Parsons Evergreene, LLC

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- )
)
Parsons Evergreene, LLC ) ASBCA No. 58634
)
Under Contract No. FA8903-04-D-8703 )

APPEARANCES FOR THE APPELLANT: Douglas S. Oles, Esq.
James F. Nagle, Esq.
·Adam K. Lasky, Esq.
Howard W. Roth III, Esq.
Oles Morrison Rinker & Baker LLP
Seattle, WA

APPEARANCES FOR THE GOVERNMENT: . Jeffrey P. Hildebrant, Esq.
Air Force Deputy Chief Trial Attorney
Michelle D. Coleman, Esq.
Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE CLARKE

This appeal I involves the design and construction of a Temporary Lodging Facility
and Visitor Quarters at McGuire Air Force Base (MAFB), New Jersey. The project was a
"Design-Build Plus" arrangement having two phases: the concept definition phase and the
completion of design and construction phase. Appellant, Parsons Evergreene, LLC's (PE's'
or Parsons'), claims arise out of the second phase. PE claim·s $28,843,173 based on a variety
of problems it experienced. As discussed at the end of this decision, we have jurisdiction
pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. We sustain
in part and deny in part. We sustain in the amount of$10,519,082.

FINDINGS OF FACT

Temporary Lodging Facility (TLF) & Visiting Quarters (VQ) Project at MAFB

1. The TLFNQ project is located on MAFB. The TLF facility provides a
50-unit transitional housing facility for military and civilian personnel until permanent

1
For reasons of judicial efficiency and clarity, pursuant to a separate order issued
today, we address the subject of government liability for costs associated with
allegedly tardy requests for payroll records in a separate opinion under a new
appeal numb~r, ASBCA No. 61784, though it was fully litigated under the
present appeal.
housing can be obtained. It includes one and two bedroom units with living room,
dining/kitchen, bath and storage. The VQ is a 175-unit facility similar to a hotel with
individual rooms with private baths. (R4, tab 7 at 20 2 ) The project employed a
"Design-Build-Plus 03" 3 (DBP03) process that integrated the DBP03 contractor, a .
contractor with experience in construction, with the concept definition contractor, a
contractor with experience in architectural design (id. at 19, 21 ).

Concept Definition (CD)4

2. The CD contractor for the MAFB TLFNQ project was Michael Baker &
Associates (Baker) 5 (tr. 5/8-10, 11/60; R4, tab 20C at 10). 6 The CD effort focus,ed on
"site, civil and architectural" design with "varied levels of development within
structural, mechanical, electrical and fire protection/detection" (id.). The objective of
the CD phase was to produce a 35% design that would be used to award the design ·
completion and construction contract.

3. Between 4 August 2003 and 27 February 2004, the Air Force Materiel Command
(AFMC) issued task orders TG 17 and TG31 to Contract No. F41622-02-D-0003 (contract
0003) 7 in the total amount of $255,276 for DBP03 services to Parsons Infrastructure &
Technology Group Inc., San Antonio, Texas (PI&T) (R4, tab 20 at 1, tab 20A at 1-2,
tab 20B at 1, 6, tab 20C at 1-2). PI&T was a business unit of Parsons responsible for
management and business growth in Parson's government contracting business. It exists
today under a different name not identified in the record. (Tr. 1/110-11) Under TG 17 and
TG31, PI&T was to provide architectural and engineering services to Baker to develop the
35% design package for the TLFNQ (tr. 1/121; R4, tab 20C at 8). PI&T was the "DB+
A-E" (Design Build Plus - Architectural & Engineering) contractor supporting Baker (R4,
tab 20C at 8). Specifically. PI&T was to provide "surveys, site analysis, constructability

2
All Rule 4 citations are to the PDF page numbers.
3 Design-Build-Plus 03 is referred to by various acronyms in the record: "DBP03,"
"DB," "DB+," "DB+A-E" and "DB03Plus."
4
This is sometirries referred to in the record as "Concept Design."
5
The record does not include a copy of Baker's CD phase contract with the Air Force·
(AF).
6
The documentary record in this case is voluminous consisting of an electronic Rule 4
having 3,443 tabs, many individual tabs having hundreds of pages, and numerous
hearing exhibits. The majority of the documents in the record were not cited by
the parties. The Board relies mainly on the documents identified by the parties in ·
their collective 1,500 pages of briefs. When we say a document is "not in the
record" we mean neither party cited to it or we did not independently identify it.
It is not an absolute confirmation that it is not somewhere in the voluminous
record.
7
Contract No. F41622-02-D-0003 is not in the record.
2
 .reviews, design review com~ents, attendance at conferences for comment resolution, and
project cost validation" (id. at 9).

CD & Progressive Collapse

4. Mr. Basham is an architect who was accepted by the Board as an expert in
design-build contracting for appellant (tr. 1/228, 239). He testified that progressive
collapse is a phenomena that occurs when certain members of a building are damaged and
weight is transferred to other members that cannot handle the weight and the building starts
to collapse (tr. 2/7). A building designed to resist progressive collapse must have a
back-up/redundant structural system so that failure is avoided (tr. 2/7, 11/51-52):

5. Mr. Cochran is an architect who was the AF's project manager and design agent
on the TLFNQ contract from June 2003 to November 2004 (tr. 11/6-7). Mr. Cochran
explained that the purpose of a "charrette report" is "to prese_nt the functional and
engineering criteria, design information, procedure and basis of design to document project
requirements" (R4, tab 1474 at 5). The charrette report for the VQ was developed by
Baker (tr. 11/55). The charrette report summary.of the VQ structural design does not
specifically mention progressive collapse but does state at the end of section 3 .3 .4, ''Force
Protection: The structural needs of the VQ are not affected by force protection if the
25-rrieter standoff zone is maintained" (R4, tab 1474 at 27).

6. A 9 September 2003 review of the VQ Charrette report by Ms. Hopkins, PI&T,
included the following comment, "Ch 3, 3.3.4, pg 34[.] We suggest an alternate masonry
wall design using structural brick (e.g., Interstate Atlas Brick). The advantage is a single
brick wall system vs. two wall system (8" CMU and 4" brick veneer)" (R4, tab 467 at 2,
cmt. 20, tab 1761 at 7). Baker responded to this suggestion with, "Baker has investigated
the structural brick systems and do not believe that it is appropriate for this project" (R4,
1761 at 7). Baker went on to explain why it rejected structural brick (id.). Mr. Ward, an
architect with Baker, with assistance from Baker's engineers, wrote Baker's response
(tr. 14/149). Mr. Ward recalled that the use of structural brick was suggested by PI&T and
considered by Baker during-the 35% design phase b~t for a variety of reasons was not used
(tr. 14/143, 149-53). Mr. Cochran recalled "some discussion on structural brick" during
the 35% design phase but he did not recall receiving information on constructability, cost
analysis, product specifications, etc. of the structural brick ·design (tr. 11/64).

7. Ms. Willingham, Non-Appropriated Fund (NAF) program manager, reviewed
· the VQ Charrette report. Her 10 September 2003 comments, number nine, states:
"3.3.4. The position taken by the designer that the 'structural needs of the VQ are not
affected by force protection if the 25-meter standoff zone is maintained' is an incorrect
assumption. The structure does have to be designed to resist progressive collapse {Ref.
UFC4-010-0l, Standard 7) please re-evaluate." (R4, tab 468) 8

8
. On this document the "ACTION" column is blank.
3
 8. Mr. Cochran also reviewed the VQ Charrette report. An entry on the
Charrette Report review, dated 12 September 2003, reads:

[Comment] Chapter 3, Section 3.3.4, page 34, Structural[.]
This paragraph notes force protection is not a consideration
. for structural needs. The charrette report should identity the
threat level, and the structural system designed accordingly.
Verify if the structural system.should be designed to prevent
progressive collapse.

[Action] Concur. In accordance with UFC 4-010-01, the
structure wiH be designed to resist progressive collapse.

(R4, tab 2 at 753, cmt. 10) Mr. Cochran testified that the 35% design team agreed that
the VQ would be designed to resist progressive collapse (tr. 11/58-59). Mr. Cochran
testified that PI&T was responsible for validating that the 35% design included
resistance to progressive collapse (tr..11/59).

, 9. Mr. Williams is an architect and was project manager with AF Services
during the VQ/TLF 35% CD phase through completion of the buildings (tr. 14/204, -
211 ). Mr. Williams testified that resistance to progressive collapse was a requirement
for the Cr;> phase of the VQ (tr. 14/206). During a meeting in December 2003 with
Baker, Mr. Williams told the design team that resistance to progressive collapse was a
requirement for the three story VQ (tr. 15/6-7).

10. Mr; Bennett has practiced architecture since 1989 and is the owner ofKCB .
Architecture (tr. 5/6). During the CD phase Mr. Bennett worked for PI&T. He and two
other PI&T employees (Mr. Martin and Mr. Binks) worked with Baker during
development of the 35% design under a contract with the AF (tr. 5/8~9). Their job was
to look at the preliminary design of the project and constructability (tr. 5/9). However,
Mr. Bennett was not architect of record for the 35% CD (tr. 5/10). Mr. Bennett testified
that he did not recall a detailed discussion of progressive collapse during development
of the 35% design. The progressive collapse requirement was in the statement of work
(SOW) for the Baker 35% design, but he recalled it only played inJhe location and
orientation of the building not in the structural design of the VQ. (Tr. 5/94-95) After it
was awarded the contract, PE hired Mr. Bennett for its contract to complete the design
and construct the TLF and VQ (tr. 1/121). He was the architect of record for the
construction project (tr. 5/6-7). Mr. Lengyel, a licensed architect, worked for
Mr. Bennett and did the day-to-day design work (tr. 5/7). Mr. Aldave, a structural
engineer, also worked on his design team (tr. 4/174-75, 5/7-8).

4
CD & Utilities

11. Mr. Ward is an architect who worked for Baker and participated in the 35%
design of the VQ/TLF (tr. 14/115). He participated in the design charrette (tr. 14/115-16).
Mr ..Ward recalled that after Baker issued the 35% design they gave the "topographic and
utility survey that was done for the TLF and VQ site, in electronic format" to PE
(tr. 14/120). He recalled providing three files, the base map, computer-aided tracking, and
existing utilities (tr. 14/121-22; R4, tab 1762). The utilities Computer-Aided Design
(CAD) file was created based on "GTAB" 9 files provided by the AF (tr. 14/167-68).
Baker did not subcontract for a full utility survey during the 35% design. Baker relied on
GTAB utility information from the AF. (Tr. 188-89)

CD 35% Drawings

12. Mr. Williams produced the 35% design drawings for the TLF and VQ
(tr. 14/133; R4, tabs 1745, 1746). The "Corrected Final Concept Design" drawings for the .
VQ are dated 18 May 2004 (R4, tab 1746). Each of the drawings for both buildings
include the following note. 10

ALL THE INFORMATION INCLUDED IN THE
REQUEST FOR PROPOSAL (RFP) CONSTRUCTION
DOCUMENTS REPRESENTS A 35% LEVEL OF
DESIGN AND IS NOT INTENDED TO REPRESENT A
COMPLETE SET OF CONSTRUCTION DOCUMENTS.
THIS.INFORMATION INCLUDES BUT IS NOT
LIMITED TO ALL GRAPHIC INFORMATION AND
VERBIAGE (TEXT) INCLUDED IN THE DRAWINGS.
SPECIFICATIONS, DESIGN ANALYSIS AS WELL AS
CID AND SID INTERIOR PACKAGE. THIS
INFORMATION ALSO INCLUDES QUANTITIES AND
CAPACITIES INCLUDING, BUT NOT LIMITED TO
ALL UTILITY REQUIREMENTS NEEDED TO
PROVIDE A FULLY OPERATIONAL FACILITY IN
ACCORDANCE WITH ALL APPLICABLE CODES AND
DESIGN GUIDELINES OUTLINED IN THE DESIGN
ANALYSIS. THE DESIGN-BUILD PLUS (DB+)
CONTRACTOR MUST COMPLETE THE DESIGN AND
CONSTRUCTION OF THE McGUIRE VISITING
QUARTERS TO A FULL.Y OPERATIONAL LEVEL OF
. COMPLETION IN ACCORDANCE WITH THE INTENT

9
In the record these are variously referred to as GTAB, G-TAB and G-Tab.
10
The only difference in this note is that the TLF drawings refer to the TLF and the VQ
drawings refer to the VQ.
5
 OF ALL DESIGN(S) REPRESENTED IN THE (RFP)
CONSTRUCTION DOCUMENTS. THE DB+
CONTRACTOR MUST MEET ALL DESIGN
REQUIREMENTS, CODES AND STAND ARDS SET
FORTH IN THE RFP AND MUST FOLLOW THE FULL
DESIGN INTENT REPRESENTED IN THE RFP
CONSTRUCTION DOCUMENTS. IN THE EVENT ANY .
OF THE REQUEST FOR PROPOSAL INFORMATION
REPRESENTED IN THE DRAWINGS;
SPECIFICATIONS, DESIGN ANALYSIS OR CID AND
SID INTERIOR DESIGN PACKAGE MAY BE IN
CONFLICT, THE DB+ CONTRACTOR WILL BE
REQUIRED TO PROVIDE THE MOST STRINGENT
REQUIREMENT(S). THIS PROVISION WILL NOT
WARRANT ANY INCREASE IN THE CONSTRUCTION
COST LIMIT (CCL) OF THE DESIGN BUILD PLUS
CONTRACT AMOUNT.

(R4, tabs 1745-46) Drawing notes for both buildings referred to MAFB architectural
standards (R4, tab 1745 at L-101, tab 1746 at L-101, 502). RFP 8234 specified that the
"face brick" for the two buildings would be:

Brick: Face brick
1. Red Brick: Richtex Corporation, Type D-80, Shade-223
. flashed range wirecut. Size 2-1/4 in. x 3-5/8 in. x 7-5/8
in. ASTM C 216, Grade SW, Type FBS. Or BCE
approved equal.

(R4, tab 2 at 465, 1047)

13. VQ 35% drawings C-102, Site Demolition Plan, C-103, Utilities Demolition
Plan, C-104, Site Geometry and Paving Plan, C-105, Site Utility Plan, and C-106, Storm
Drainage and Grading Plan" each have a version 11 of the following note:.

1. THE LOCATION OF ALL EXISTING UTILITIES
. SHOWN ARE APPROXIMATE BASED ON G-TAB
. MAPPING FROM MCGUIRE AFB CIVIL
· ENGINEERING SQ. THE HORIZONTAL AND
VERTICAL LOCATIONS OF ALL EXISTING
UTILITIES SHALL BE VERIFIED BY THE
CONTRACTOR PRIOR TO CONSTRUCTION,
PARTICULARLY AT NEW PIPE CROSSINGS.

11
Drawings C-102, C-103 and C-104 have slightly different shorter versions of this note.
6
(R4, tab 1746 at 4-8) Mr. Temchin, vice president of program management with Parsons
(tr. 2/96), testified that Parsons went to the base "field shop" where the drawings were
maintained and asked for the drawings showing what was in the ground. The base
maintained two sets of "G-Tab" drawings, one for active utilities and one for abandoned
utilities. The abandoned utilities G-:-Tab drawings were never given· to PE. (Tr. 5/242-43)

14. VQ 35% drawing C-106, Storm Drainage and Grading Plan, includes a
stormwater detention basin, sometimes referred to as a "pond," and includes the following
note:

3. THE SIZE OF THE STORMWATERDETENTION
BASIN WAS APPROXIMATED BASED ON
CONTROLLING THE PEAK OF THE 1.5 YEAR STORM
EVENT. DURING FINAL DESIGN, A DETAILED .
HYDRAULIC ANALYSIS SHALL BE CONDUCTED AT
THE EXISTING CULVERTS DOWNSTREAM OF THE
BASIN OUTFALL (ACROSS MITCHELL ROAD) TO
DETERMINE IF A LESS-FREQUENT, HIGHER-
MAGNITUDE DESIGN STORM WOULD BE
APPROPRIATE. DURING FINAL DESIGN, THE
CONTRACTOR MAY CONSIDER OTHER OPTIONS TO
ADDRESS THE INCREASED PEAK FLOWS
INCLUDING UNDERGROUND DETENTION,
OVERSIZED STORM DRAIN PIPES, AND/OR
UPGRADING THE MITCHELL ROAD CULVERTS, OR
DO NOTHING AND ACCEPT THE CONSEQUENCES
OF HIGHER FLOWS. FINAL DETERMINATION
REGARDING SWM SHALL BE MADE DURING FINAL
DESIGN. IF SWM IS DISCARDED, THE STORM
DRAIN SYSTEM COULD BE RE-CONFIGURED TO
MORE DIRECTLY DISCHARGE lNTO THE CHANNEL
ALONG MITCHELL ROAD.

