A.T.I. TACOSE S.C.a R.L.

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of -- )
)
A.T.I. TACOSE S.C.a R.L. ) ASBCA Nos. 59157, 59200
)
Under Contract No. N33191-l 1-C-0413 )

APPEARANCE FOR THE APPELLANT: Antonio Marcello Boschetti, Esq.
Studio Legale Avv. Antonio M. Boschetti
San Salvo, Italy

APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq.
Navy Chief Trial Attorney
David L. Koman, Esq.
Senior Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE NEWSOM
ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

Appellant, A.T.I. TACOSE S.C.a R.L. (TACOSE), was awarded a contract to
design and build a dormitory for the Navy at Aviano Air Base in Italy. It appeals from
final decisions denying two claims for additional compensation for work that it contends
the government added to its contract. The government contends that the contract as
originally awarded required this work and no additional compensation was warranted.
Our jurisdiction to entertain these appeals arises from the Contract Disputes Act of 1978
(CDA), 41 U.S.C. §§ 7101-7109.

Both appeals involve disputes over the interpretation of requirements in a
design/build contract. For the reasons explained below, we agree with the
government's interpretations. We grant the government's motion for summary
judgment and deny TACOSE's motion for summary judgment with respect to both
appeals.

STATEMENT OFF ACTS (SOF) FOR PURPOSES OF THE MOTIONS

The following facts are not in dispute.

1. On 10 February 2011, the Naval Facilities Engineering Command, Europe,
Africa, Southwest Asia, issued a solicitation for a competitive procurement seeking to
award a design/build contract for a dormitory at Aviano Air Base in Aviano, Italy
(R4, tab 7 at 1367). Proposals were due 43 days later on 25 March 2011 (id. at 1368).
 2. The request for proposals (RFP) did not include a finished design. The
RFP included a package setting forth minimum requirements, including specifications
and drawings (R4, tab 1 at 143). After award, the selected contractor was required
to design and construct the dormitory in accordance with these requirements (R4,
tab 40 at 1991 ). Bidders were encouraged to develop unique solutions that exceeded
the minimum requirements, provided that the design satisfied applicable building
codes (R4, tab 1 at 143).

3. Because both appeals tum on the interpretation of the minimum
requirements, we describe those requirements in some detail. The RFP and later the
contract set forth requirements in six Parts, as follows:

Part I - Proposal Forms and Documents
Part 2 - General Requirements
Part 3 - Project Program
Part 4 - Performance Technical Specifications
Part 5 - Prescriptive Technical Specifications
Part 6 -Attachments, including project drawings

(R4, tab 1 at 2, 688)

4. The contract required that the dormitory "be designed and constructed
according to the latest version of all applicable design guides ... US Government
Standards and Italian Laws and Norms." It expressly identified certain Italian,
European and other building codes applicable to the dormitory design and
construction. (R4, tab 1 at 143) It also incorporated by reference other building
codes, laws, and other building standards (e.g., R4, tab 1 at 47-48, 369). Most contract
Parts listed multiple codes and standards that were incorporated by reference (e.g., R4,
tab I at 47, 143, 222, 369, 480, 711).

5. The contract required compliance with applicable building codes even if
those codes were not expressly listed in the contract, stating "All applicable norms and
standards, including those incorporated by reference, shall be met, whether or not a
specific Italian or European norm or standard is indicated for a product or installation"
(R4, tab 1 at 479-80, 489-500).

6. Among the publications incorporated by reference were certain U.S. Department
of Defense (DoD) Unified Facilities Criteria (UFC) (R4, tab 1 at 47, 370). The UFC
comprise a system of criteria for the planning, design, construction, sustainment,
restoration, and modernization of DoD facilities (R4, tab 5 at 1236). Each UFC covers a
different discipline or subsystem, e.g., electrical engineering, fire protection engineering,
interior design, and design procedures, among others (R4, tab 1 at 4 7).

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 7. On 28 July 2011, the government awarded Contract No. N33191-l 1-C-0413
(contract) to TACOSE for a firm-fixed-price of €9,860,000 (R4, tab 14 at 1411-14).

