit,
not to protect the contractor from its mistakes (or in this case, intentional destructive
acts). We highlight several relevant provisions of this clause:
(b) The Contractor shall maintain an adequate inspection
system and perform such inspections as will ensure that the
work performed under the contract conforms to contract
requirements. . . .
(c) Government inspections and tests are for the sole benefit
of the Government and do not—
(1) Relieve the Contractor of responsibility for providing
adequate quality control measures;
(2) Relieve the Contractor of responsibility for damage to or
loss of the material before acceptance;
(3) Constitute or imply acceptance; or
(4) Affect the continuing rights of the Government after
acceptance of the completed work . . . .
22
(d) The presence or absence of a Government inspector does
not relieve the Contractor from any contract requirement . . . .
(e) The Contractor shall promptly furnish, at no increase in
contract price, all facilities, labor, and material reasonably
needed for performing such safe and convenient inspections
and tests as may be required by the Contracting Officer. . . .
(f) The Contractor shall, without charge, replace or correct
work found by the Government not to conform to contract
requirements, unless in the public interest the Government
consents to accept the work with an appropriate adjustment in
contract price. The Contractor shall promptly segregate and
remove rejected material from the premises.
FAR 52.246-12; Granite Const. Co. v. United States, 962 F.2d 998, 1003 (Fed. Cir. 1992)
(“The lack of government inspection does not relieve the contractor of the burden of
providing conforming materials under the contract.”).
Finally, HPA also contends that NASA violated the duty of good faith and fair
dealing by first agreeing to omit the UT test requirement only to re-impose it later when
“everyone knew” that the welds would not pass (app. reply at 2, 17). The Board
disagrees. There is no evidence that NASA imposed the UT test requirement after the
slugged welds were discovered or that “everyone” knew that this was not an appropriate
reaction to the sabotaged welds. In fact, the evidence indicates that, as the prime
contractor, HPA shared the same sense of consternation or betrayal as NASA after it
learned that an employee of a sub-subcontractor had done this. HPA reacted immediately
to hold Quality Iron responsible and require it to inspect all the welds and fix those found
to be flawed. Part of this inspection and repair process involved UT inspections, but
there is no indication that NASA forced it on HPA. (Findings 51, 54-56) HPA has not
shown that there was a better, faster, or cheaper response to the problem once the slugged
welds were disclosed.
Appeal Nos. 62039 and 62040 are denied.
ADDITIONAL FINDINGS OF FACT APPEAL No. 62042
62. The claim that is the basis for this appeal was made by HPA on behalf of
Quality Iron for what it (Quality Iron) calls excessive movement of the B2 test stand
during the erection of the SLS Support Tower and Access Tower steel. According to
Quality Iron’s John Phillips, the structure was moving more than two inches. He testified
23
that the structure, which is U-shaped, was expanding and contracting at the open end of
the U (tr. 3/50-52). This caused HPA a variety of problems, especially the inability to
line up bolt holes (id. at 53). HPA contends that standards incorporated in the contract
allow the steel to expand or contract approximately 1/8 inch per 100 feet for each change
of 15 degrees Fahrenheit (app. supp. R4, tab 3 at 60). HPA offers three types of evidence
in support of its contentions: surveys, physical measurements, and expert testimony (app.
reply at 25).
63. The Board finds that the surveys are inconclusive. Both parties commissioned
surveys but the surveyors produced inconsistent results (tr. 6/154). On March 29, 2016,
an HPA vice president, Clyde McCutcheon, wrote to Quality Iron expressing
considerable doubt that the surveys showed that the test stand was moving and instead
blaming Quality Iron for fabrication errors. He wrote:
I have not seen anything other than anecdotal evidence that
the stand is moving other than in predictable ways from
thermal expansion. . . . We have used the same surveyor here
since 2012, coming off the same control points that allowed
us to lay out and drill the holes for the MPTA base plates
[within] thousandths. We have used the same control lines
for center line of structure since that time as well. The
benchmark set on the structure is certified within thousandths
of the theoretical elevation. The location errors for the
Forward Thrust Attachments and Aft Thrust attachment were
not fabricated in the proper location relative to each other.
We have been waiting for weeks for John [Phillips] to
produce anything concrete . . . .
(R4, tab 57a at 2)
64. HPA’s surveyor did not testify at the hearing. The parties instead filed a
stipulation of expected testimony by the surveyor that diminished any support his surveys
provided to HPA. He stated:
In my professional opinion, there are several factors
that can affect the accuracy of surveys taken at the same
location, but on different dates. By that I mean, there are
several factors that can affect the “repeatability” of surveys,
thereby calling in question whether a surveyor can
definitively state whether a structure has moved when
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multiple surveys of the same location(s), taken on different
dates contain different measurements.
....
I am aware that Harry Pepper has used the variations
found in several of my surveys, taken at the same
locations/elevations on the test stand, but on different dates,
to illustrate what they believe is movement of the test stand,
and to document specific amounts of movement. I will vouch
for the accuracy of the various surveys that I/my company
performed; however, as I earlier stated, I have concerns about
the “repeatability” of surveys, and I cannot state that any
party can establish movement solely by comparing survey
results/measurements taken at the same test stand locations,
on different dates. As stated during my deposition, I do not
have an opinion one way or the other as to whether this
particular test stand moved during our survey work.