(R4, tab 1746 at 8, drawing C-106) The VQ 35% design, drawing C-106, Storm Drainage
and Grading Plan, shows a "Stormwater Basin" with "BOTTOM ELEVATION= 106.00"
(id.). Mr. Morrison, AF Center for Engineering and the Environment (AFCEE) 12 (R4, tab
213 at 337), program manager, testified that the EPA required that stormwater be retained
on the site but that a basin was "problematic in or near an airport or an Air Force base
because birds collect there and they're problematic for aircraft" (tr. 11/220). He explained
that the basin on drawing C-106 was 'just a place holder on the low spot on the site" and the

12
AFCEE provided technical support to the contracting officer (R4, tab 213 at 337).
7
contractor would have to do a percolation test to see how much water the basin would .
absorb in a 12 to 24 hour period to design the basin (tr. 11 /221).

IDIQ Contract

15. On 12 December 2003 AFMC awarded Parsons Infrastructure and Technology
(PI&T), indefinite-delivery, in.definite-quantity (IDIQ) Contract No. FA8903-04-D-8703
(contract 8703) in the total program amount of amount of$2.1 billion (R4, tab 1 at 1-5).
The contract provided that planning and programming (CLIN 1), constructability and
parametric estimates (CLIN 2), and construction (CLIN 3) services would be detailed
under "subsequent task order Statements of Work (SOW)" (id. at 2-5). Contract 8703
incorporated FAR 52.233-1, DISPUTES (JUL2002)-ALTERNATE I (DEC 1991); and
FAR 52.23.6-2, DIFFERfNG SITE CONDITIONS (APR 1984) (R4, tab 1 at 24).

Demolition Work

16. The VQ was to be constructed in a location where swimming pools existed
that required demolition (R4, tab 1746 at 4, drawing C-102). By email dated 29 April
2004 to Ms. Willingham, Mr.- Cochran, AFCEE, expressed concern that the demolition
of the pools had to be properly monitored to ensure that select fill was placed in the pool
excavation to avoid "unforeseen site conditions" (tr. 11/92-94; R4, tab 4248 at 2). By
email dated 14 May 2004 to Mr. Martin, PE's 13 project manager, !Lt McAlpine, project
manager, Civil Engineer Squadron; MAFB, informed him that another contractor would
perform the demolition of the Officer's Club pools and that contractor "would need to
ensure the backfill was placed in compacted lifts to ensure it would be suitable for the
future building" (R4, tab 3831 at 3). Mr. Martin responded 14 on 16 May 2004 stating
that the calculations for structural fill could not be completed until PE received the final
DB+ contract and if the fill placed by the demolition contractor did not meet the fill
requirements, it would have to be removed and replaced by PE at AF expense (id. at 3).
Mr. Cochran responded to Mr. Martin on 17 May 2004 stating that the backfill
requirements for the demolition contract were standard specifications on MAFB -and
should be acceptable for construction and that no additional costs would be expected
(id. at 2). Mr. Martin responded on 17 May 2004 stating that had PE been selected to
do the demolition the adequacy of the fill would ,not be an issue (id. at 1).

Novationfrom PI&T to PE

17. PI&T was involved in Parsons' purchase of "Evergreene" a construction
company, renamed Parsons Evergreene (PE) (tr. 1/110-11). Modification No. POOOOI to
contract 8703, dated 7 September 2004, changed the contractor from PI&T to PE based on
a novation (R4, tab IA).

13 PI&T had not yet novated the contract to PE.
14
Mr. Martin's email address was Tony.Martin@parsonsevergreene.com (R4, tab 3831 at 2).
8
 Request for Proposals (R.FP) for 100% Design and Construction Task Order

18. Request for Proposal (RFP) No. FA8903-05-R-8234 (RFP 8234), dated
10 February 2005, solicited proposals for the task order (T0) 15 under contract 8703 to
complete the 100% design (from the 35% design) and construction of the TLF and VQ
(R4, tab 2 at 1). 16 The Baker 35% design analysis is the basis for the RFP (tr. 5/62; R4,
. tab 2 at 692). RFP 8234 included the Independent Government Estimate (IGE) for the VQ
of $17,977,243 and TLF of$15,373,500 for a total of $33,350,743 (R4, tab 2 at 2) ..
Award was to be "to the contractor offering the lowest price" (id.). RFP 8234 included
the SOW for the TLF, PTFL 04-5000, and the VQ, PTFL 02-3004 (ic/. at 1). Bidders were
informed "Only upon receipt of the executed TO will you commence work" (id. at 2).
The notice to proceed (NTP) was to be issued not later than 30 days after award and,
"Construction services shall not commence until the bortds have been submitted and
approved and a NTP has been issued by the Contracting Officer" (id.).

19. RFP 8234 includes a SOW, dated 20 January 2005, for the TLF and VQ that
includes the following note to paragraph 3 .0 Scope:

Note: Site demolition is not required. The demolition has
been accomplished locally by others. The site is clean and
ready for construction. Mock-up rooms for the VQ are not
required in this project. All references to mockup rooms are
not applicable.

(R4, tab 2 at 5)

20. RFP 8234 includes the following concerning the construction site:

1.7 DATABASE: These specificat.ions and accompanying
drawings were prepared using data derived from the
original construction drawings and from site visits. The
construction shown shall not be construed as exact or
complete nor are minor variations covered. It is
recognized that site conditions referred to vary and that
those building and site conditions ordinarily
encountered and generally recognized as inherent in
work of this character may include variations. The

15
Task order and delivery order are used interchangeably in the documents.
16
The PDF page numbers in Rule 4, tab 2, do not match the numbers marked on the
pages. There are 1,874 PDF pages in tab 2. The.last page number marked on the
page is 2,434. The AF brief refers to numbers marked on the pages but we use
the PDF page numbers.
9
 contractor shall he responsible for determining the exact
conditions at the site and building and shall accept
them, as they exist at the time of contract award,
regardless of whether or not the contractor visited the
site prior to award: The contractor shall verify. all
measurements of existing conditions before ordering
sized materials. If materials are ordered on the basis of
what is shown on the construction drawings without
verification of existing conditions, the contractor does
so at his/her own risk and expense. All existing field
conditions shall be accounted for in all required shop
drawings. Actual dimensions and elevations take
precedence over any shown in the contract drawings.

(R4, tab 2 at 287) 17

21. RFP 8234 require~ submission of a Critical Path Schedule and included an
estimated "Design/Construction Schedule" starting with contract award on 15 February
2005 (R4, tab 2 at 294). It also included procedures for submittals:

. SECTION 01330-SUBMITTAL PROCEDURES

1.6 PROCEDURES FOR SUB MITTALS

C. Scheduling .

. 2. Except as specified otherwise, allow review period,
beginning with receipt by approving authority, that
includes at least 15 working days for submittals for
QC [Quality Control] Manager approval and 20
working days for submittals for contracting officer
approval. Period of review for submittals with
contracting officer approval begins when the
Contracting Officer receives submittal from QC
organiz~tion .. Period of review for each resubmittal is
the same as for initial submittal.

17
This paragraph is found on a page identified with the TLF, however, we interpret it to
·apply equally to the VQ because pages for the VQ and TLF are comingled in
RFP 8234 (R4, tab 2 at 350-51).
10
(R4, tab 2 at 330, 337) The "QC Organization Responsibilities" section requires that
the date of receipt from the contractor be noted on each submittal. The QC organization
then reviews the submittal (id. at 339). When the QC manager is the approving
authority, the manager will take the appropriate action in accordance with specification
01330 paragraph J. 6. b~ (id. at 340). When the contracting officer (CO) is the
approving authority, the QC organization will certify that the submittal is acceptable
and forward it to the CO (id. at 339). RFP 8234 included a list of key personnel
identified as located in Texas, Illinois, and New Jersey (id. at 1757-58).

22. RFP 8234 included the following concerning the High Temperature Hot
Water (HTHW) system:

The proposed high temperature hot water (HTHW)
service line will connect to a new HTHW main line, which
will connect at the.existing main along East Arnold Avenue
Gust west of the VQ) and extend eastward to Mitchell Road.
The new main will service both the new VQ and planned
TLF facility on the other side of Mitchell Road. The
capacity of the existing system at this point of connection
shall be verified during final design.

(R4, tab 2 at 701)

23. RFP 8234, Attachment No. 2 included a clause setting liquidated damages at
$5,043 a day that PE was late in completing the project (R4, tab 2 at 1807). It also
included a clause concerning "record drawings":

_Record drawings showing existing underground utilities will
be provided or made available to the Contractor. Record
Drawings shall be made available by the base C.E. at
McGuire AFB, NJ. Any utility-line shown on the record
drawings (or made knownto the contractor) and damaged
during construction work, will be repaired immediately by
the contractor at no cost to the Government

(Id. at 1808)

24. RFP 8234, Attachment #4 was Davis-Bacon Wage Determination
No. 120030002 dated 21 January 2005 (R4, tab 2 at 1811-34).

11
RFP 8234 - Standing Seam Metal Roof

25. RFP 8234 required a standing seam metal roof (SSl\!IR) for the TLF and VQ
(R4, tab 2 at 506, 1089). Specification Section 07411 Metal Roof Panels (SSSMR), 17
paragraph 1.6, "PRODUCTS," A.5. required, "Panels shall be manufactured of adequate ·
metal gauge an_d rigidity to eliminate any 'oil canning' effect" (R4, tab 2 at 507, 1090).
Oil canning is a waviness in the metal roofs (R4, tab 116 at 14).

26. When PE contacted subcontractors to bid on the SSMR, they all took exception
to the requirement to "eliminate" oil canning stating that it could not be eliminated (tr.
3/87-88). Mr. Temchin, PE's vice president, testified that the first RFP language made "no .
sense" because it was impossible to "eliminate oil canning" (tr. 6/l 74r On 24 March 2005
Amendment No. 1 to RFP 8234. was issued (R4, tab 2A at 1). The language concerning the
SSMR was changed:

5. COMPONENTS: SSSl\!IR.panels shall be 13 inches to 19
inches in width and standing seams shall be a minimum
of 2-1/2 inches in height. Though "oil canning" is
inherent in sheet metal formed panels. [sic] The panels
shall be manufactured of adequate metal gauge and
rigidity to eliminate or seriously minimize any "oil ..
canning" effect. The Government will not release any
Contractor/ Manufacturer liability for rejecting SSSMR
panels on the basis of the ''oil canning" effect on the final
installed system. All fasteners shall be concealed and
_applied sealants shall be the same color of the SSSMR
system.

(R4, tab 2A at 20) Liquidated damages were reduced from $5,043 to $1,347 per day. The
estimated construction costs were revised to VQ - $18,053,320 and TLF - $15,525,546.
(Id. at 1-2)

RFP 8234 -Amendment No. 2

27. On 5 April 2005 Amendment No. 2 to RFP 8234 was issued (R4, tab 2B at 1). -
The amendment replaced the SOW with a revised version dated 31 March 2005 18 that
included the following:

17
"SSSMR" stand for Structural Standing-Seam Metal Roof Panels (R4, tab 2 at 507).
We use Standing Seam Metal Roof (SSMR).
18
All future reference to the SOW refer to the 31 March 2005 version.
12
 \

2.0 Purpose:

[delete]
Construct a 175 room multi story Visitors Quarters (VQ), a
50 unit Temporary Lodging Facility (TLF), and all support
facilities as identified and Needs Assessment Study. The
rn10 projects 1,.vill be interconnected and constructed on
adjacent sites.l 19 1

[substitute]
The contractor will utilize the t~ttached concept design to
· generate the construction drawings and build a 175 room
multi-storv Visitors Quarters (VO), a 50 unit Temporarv
Lodging Facility (TLF) 011 adiacent sites.

3.0 Scope:

Note: Site demolition is not required. The demolition of
the houses and swimming pools has been accomplished
locally by others; remaining site 1rork and utiliD-' work pe1~
the drawings is required. Electrical lines must be relocated
and transformers removed and turned in to the base. +he
site is elean and ready for constn1etion. Mockup rooms
for the VQ are not required in this project. All references to
mockup rooms are not applicable.

(R4, tab 2B at 6) 20 The SOW listed the attachments as, "Concept Design Documents
(2 CDs): TLF, VQ dated 5/18/2004, Rickenbacker October 2004" (id. at 11). The 35%
drawings are dated 18 May 2004 (R4, tabs 1745-46). Mr. Morrison was the AF
construction manager and contracting officer's representative (COR) for the TLF/VQ
project from January 2004 to September 2005 (tr. 11/153, 227). He drafted Amendment
No. 2 (tr. 11/165). He explained the change to the note was a response to questions from
bidders and the fact that "we realized that it might [be] clearer to say that the demo had

19
This lined through language was riot shown in the amendment, it was simply deleted.
We show it lined out here to enable comparison.
20
The words in bold/strikethrough· were deleted (tr. 1/179-80). The words in italics and
underlined were added.
13
been accomplished but there still remains some utilities and electrical transformers, et
cetera, in that area. Again, the - the fill dirt was supposed to be clean, but we realized
there was some subsurface utilities that need to be dealtwith." (Tr. 11/165)

28. SOW paragraph 3.2.2.2, Working Drawings, Construction, Delivery and
Warranty, reads: ' ·

At the conclusion of the CD phase, the Government will
issue a separate task order with a RFP or RFQ and thus,
transition from the Concept Definition Phase to the
Construction Phase. During the Construction Phase, design
completion, construction, and the delivery and warranting of
the projec_t/facility takes place. It is the intent of the.
Government to require the DBP03 contractor to use the
results of studies and investigations conducted during the
CD Phase by the same or a different DBP03 contractor. If
the same DBP03 contractor performs these studies and
investigations during the CD Phase and is awarded the
Construction Phase task order for essentially the same
project, then the DBP03 contractor is responsible for the
results of its efforts during the CD Phase. See paragraph 7
for possible Construction Phase tasks at the task order level.

(R4, tab 2B at 7) (Emphasis added)

Pre-Bid Questions and Answers

29. The record contains three sets of pre-bid questions and answers (R4, tabs 4, 21
52, 25 22 ). We consider them in chronological order.· A pre-proposal conference was held
on 2 March 2005. Attendees submitted questions in the form of Requests for Information
(RFis ). Answers to the RFis were provided in a 22 March 2005 memorandum by
CO Macdecy 23 (R4, tab 52). Three of the RFI's and answers are:

6. RFI: It appears the VQ structure was designed without
a provision for progressive collapse. Is this
.feature not required for this facility?

21
This document is also at Rule 4, tabs 24, 513.
22
These same questions and answers were emailed to bidders on 20 April 2005 (R4, tab 518).
23
Between 2004 and late 2005, Mr. Macdecy was the CO on the MAFB TLFNQ contract
(tr. 10/161-62).

14
 Answer: Yes, progressive collapse features are required for
VQ ! The architect of record resulting from the
award of a task order under the DBP03 concept
will be expected to include this feature in the final
stamped drawings.

8. RFI: Has any environmental testing been accomplished
post demolition and has an environmental
baseline of the site been established? If so, is it
available?

Answer: No to all three questions. The site is clean and
ready for construction. The SOW utilized by the
base in the demolition contract did not require
compaction of fill dirt.

l3. RFI: Will copies of fill reports and geotech reports on
the demo'd pools be provided?

Answer: No. A Geotech report for the swimming pools
does not exist. It should be assumed that soil
content is at least equivalent to the worst
condition level permitted in the Base Demo
contract requirements.

{R4, tab 52 at 2,. 3) Mr. Morrison, the AFCEE Program Manager, testified that the base
assured him that the backfill_would be clean but not compacted (tr. 11/161, 163-64).

30. On 7 April 2005 PE received AF answers to various additional questions
(R4, tab 25 at 1). In an email dated 20 April 2005 to PE, with a copy sent to
CO Macdecy, Mr. Hillestad who worked as a contracted contract specialist for the
government during the RFP phase (tr. 10/ 114 ), sent out the same set of questions and
answers (R{ tab 518). Concerning the VQ, question and answer number 3 is as
follows: .

3. Concerns continue to exist regarding the adequacy of the
structure as shown in the_ 35% documents to satisfy the
progressive collapse requirements. Confirm the
structural adequacy of the pre-cast has been confirmed in
the 35% submittal calculations. All roof loads and the

15
 line load of the third floor-are transferred to the third
floor hollow core planks (See Section 2 / A-302). Are
we allowed to substitute assemblies and structural
systems in order to be compliant with the progressive
collapse requirement provided the performance
requirements and appearance of the building are
satisfied. Yes, the drawings are concept only. You
have the responsibility to generate. the construction
details and drawings. Tim Morrison, AFCEE/HDM

Note[ 24J: A design to provide a facility compliant with
the Progressive Collapse criteria would require
substantial work at a considerable additional
compensation.