8. After award, TA COSE was required to prepare designs of increasing
maturity for government review and approval, including a Design Development
submittal of 50-60% completion; a Prefinal Design of 100% completion; and a Final
Design (R4, tab 1 at 72). TACOSE was also required to designate a Designer of
Record (DOR) who had overall responsibility for the design (R4, tab 1 at 27, 49-50).
TACOSE designated the OK Design Group of Rome, Italy (OK Design) as its DOR.
OK Design was a subcontractor to TACOSE. (Tr. 15-17, 27; R4, tab 32 at 1560)

9. During performance, disagreements over the requirements arose between the
government and TACOSE, some of which are the subject of these appeals. In ASBCA
No. 59157, TACOSE contends that the government directed it to install 144 more
mass notification speakers than the contract required. In ASBCA No. 59200,
TACOSE contends that the government constructively changed the contract to add
requirements for a perimeter waterproofing membrane and insulation for the ground
floor slab. (R4, tabs 19, 34)

Mass Notification System Speaker Dispute

10. In Part 3 of the contract, entitled Project Program, Paragraph D4010
governed the dormitory's Life Safety Notification Systems. It required that the
contractor "[p]rovide a complete, electrically supervised mass notification system
(MNS) with paging function throughout the facility." (R4, tab 1 at 201)

11. The purpose of an MNS is to "protect life by indicating the existence of an
emergency situation and instructing people of the necessary and appropriate response
and action." In an emergency, the MNS provides "real-time information and
instructions" to people in the building, using voice communications along with visible
signals, text, graphics, or other methods of communication. (R4, tab 5 at 1243)

12. Paragraph D4010 specified further that the MNS was to include, in finished
spaces, flush-mounted speakers to provide audible notifications (R4, tab 1 at 201 ).
The dispute in this appeal concerns the number and placement of these speakers.

· 13. The contract called for 144 sleeping rooms arranged in 36 groupings,
each consisting of 4 bedrooms and a common area. Each grouping was known as a
"Quad Module." (R4, tab 14 at 1411) TACOSE contends that the contract required
it to install one MNS speaker in each Quad Module, to be installed in the common
room (app. br. at 11). The government contends the contract required TACOSE
to install at least four speakers in each Quad Module, one in each sleeping room
(gov't br. at 16-17).

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 14. Various contractual elements bear upon the location of MNS speakers.
The contract required compliance with UFC 3-600-:l ON, entitled "Fire Protection
1 Requirements" (R4, tab 1 at 370, tab 6 at 1331). This requirement appears in many

'sections, including Part 2 General Requirements; Part 4 Performance Technical
Specifications; and Part 6 Attachments, Project Description, and Life Safety Analysis
(e.g., R4, tab 1 at 48, 62 (Part 2), at 370-71, 3 76-77, 482, 487 (Part 4), at 711, 720
(Part 6)).

15. In particular, Part 4 Performance Technical Specifications, paragraph
D401001, subparagraph 1.3 .2.1, described the requirements for MNS notification
features and expressly required compliance with UFC 3-600-1 ON, directing: "Provide
audible notification throughout the facility meeting the requirements of UNI EN 54,
UFC 3-600-01, and UFC 3-600-lON" (R4, tab 1 at 376). In addition, paragraph ZIO,
paragraph 1.8.3, entitled "FIRE PROTECTION" directed:

Design and construct the facility in compliance with Italian
Laws and standards and US Government standards relating
to fire protection and life safety. This includes but is not
limited to UFC 1-200-01, "General Building
Requirements", UFC 3-600-01, "Design: Fire Protection
Engineering for Facilities", and UFC 3-600-JON "Fire
Protection Engineering".

(R4, tab 1 at 487) (Emphasis added)

16. The contract specified that the version of UFC 3-600-1 ON applicable to this
contract was the "26 Final Draft August 2007" (R4, tab 1 at 711, 720).

17. Section 2-4 ofUFC 3-600-ION addressed "FIRE ALARM, DETECTION,
MASS NOTIFICATION, AND CONTROL SYSTEMS" (R4, tab 6 at 1341).
Subsection 2-4. 7 therein set forth design criteria for notification appliances.
Significantly, it expressly required audible notification appliances in each sleeping
room, stating:

2-4.7.3 In addition to devices required by Code,
provide audible notification appliances in each sleeping
room regardless of occupancy classification. The
provision of a room smoke detector sounder base does
not negate the requirement of the audible notification
appliances for each sleeping room.