(Ex. G-16)
65. Next, HPA relies on measurements taken by Quality Iron’s John Phillips with
a measuring tape. As the Board finds below in the discussion of the testimony from
HPA’s expert, the dispute devolves down to whether over a distance of approximately
34 feet the two ends of the structure were moving in and out by about one-half inch,
which would require a high level of precision for a hand measurement. The photos that
HPA has submitted raised questions about the accuracy of the measurements because
some photos show twisting of the tape measure and the Board cannot tell if Quality Iron
used accurate benchmarking of the tape (same start and endpoints each time) (tr. 4/139;
R4, tab 63).
66. HPA’s expert, Dr. Thomas Tarpy, agreed that the photos did not demonstrate
that Quality Iron had used proper benchmarking in taking the measurements and that the
twisting seen in the photos could impact the accuracy (tr. 4/139-43). Because of the
small amount of movement at issue, the tape measurements do not have sufficient indicia
of reliability for the Board to find that they support the claimed movement.
67. Finally, HPA presented expert testimony from Dr. Tarpy in the field of
structural steel engineering and design, and oversight of structural engineering,
fabrication, and erection (tr. 4/85). However, Dr. Tarpy’s testimony hurt HPA more than
it helped. Dr. Tarpy did not believe it was possible that the test stand moved more than
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two inches as Quality Iron contends. Rather, he testified that the movement was “up to
three eighths, maybe a half inch in some cases” (tr. 4/119). However, as we have already
found, neither the surveys, nor the hand measurements support even this amount of
movement. And Dr. Tarpy agreed that the work required by a 3/8 to 1/2-inch movement
would have been much less than the 2+ inches alleged by Quality Iron. He characterized
this as a “night and day” difference and that there was “no comparison” in the amount of
work that would be required as a result of movement at these levels. (Tr. 4/150)
68. Dr. Tarpy also opined that when Quality Iron raised the movement issue,
NASA’s designer should have approved the use of slotted connections for fit up of
horizontal members into the sides of the vertical members (tr. 4/102). But there is no
evidence that HPA ever asked NASA to approve the use of slotted connections (tr. 9/42,
10/10).
69. Dr. Andrew Martin, the project manager for NASA’s structural steel design
contractor, testified credibly that while “everything moves,” the B2 test stand was “about
the beefiest structure” he had ever been associated with and was “nuclear blast resistant.”
He did not agree that the structure moved in the amount HPA claimed. (Tr. 6/107)
Moreover, he testified convincingly that situations do occur where bolt holes in
fabricated steel do not line up but skilled ironworkers have a variety of techniques to
address this problem (id. at 110-12).
70. HPA submitted a certified claim on December 20, 2018, (referred to as REA
12) seeking $4,102,121.47 and a 227-day delay based on theories of defective
specifications, breach of the duty not to hinder, delay or interfere with HPA, constructive
changes, differing site conditions, and cardinal change (R4, tab 52 at 8-16).
71. CO Edge denied the claim on March 27, 2019 (R4, tab 57). HPA filed a
timely appeal that the Board docketed as No. 62042.
DECISION - APPEAL No. 62042
Because HPA has not proven that the test stand moved in any meaningful way,
this appeal is denied.
OTHER CLAIMS
At pages 44-54 of HPA’s opening brief, after its proposed findings of fact on the
four appeals, it presents a section entitled “Breach of Contract.” HPA states: “In addition
to the four discrete claims discussed above, the proof showed that from the outset of the
construction NASA breached its contractual duty of good faith and not to hinder, delay or
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interfere with HPA’s performance by NASA’s egregious and continuous delays.” (app.
br. at 44). HPA does not make a separate money demand for the alleged breach of
contract and the section appears to be simply an attempt to buttress HPA’s claims by
reciting a litany of other supposed bad acts by NASA that largely appear unrelated to the
four appeals. For example, it contends that NASA hindered HPA by: delaying shop
drawing approval, solving site access issues, issuing change orders when needed,
responding to RFIs, providing information concerning government furnished property,
and delivering field change requests (app. br. at 50-51).
If HPA had other claims against NASA for delay or hindrance, it could have
submitted a claim to the contracting officer. The Board has carefully examined the facts
of the four appeals after a two-week hearing. The Board has decided all four appeals on
the merits. The other supposed bad acts alleged by HPA do not revive claims that the
Board has found to fail on the facts nor does it add anything to the claim that the Board
has sustained in part. Accordingly, the Board finds that the contentions on pages 44-54
of HPA’s brief do not add anything to the four appeals and that no further action by the
Board is necessary.
CONCLUSION
The Board sustains ASBCA No. 62038 in part, and denies ASBCA Nos. 62039,
62040, and 62042.
Dated: November 3, 2021
MICHAEL N. O’CONNELL
Administrative Judge
Armed Services Board
of Contract Appeals
(Signatures continued)
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I concur I concur
JOHN J. THRASHER J. REID PROUTY
Administrative Judge Administrative Judge
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 Nos. 62038, 62039, 62040,
62042, Appeals of Harry Pepper and Associates, Inc., rendered in conformance with the
Board’s Charter.
Dated: November 3, 2021
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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