(R4, tab 25 at 3) A copy was sent to CO Macdecy (R4, tab 518 at 1). Drawing A-302 is
an architectural drawing that shows the Baker double wall design (R4, tab 1746 at A-302).
This question specifically points to Wall Section 2 on drawing A-302 where the thirq floor
roof load is transferred to the third floor hollow core plank. instead of the second floor
reinforce9 concrete masonry wall. We find that this is at least one place in the design .
where the progressive collapse problem is found. Neither party presented testimony on the
meaning of the note warning of substantial work at considerable expense to provide a VQ
that meets progressive collapse. Mr. Bennett testified that this question and answer
demonstrated that the 3 5% design "was a concept that therefore needed to be fully fleshed
out and developed with the responsibility of the Design-Build tearri to do that very thing to
bring the design to the completion" (tr. 5/23).

31. There were a total of 32 questions and answers in the memo and the statement (or
words to that effect) "The drawings are concept only. You have the responsibility to generate ·
the construction details and drawings. Tim Morrison, AFCEE/HDM" was used 7 times
therein in the responses to questions (TLF) Nos. 2, 3 (VQ) Nos. 1, 3, 12 (TLFNQ) Nos. 6, 7.
(R4, tab 25 at 2-6)

· 32. A 5 April 2005 memo by CO Macdecy containing a set of consolidated
questions and answers was sent to the bidders on 7 April 2005 (answer in. bold italics):

7. Page 6- The second paragraph references Buildings 33
and 3 5. These buildings do not appear anywhere near
the Sanitary POC on C-104. The scope of the
recommended "downstream survey" is hard to finitely

24
This note was part of the original question (R4, tab 4363 at 4).

16
 estimate until a copy of the Base "G-Tabs"r 25 1 is
received.

Refer to attached "G-Tab" files that were provided to
the Title I AIE. DB+ contractor needs to verify that
these are the most up to date G-Tabs available.

15. Page 82- Item #8- Has the "Note 2" on C-104 been
modified to indicate the capacity of all utilities are
adequate as per response provided?

A site utility survey was not performed by Baker. .All
capacities were derived from G~Tab.information or
were provided by Base CE.

21. It is assumed that the location and elevation of all utility
"capped" locations "By Others" will be documented,
physically marked, and provided to successful offeror.

No information is available. Lines are capped at the
main and abandoned in place. Only the electrical
service must be relocated as part of this project per the
drawings.

42. Page 6- Para 2.5- Should the service line from the new
HTHW main be tied into the main with a manhole and
valves? (See also question 13 above)

This is to be determined duringfinal design. The DB+
. contractor shall be required to address this.

25
"G-Tab" drawings are a base map that purports to show all of the utilities and their
location and identification (tr. 11/166). It was provided to all bidders (id.).
Mr .. Morrison testified that the G-Tabs would show all of the locations accurately
(tr.11/169). ·

17
 A minimum of two (2) new HTHW manholesl26 l shall
be required, one at the tee for the VQ and a second on
the TLF site POC. Note to all contractors there are a
lot of existing utilities along East Arnold gas, phone,
water, etc. (both sides). Extreme care will be required
when approaching and crossing east Arnold with the
HTHW/ines.

,.43. Page 6- Para 2.5- What is the capacity of the· existing
HTHW system at the proposed tie-in point?

Refer to the drawings (H-201). This will have to ~e
verified by the DB+ contractor.

46. Page 28-Para 5.7.1- Last bullet- Ceilings in corridors
are indicated as GWB and at 9' -0". These will need to
be lowered to 8'-0" and 'revised to acoustical ceil_ing to
facilitate necessary water, electrical and communication
rough in fat each floor.

The space above the corridors was designed around a
9'-0" corridor ceiling height. This is only a 35% level
of design, so not every access panel is shown. There
are alternative design solutions that the DB+
contractor may have to implement in order to achieve
the design intent of the RFP drawings. The end user.
and the VQ design guides both specified the need for
gyp. board in the corridors and to have a 9'-0" ceiling
height. If the contractor feels they need to deviate
· from this requirement, then the base will have to
authorize this change.

48. Page 32 - Civil -Are the results of the "key manhole
study" available yet?

26
Neither party submitted evidence of the location of the two new manholes; however,
one is "on the TLF site" and we found the other on VQ 100% drawing C-107
where the new HTHW line divides into two lines for the VQ and TLF, i.e., the
''tey" (R4, tab 1755 at sheet 9, drawing C-107). ·
18
 A key manhole study was never performed. The
design was based on information taken from the base
map/G..,tab data.

51. Page 82'." Item 1- Is the scope of all required utility,
demolition indicated on C-103 or will the Gov't use the
"catch all" notes to require additional demolition
without additional reimbursement?

It remains the responsibility of the DB03Plus
Contractor to determine requirements utilizing
existing documentation and drawings to complete the
final designs and project requirements. Should
changes occur involving additional and/or
. unanticipated work post mobilization, the Contractor
has recourse under various provisions of the contract.

61. Dwg. C-102 & C-103 - Site visit revealed that some of
the demolition indicated on this drawing has been
accomplished. It is assumed that all demolition below
grade has been completed in accordance with contract
requirements and that all backfill is compacted in .
accordance with contract requirements. What items
indicated on this drawing have not been accomplished
and remain part,ofthis contract? Are demolished
utilities physically marked at capped locations?

See the attached base demolition SOW to amendment
#1. The backfill is clean but not compacted. Use the
worst soil boring sample for calculations. Utilities
are capped at the mains and lines abandoned in
place. Electrical system must be re-routed and
· transformers removed and turned in to the base.

68. Dwg. C-105 -Are there any HTHW manholes
required?

The DB+ Contractor will need to make this
determination. However, a (minimum) of two (2) new
HTHW manholes shat/be required, one at the tee for

19
 the VQ and a second on the TLF site POC. Note to
all contractors there are a lot of existing utilities
along East Arnold gas, phone, water, etc. (both sides) .
.Extreme care will be required when approaching and
crossing east Arnold with the HTHW lines.

70. Dwg. C-106 -Location of proposed HTHW line is
drawn through proposed storm drain lines, headwalls,
and catch basins. It is assumed that the location of the
new HTHW can be relocated south to avoid these
structures.

DB contractor shall be required to provide new
routing for all new utilities to avoid existing/new
structures, utilities, trees, etc.

(R4, tab 4 at 3-5, 7-10) Mr. Morrison testified about the answer to question 68:

In our preliminary design, we determined that it looks like
it's going to take twE's quantum section. Additionally, because we agreed to decide quantum, there are
several areas where we agreed PE was entitled to recover but because our decision
varied from PE's quantum presentation we could not calculate an amount for PE.

35%Design

In numerous places in its brief PE refers to RFP 8234 35% design as if the 35%
design survived the approval of PE' s 100% for construction design., We address that
argument here rather than each time it appears. The 35% design was used in the
contract solicitation and bidding process (finding 18). After award, PE was required to
complete the design and construct the buildings. PE's 100% Site Civil/Structural
. drawings for the TLF ( 17 April 2006) and VQ (27 April 2006) completed the design for
the foundations (finding 90). PE's 100% for construction drawings for the entire project

108
were approved on 24 July 2006 (finding 99). Thereafter, the 35% drawings·become
irrelevant to the construction of the buildings. For the reasons stated in this decision,
the only exception relates to progressive collapse.

"NewArguments"

PE includes Addendum A, PFF Analysis, to its reply brief. In it PE lists and
comments upon every numbered Proposed Finding of Fact (PFF) in the AF's brief. One
column in the Addendum is titled "New Argument" where "X" indicates the PFF is an
argumerit PE has not seen before. PE asks the Board to reject these new arguments:

NEW ARGUMENTS. Government counsel have combed
selectively through the contract documents and exhibits and
come up with a number of completely new arguments and
interpretations. We ask the Board to reject such new
defenses as untimely, and because Appellant never had an
opportunity to challenge them either through
cross-examination or through its own witnesses at trial.

(Addendum A at 1) The problem with PE's request is that all the documents used by the
AF in these "new arguments" were admitted into the record without objection from PE.
Such argument is acceptable. See, e.g., United Technologies Corp., ASBCA No. 25501,
86-3 BCA ,r 19,171 at 96,920 ("Attachment A to the Government's brief presents
arguments of data contained in Rule 4, tab 44, Exhibits G-15 and G-5, tab C. Arguments of
evidence in the record are permissible. Attachment [A] shall remain in the brief."). 102 The
record in this case includes over 3,000 Rule 4 tabs, some tabs having hundreds and a few
over a thousand pages. It is clear to us that this is a danger associated with extensive
electronic Rule 4 files. With electronic files, it is easy for the parties to "dump" so many
documents into evidence that they simply do notknow what is in the record and certainly
cannot use them all. Nevertheless, in the circumstances before us here, the documents PE
complains about are in the record, they are fair game for use by either party. We deny PE's
request that we "reject" these "new arguments."

FAR 31.201-2 Determining Allowability

PE accurately identifies the elements listed in FAR 31.201-2 required to determine
that a cost is allowable:

102
Changes to spreadsheets attached to the government's brief that had previously been
introduced into evidence were not allowed. United Technologies, 86-3 BCA
,r 19,171 at 96,923. Summaries of voluminous documents (invoices) without
citation to the record have likewise been stricken for lack of authentication.
Versar, Inc., ASBCA No. 56857 eta!., 12-1 BCA ,r 35,025 at 172,118.
109
 (I) Reasonableness.

(2) Allocability.

(3) Standards promulgated by the CAS ?oard, if applicable,
generally accepted accounting principles and practices
appropriate to the circumstances. ·

(4) Terms of the c~mtract.

(5) Any limitations set forth in this subpart.

(App. br. at 427-30) In its brief the AF identifies which of the elements it contests,
"What Respondent contests is the allegation that the incurred costs were caused by
Respondent or were reasonable in amount" (gov't br. at 475). This narrows our inquiry
to reasonableness and causation.

PE's Claimed' Costs were Incurred

At the request of the AF, DCAA verified that the claimed costs were incurred
(findings 211, 213-19). Mr. McGeehin found that all of PE's claimed costs were .
actually incurred (tr. 17/59). The AF does not take issue with DCAA's finding, "The
fact that Appellant incurred its claimed costs is not at issue in the litigation -
Respondent concedes that Appellant incurred costs" (gov't br. at 475).

PE's Incurred Costs are Allocable to DO 13

Mr. McGeehin found that all of the incurred costs were allocable to the contract
(tr. 17/59-60). The AF does not contest that PE's claimed costs are allocable.

PE's Bid was Reasonable

Even though we do not see this as a modified total cost claim, we feel we need to
deal with this point. We evaluate bid reasonableness primarily based on what was known
before award. PE discusses the process it went through to arrive· at its bid consisting of
Mr. Tengler's calculation of the bid, Mr. Booth's "check estimate," the U.S. Cost estimate
and the executive review meeting (app. br. at 435-40; findings 59, 60). The AF responds
with various facts in support of its argument that the bid was unreasonable (gov't br. at
477-81). The AF argues that because PE failed to implement its mitigation strategy to

110
address cost escalation 103 after award its bid must have been unreasonable (id. at 479).
We disagree.

Whether a cost is reasonable is a question of fact. Kellogg Brown & Root
Services, Inc., ASBCA No. 58081, 17-1 BCA 136,595 at 178,240 (The Federal Circuit
additionally noted that cost reasonableness "is a question of fact."). We understand the
same to be true for the reasonableness of a bid. In Ingalls Shipbuilding Division, Litton
Systems, Inc., ASBCA No. 17579, 78-1BCA113,038, we explained that "the purpose
of an accurate bid or estimate is to enable us to determine with some degree of
reliability what portion of the actual cost exceeds what it properly should have cost."
Id. at 63,671. While we agree with PE that the process it used to reach its bid price was
logical, that is only one factor we consider in arriving at our conclusion that the
$33,566,277 bid was reasonable.

We consider the unusual way the bids were solicited and evaluated. RFP 8234
informed bidders that contract award would be "to the contractor offering the lowest price"
(finding 18). RFP 8234 included the AF's IGE for the VQ of $17,977,243.00 and TLF of
$15,373,500 for a total of$33,350,743 (id.). There was also something called the
Construction Cost Limitation (CCL) that was mentioned in a note on the 35% drawings
(finding 12). However, the amount of the CCL of $33,598,568 was not disclosed in RPF ·
8234 but was discussed in the Price Competition Memorandum (PCM) (finding 61). The
CCL was only about $250,000 greater than the IGE. The CCL appears to be a price-cap
imposed by the AF on the award of the contract. We come to this conclusion based on the
PCM that stated the two other bidders, MWH and Caddell, were "too far out of range [over
the CCL] to allow further consideration" and "were deemed irreparably high when
compared with the CCL, the IGE and the offer from Parsons" and were "rejected out cif
hand" (findings 62-63). The AF then negotiated with PE to allow "award within the funds
set forth in the CCL" (finding 63). The AF then found that PE's bid was reasonable based
on "adequate price competition" (finding 64 ). 104

We are not convinced that the AF acted appropriately in its pre-award dealings
with PE. If there was truly price competition we would expect the record to reflect AF
concern that PE's bid might be mistaken. We understand that the AF asked PE if it
would confirm its bid but did not point out the disparity between PE's bid and the other
two bids (finding 60). To the contrary, the AF rejected the other two bids "out of hand"

103 PE planned to require subcontractors to hold their bids for 120 days, that bids would
include material costs, that "volatile materials such as concrete and steel" were to
be purchased within that 120 days and "stored either on site or in bonded and
insured warehouses" (finding 58).
104
We recognize that the government's pre-award assessment that a bid was reasonable
is not binding on the Board. Grumman Aerospace Corp., ASBCA No. 48006,
06-1BCA133,216 at 164,620-21.

111
and focused solely on getting PE within the CCL. We understand we are not dealing
with a mistake in bid/reformation case because PE defends its bid. However, FAR
imposes an obligation on the government to guard against mistakes in bid. 105 This
obligation is not diminished by the fact that award is based on price alone. There is no
evidence in the record that the AF ever considered alerting PE to a possible mistake. The
record convinces us that the only thing the AF was interested in was getting PE's bid at
or below the CCL, mistaken or not. 106 Now, when it suits the AF's purposes, it argues
that the two higher bids are proof that PE's bid is unreasonable (gov't br. at 477-78). We
will not give any weight to this argument given the AF's completely contradictory
behavior before award.

We also consider the fact that DCAA's conclusion that PE's bid was
unreasonable was based on the AFCEE's technical evaluation of the claims. DCAA
noted that since the AFCEE technical evaluation found there was no "cardinal
change," 107 the 100% overrun indicates the bid was unreasonable (finding 217). We do
not agree with DCAA's conclusion because, contrary to the AF's technical evaluation,
we find in this decision substantial changes and delays that increased the cost of
performance for which the AF is responsible. Other post-award factors such as
commodity and labor price escalation and PE's failure to execute its pre-award
mitigation plans, do not support the conclusion that PE's bid itself was unreasonable.
By way of example, if the fair market price for concrete was $10 .00 a unit before award
and $20.00 a unit when it was purchased, both prices were reasonable. We find that
PE's bid was reasonable.

PE's Costs are Reasonable

It is PE's burden to prove its claimed costs are reasonable. PE argues its costs
are reasonable because, "The Contracting Officer asked DCAA to verify that Parson's
actual incurred costs were reasonable, and the DCAA audit report did not question the
reasonableness of those costs (R4, tab 213 at 109-112)" (app. br. at 427). This ts not
accurate. The record cite provided by PE does not support PE's argument. The DCAA
audit report indicates that the contracting officer asked DCAA to verify that the claimed
costs were incurred. In response, DCAA traced the applicable costs in job cost ledgers
to supporting accounting records and source documents and found that the claimed costs

105
FAR 14.407-1 requires that when a "contracting officer has reason to believe that a
mistake may have been made, the contracting officer shall request from the
bidder a verification of the bid, calling attention to the suspected-mistake." We
discussed this obligation in Orion Technology, Inc., ASBCA No. 54608, 06-1
BCA, 33,266 at 164,854-55.
106
The AF's expert, Mr. Rushing, seems to reach the same conclusion, "It appears this
discussion effort was geared more toward getting the Parsons team to the CCL than
with clarifying their understanding of the RFP requirements" (R4, tab 1449 at 7).
107
We have no idea why AFCEE and DCAA focused on a "cardinal change."
112
 were incurred. (Findings 211-20) In its audit, DCAA did not challenge the
· reasonableness of any specific costs. DCAA generally questioned all costs based on the
AF's flawed te.chnical review basically finding no entitlement.