(R4, tab 6 at 1344) (Emphasis added)

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 18. Part 6 of the contract included drawings (R4, tab 1 at 2, 688), at least two of
which depicted MNS speakers. Drawing FA-101, entitled "FIRE ALARM," displayed
a fire alarm diagram that showed a quad common room that included an MNS speaker
and showed sleeping rooms without MNS speakers (R4, tab I at 822). Drawing
FA-601, entitled "RISER DIAGRAM - FIRE ALARM/MASS NOTIFICATION"
showed speakers but did not show any rooms (R4, tab 1 at 823).

19. The contract included various clauses to resolve discrepancies between the
specifications and drawings. First, it incorporated Naval Facilities Acquisition
Supplement (NF AS) clause 5252.236-9312, DESIGN-BUILD CONTRACT- ORDER OF
PRECEDENCE (AUG 2006), which provides:

(A) In the event of conflict or inconsistency between any
of the below described portions of the conformed contract,
precedence shall be given in the following order:

( 1) Any portions of the proposal or final design that
exceed the requirements of the solicitation.
(a) Any portion of the proposal that exceeds the
final design.
(b) Any portion of the final design that exceeds
the proposal.
(c) Where portions within either the proposal or
the final design conflict, the portion that most
exceeds the requirements of the solicitation has
precedence.

(2) The requirements of the solicitation, in descending
order of precedence:

(a) Standard Form 1442, Price Schedule, and
Davis-Bacon Wage Rates.
(b) Part 1 - Contract Clauses.
(c) Part 2 - General Requirements.
(d) Part 3 - Project program Requirements.
( e) Part 6 - Attachments (excluding Concept
Drawings).
(f) Part 5 - Prescriptive Specifications exclusive
of performance specifications.
(g) Part 4 - Performance Specifications exclusive
of prescriptive specifications.
(h) Part 6 -Attachments (Concept Drawings).

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 (B) Government review or approval of any portion of the
proposal or final design shall not relieve the contractor
from responsibility for errors or omissions with respect
thereto.

(R4, tab 14 at 1437-38)

20. Second, the contract contained Federal Acquisition Regulation (FAR)
clause 52.236-21, SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION (FEB 1997),
which provides in relevant part at paragraph (a):

Anything mentioned in the specifications and not shown
on the drawings, or shown on the drawings and not
mentioned in the specifications, shall be of like effect as if
shown or mentioned in both. In case of difference between
drawings and specifications, the specifications shall
govern.

(R4 tab 14 at 1418)

21. Third, Part 2, General Requirements, provided in section 00 73 04,
subsection 1.5, that "[i]n case of differences between project specifications and the
accompanying drawings, the specifications shall govern" (R4, tab 1 at 9).

22. Fourth, the contract contained DoD FAR Supplement (DFARS) 252.236-7001,
CONTRACT DRAWINGS AND SPECIFICATIONS (AUG 2000), which provides, in relevant
part:

(d) Omissions from the drawings or specifications or the
misdescription of details of work that are manifestly
necessary to carry out the intent of the drawings and
specifications, or that are customarily performed, shall not
relieve the Contractor from performing such omitted or
misdescribed details of the work. The Contractor shall
perform such details as if fully and correctly set forth and
described in the drawings and specifications.

(R4, tab 14 at 1428)

23. Following contract award, TACOSE, through OK Design, submitted its
designs for government review. Government personnel reviewing the designs noticed
the absence of MNS speakers in sleeping rooms and commented on 9 December 2011
that the design needed to "Provide Fire Alarm/Mass Notification audible notification
in bedrooms per UFC 3-600-lON, 2-4.7.3." (R4, tab 32 at 1570, 1669-72) OK Design

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acknowledged the comment (id. at 1669). Subsequently, on 2 May 2012, another
government reviewer commented that "speakers are required in all occupied areas,
including sleeping rooms" (id. at 1670).

24. TACOSE accordingly added 144 MNS speakers to the bedrooms in its
design and ultimately on 16 September 2013 submitted a certified claim seeking
reimbursement of€62,669.60 for the added cost (R4, tab 32). On 18 November 2013,
the contracting officer issued a written decision denying the claim (R4, tab 33). The
final decision was timely appealed and docketed as ASBCA No. 59157.

Insulation Disputes

25. ASBCA No. 59200 concerns disputes over two aspects of the building
insulation: the insulation around the perimeter of the foundation; and the insulation
under the ground floor slab (R4, tabs 38, 39).

26. The requirement for perimeter insulation appeared in Part 3 Project
Program, paragraph Al030 Slab on Grade, which stated "Provide perimeter
insulation" (R4, tab 1 at 181 ).