The AF argues that PE's claimed costs were not reasonable because it "failed to
perform in accordance with its bid plans" and failed to hold subcontractors to fixed
price bids, and failed to implement its mitigation plan (gov't br. at 481-82). We agree
that PE failed to fully execute its plans, but we fail to see how this relates to the
reasonableness of specific ii:curred costs.

PE's costs are not presumed reasonable just because they were incurred. Northrop
Worldwide Aircraft Services, Inc., ASBCA Nos. 45216, 45877, 96-2 BCA ,r 28,574 at
142,628-29. Although the AF accurately quotes FAR 31.201-3(a) (gov't br. at 476-77), it
fails to properly interpret the clause. We focus on the following language:

Reasonableness of specific costs must be examined with
particular care in connection with firms or their separate
divisions that may not be subject to effective competitive
restraints. No presumption of reasonableness shall be
. attached to the incurrence of costs by a contractor. If an
initial review of the facts results in a challenge of a specific
cost by the contracting officer cir the contracting officer's
representative, the burden of proof shall be upon the
contractor to establish that such cost is reasonable.

FAR 31.201-3(a) (Emphasis added) When interpreting a procurement regulation, ''we
seek an interpretation consistent with the plain terms provided; it is not our prerogative
to insert additional words or phrases to alter an otherwise plain and clear meaning."
Raytheon Company, ASBCA No. 57576 et al., 15-1 BCA ,r 36,043 at 176,050. The
critical language is, "If an initial review of the facts results in a challenge of a specific
cost by the contracting officer or the contracting officer's representative, the burden of
proo.f shall be upon the contractor to establish that such cost is reasonable." This
language in FAR 31.20 l-3(a) is unambiguous. It requires two actions by the
government: (1) it must perform an "initial review of the facts," and (2) that review
results in a "challenge" to "specific costs." It is the contractor's burden to prove the
reasonableness of the challenged specific costs.

We interpreted FAR 3 l .201-3(a) in our recent case of Kellogg Brown & Root,
17-1 BCA ,r 36,595, where we recognized that contesting reasonableness "is significant
because it shifts the burden of proof'to the contractor. Id. at 178,240. We went on to
hold that a general assertion that all costs are unreasonable is insufficient to require the
contractor to do more to prove reasonableness:

113
 [T]he Navy also asserts that the disallowed costs are all
improper on a price reasonableness basis. However, the
Navy does not cite any specific evidence challenging the
reasonableness of these costs, instead simply asserting that
the costs are unreasonable. Based upon the evidence
presented, including KBR's testimony that BE&K was the
only offeror able to provide the required labor, and was the
lowest bidder with the prices of the two other offerors being
roughly 50% higher (finding 95), the Board finds that the
cited costs were reasonable.

Id. at 178,250 (Emphasis added).

We must consider if the AF satisfied FAR 3 l.201-3(a). The CO requested a
. DCAA audit of PE's claim. We hold that DCAA's audit satisfies the requirement for an
"initial review of the facts." However, although DCAA found that PE's claimed costs
were incurred, it relied on the AFCEE's technical_review to question all of the costs in
PE's claim. As is obvious from this decision, AFCEE's technical review was wrong.
Neither DCAA nor the AF challenged the reasonableness of any "specific costs" in the
claims. (Findings 211-20)

During the course of this litigation the Board ordered PE to file a Statement of
Costs (SOC). PE did so on 14 March 7014 (R4, tab 3001). The AF then had the
opportunity to audit the SOC. The AF did not request a DCM audit of the SOC.
Mr. McGeehin is the AF's construction accounting and pricing of damages expert
(finding 222). Mr. McGeehin reviewed the SOC and issued a report on 13 August 2014
(R4, tab 1447). This also satisfies the FAR 31.201-3(a) requirement for an "initial
review." Mr. McGeehin found that the SOC did not provide sufficient information to
determine the reasonableness of PE's estimate (bid) (id. at 9). The reasonableness of the
pre-award bid is separate and distinct from the reasonableness of SOC costs incurred after
award. Mr. McGeehin did not "question" mark-up rates for Bond, GL & BR Insurance,
Composite G&A and 10% profit (id. at 11 ). He did not take "exception" to Labor and
other Direct Costs (id. at 6-7), Labor Burden (id. at 7-8), and Subcontractor costs (id. at 8).
He found that "Timberline" and "Prism," accounting software used by PE to maintain its
books and records, was "widely used in the construction industry;' (id. at 9). _
Mr. McGeehin also issued an expert report, dated 18 June 2014, responding to
Mr. Rosenfeld's updated expert report (R4, tab 1451). He again questioned certain
estimates, but did not challenge any of the underlying incurred costs as unreasonable (id.).
Additionally, we carefully read all of Mr. McGeehin's testimony; we did not see testimony
that specific costs identified in the SOC were unreasonable (tr. 17 /5-100). Likewise, the

114
PowerPoint version of his expert report used during the hearing does not address
reasonableness of PE's costs in any detail (ex. G-4). 108

Just as in Kellogg Brown & Root Services, the DCAA's audit of PE's claim and
Mr. McGeehin's review of PE's SOC challenged all costs based on the AFCEE's flawed
technical review, but failed to challenge the reasonableness of any specific costs in the claim.
Such a blanket challenge to all costs is insufficient to satisfy FAR 31.201-3(a). Therefore, we
hold that PE has satisfied its burden to prove that its claimed costs are reasonable.

Causation

Having found that PE's claimed costs were incurred, are allocable to DO 13 and
reasonable and there being no other assertions that the elements of FAR 31.201-2,
Determining allowability, are not met, our quantum analysis boils down to causation, or
which party is responsible for the cost. The importance of this conclusion is not lost on
the Board. It means that if we find that the AF caused a claimed cost, we will accept
PE's claimed amounts.

Design Impact Claim ($772,176)

This claim in large part is to compensate PE for structural design work to make
the VQ resist progressive collapse. We start by addressing the obvious question of why
would PE be entitled to additional compensation for designing the VQ to resist
progressive collapse when that requirement was in RFP 8234? (Findings 29, 37-39) As
explained below, the answer is that PE was entitled to bid believing it had the right to
make unilateral changes to the VQ 35% design. In pre-bid questions and answers the
AF was warned that modifying the Baker double wall design to resist progressive
collapse would cost more (finding 30).

PE devotes 110 pages to the design impact portion of its entitlement Section IV,
A. (app. br. at 62-172). As is made clearer in PE's four-page quantum discussion (id. at
446-50), this claim deals with design costs not construction costs. However, in order
for us to .decide this design impact claim we must deal with topics relating to
construction.

PE claims that it was improperly prohibited from exercising its inherent rights as
the DBP03 contractor to change the structural design from Baker's double wall design .
to PE's single wall structural brick design (app. br. at 162). PE argues the AF should be
responsible for all the additional costs and delays caused by its direction that PE build to
Baker's design. The AF counters that there is no authority for such design flexibility in
the contract and, in any event, the claim is barred by the release in Mod. 2 (gov't br. at

108 The AF does not refer to·Mr. McGeehin's reports or testimony in support of its
quantum argument (gov't br. at 481-82).
115
347-350). PE agrees Mod. 2 settled both time and PE's general condition costs and
design costs associated with the structural brick proposal. However, PE contends Mod.
2's release does not cover the cost to correct the deficiencies in Baker's 35% design
(app. br. at 169-72).

We start by considering what was required in Baker's CD contract as regards
progressive collapse. This is relevant because the contract required Baker to account for
progressive collapse and because ?I&T, part of Parsons, participated as an AF
contractor. Baker was the CD prime contractor with support from PI&T, not as a Baker
subcontractor, but as an AF contractor (findings 2, 3). We were not able to find Baker's
contract with the AF in the record (finding 2 n.3). PI&T's contract with the AF is in the
record (finding 3): PI&T was responsible for, "surveys, site analysis, constructability
reviews, design review comments, attendance at conferences for comment resolution,
and project cost validation" (finding 3). However, Baker was the prime CD contractor
and architect of record and as such was ultimately responsible for the 35% design.

It appears that initially Baker did not intend to include structural design to resist
progressive collapse because the "25-meter standoff zone is maintained" (finding 5). This
fact is corroborated by Mr. Bennett who·worked for PI&T and testified that progressive
collapse requirement was in the SOW for the.Baker 35% design but it only played in the
location and orientation of the VQ not in the structural design (finding 10). However
there is ample evidence that the AF informed Baker and Baker agreed that it was required
to account for progressive collapse in its 35% structural design (findings 7-9). It was also
made clear in RFP 8234 that the VQ must be designed to resist progressive collapse
(findings 29-30, 37-39). The preponderance of the evidence before us leads us to find that
the CD contract required Baker's 35% structural design to resist progressive collapse and
not simply through the location of the VQ.

· Next we consider the relationship between PI&T and PE. PE would have us find
that PI&T and PE were completely separate entities. PI&T was the DBP03 contractor
supporting .Baker during the CD contract (finding 3). PI&T and PE were both part of
Parsons. Sometime before 7 September 2004, PI&T novated IDIQ contract8703 to.PE
(finding 17). As early as May 2004, well before the novation, PE was involved in the
project (finding 16). In PE's Executive-Proposal Review/EPR it stated several times that
it performed/completed the 35% design (finding 58). PE was the DBP03 contractor for
the final design and construction contract (findings 65-66). Mr. Bennett was the architect
for both PI&T and PE during both Baker's CD contract and PE's construction contract
(finding 10). In August 2005 PE represented to the AF that "Parsons Evergreene was the .
DBP03 contractor during the CD phase" (finding 71 ). Based on these facts we consider
PE to be effectively the sam~ DBP03 for both contracts. We find that PI&T and PE are
the same entity. This conclusion raises another question. SOW paragraph 3.2.2.2,
Working Drawings, Construction, Delivery and Warranty states, "If the same DBP03
contractor performs these studies and investigations during the CD Phase and is awarded
the Construction Phase task order for essentially the same project, then the DBP03

116
contractor is responsible for the results of its efforts during the CD Phase" (finding 28).
Although we consider PE to be the "same DBP03" contractor during both the CD and
construction phase, we do not hold PE responsible for Baker's flawed double wall design
for two reasons. First, PI&T attempted to persuade Baker to abandon the double wall
design in favor of the structural brick design during the CD phase (finding 6). Second,
PI&T was not the architect of record and the scope of PI&T's contract was limited to
"surveys, site analysis, constructability reviews, design review comments, attendance at
conferences for comment resolution, and project cost validation" (finding 3). Therefore,
the double wall design was not the "results of its [PE' s] efforts during the CD Phase" and
PE is not responsible for the failure of Baker's 3 5% design to account for progressive
collapse.

Next we deal with PE's contention that, as DBP03 contractor it had the unilateral
right to change the wall design from Baker's double wall to a single structural brick wall.
. In a letter entitled "Memo of Understanding Design/Build Procedures" dated 23 August
2005, PE seemed to agree it would follow the Baker double wall design by stating the
"Overall concept and expression of the building will follow the 35% design. (Materials.
and design details will be further developed and designed through the 64% and 95%
design.)." (Finding 71) Likewise, in notes from a meeting held on 1 September 2005, the
parties "agreed that Parsons has the opportunity to improve on the conceptual drawings in
the less developed portions of the drawings such as electrical, mechanical, structural, and
civil. Architectural drawings are much more developed and the expectation is that the
floor plans and room layouts are fixed and will not change. Parsons agrees with this
understanding." (Finding 72) The Baker double wall design is shown on the architectural
drawings (finding 30). The VQ 35% drawings included a note that required the contractor
to complete design and construction "in accordance with the intent of all design(s)
represented in the (RFP) construction documents" and "must follow the full design intent
represented in the RFP construction documents" (finding 12). We consider this drawing
note clear and unambiguous and disposhive of this issue. We find that Baker's double
wall design as shown on the 35% construction drawings was the "design intent represented
in the RFP construction documents." We interpret this note to require PE to adhere to
Baker's double wall hollow core plank design. 109. Without more, PE was not free to vary
from Baker's design without AF approval. However, we must also consider if pre-bid
communications affect our interpretation of the drawing note.

During the .bidding period there were a series of pre-bid questions and answers
that dealt with progressive collapse and other design matters. A 22 March 2005 memo

109
We considered PE's witness testimony, including expert testimony, urging us to find
that a design-build contractor has the right to select the design it prefers. We find
this testimony unpersuasive when faced with explicit language on the 35%
drawings that require PE to follow the "full design intent represented in the RFP
construction documents," i.e., the Baker design (finding 12).
117
 included question No. 6 asking that, since the VQ 35% design did not address
_progressive collapse, was it required in the final design. The answer was:

Yes, progressive collapse features are required for VQ ! The
architect of record resulting from the award of a task order
under the DBP03 concept will be expected to include ·this
feature in the final stamped drawings.

(Finding 29)

Another set of questions and answers sent to PE on 7 and 20 April 2005 included
question No. 3 that expressed concern over the adequacy of the 35% drawings to
"satisfy the progressive collapse requirements" and asked, "Are we allowed to substitute
assemblies and structural systems in order to be compliant with the progressive collapse
requirement provided the performance requirements and appearance of the building are
satisfied." This question specifically points to Section 2· on drawing A-302 where the
. third floor roof load is transferred to the third floor hollow core plank instead of the
second floor reinforced concrete masonry w~ll. This design was at least one example of
the 35% design's failure to address progressive collapse. The question included the
note, "A design to provide a facility compliant with the Progressive Collapse criteria
would require substantial work at a considerable additional compensation." The AF's
answer was:

Yes, the drawings are concept only. You have the
· responsibility to generate the construction details and
drawings. Tim Morrison, AFCEE/HDM

(Finding 30) A copy of the 20 April 2005 email was sent to CO Macdecy (id.). This or
a similar answer was repeated many times in the pre-award questions and answers
(finding 31 ). There was no testimony or other evidence in the record about the parties'
understanding or communications about the note warning "substantial work at a
considerable additional compensation" would be required to make the VQ compliant
with progressive collapse. In interpreting the question we read the question and note
together. NVT Technologies Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)
(When interpreting the contract, the document must be considered as a whole and
interpreted so as to harmonize and give reasonable meaning to all of its parts.). Taken
as a whole, question No. 3 asks if bidders can substitute a different design to resist
progressive collapse and if not, it would cost a lot more to do so with the Baker double
wall design. The AF's answer clearly told the bidders that they could choose a different
design. It specifically did not say only with AF approval. We have a conflict between
the drawing note requiring PE to adhere to the Baker 35% double wall design and the
AF's answers to pre-bid questions. ·

118
 Mr. Hillestad recognized this conflict and expressed concern over the bidder's
questions in a 14 April 2005 email, "what latitude, if any, we are willing to allow the
contractor in departing from specific criteria provided in the concept design" (finding 35).
The record does not include further evidence of any response to or discussion of
Mr. Hillestad's c.oncern. We conclude the issue raised by the questions was understood
';Vithin the AF when the answers were sent to bidders.

On 15 April 2005, Mr. Hillestad sent out an email to bidders that stated:

· Effective this date the time for submittal of additional
1
questions is now dosed .... Ambiguities and/or patently
obvious errors in the concept design criteria will henceforth
be resolved after receipt of proposals and prior to award.

(Finding 36) We find that because the bidders recognized that Baker's 35% design
failed to resist progressive collapse, there was a ""patently obvious error in the concept
design" that was not "resolved prior to award."

In a final email before award, dated 19 April 2005, addressing progressive
collapse, Mr. Hillestad stated:

(2) When addressing the progressive collapse design
requirements for the VQ at McGuire, the specified threat
level is "LOW". ·
"""
Further clarification should not be required. To the extent
mis-information, erroneous, or misleading direction is
contained in the RFP, appropriate corrections shall be
accomplished in the award document(s).

(Finding 39) This email did ~othing to clarify the confusion relating to how to deal with
progressive collap~e.

There is no question that RFP 8234 required the VQ to be designed to resist
progressive collapse (findings 29-30, 37-39). Above, we interpreted the drawing note on
the VQ 35% drawings to require PE to adhere to Baker's double wall design. However,
the AF's repeated statement in responses to pre-bid questions and answers that "the
drawings are concept only. You have the responsibility to generate the construction details
and drawings" is a concern. (Findings 30-31) This is especially true of question No. 3 that
specifically questions the 35% structural design ability to resist progressive collapse and
warns that "substantial work at a considerable additional compensation" if the-Baker
double wall design was followed (finding 30). We have held that pre-bid questions and
answers are not "wiped from the record by formal execution of the contract." Northwest
Marine, Inc., ASBCA No. 43502, 94-1 BCA ,i 26,521 at 131,999. In Metcalf Construction

119
Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014), the Federal Circuit held that pre-bid.
questions and answers used by bidders in estimating and submitting bids are highly
relevant to the post award interpretation of contract provisions. Id. at 995-97. ·In earlier
decisions we have held the same. Ogden Allied Services Corp., ASBCA No. 40823, 91-1
BCA ,i 23,455 at 117,671 (appellant has the right to rely on pre-bid questions and answers
as to matters of contract interpretation); Bogue Electric Manufacturing Co., ASBCA
No. 16958, 74-1 BCA ,i 10,513 at 49,794 (questions,and answers at a pre-bid conference
can properly be referred to for the purpose of evaluating the reasonableness of appellant's
interpretation). The Court of Federal Claims follows the same law. Aero Corp., S.A. v.
United States, 38 Fed. Cl. 739, 762 (citing Sharpe Refrigeration, Inc. v. United States,
30 Fed. Cl. 735, 739 (1994)) (Official statements made during pre-bid conferences to
clarify contract language should be utilized in resolving questions of contract
interpretation.). Therefore, contrary to the AF's position that the pre-bid questions are
irrelevant (finding 80), we find that PE was entitled to rely on the AF's answers to pre-bid
questions that "the drawings are concept only. You have the responsibility to generate the
construction details and drawings" and allowed PE to "substitute assemblies and structural
systems in order to be compliant with_ the progressive collapse." (Finding 30) We find
that as a result of the pre-bid answers provided by the AF that conflicted with the notes on
the 35% drawings, the AF bestowed upon PE the unilateral right to change Baker's double
wall design to structural brick.

There is another problem with the AF's argum~nts. The AF hired a structural
engineering consultant, JQA, to evaluate Baker's 35% design. JQA agreed with PE that the
Baker design did not resist progressive collapse and would require structural changes
(finding 79). It is undisputed that the AF was warned in Question #3, that making the Baker
design resist progressive collapse would require "substantial work at a considerable
additional compensation" (finding 30). · The AF was again warned at the 25 January 2006
"summit" meeting that there would be a cost impact if PE was directed to build the double
wall design (finding 84). The record supports our conclusion that PE's structural brick
design accounted for progressive collapse at no increase in price (findings 73, 76, 78, 82).
Mr. Williams, AF architect and project manager, supported the change to structural brick
(finding76). There is evidence in the record that the reason the structural brick design was
rejected was th~ ~ppearance of the brick (finding 84). However, PE assured the AF that
the structural brick would meet the base's color and size standards (findings 74, 81, 84).
Even Mr. Rola agreed the structural brick could be matched with the brick MAFB wanted
(finding 81). In MA. Mortenson Co., ASBCA No. 39978, 93-3 BCA ,i 26,189, a case
involving a similar design-build contract, we held that the government warranted the
adequacy of the 35% "concept submittal" drawings. Id. at 130,367. Therefore, the AF
warranted that the Baker 35% double wall design would account for progressive collapse
and the record overwhelmingly indicates it did not. Given this warranty, the pre-bid
answers, all the facts the AF knew and the right it effectively bestowed on PE to change
the 35% design, we conclude there was no right or good reason to reject the structural brick
design. Having done so we apply the logic of MA. Mortenson and allocate the additional
cost of design and construction required to make the Baker 35% design resist progressive

120
 collapse Jo the AF. We must now consider if the release in Mod. 2 affects this allocation
of risk.

During the discussions with the AF about structural brick, PE developed the 65%
design assuming it would be allowed to use structural brick. When the AF directed PE
to build to the Baker 3 5% design, PE effectively had to start the 65% design over' and
redesign the entire interior of !he VQ necessitating additional time. (Findings 84-87) In
Mod. 2, dated 6 June 2006, the parties agreed to extend the period of performance by
126 days to account for the time spent on the structural brick issue (finding 92). Mod. 2
extended the period of performance to 9 July 2007 and included a release. The release.
covered "any delays or costs rising from varying design approaches, including delays in
reviewing approaches" relating to the structural brick issue (finding 92). The AF
contends that this release covers all costs claimed by PE to modify the Baker 35%
design to resist progressive collapse (gov't br: at 347-50). PE counters that the release
is limited to evaluation of the structural brick design not subsequent design and
construction costs (app. reply br; at 81-84). PE states that Mod. 2 "was a settlement of
both time ( 4 months of time lost while the parties debated PE's Structural Brick Design
solution), PE's General Conditions costs associated with that time, and design costs
incurred during that period to support the Structural Brick proposal" (id. at 82). The
general principles of contract interpretation apply to release language and if the
language is clear and unambiguous it inust be given its plain and ordinary meaning.
United Launch Services, LLC, ASBCA No. 56850 et al., 16-1 BCA 136,483 at
177,764. We consider the release in Mod. 2 to be clear and unambiguous. It is limited
to "delays and costs arising from varying design approaches including delays in
reviewing approaches." This can only be interpreted as referring to the structural brick
"design approach" and not the additional costs of correcting the Baker 35% design. We
agree with PE's interpretation and are not persuaded by the AF's argument to expand
· ·the clear language of the release to cover the cost of fixing the Baker 35% design. The
AF is responsible for the additional design and construction costs incurred to change the
Baker 35% design to resist progressive collapse.

In the quantum section of its brief PE discusses what design costs are included in
the claimed $772,176 (app. br. at 446-50). Specifically, PE wrote:

Parsons completed its 100% design within its bid budget,
but the budget th~reafter overran as the contractor was
forced to (a) make ongoing design changes to accommodate
the heavy structural wall system and hollow core planks
floors on which the Air Force insisted and (b) develop
design and pricing for multiple iterations of "shopping list"
proposals demanded by the Air Force.

121
(Id. at 446) 110 We found above that the AF is liable for (a). However, (b) design costs
related to the "shopping list," is another matter. The shopping list was formalized in
Mod. 5 wherein the parties agreed on a price of $499,441.00 (finding 149). First, we would
expect PE to include its design costs in the price for the shopping list. PE failed to enter
evidence on this point in the record or address this in its brief. Second, Mod. 5 includes a
release that also included, PE "will not release the government in a 'blanket' fashion for all
events that have occurred on the project to date." (Finding 149) Neither party discussed
this release. Because of the questions surrounding design costs for the shopping list,. we
find that PE failed to meet its burden of proof as to AF liability for (b ). We will have to
apportion the $772,176 to account for this split in liability. Before we -move on to that, we
must deal with PE's characterization of its claim.

PE characterizes this claim as using a "Modified Total Cost methodology" (MTCM) ·
(app. br. at 447). We disagree. That is_because PE tracked its design costs and calculated
the claim on "design costs as booked in the contemporaneous job cost records" (id. at 446).
That means that all of the costs claimed are for the design work and nothing else. A total
cost or modified total cost approach does not specifically track costs for a single effort as
was the case for the design effort. We faced a similar situation in Raytheon Missile Systems
Company, ASBCA No. 59258, 15-1BCAi136,102:

The Navy characterizes Raytheon's quantum analysis·
as a "total cost" claim and structures much of its quantum
briefs argument around the elements of proof required to
sustain a total cost claim (gov't br. at 27-36). We agree with
Raytheon, this is not a total cost claim. See, e.g., Raytheon
Co. v. White, 305 F.3d 1354, 1365 (Fed. Cir. 2002) ("Under
the total cost method, the measure of damages is the
difference between the actual cost of the contract and the
contractor's bid."); WRB Corp. v. United States, 183 Ct. Cl.
· 409,426 (1968) (total cost claim is difference between
actual and estimated expenses). Rather, Raytheon's approach
to quantum identifies the number of gallons of fuel priced at
$25.00 that it loaded into Contract 0569 missiles and, with
certain other adjustments, simply calculates quantum based
on the $11.00 difference between $14.00/gallon Raytheon
bid and the $25.00/gallon charged. This approach is a direct
quantification of the damage caused by the Navy's breach.

110
Later in its brief PE changed its description to design overruns "attributable to
defects in the Government's 35% design, unreasonably protracted approval
processes (e.g., standing seam metal roof), and/or ongoing design changes (e.g.,
the 'shopping list')" (app. br. at 449). We do not understand how the "approval
process" for the SSMR would cause design changes so we disregard it.

122
Id. at 176,260. PE's design claim is also a direct quantification of damages because all
of the costs claimed are design costs just as all the costs claimed in Raytheon were fuel
costs. The fact that PE took responsibility for some of the design costs recorded in its
books and records does not make this a MTCM claim. Therefore, we need not go into
the elements of a MTCM as PE does in its brief111 (app. br. at 447-50). We do however,
have to separate design costs for correcting the Baker design from design costs for the
"shopping list." We generally t1:nderstand from the record the relative complexity of the
design effort to resolve progressive collapse and the "shopping list" which gives us the
ability to estimate relative costs. We conclude that the design for progressive collapse
is far more complex than for the shopping list. We estimate that the design cost for the
shopping list would be about $50,000 and subtract that amount from PE's claim. PE is
entitled to $722,176 for its design impact claim.

Delay and Extended Overhead

We are about to consider the first delay claim. There will be other delay claims and
also constructive acceleration claims. Before we proceed, we·set forth how we will deal .
with delay and constructive acceleration. A delay claim and constructive acceleration
claim are two distinct claims: "A constructive acceleration claim, although arising out of
the same facts as a delay claim, has been held to be a separate claim because it requires
proof of the additional element of an express or implied Government order to overcome
the excusable delay." Gaffny Corp., ASBCA No. 37639 et al. 94-1 BCA 126,522 at
132,012 (citati.on omitted). Damages are calculated differently for each. Delay damages
are based on a daily cost of field overhead multiplied
. .
by. the number of delay days.
DANAC, Inc., ASBCA No. 33394, 97-2 BCA 129,184 at 145,148. Acceleration damages
are the direct costs caused by the acceleration, "Unlike the delay and impact claims,
appellant's claim for acceleration, as finally adjusted, comprises principally extra direct
costs [with burden] that were incurred during the acceleration period." Fischbach &
Moore International Corp., ASBCA No. 18146, 77-1BCA112,300 at 59,241.

Schedule Delay/Extended Site Overhead-Daily Rates

We discussed PE's daily rates in our findings of fact (finding 223). We need not
delve deeply into the accounting information in the record because we rely the AF's

111
If we did it would not affect the outcome.
123
 expert, Mr. McGeehin's, adjustment to PE's rates increased three out of four of them
(id.). Accordingly, we will us-e PE's daily rates for delay as follows:

Time Period Daily Rate
13 July 2005 to 31 July 2006 $1,696
1 Aug 2006 to 3 1 Aug 2007 $7,712
1 Sept 2007 to 31 May 2008 $13,548
1 June 2008 to 31 October 2008 $4,688

(Id.) These daily rates do not include mark-up (id.).

Delay in Issuing Foundation NTP 112

The TLF Site Civil/Structural 100% for Construction drawings are dated 17 April
2006 (finding 90). The VQ Site Civil/Structural (100%) are dated 27 April 2006 (id.). The
AF did not issue a limited NTP for foundation work. The unlimited NTP was issued on
10 July 2006 (finding 98). Mr. Evans contends that the 83 days between 18 April 2006 and
10 July 2006 are critical path delays. The AF counters with evidence that PE's designs
were not complete and that CO Brown issued the final NTP as s<;>on as the designs were
complete (gov't br. at 138-39). PE responds in its reply brief that Mr. Evans "researched
the review commerits" and found them minor (app. reply br. at 90). As explained below,
we need not attempt to sort out if the comments were "minor" or not.

r We rely on the actual dates on the drawings. The VQ Site Civil/Structural
(100%) drawings are dated 27 April 2006 (finding 90). That means that the foundation
design work was completed no later than 27 April 2006. We agree with Mr. Evans that
the VQ foundations were on the critical path. We see no reason why the AF could not
have issued a LNTP for the VQ foundations on or about 27 April 2006. There are 74
days between 27 April 2006 and)O July 2006. We give the AF four days in which to
issue the foundation LNTP. Therefore, we hold the AF responsible for 70 days of
excusable compensable delay.

This 70-day delay falls within period one where the daily rate is $1,696.
Therefore the extended overhead is $118,720 (70 x $1,696). We follow DCAA's
method of calculating markup (R4, tab 213 at 39):

112
We were confused in that PE identified this as "design impact" delay (app. br. at
483). Mr. Evans delay analysis Review Period 2 explains this is foundation NTP
delay (R4, tab 3004 at 20) but also as design delay (id. at 21). We think
foundation NTP delay is accurate.
124
 Description Audit Determined Rate Amount w/ Markup
Extended Overhead $118,720
Markups
Bond · 0.6375% $757
GL & BR Insurance 0.8316% $987
Subtotal $120,464
Composite G&A 2.8600% $3,445
Expense
Profit 10.0000% $12,046
Total $135,955

Clean Site Delay 113

In June 2006 PE asked the AF for a Certificate of Clean Site but none was
forthcoming (finding 95). In July 2006 PE's subcontractors were working on footings for
the VQ. Because of concerns over environmental contamination in the area where the
swimming pools had been demolished, on 7 July 2006 PE directed its subcontractors to
stop work on the VQ footings (finding 96). The AF issued an unlimited NTP on IO July
2006 (finding 98). 1-14 On 4 August 2006, PE's concerns over VQ site contamination were
resolved and PE lifted its stop work order (finding 100). We find that since this -yvas an ·
area where two swimming pools existed and the AF contracted with another contractor to
demolish the pools, the AF was responsible for ensuring the are~ was not contaminated
with environmental hazards. PE's concern over environmental contamination was
reasonable. We allocate 28 days of delay, from 7 July 2006 to 4 August 2006, to the clean
site delay. The AF kresponsible for this delay. We agree with Mr. Evans that this
foundation work was on the critical path (R4, tab 3004 at 25). Therefore the delay was
excusable and compensable. This delay spans two daily rate periods - 25 days in July at
$1,696/day and 3 days in August at $7,712/day for a total of $65,536 (25 x $1,696 + 3 x
$7,712). We follow DCAA's calculation for markup:

Description Audit Determined Rate Amount w/ Markup
Extended Overhead $65,536,
Markups
Bond 0.6375% $418
' GL & BR Insurance 0.8316% $545
Subtotal $66,499

113
There was also confusion concerning this delay because even though Mr. Evans
discussed the clean site facts (R4, tab 3004 at 26-27), he did not appear to
include it in his schedule analysis (id. at 25-26).
114
It is unclear why PE started work on the footings before the unlimited NTP.
125
 Composite G&A · 2.8600% $1,902
Expense -

Profit 10.0000% $6,649
Total $75,050

Earthwork Differing Site Condition Delay

This section consists of two claims. There is the claim for $582,375 in direct
costs (app. br. at 450-55) and the claim for $1,995,993 in delay damages (id. at 483).
We deal with them together. There are three components involved in these two claims:
unsuitable fill, organic material, and asbestos pipe.

Unsuitable Fill ($178,425)

As early as April 2004 PE expressed concern over whether the AF had properly
monitored the demolition contractor "to ensure that select fill was placed in the pool
excavation to avoid 'unforeseen site conditions"' (finding 16). This concern turned out
to be legitimate.

The original SOW in RFP 8234 stated that.site demolition was not required and that
the site was "clean and ready for construction" (finding 19). Amendment No. 2, dated
5 April 2005, deleted these statements (finding 27). Mr. Morrison, drafter of Amendment
No. 2, explained that it was due to the fact that there were electric utilities in the area, bu~
that the fill dirt was still supposed to be clean (finding 27). In a 22 March 2005 memo
listing pre-bid questions and answers, the AF's answer to question No. 8 stated "the site is
clean and ready for construction" but the fill was not compacted (finding 29). The AF's
answer to question No. 13 stated there was no "Geotech report" on the demolished pools
and that bidders should assume the soil content is "at least equivalent to the worst condition
level permitted in the Base Demo 'contract requirements" (finding 29). In questions and
answers sent to bidders on 7 April 2005 the AF's answer to question No. 61 stated the ·
"backfill is clean but not compacted. Use the worst soil boring sample for calculations"
(finding 32). Mr. Temchin and Mr. Radin testified that PE relied on the AF's answers in·
bidding and believed the backfill would be clean and ready for construction. (Finding 34)
We discussed the legal importance of pre-bid questions and answers above in our decision
on structural brick. PE is entitled to rely on these pre-bid questions and answers.
Therefore, notwithstanding Amendment No. 2's removal of the language, "The site is clean
and ready for construction," subsequent answers that the fill dirt was clean did, as
Mr. Temchin testified, put the representation that the fill dirt was clean back in the contract
(finding 34).