27. As it had with respect to the mass notification speakers, the contract
incorporated by reference, and required compliance with, building codes and similar
authorities. The Part 4 Performance Technical Specifications, Section ZIO, General
Performance Technical Specification, directed that "[a]ll Performance Technical
Specification (PTS) sections must be used in conjunction with all parts of the Design
Build (D/B) Request for Proposal (RFP) to determine the full requirements of this
solicitation." It further directed the contractor to "[f]ollow all applicable Italian and
European codes and standards for each product and installation required for the
project." (R4, tab 1 at 479-80) It required the contractor to comply with applicable
building codes and standards that were expressly listed in the contract, and also those
that were not expressly listed in the contract, stating "All applicable norms and
standards, including those incorporated by reference, shall be met, whether or not a
specific Italian or European norm or standard is indicated for a product or installation"
(R4, tab 1 at 4 79-80, see also at 489-500).

28. TACOSE was requred to prepare designs for the foundation and
building insulation that complied with the contract's minimum requirements and
with applicable building codes and standards (R4, tab 1 at 180-81 (Foundations), at
233 (Foundations), at 184 (Insulation), at 249 (Insulation)).

29. The contract placed responsibility on the DOR "for coordinating the design
with all applicable Italian standards and laws" (R4, tab 1 at 489).

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 30. After award, TACOSE's DOR, the OK Design Group, determined that a
European building code designated EN 13969, which addresses "[f]lexible sheets for
waterproofing," applied to this dormitory (R4, tab 38 at 1860 (claim); app. hr. at 12).
EN 13969 was not listed among the building codes that were expressly incorporated
into the contract.

31. OK Design concluded that EN 13969 required a perimeter insulation
membrane (R4, tab 38 at 1860 (claim); app. hr. at 12). Accordingly, OK Design
prepared and submitted for government approval a design that included a perimeter
insulation membrane, as shown on the DOR's drawing A-501 (R4, tab 38 at 1954).
The government did not otherwise direct TA COSE to provide a perimeter insulation
membrane.

32. In addition to requiring perimeter insulation, the contract provided
generally that the contractor shall install insulation elsewhere to meet energy savings
requirements. Part 3 Project Program, paragraph B201003, Insulation and Vapor
Retarder, stated:

Provide insulation to meet the energy savings
requirements.

Provide a continuous air barrier to control air leakage into,
or out of, conditioned spaces. The building envelope shall
includ[e] all elements of the facility that are exposed to the
outside environment or outside environmental conditions
such as roof, walls, floors, and compartmentalized
unconditioned portions of the facility. Permanently seal
penetrations through the air barrier, joints in the air barrier,
adjoining construction, and transitions to different air
barrier materials.

(R4, tab 1 at 184)

33. Neither party has pointed to any language within the body of the contract
that expressly prescribed that the contractor provide a "perimeter insulation
membrane" nor language that expressly mentioned a requirement for insulation
under ground floor slab, and we have found no such express language (app. hr. at 10;
gov't hr. at 28).

34. The contract incorporated by reference Italian authorities, including
Italian Legislative Decree DL 31112006 and Italian Presidential Decree DPR 59/2009.
(R4, tab 1 at 143, 500) Among other relevant provisions, the first page of Part 3
Project Program, section 1.0, Project Description, stated that the "[t]acility shall be
designed and constructed according to the latest version of all applicable design

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guides ... and Italian Laws and Norms." It added that "The Design Build Contractor
is responsible to have all facilities meet the appropriate certifications for that
building," and "the DOR shall assert the 'Building Energy Qualification
Certificate ... that shall attest the building Compliance with the requirements of Italian
decrees D. Leg. vo 192/2005 - 311/2006 - 115/2008 - 5912009." (R4, tab 1 at 143)

35. According to TACOSE, after award, OK Design determined that
DL 311/2006 and DPR 5912009 required ground floor slab insulation, and that such
insulation must have such thermal transmittance values that necessitated 8 cm of
insulation under the ground floor slab (R4, tab 38 at 1860-61 (claim); app. br. at 13).
The government did not otherwise direct TA COSE to include insulation under the
ground floor slab.

36. OK Design accordingly prepared and submitted for government approval a
design that included 8 cm of insulation under the ground floor slab, as shown on the
DOR's drawings S-502, SD-04, and A-701 (R4, tab 38 at 1961-63).