In mid-August 2006 test pits were dug in the TLF and VQ areas (finding 103). On
16 August 2006 PE notified the AF that the test pits had uncovered "wood, concrete
rubble, metal, wire, charred debris and other construction debris" that indicated the
demolition contractor had not backfilled with clean material (findings 103-04). On
i
126
 22 August 2006 PE stopped work on excavation at the VQ due to the unsuitable material
found in the test pits (finding 104). We find PE was entitled to stop work because that is
what the differing site condition clause mandates. Lean Construction and Engineering
Co., ASBCA No. 58995, 15-1 BCA ,r 36,159 at 176,462 ("The clause requires that such
notice be given promptly and before the conditions are disturbed."). Due to funding issues
"the AF did not direct PE to start removing and disposing of the unsuitable materials until
2 November 2006. The direction imposed a $70,000 price ceiling. (Finding 105) We find
that the AF failed to properly supervise the demolition contractor's work. We find that
before award the AF represented that the soil would be clean. This is a Type 1 differing
site condition in that the AF represented that backfill from the demolitfon would be "clean"
and it was not. PBS&J Constructors, Inc., ASBCA Nos. 57814, 57964, 14-1 BCA
,r 35,680 at 174,654 ("A Type I differing site condition claim is dependent on what is
'indicated' in the contract."). The AF is responsible for any unreimbursed costs (over the
$70,000), of removing the unsuitable material, replacing it with suitable compacted
backfill and the 72 days between 22 August 2006 and 2 November 2006. 115 . We agree this
delayed VQ foundation work that was on the critical path (R4, tab 3004 at 24-25, 30-31).
We also find that this delay was excepted from the release in Mod. 3 (finding 123). It is
excusable compensable delay, however, this 72-day delay runs concurrent with the organic
layer delay discussed below and we account for it below. We accept PE's costs; the AF is
liable for $178,425 to resolve the unsuitable soils problem at the site.

Organic Material ($297,274)

Also on 22 August 2006 PE found organic material in two test pits (finding 107).
PE had PSI perform borings to map out the extent of the organic material (id.). PSI
recommended that the organic layer be removed (finding 108). Even though the organic
layer was about five feet below the elevation of the footings, PE concluded it needed to be
removed because of possible differential settlement (findings 109, 115). Mr. Rola took the
position that the organic layer was deep enough it did not need to be removed (findings
111, 116). CO Brown did not agree with Mr. Rola (finding 111). However, the parties
spent valuable time going back and forth discussing the need to remove the organic layer
because of Mr. Rola' s opposition 116 ( findings 111, 114, 116). By the end of October 2006
PE decided to remove the organic layer without AF permission. We find that the organic
layer was a Type 1117 differing site condition because the geotechnical report did not list
organic matter as a subsoil condition (finding 57) and, in the circumstances here, this
absence should be construed as a representation that there was no such organic material

115
Mr. Evans shows the unsuitable fill delay running from 27 June 2006 to 21 August
2006 (R4, tab 3004 at 31 ). This is incorrect and we think Mr. Evans confused
unsuitable fil with contaminated fill.
116
In an apparent attempt to justify Mr. Ro la's opposition, the AF included a 2014
report in the record from another contractor, Versar, agreeing that it was not
necessary to remove the organic layer (finding 114). We are not persuaded.
117
Organic material could also qualify as a Type II differing site condition.
\

127
 present. The fact that Boring B-OlA found "trace amounts of organics'; (id.) is not enough
to put PE on notice of the organic material it found. PE was entitled to rely on the
geotechnical report and associated boring logs that indicated what the subsurface soil
conditions would be. PBS&J, 14-1BCA135,680 at 174,653 (borings are the most
significant indication of subsurface conditions). We also find that PE was the engineer of
record and bore the risk associated with possible differential settlement that may have been
caused by the organic layer. CO Brown recognized PE's risk (finding 111). Accordingly,
it was PE's right to decide to remove the organic layer without interference from the AF,
which it encountered from Mr. Rola. Right or wrong, Mr. Rola did not have the right to
second guess PE that bore the ultimate responsibility for the stability of the VQ. We find
the AF responsible for the cost associated with the organic layer and associated critical
path delay discussed below. We are satisfied that PE reasonably incurred a cost of
$297,274 for dealing with the organic layer and find the AF liable for that amount.

"Transite" Asbestos Pipe ($106,676)

On 3 November 2006 when PE started to remove the organic layer it encountered
"transite" asbestos insulated pipe. PE notified the AF of a differing site condition and
stopped work. (Finding 110) We have determined that while the pipe was shown on
drawings, the fact it was "transite" asbestos pipe was not disclosed (id. at n.48). At AF
direction, PE contracted to have the asbestos pipe removed and the work was completed
by 1 February 2007 (finding 119). This was a 90-day delay from 3 November 2006 to 1
February 2007. PE was then able to restart removal of the organic layer material that
was finished on 28 February 2007 (id.).

Mr. Rola took the position that the asbestos pipe was not a differing site
condition (findings 113, 118). CO Brown disagreed (finding 113). We agree with
CO Brown. We find that the drawings indicating the location of utilities did not identify
the "transite" asbestos pipe. We find that the asbestos insulation is a Type 1 differing
site condition because PE was entitled to rely on the AF's drawings that did not indicate
the presence of asbestos. The AF is responsible for any unreimbursed cost of abatement
of the asbestos insulated pipe and associated delay. . .

PE's scheduling expert, Mr. Evans, found that the delay of the foundation work at
wing A of the VQ that was caused by the unsuitable fill, organic layer and asbestos pipe
was on the critical path (app. br. at 365-68). The AF's scheduling expert, Mr. Ockman,
. used the "time impact analysis" method which is different from the CPM analysis used by
Mr. Evans. We do not comment on the relative merits of these to methodologies because
we understand both to place the foundation work at VQ Wing A on the critical path.
Mr. Ockman, however, assigns responsibility for the contaminated fill (Time Impact No. 5)
and "substandard fill" 118 and asbestos pipe (Time Impact No. 6) to PE because it failed to

118
Mr. Ockman's "substandard fill" refers to the fill improperly placed in thicker·
layers, not the construction debris (R4, tab 1739 at 20).
128
prepare subgrade and locate the asbestos pipe {gov't br. at 323-24). We reject this
allocation of responsibility. Also, we did not see the organic layer in Mr. Ockman's Time
Impact Nos. 5 and 6. We accept PE's costs of $106,676 to deal with the asbestos pipe and
find the AF liable for that amount.

Cumulative Delay/Earthwork

In our findings of fact, we calculated 191 days of critical path delay for unsuitable
fill/organic layer/asbestos pipe from 21 August 2006 to 28 February 2007, deducting nine
days for replacing the improper fill, we have 182 days of delay (finding 121 ). This is
excusable compensable delay. This delay is in daily rate period two where the rate is
$7,712/day. Therefore, the extended overhead for the earthwork delay is $1,403,584
(182 X $7,712)'.

Again we follow DCAA's calculation to markup:

Description · Audit Determined Rate · Amount w/ Markup
Extended Overhead $1,403,584
Markups
Bond 0.6375% $8,948
GL & BR Insurance ·0.8316% $11,672
Subtotal $1,424,204
Composite G&A 2.8600% $40,732
Expense
Profit 10.0000% $142,420
Total $1,607,356

Mod. 3

On 20 March 2007 the parties signed Mod. 3 extending the contract by 171 days to
27 December 2007 and decreased the contract price by $230,337 (finding 124). The
$230,337 was calculated multiplying the liquidated damages daily rate of $1,347.00 (id.)
by the 171-day extensiQn. In our prior section, we found 182 days of excusable delay;
later in this decision we address concurrent delay that extends the delivery period into June
2008, well beyond 27 December 2007. Therefore, liquidated damages were not running
during the 171-day extension in Mod. 3. The release in Mod. 3 was limited by PE' s
extensive reservation of its right to claim the $230,337 and reserved claims associated with
unsuitable fill, organic layer, asbestos pipe, unusually severe weather, NTPs, delay in
approving submittals, and delay in approving roofing (finding 123), Given all of these
exclusions, the release essentially has no effect on PE's claims. Given our decision that
the 171 days was excusable delay, Mod. 3 is no longer valid. We find PE is entitled to the
return of the $230,337, however, PE "adjusted" this amount in its quantum section to
$228,990 and that is the amount we award to PE.

129
High Temperature Hot Water (HTHW) Differing Site Condition Claim ($784,186)

The TLF and VQ were connected to MAFB's HTHW system that required PE to
trench and install new HTHW pipe (findings 22, 127). In so doing, PE contends it ran ·
into various differing site conditions such as underground utilities that were not
disclosed on AF drawings causing it additional time and expense. It also contends that
AF delay pushed the work into winter that also caused additional expense. This
contention is supported by dated pictures of some of the conditions encountered by PE
which indicate that they were discovered in late November to early December 2007
(finding 131).

RFP 8234 included comments stating that "survey base mapping" and "Site Utility
Plan" show utilities (finding 56). However, the 35% drawings do not extend to areas near
East Arnold Ave. where many of the obstacles encountered by PE were located (findings
127, 130-33). From this the AF concludes that it "made no representations in the 35%
drawings included in the RFP regarding existing utilities beyond those depicted" (gov't br.
at 189). According to the AF it cannot be liable for a Type 1 differing site condition
because it did not represent the condition of the site. We disagree. The AF must also
assume responsibility for the representations of utilities on the G-Tab drawings provided
to bidders before award (findings 11, 13, 32, 134), and these G-Tabs, in fact,
misrepresented the utility locations. G-Tab drawings were Auto CAD (electronic) "maps"
showing all utilities. They were provided to all bidders (finding 134). Mr. Morrison
testified that the G-Tab drawings showing the utilities were accurate (finding 32, n.25).

The subject of utilities was addressed in pre-bid questions and answers. In several
answers bidders were told that utilities were shown on "G-Tab" drawings made available
to the bidders (findings 11, 13, 32). Notes on 35% drawings informed bidders that utility
locations are approximate based on "G-TAB MAPPING" (finding 13). Bidders were
warned that "there are a lot of existing utilities along East Arnold gas, phone, water, etc.
(both sides). Extreme care will be required when approaching and crossing east Arnold
with HTHW lines." (Finding 32, #42) When asked about utility demolition, bidders were
told to use "existing documentation and drawings to complete the final designs and project
requirements" (finding 32, #51). When asked if there are any HTHW manholes required,
bidders were told "The DB+ Contractor will need to make this determination" but that two
new manholes would be required (finding 32, #68). These new manholes did not include
manhole #3 5B.

After award of DO 13 on 13 July 2005, PE developed the 100% "for construction"
drawings for the TLF and VQ dated 24 July 2006 (finding 99). We hold that the 100%
drawings embodied the utility locations provided before award on the 35% and G-Tab
drawings. Because the G-Tab drawings are Auto CAD they were not in a useable format
for us to review. We can however, find a proxy for what was in the G-Tabs by
examining the 100% drawings made by PE, which we based on pre-bid information

130
provided by the AF. Therefore, even though produced by PE after award, we use the
100% drawings in our differing site condition analysis because they incorporated pre-
award utility information provided by the AF.

We also consider the post award efforts taken to locate all utilities. Of particular
interest to us are the notes on 100% VQ drawings C-101, C-102, and C-103 that state,
"UNDERGROUND UTILITIES SHOWN HEREON WERE FIELD LOCATED BY
MASTER LOCATORS, INC. BETWEEN 08/23/05 & 08/31/05" (finding 128). The
note on drawing C-107 states, "UTILITY LOCATIONS AND INVERTS ARE BASED
UPON FIELD SURVEY AND BEST AVAILABLE DATA" (finding 129). Neither
party presented evidence to explain Master Locators' activities or the "field survey." We
take this language at face value and conclude that at some time somebody had Master
Locators go to the site to conduct a "field survey" to locate utilities and that information
was incorporated into the 100% drawings. We infer that this field survey·included use of
some device to locate buried utilities such as a magnetometer. We also know that
Mr. Temchin testified that PE was never given the G-Tab drawings of abandoned utilities
(finding 13). The record is insufficiently developed for us to understand what abandoned
utility information was shown on the G-Tab drawings or why the AF would not give
them to PE. We cannot speculate on what these G-Tab drawings show and only point
out that they were withheld. In addition to the Master Locators' field survey and G-Tab
drawings, the AF marked utilities with various colors of paint before issuing a "dig
permit" to PE (finding 130). The drawing notes each have a statement requiring PE to
verify all utility locations before starting construction (findings 128-29). We find that PE
satisfied its obligation to verify utility locations based on the 35% and G-Tab drawings,
the survey by Master Locators, and the AF' s marking of utilities for the dig permit. We
do not know what more/PE could have done. To the extent PE encountered utilities not
shown on the 100% drawings, we find a Type 1 differing site condition.

PE itemized ten differing site conditions. In our findings of fact we found that
100% VQ drawing C-107 showed the storm sewer and telephone lines that PE contends
are differing site conditions (finding 133). Since what is shown in picture DC #3 was also
shown on the drawings, DC #3 is not a differing site condition. We also disagree with PE
on DC #9 relating to the new manhole #35B (finding 131). RFP 8234 directed that the
contractor shall verify and accept the "exact conditions" at the site (findings 11, 13, 20).
The existing manhole #35 is not a differing site condition because it was in plain sight and
Mr. Burdick admitted that it was obvious that it was not big enough to connect the new
HTHW lines (finding 131). Top Painting Co., ASBCA No. 57333, 12-1 BCA ~ 35,020 at .
172,082 ("Visible rust, mold and mildew on the generator housing and AST surfaces when
Top submitted its ·proposal for the contract do not qualify as a DSC under the quoted DSC
clause, because they were neither 'subsurface or latent' nor 'unknown."'). By not looking
at manhole #35, PE assurped the risk that it would be too small to connect its new HTHW
lines (finding 131). Therefore, we sustain differing site conditions #1, #2, #4, #5, #6, #8,
#10 and #11 and deny #3 and #9 (including the cost of manhole #35B). The AF is
responsible for the additional cost caused by the differing site conditions we sustain.

131
 PE claims $784,186 for the differing site condition portion of its claim, which we
accept but must reduce to account for our denial of differing site conditions #3 and #9.
PE refers to the October 2014 Rosenfeld Rebuttal report for "full original documentation
of the HTHW pricing." (App. br. at 455; R4, tab 3003 at 130-47) Most of the cost data
does not relate to the specific differing site conditions. As to damages, we conclude from
the pictures and drawings that the manhole work was the most expensive and that we can
treat the remainder of the differing site conditions as similar in impact. Therefore, we
reduce the claimed amount by $150,000 for the manhole DC #9 and reduce the claimed
amount by $50,000 for DC #3 for a total reduction of $200,000. We sustain the HTHW
differing site condition claim in the amount of $584,186 ($784, 186-$200,000).

As for delay, based on the dates on pictures of the differing site conditions they
occurred between late November and early December 2007 (finding 131). This is in
Mr. Evans' Delay Review Period 8 (16 October 2007 to 25 January 2008) (R4, tab 3004 at
43). Mr. Evans contends that during this period the project was delayed 24 calendar days
due to ceiling framing installation, catwalk installation and ceiling paint in Area B in the
VQ (id. at 44). Mr. Evans does identify "HTHW issues" from 14 November to
28 December 2007 but from CPM Figure 16, Review Period 8, As Planned and As-Built
Schedule, the HTHW delay is concurrent with the catwalk delays; Also Mr. Evans does .
not discuss the "HTHW issues" so we do not know if they are solely related to the
differing site conditions. We find that PE failed to prove critical path delays associated
with the HTHW differing site conditions. 119

Triarch Claim ($589,405)

PE claims $589,405 for the "purchase and installation of the Triarch wall
coatings in VQ guest room walls after the Air Force revoked its previous approvals for
using Sherman Williams paint" (app. br. at 222, 231). PE incorrectly centers its
argument on what happened after award. The real question is if RFP 8234 obligated PE
to include the cost of Triarch in the VQ in its bid. As explained below we find it did.
However, we also find liability on the part of the AF for its indecision on what wall
coating it wanted, causing PE to.start applying Sherwin Williams paint in the VQ.