3 7. The government approved the designs submitted by OK Design that
included perimeter insulation membrane and 8 cm of ground floor slab insulation
(R4, tab 38 at 1956-58, 1973-75).

38. Arguing that the requirements for a perimeter insulation and 8 cm of
insulation under the ground floor slab constituted constructive changes, TACOSE
submitted a claim on 10 October 2013 seeking reimbursement of €62,243.95* for the
added cost of including these features (R4, tab 38). On 9 December 2013, the
contracting officer issued a written decision denying the claim (R4, tab 39) which was
timely appealed to the Board on 6 March 2014 and docketed as ASBCA No. 59200.

DECISION

Summary judgment is appropriate where there is no genuine issue of material
fact and a movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). A material fact is one which may make a difference in the
outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
moving party bears the burden of establishing both the absence of disputed material
facts and that it is entitled to judgment as a matter of law. Dongbuk R& U Eng 'g Co.,
ASBCA No. 58300, 13 BCA if 35,389 at 173,637. If the moving party makes the
requisite showing, the burden shifts to the nonmovant to show that there is a genuine,
material factual issue for trial. BAE Sys. San Francisco Ship Repair, ASBCA No. 58810,

* We find the claim value to be less than $100,000, based upon an exchange rate of
1.35 dollars to the euro, therefore no certication was required.

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14-1BCA~35,667 at 174,588; Teledyne Brown Eng'g, Inc., ASBCA No. 58636,
14-1 BCA ~ 35,495 at 173,998.

In these appeals, the material facts are undisputed. The disputes arise from
disagreements over the interpretation of the contract requirements for this design/build
contract, particularly requirements that appear in building codes or similar authorities,
some of which were expressly incorporated into the contract.

ASBCA No. 59157-The MNS Dispute

The dispute over MNS speakers stems from differences between the contract's
specifications and its drawings. TA COSE argues that it relied upon drawings FA-101 and
FA-601 to conclude that MNS speakers were required only in quad common rooms and
not in sleeping rooms. Both drawings, it argues, depicted no MNS speakers in sleeping
rooms. According to TACOSE, by insisting that TACOSE install speakers in sleeping
rooms, the government constructively changed the contract. (App. br. at 11-12) The
government argues that the RFP and contract, through incorporation ofUFC 3-600-lON,
required MNS speakers in sleeping rooms. To the extent that the contract drawings
conflicted with that UFC, the government argues that the order-of-precedence clauses
dictated that UFC 3-600-lON governed (gov't br. at 17-18). We agree with the
government.

TACOSE is correct that drawing FA-101 depicted an MNS speaker in each
quad common room and none in sleeping rooms (SOF ~ 18). But it is incorrect
concerning drawing FA-601; that drawing did not depict any rooms and thus TA COSE
could not reasonably have relied upon it to determine the rooms in which MNS
speakers were required (id.) Thus, ifTACOSE focused solely on drawing FA-101 and
ignored all other contract provisions and specifications, TACOSE could have
concluded that MNS speakers were not required in sleeping rooms.

It is unreasonable, however, to ignore other contract provisions and
specifications. The contract must be read as a whole, giving meaning to all its parts.
Hof-Gar Mfg. Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl. 1965).
The contract incorporated UFC 3-600-ION, which expressly required MNS speakers
in each sleeping room and thus conflicted with drawing FA-101 (SOF ,, 14-17). The
order-of-precedence clauses dictate how to resolve such conflicts. Hensel Phelps
Construction Co. v. United States, 886 F.2d 1296, 1299 (Fed. Cir. 1989). The
contract's order-of-precedence clause, NFAS 5252.236-9312, provided that Part 2,
Part 4, and the Part 6 attachments took precedence over the Part 6 drawings
(SOF ~ 19). Because UFC 3-600-ION was incorporated within Part 2, Part 4, and the
Part 6 attachments, this UFC took precedence over inconsistencies in drawing FA-101.
Accordingly, the requirements in UFC 3-600-lON governed, and MNS speakers were
required in sleeping rooms.

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 This conclusion is reinforced by FAR 52.236-21 and Part 2, General
Requirements, which provide that in case of differences between the specifications
and the drawings, the specifications govern (SOF ~~ 20, 21 ). Furthermore, DF ARS
252.236-7001 provide that TACO SE must perform details omitted from drawings that
are "manifestly necessary to carry out the intent of the ... specifications" (SOF ~ 22).
Because UFC 3-600-1 ON expressly required "audible notification appliances in each
sleeping room," it was "manifestly necessary" to provide speakers in sleeping rooms
to carry out the intent of that UFC.