RFP 8234, Specification Section 09911 for TLF required that "Duroplex -
Triarch Industries" and "Plexture - Triarch Industries" be applied to walls and ceilings
of the TLF (finding 41). RFP 8234, Specification Section 09911 for the VQ required
"Duroplex -Triarch Industries" and "Plexture - Triarch Industries" for interior paints 120

119
PE does not appear to claim delay damages for this differing site condition in its.
· claim summary (R4, tab 3149).
120
We disagree with PE's contention that VQ Section 09911 "did not clearly mandate
either paint or Triarch Duroplex" because of the use of the word "paint" (app. br.

132
 (finding 42). The 35% drawings included in the RFP required Triarch for the TLF, but
Sherwin Williams paint for the interior of the VQ (finding.43). Therefore there was a
conflict between the 35% drawings and specifications as to the "paint" for the VQ. The
conflict is resolved by the RFP' s order of precedence clause that reads, "In case of a
difference between the drawings and specifications, the specifications shall govern"
(finding 44). Therefore, the Specification Section 09911 requiring Triarch in both
buildings takes precedence over the 35%.drawing (finding 44). Gosselin World Wide
Moving NV, ASBCA No. 55367, 09-2 BCA, 34,242 at 169,235 ("Nonetheless,
appellant is correct that the Order of Precedence clause resolves the inconsistency.").
The oontract requires Triarch in the VQ.

We must also consider the pre-bid actions of the AF and bidders. In a 5 April 2005
response to questions from bidders about the missing CID for the VQ, the AF twice gave
an incorrect answer. The answer was that the VQ CID was attached to Amendment No. 1
.to the RFP - it was not. (Finding 45) .Mr. Hillestad's 12 April 2005 email to bidders states
that the paint specifications are identical and bidders should proceed accordingly
(finding 46). This was a true statement about Section 09911 for both the TLF and VQ, but
not for the VQ 35% drawing DI-401. In his 13 April 2005 internal email, Mr. Hillestad
recognized the conflict between the VQ Section 09911 that required Triarch and the VQ
CID that required Sherwin Williams paint (finding 47). Mr. Hillestad referred to the VQ
CID, but we do not know what he was looking at because the VQ CID was not in RFP
8234 (finding 42). We noted above a similar conflict between the VQ specification and
35% drawing ID-401 that_was in RFP 8234. In an apparent attempt to address this
conflict, Mr. Hillestad wrote his 19 April 2005 email to bidders. This email, however, did
not clarify anything, butrather made matters more confusing in two ways. Armed with the
knowledge of the conflict, rather than providing unambiguous clarification, Mr. Hillestad
imposed a brand name or equal provision that had nothing to do with the conflict between
- VQ Section 09911 ·and drawing ID-401. He ended the email with:

Further clarification should not be required. To th~ extent
mis-information, erroneous, or misleading direction is
contained in the RFP, appropriate corrections shall be
accomplished in the award document(s).

(Finding 49) This statement makes little sense because, if "mis-information, erroneous, or
misleading direction is contained in the RFP," how could clarification be "accomplished in
the award document(s)," i.e., before award without "further clarification"? In any event
there is nothing in the record that would allow us to interpret it differently - it is just
meaningless for our purposes. Contrary to the last paragraph in the first 19 April 2005
email, Mr. Hillestad did provide "further clarification." He sent another email on the topic
on 19 April 2005 where he clarified that "Triarch or equal product will only be applied to

at 222). We understand that technically Triarch is not traditional paint but this
does not cause the confusion PE suggests.
133
 the interior walls of the structures," not the ceilings. The subject of the email, "McGuire -
VQ/TLF - Paint issue" makes it clear that this email applies to both the VQ and TLF.
(Finding 49) Therefore, the last email notified bidders again that Triarch was to be used in
both buildings. Although the AF created confusion by not providing the VQ CID before
award and not unambiguously addressing the issue in the 19 April 2005 emails, thi~
confusion does not change the fact that RFP 8234 required PE to include Triarch for both
the TLF and VQ in its bid. This time, pre-award communications do not change the terms
of the contract as the Q&As did in the structural brick claim.

Finally, PE contends in its brief that it and its subcontractors were misled into ·
including Sherwin Williams paint for the VQ in their bids:

Meanwhile, paragraph 1.4 A in Section 09911 (R4,
tab 89)( 121 1 continued to call for paint. Parsons and its
subcontractor(s) followed that paint specification, although
the specification also named a textured wall covering by
Triarch. (R4, tab 89) Parsons included paint in its bid for
the VQ walls and understood that any "mis-information, or
misleading direction in RFP" would be accomplished later.

(App. br. at 224) PE cites to no evidence in the record supporting its contention that PE
and its subcontractor(s) bids wer~ misled into bidding based on Sherwin Williams
"paint" and not Triarch in the VQ. Also, there are several problems with this argument.
Section 09911, paragraph 1.4 A. does not "continue to call for paint." It specified
"Duroplex - Triarch Industries." (Finding 42) The word "paint" is not used as
narrowly as PE suggests. It is clear that "paint" is used to refer to both Triarch and
Sherwin Williams traditional paint. Also, arguing that PE "understood that any
'mis-information, or misleading direction in ~P' would. be accomplished later" is itself
misleading. The actual language referred to is contained in emails and reads "To the
extent mis-information, erroneous, or misleading direction is contained in the RFP,
appropriate corrections shall be accomplished in the award document(s)" (finding 39).
The words "later" and "in the award document(s)," i.e., at award, are not synonymous.
The fact that in its brief the AF seems to accept PE's statement that it bid Sherwin
Williams paint (gov't br. at 200) does not change the fact that there is no evidence in the
record supporting PE's contention. There is, however, evidence that PE mistakenly
·underbid the YQ finishes using Testino's incomplete bid rather than Pro-Spec's bid
with the complete scope (finding 50). This evidence does not support PE's argument
that it and its subcontractors were misled and, as a result, bid Sherwin Williams paint.

Additionally, we consider the conflict between the VQ specification and the
drawing to be a patent ambiguity. As such, PE had an affirmative obligation to inquire
to the government about it. NVT Technologies, 370 F.3d at 1162 (if the ambiguity fa

121
Section 09911, Rule 4, tab 89 is also included in RFP 8234 (R4, tab 2 at 1154).
134
 patent, it triggers a duty to inquire); see also States Roofing Corp. v. Winter, 587 F.3d
1364, 1372 (Fed. Cir. 2009); Triax Pacific, Inc. v. West, 130 F.3d 1469, 1474-75 (Fed.
Cir. 1997). If the government's response to an inquiry does not clear up the ambiguity,
the duty to inquire continues. Phoenix Management, Inc., ASBCA No. 57234, 11-1
BCA 134,734 at 171,005 (Furthermore, when an offeror attempts, but the government's
response fails, to resolve an ambiguous solicitation provision, the offeror has the duty to
continue to seek to resolve that ambiguity.). We see no evidence in this record showing
· that PE clearly inquired in an attempt to clear up this patent ambiguity. Therefore, PE's
interpretation must fail. NVT Technologies, 370 F.3d at 1162 (if an ambiguity is
1

obvious and a bidder fails to inquire with regard to the provision, his interpretation will
fail). PE is not entitled to the cost of purchasing and applying Triarch in the VQ.

Having found that RFP 8234 required the use of Triarch in both buildings does not
end our analysis. After award the AF continued to create confusion over the use of
Sherwin Williams paint in the VQ. The 100% VQ drawing ID401 still specified Sherwin
Williams paint (finding 143). In response to RFI No. 43 the AF added to the confusion
identifying Sherwin Williams paint be used in the VQ (finding 144). CO Brown approved
ASI No. 13, writt.en by PE, on 19 September 2007 identifying Sherwin Williams paint, hot
Triarch, for the VQ (finding 145). After approval of ASI No. 13, PE directed its painting
subcontractor to start applying paint to the walls of the VQ (id.). It was not until
4 February 2008 that CO Brown directed the use ofTriarch and on 15 February 2008
CO Cruz formally rescinded ASI No. 13 and directed that Triarch be used in both the TLF
· and VQ (finding 147). As a result of these actions, the AF is .liable for all costs and critical·
path delays associated with its direction to use Sherwin Williams paint in the VQ.

As far as the costs of applying paint to the VQ we are left without any assistance
from PE. This is because its "claim seeks only the cost overrun associated with changing
VQ walls from paint to Triarch" (app. br. at 458). We carefully read PE's discussion of its
Triarch claim in its brief (id. at 222-30, 457-59). We know that KLM installed Triarch in
the VQ, however, because of PE's approach, there is no information allowing us to estimate
the cost of applying the paint to the VQ. Therefore, although PE is entitled to recover the
costs of applying paint to the VQ, we cannot determine quantum. This problem is caused
by PE's demand that the Board decide both entitlement and quantum.

A total of 149 days elapsed between issuing ASI No. 13 on 19 September 2007 and
rescinding it on 15 February 2008. However, we are only interested in the period from
the start of painting to the rescinding of ASI No. 13. We believe this is an appropriate
period to use for calculation of this delay. According to the Review Period 8 as-built
schedule applying paint to the VQ walls in area B started on 26 January 2008 122 and it
was on the critical path (R4, tab 3004 at 44). PE's 1 February 2008 letter states that at

122
The as-built schedule for Period 9 changes this to "Paint Ceilings Area B" so we do
not know precisely when the wall painting was stopped but painting was on the
critical path and preceded the application of Triarch (R4, tab 3004 at 47).
135
that time painting in the VQ was progressing (finding 146). ASI No. 13 was rescinded on
15 February 2008. There were 20 days b~tween 26 January 2008 and 15 February 2008.
Based on the incomplete record before us, we conclude that the AF is responsible for
these 20 days of critical path delay caused by the AF's direction to apply Sherwin
Williams paint to the VQ.

The 20-day critical path delay between 26 January 2008 and 15 February 2008
falls within period three, Acceleration & Vertical Construction, where the daily rate. was
$13,548 (finding 223). The extended overhead is therefore $270,960 (20 x $13,548).
Again we follow DCAA's calculation to markup:

Description Audit Determined Rate Amount w/ Markup
Extended Overhead $270,960
Markups
Bond 0.6375% $1,727
GL & BR Insurance 0.8316% $2,253
Subtotal $274,940
Composite G&A 2.8600% · $7,863
Expense
Profit 10.0000% $27,494
Total $310,297

Stormwater Detention Pond and Underground Storage ($248,390)1 23

PE contends that the VQ detention pond was properly designed using the
24 November 2003 PSA geotechnical report that located the groundwater at
approximately 5 feet below the bottom of the pond. When the pond failed to drain, ESA '
found that the groundwater had ri~en to within a foot of the bottom of the pond. PE
conten.ds this was a differing site condition that entitles PE to be reimbursed for the
additional cost to construct the underground detention system. (App. br. at 257-59)
The AF spends little time on this issue in its brief and takes the position that the
requirement was a performance specification and that the pond failed to meet the
performance requirements due to poor design (gov't br. at 325-26).

During the development of the 35% drawings the stormwater detention pond was
discussed (findings 14, 51-55). MAFB engineers expressed concerns about standing water
that would attract birds close to the runway (finding 51 ). There was direction from MAFB
that the surface pond be removed from the 35% design (findings 52, 55). However, the AF
decided to leave the surface detention pond in the design due to cost considerations
(finding 55). ·

123
This amount was not identified in quantum section K of PE's brief. The amount
comes from the entitlement section (app. br. at 249).
136
 The 3 5% design drawing package, dated 18 May 2004, included drawing C-106,
Storm Drainage and Grading Plan, that showed the stormwater detention basin (pond). A
note on the drawing states that, during the final design phase, a detailed hydraulic
analysis "shall be conducted" and that other options such as underground storage could
be considered (finding 14). We conclude that the AF left the surface pond in the 35%
design, knowing that the MAFB did not allow such ponds (findings 51-5 5).
Accordingly, bidders were entitled to bid based on the surface detention pond shown on
the 35% drawing C-106. Although the drawing note provided that other options could be
considered, there is nothing in the note or contract that required the contractor to provide
other more costly options at no cost to the AF. We also note that we found nothing in the
35% design requiring that the pond drain within a certain period of time. However, PE
seems to agree that the pond was supposed to drain in 72 hours (finding 141) so we find
that the pond was supposed to drain within 72 hours.

PE hired ESA to develop the 100% for construction detention pond design
(finding 139). ESA's design is shown on 190% design For Construction Drawing C-106
and includes a boring log at one site adjacent to the pond (finding 140). It is important to
remember that this boring was done after award of contract 8703. The boring found
groundwater at about 5 feet below the bottom of the pond (id.). This was consistent with
the findings of site boring samples included in PSI's pre-award 24 November 2003
geotechnical report (finding 57). In the fall of 2006 there was a "hundred year storm" and
the pond did not drain (finding 141). ESA determined that the groundwater level was
much higher, about a foot under the bottom of the pond (id.). PE contends this was a
differing site condition for which it is not responsible (app. br. at 258-59). A differing site
cpndition does not apply in this situation because the site condition found after award in
the ESA boring was the same as the site condition _described before award in the PSI
geotechnical report (findings 57, 140). That is, the groundwater was approximately
five feet below the bottom elevation of the pond both before and after award. It was not
until the "hundred year storm" that the groundwater rose to within a foot of the bottom of
the pond apparently preventing the pond from drain1ng properly. The Board has held that
a post award "act of God" such as severe weather is not a differing site condition:

However, "weather occurring during contract performance,
no matter how severe, and other acts of God alone do not
fall within the provisions of the Differing Site Conditions ...
clause." Commercial Contractors Equipment, Inc., ASBCA
No. 52930 et al., 2003-2 BCA ,-( 32,381 at 160,255.
· Moreover, the differing site conditions clause protects a
contractor from undisclosed or unknown site conditions that
predate the contract, not something occurring thereafter.
See John McShain, Inc. v. United States, 375 F.2d 829, 179
. Ct. Cl. 632 (Ct. Cl. 1967) (addressing predecessor changed

137
 conditions clause); Commercial Contractors Equipment,
03-2 BCA 132,381 at 160,258.

PBS&J, 14-1 BCA 135,680 at 174,653.

Although PE cannot rely on differing site condition as the cause of the pond's failure
to drain, the fact is that MAFB would not allow a surface pond (findings 52, 54-55, 142).
Also, after the pond failed to drain, the AF took the position that the pond had to drain
"continuously" (finding 142). First, we find that by keeping the surface pond in the design
after being told to remove it by MAFB authorities, the AF assumed the risk that the surface
pond would not be allowed by MAFB after award of the contract: Second, we find that the
AF changed the requirement for a surface pond that would drain in 72 hours to continuous
draining. There is no evidence in the record that continuous draining was either possible or
acceptable to MAFB.

It is true that PE installed the underground system without AF advance approval
(finding 142) but this does not shift liability to PE. It is obvious from this record that
the AF would not agree to pay for the underground system. In its brief, the AF
mentions note 3 on drawing C-106 that suggests "underground detention" as an option
that could be considered during final design (gov't br. at 325; R4, tab 1746, sheet 8).
The AF seems to imply, without arguing, that "underground detention" should b.e a
no-cost option. As we stated above, PE was entitled to base its bid on the 35% design
surface detention pond and there is nothing in the note or in the contract that required
the PE to construc_t a more costly alternative at no additional cost to the AF. The AF
and MAFB put PE in ari impossible position, on one hand the AF specifying the surface
pond and on the other MAFB prohibiting the surface pond. We find that, under these
circumstances, the only reasonable option for PE was to build the underground·
detention system without AF approval and file a claim. The AF is liable for the
additional cost of the underground system.

The underground detention costs are included in PE's buyout claim discussed
below. PE subcontracted with Robert E. Haas, Inc., to construct the underwater
detention system for $248,390 (finding 142). PE claims two different amounts for this
work, $248,390 (app. br. at 244, 256) and $253,015 (id. at 249). The difference is a
change order for $4,625 (id.). However, in support of the change order, PE cites us to a
spreadsheet that is cut off on the left margin so we cannot verify the change order (R4,
tab 3003 at 175). Therefore, we accept the $248,390 as the amount that the AF is liable
for PE's building the underground system. Mr. Evans does not contend that the
underground detention system caused critic·al path delay so we find that there was no
excusable compensable delay associated with the underground system.

138
Balance of Construction ($20,676,990) 124

This claim is comprised of six separate elements: Subcontractor Buyout Overruns
($4,068,798); Subcontract Change Orders ($5,672,525); Miscellaneous Construction Costs
Credits ($800,506); Extra Work Coded During Project ($2,593,064); Jobsite
Overhead/Constructive Acceleration/General Conditions ($4,614,438); and Added Costs
Due to Rejection of "Structural Brick" design ($1,906,401 ). 125 There is also a 29-day delay
claim. We consider each of these below.