TACOSE advances two additional arguments that are unpersuasive. First,
it argues that the discrepancy between the drawings and specifications was a
"specification defect" for which the government is responsible (app. br. at 5). A
defective specification (or defective drawing) is a breach of the government's implied
warranty that satisfactory contract performance will result from adherence thereto.
Essex Electro Eng'rs, Inc. v. Danzig, 224 F.3d 1283, 1289 (Fed. Cir. 2000). To
recover on this basis, TACOSE must show that there was a defect, that it reasonably
relied on the defect, and that the defect was latent. E.L. Hamm & Assocs., Inc. v.
England, 379 F.3d 1334, 1339 (Fed. Cir. 2004); Robins Maint., Inc. v. United States,
265 F.3d 1254, 1257 (Fed. Cir. 2001).

TA COSE cannot carry this burden, among other reasons because there was no
defect. The contract contemplated the possibility of inconsistencies between drawings
and specifications and dictated how to resolve them. Straightforward application of
the order-of-precedence clauses resolved any conflict between UFC 3-600-1 ON and
drawing FA-101, for the reasons already explained. Secondly, TA COSE cannot
show reasonable reliance on its interpretation. It presented no evidence, such as
affidavits or contemporaneous documents, showing that in preparing its proposal it
actually relied upon its current interpretation, and in any event, reliance upon the
drawings while ignoring other provisions and specifications in the contract would
have been unreasonable. LRV Environmental, Inc., ASBCA Nos. 58727, 58728,
15-1 BCA ~ 36,042 at 176,040 (citing William F. Klingensmith, Inc. v. United States,
505 F.2d 1257, 1262 (Ct. Cl. 1974)) (interpretation which requires complete disregard
of entire paragraphs of contract not normally considered reasonable).

We are also unpersuaded by TACOSE's contention that the large number of
specifications, coupled with what TA COSE contends was insufficient time to prepare
a proposal (43 days), created a latent ambiguity concerning the location of MNS
speakers (app. br. at 15). Four separate contract provisions or clauses alerted bidders
that in case of conflict, the specifications governed over drawings (SOF ~~ 19-22).
TACOSE should therefore have known of the importance of the specifications and that
it should not rely solely on drawings. Indeed UFC 3-600-1 ON - the key specification
- was prominently called out in the contract text. It was listed throughout the contract
as a required specification, and two separate textual provisions addressing MNS and

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fire protection expressly noted the requirement to comply with UFC 3-600-1 ON
(SOF ,, 14-17). The requirement to comply with that UFC was patent.

For the foregoing reasons, the Board holds that the government did not change
the contract requirements for MNS speakers. We grant the government's motion for
summary judgment and deny appellant's motion for summary judgment regarding the
MNS speakers appeal.

ASBCA No. 59200-Insulation Appeal

At issue in the disputes over insulation is whether the government is responsible
for paying to add features that were not mentioned expressly in the body of the contract,
but which appellant later found to be required by government building codes and
standards. TA COSE asserts that after award, its DOR, OK Design, discovered legal
requirements in Italian and European building codes for a perimeter waterproofing
membrane and insulation under the ground floor slab, so it added these features to the
design. TACOSE argues that, because the contract text did not mention these features,
the specifications were defective, and the government is responsible for the costs
TACOSE incurred to provide them. (App. br. at 20) The government argues that
TACOSE is responsible for the cost of these features because the contract specifications
required compliance with European and Italian building codes (gov't br. at 23, 27). It
should be noted that neither party contests the conclusion of OK Design that the building
codes required these features (gov't post-argument br. at 9-1 O; app. post-argument
br. at 5-6). The issue concerns which party is obligated to pay the costs of adding them.

We hold that TACOSE is not entitled to additional costs to add these features.
The contract set forth general requirements for "perimeter insulation" and "insulation
to meet the energy savings requirements" and directed that insulation should satisfy
general performance requirements such as "Provide a continuous air barrier to control
air leakage into, or out of, conditioned spaces [to] includ[ e] all elements of the facility
that are exposed to the outside environment"; and "Permanently seal penetrations
through the air barrier" (SOF, 32).

Specific requirements, such as the type, amount, or properties of insulating
material, were not prescribed within the body of the contract. The contract, however,
incorporated building codes and similar standards into the contract specifications. The
Performance Technical Specification directed the contractor to "[f]ollow all applicable
Italian and European codes and standards for each product and installation required for
the project." It required the contractor to comply with applicable building codes even
if those codes were not expressly listed in the contract, stating "All applicable norms
and standards, including those incorporated by reference, shall be met, whether or not
a specific Italian or European norm or standard is indicated for a product or
installation." (SOF ,, 27-28, 34) According to TACOSE, EN 13969 applied to this
dormitory (SOF , 30). Thus, pursuant to the Performance Technical Specification,

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compliance with EN 13969 was a required element of the specifications even though
that authority was not incorporated expressly into the contract. Italian standards
DL 311/2006 and DPR 59/2009, were prominent in the contract and expressly
incorporated therein, as they were called out on the first page of the first section of
Part 3 Project Program (SOF, 34). Accordingly, pursuant to Performance Technical
Specification, compliance with those Italian authorities was also a required element of
the contract specifications.

The contract placed responsibility on TA COSE and its DOR to design the
dormitory in accordance with applicable requirements (SOF ,, 2, 4, 5, 8, 28-29). To the
extent that EN 13969 required a perimeter insulation membrane and DL 311/2006 and
DPR 59/2009 required 8 cm of insulation under the ground floor slab, these features were
thus part of the contract specifications.

TACOSE's argument implicitly assumes that all requirements should have been
called out expressly in the contract text. This assumption is untenable in light of repeated
contract language incorporating into the contract various building codes and standards
external to the contract text and requiring compliance with them (SOF ,, 27, 29, 34)
These authorities, having been incorporated into the contract, are part of the specifications.

In rendering this decision we assume, without deciding, that TACOSE and its
DOR correctly interpreted the European building code EN 13969 to require a perimeter
waterproofing membrane, and correctly interpreted Italian authorities DL 311/2006 and
DPR 59/2009 to require 8 cm of insulation under the ground floor slab. Even if these
authorities did not require a perimeter waterproofing membrane and ground floor slab
insulation, TACOSE would still be unable to recover. To recover for a constructive
change, a contractor must prove ( 1) that it performed work beyond the contract
requirements; and (2) that the additional work was ordered, expressly or impliedly, by
the government. Bell/Heery v. United States, 739 F.3d 1324, 1335 (Fed. Cir. 2014);
AMEC Environment & Infrastructure, Inc., ASBCA No. 58948, 15-1BCA,35,924 at
175,594. TACOSE is responsible for the costs of features that exceed the contract
requirements if it voluntarily includes them in its design. Northrop Grumman Systems
Corp. Space Systems Division, ASBCA No. 54774, 10-2 BCA, 34,517 at 170,243
(holding that contractor who acted at its own initiative is not entitled to costs for a
constructive change). Other than by requiring compliance with EN 13969, DL 31112006,
and DPR 59/2009, the government did not direct TACOSE to include either a perimeter
insulation membrane or insulation under the ground floor slab (SOF ,, 31, 35).
Accordingly, if those authorities did not actually require a perimeter insulation
membrane or insulation under the ground floor slab, TA COSE could not establish that
these features were ordered, expressly or impliedly, by the government.

TACOSE reiterates its argument that the large number of specifications and
building code references, coupled with what TACOSE contends was insufficient time to
prepare a proposal (43 days), created a latent ambiguity concerning the insulation

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requirements (app. br. at 15). This argument is unpersuasive. The time limitations for a
proposal and the complexity of the RFP package were apparent. Having elected to
submit a proposal in these circumstances, TA COSE accepted the ground rules under
which the proposal was to be submitted, and it is too late for TA COSE to complain.

For the foregoing reasons, the Board holds that there was no specification
defect regarding perimeter insulation or ground floor slab insulation. We grant the
government's motion for summary judgment and deny appellant's motion for
summary judgment regarding the insulation appeal.

CONCLUSION

Appellant's appeals in ASBCA Nos. 59157 and 59200 are denied.

Dated: 4 January 2017

~WSOM
Administrative Judge
Armed Services Board
of Contract Appeals

I concur I concur

4~~u---£
, MARK N. STEMPLE~ RICHARD SHACKLEFORD
.
Administrative Judge 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 Nos. 59157, 59200, Appeals of
A.T.I. TACOSE S.C.a R.L., rendered in conformance with the Board's Charter.

Dated:

JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals

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