Subcontractor Buyout Overruns ($4,068, 798)

Subcontractor "buyout" is when PE and its subcontractors agree to final negotiated
fixed-price subcontracts (finding 163). PE's EPR.recognized risks in quality of
subcontractor pricing, material price escalation, price to buyout and managing scope of
completion (finding 58). Prior to submitting its proposal PE planned to require its
subcontractors to holcl their bid open for 120 days and that "volatile materials such as
concrete and steel" would be purchased within the 120 days and stored either on site or in
bonded and insured warehouses (id.). We find that PE knew about material price escalation
before submitting its bid·. PE's bid was based on subcontract prices that were not
"indefinite" and most subcontractors said if costs increased they would pass the costs on to
PE (finding 163). There is no explanation why PE accepted bids with this condition
imposed. PE could have insi~ted on firm bids and allowed the subcontractors. to price the
risk. PE's initial schedule indicated PE planned to complete all buyouts by 3 November
2005 (finding 70). PE argues it could not adhere to this schedule because of various delays.
PE's buyout overrun claims are generally based on the difference between subcontractor's
bids and the actual final negotiated subcontract prices (finding 164). These are therefore,
total cost claims 126 that are disfavored by courts. Custom Blending & Packaging; Inc.,
ASBCA No. 49819, 00-2 BCA i131,083 at 153,479 ("The total cost method is a disfavored
means of measuring a contractor's recovery."). We consider the subcontractors' warning
that future increased costs will be "passed on" to PE both inconsistent with fixed-price
contracting and an incentive to PE to "buy-out" the subcontracts as soon as possible.

A contractor is entitled to recover for cost escalation if it can prove that
government-caused delay pushed performance into a time when costs had escalated.
ADT Construction Group, Inc. by Timothy S. Cory, Chapter 7 Trustee, ASBCA
No. 57322, 15-1BCAi135,893 at 175,470-71. However, liability for escalation caused
by government caused delay is different from escalation caused by a contractor's failure
to lock in fixed-priced contracts (buyout) in a timely manner.

124
This amount includes mark-up (app. br. at 234).
125
These amounts do not include mark-up.
126
We do not consider this inconsistent with our determination in the design impact
claim discussed above that the claim was not a MTC claim.

139
 An earlier ADT case dealt with a "buyout" scenario similar to PE's. See ADT
Construction Group, Inc. by Timothy S. Cory, Chapter 7 Trustee, ASBCA No. 55358,
13 BCA 'if 35,307. 127 This ADT case involved the default of a firm:.fixed-price
design-build contract. Id. at 173,291. ADT argued that, due to government-caused
delay "it was not able to finalize subcontracts in April 2004 but had to wait until late
2004 when costs had risen considerably in southern Nevada." Id. at 173,300. ADT
contended it was not able to finalize its subcontracts until it received an approved design ·
in the latter part of 2004. The increased costs at buyout caused ADT to default. The
Board denied ADT's appeal. The Board identified "two fundamental questions" in
ADT: "The first is whether ADT really had to wait until November and December 2004
to buyout' its subcontractors. If it did, the second question is whether that delay
increased the cost of the subcontracts, and, if so, to what extent. Appellant has not
convinced us that the timing of its subcontracting was solely the result of government
actions or that its quantification of the claimed increase in costs is defensible." ADT,
13 BCA ~ 35,307 at 173,320. We focus on the first question, whether PE really had to
wait to enforce buyout on its subcontractors. In ADT, we found that the contractor had
not proven that it had to wait as long as it did to buyout subcontractors:

Based on the record before us, we believe that costs
were increasing in southern Nevada in 2004. We also
accept the argument that subcontracting before design:
approval would have left appellant with some uncertainties,
but it also included inherent risks it should have '1
contemplated at time of bid. What we are doubtful about is
the extent to which it can be said either that appellant was
unaware of the apparently rapidly rising costs. Bayou
Culvert Mfg., Inc., AGBCA No. 400, 76-1 BCA ~ 11,796 at
56,306 ('"A ·contractor is charged with knowledge of the
state of his industry at any given time."'), or that there was
no alternative to entering into subcontracts when it did.
ADT's May 2003 price and technical proposal listed
··named" construction subcontractors and noted that
appellant had entered into agreements with them (finding 3).
While we understand that the price of those subcontracts
may not have been finalized, appellant knew, to some
extent, early on who it was going to contract with and what
those subcontractors were going to do. We see nothing in
the record that demonstrates ADT could not have
subcontracted earlier than it did or even moved toward more
fixed arrangements with its proposed subcontractors. Cf
Yankee Telecommunication Laboratories, Inc., ASBCA

127
Neither party discussed ADT in their briefs.
140
 No. 25240 et al., 85-1 BCA 117,786 at 88,873 ("The
'notion that a bidder has no responsibility to obtain firm
commitments before bidding is not tenable."').

Id. at 173,321. PE had a design-build contract, just as ADT, and we reach the same result.

Inherent in the Board's decision was the recognition that ADT's contract was
firm-fixed-price as is PE's. Lakeshore Engineering Services, Inc. v. United States, 748
F.3d 1341, 1347 (Fed. Cir. 2014) ("The essence of a firm fixed-price contract is that the
contractor, not the government assumes the risk of unexpected costs."). In
Commissioning Solutions Global, LLC, ASBCA Nos. 57429, 57494, 13 BCA 135,355
we stated:

The fixed-price nature of the PO provisions supports
the CO's refusal to increase the PO price. See Naughton
Energy, Inc., ASBCA No. 33044, 88-2 BCA 120,800 at
105,073 (contractor bears the risk of fluctuating marketplace
prices in a fixed-price type contract); Nedlog Co., ASBCA
No. 26034, 82-1BCA115,519 at 76,986 (risk of greatly
increased costs, unanticipated and unprovided for in the
contract price, is on the contractor in a fixed-price contract).

Id. at 173,531. PE competed for and \,Von a finn-fixed-price contract where only 35% of
the design was completed. The trial judge asked Mr. Rusing, the AF design-build
expert (tr. 18/112), how such a contract could be priced. Mr. Rusing testified that prime
contractors try to deal with subcontractors that are familiar with design-build and give
them as much information on the structure and systems as possible and then have them
involved in the development of the 100% design (tr. 18/13 8-39). From our perspective
agreeing to a fixed-price construction contract based on only a 35% design has to carry
significant risk.

In its brief PE explains "The primary reasons why Appellant seeks reimbursement
for these [buyout] overruns" are the delays caused by the structural brick matter,
foundation NTP, differing site conditions (unsuitable fill, organic layer, and asbestos pipe),
the "shopping list," government design changes, government funding shortfalls, and price
escalation due to Hurricane Katrina and the "hot Chinese construction market demand"
(app. br. at 235-36, 242).

We consider competition from China first. In 4.DT the Board imposed an
obligation on ADT to know about the price escalation in Nevada at the time and deal
with it. Just as in ADT, PE put on no persuasive evidence to support a·finding that
competition for materials ·from China was not foreseeable before 27 April 2005 when
PE submitted its bid. Incleed, as early as March 2005 PE identified "price escalation of
materials prior to buy-out" as a risk in its EPR (finding 58). PE planned to require.

141
 I

subcontractors to leave their bids open for 120 days during which time "volatile
materials such as concrete and steel" would be purchased and stored for future use (id.).
Also, Mr. Rusing documented in his expert report that in 2004 to 2005 the construction
industry experienced extreme escalation in material and labor costs (finding 166). We
find that PE knew about price escalation before it submitted its bid and should have
dealt with it.

Concerning Hurricane Katrina, the AF makes a good point in its reply brief.
DO 13 was awarded on 13 July 2005 and Hurricane Katrina occurred less than two
months later (gov't br: at 475). The adverse effects of Katrina occurred well before any
delays were experienced on the contract. Also Hurricane Katrina was an unforeseeable
Act of God. The AF is not liable for price escalation caused by Katrina. Maggie's
Landscaping, Inc., ASBCA Nos. 52462, 52463, 04-2 BCA il 32,647 at 161,565
(government not liable for unforeseen circumstances such as an Act of God); E. W
Jackson Contracting Co., ASBCA No. 7267, 1962 BCA il 3325 at 17,133 ("It is a well
settled principle of law that neither party is responsible to the other for damages
occasioned as a result of an Act of God, unless such obligation is expressly assumed.").

Concerning the structur.al brick portion of the delay, PE failed to prove that this
delay somehow prevented it from buying out its subcontracts in 2006.

Buyout should be dependent on the state of completion of design not actual
construction. Mr. Temchin testified that the earthwork delays had "a significant
negative effect in our ability to buy-out the packages" and that PE could not buyout
subcontracts until a final schedule was agreed to, "Without the schedule, we couldn't
lock in the contract" (finding 166). This testimony contradicts his earlier testimony that
what was needed for buyout was the 100% design, he m.ade no mention of a final
schedule (finding 163). We agree with his earlier testimony. We disagree that a final
schedule is needed, because changes in schedule are almost inevitable in construction
contracts and .increased costs may be dealt with under the changes clause. Also, the
chronology of the design work does not support PE's position. The 65% drawings are
dated 14 November 2005 and include the 100% civil/structural design (finding 165).
Therefore, by November 2005 PE should have bought out all of its contractors involved
in horizontal work. The delay associated with clean site (contaminated soil) started on
7 July 2006 (finding 96). The unsuitable fill was not discovered until mid-August 2006
starting the earthwork delays (findings 103-04). · Therefore, these delays did not affect
buyout of the contractors performing "civil/structural" work that could have been
bought out on or before 128 14 November 2005. PE was able to buyout "Giberson 2" on
31 October 2005 for "earthwork, underground utilities, storm, site concrete, parking lot
subgrade, landscaping, and site furnishings," but there are only two other buyouts in

128
We say before because the subcontractors responsible for that work should have
been working with PE in developing the drawings.
142
 2005 (finding 164). PE should have dealt with all of its subcontractors as it did with
Giberson 2.

The 95% drawings for vertical work are dated 17 May 2006 before the stop-work
orders associated with clean site and unsuitable fill (findings 96, 103-04; 165). Since
the subcontractors were supposed to be assisting PE in the design there is no evidence
that buyouts could not have been.completed before the finalization of the 95% desi"gn in
May 2006. The 100% drawings are dated 24 July 2006 (finding 99) only a couple
weeks after the clean site stop work order. We do not agree that PE could not have
bought out all of its subcontractors on or before when the 100% designs were completed
on 24 July 2006. Indeed, 20 out of the 45 buyouts were completed before the end of
2006 and 25 occurred in 2007 and 2008 (finding 164). The timing of the earthwork
delays post-dates the time when we believe PE should have bought-out its
subcontractors. PE did not address this timing problem in its testimony or briefs.
Essentially, waiting to buyout subcontractors reduces risk to the subcontractors and
increases risk to PE, not the AF. It essentially creates what is analogous to cost
contracts with PE's subcontractors.

In conclusion, PE represented itself as having experience in design-build
contracting. PE signed a fixed-price contract with only 35%.of the design completed.
We have 65% drawings dated 14 November 2005 and 95% drawings dated 17 May
2006, before the first indication of earthwork delays, and no evidence why buyout could
not have been completed in this time frame. PE's buyout activity lasted until October
2008 (finding 164). We have found that escalation problem caused by competition for
materials from China was foreseeable and escalation caused by Hurricane Katrina was
an Act of God for which the AF is not liable. We do not agree there was no alternative
to PE's buying out subcontracts when it did. ADT, 13.BCA, 35,307 at 173,320. Based
on this conclusion, we need not address PE's other items of delay: the shopping list, AF
funding shortfalls, AF design changes, and foundation NTP. This record simply does
not support PE's argument that it acted in a prudent manner and the AF should be liable
for its buyout overruns. Essentially, PE lost control of its subcontractors and that is not
the AF's responsibility. PE's buyout claim is denied except for the stormwater
detention matter discussed above.

Subcontract Change Orders ($5,672,525)

Since PE chose not to introduce testimony on each of these 118 cb,ange orders
due to time constraints at the hearing, this aspect of its claim is essentially a record
· submission. PE argues that "its analytical breakdown of the change orders (by cause),
accompanied by supporting testimony of Jordan Rosenfeld and Dick Cardinale et al.,
should be sufficient to establish a prima facie case that the change orders have been
properly sorted by their underlying causes, shifting the burden to the Air Force to
challenge the contractor's summary" (app. bL at 264). We disagree. Without knowing
precisely how Mr. Rosenfeld and Mr. Cardinale arrived at their allocation of liability to

143
the government for each of the 118 change orders, we would have to "take their word
for it" that their allocations are correct. This we will not do. The "suppo_rting
testimony" is helpful in some cases but not nearly enough to shift the burden of proof.
PE's approach to these 118 change orders assumed considerable risk that we would
have unanswered questions resulting in our finding of failure of proof (FOP) for many
of the change orders. Each change order must stand on its own and we decided if the
record, such as it is, supported PE's allocation of responsibility. We reviewed each of
the 118 change orders and presented our results in tabular format (finding 168). Our
findings corroborate our conclusion that Mr. Rosenfeld's and Mr. Cardinale's allocation
of responsibility was not always self-evident. Based on· our analysis of individual
change orders we found that PE is entitled to $2,009,426 for its change order claim (id.).
To that we add markups:

Description. Audit Determined Rate Amount w/Markup
Overhead/General Cond. $2,009,426
Markups
Bond 0.6375% $12,810
GL & BR Insurance 0.8316% $16,710
Subtotal $2,038,946
Composite G&A 2.86% $58,314
Profit 10.00% $203,895
Total $2,301,155

Miscellaneous Construction Cost Credits ($800,506)

In this section PE explains several credits that it gave to the AF. Since these
credits have apparently already been applied (app. br. at 234) we need not address this
matter further.

Extra Work Coded During Project ($2,593,064)

PE's cryptic argument presented very little documentary or testimonial support
for this aspect of its claim (app. br. at 313-17). Nevertheless, we find that the AF
effectively conceded the matter in its ·brief. Therefore, we accept the fact that PE
accurately captured its costs for these cost codes. We briefly address entitlement in
each claim category below.

Claim Preparation ($1,840,112)

PE argues it is entitled to recover what it characterizes as "claim prepration
costs" because they were incurred before its "claim was certified and submitted to the
Contracting Officer on June 29, 2012" (app. br. at 314). The date of certification is

144
hardly the determining factor. Virtually all claim preparation costs are incurred before·
certification. The inquiry is:

In considering such claims, the Federal Circuit directed the
Board to examine the objective reason why the contractor
incurred the cost. If the contractor incurred the cost for the
purpose of materially furthering the negotiation process, the
cost normally is allowable under FAR 31.205-33 as a
contract administration cost even if the negotiation
ultimately fails. On the other hand, if the cost is incurred to
promote the prosecution of a claim, then the costs are
unallowable.

Vistas Construction of Illinois, Inc., ASBCA No. 58479 et al., 16-1 BCA ,-r 36,236 at
176,797. PE's "proof' that it is entitled to these costs is "[t]he reasonableness of those
costs was never challenged in this appeal, and their award is authorized pursuant to
FAR 31.205-33" (app. br. at 314). PE adds nothing more in its page long quantum
argument, effectively referring back to its entitlement section quoted above (id. at 473-7 4 ).
PE totally failed to meet its burden of proof that this "claim" cost was incurred "for the
purpose of materially furthering the negotiation process." This claim is denied. ·

Response to Cure Notices ($71,015)

The record contains two cure notices issued on 9 August 2006 and 3 1 May 2007
(findings 101, 126). The first notice listed seven deficiencies: failure to develop a
project schedule, lack of cut and fill calculations, lack of sufficient labor, lack of
responsiveness relating to TLF subsurface conditions, design deficiencies relating to
parking lot, failure to give notice of steel delays, and failure to provide pricing for the
changes to be incorporated into the design, i.e., the "shopping list" (finding 101 ). The
second cure notice listed three deficiencies: failure to provide a proposal as outlined in
the RFP, dated 1 November 2006, for Shopping List Items, delays in the schedule, and
failure to ensure timely delivery of the steel trusses for the VQ (finding 126).

As is the case with most cure notices the contractor is warned that the
government considers the failure to comply with the tern1s of the contract to be a
.condition that is endangering performance of the contract. The problem with these cure
notices is that the ''shopping list" was not a tenn of the contract. The AF had no valid
reason to include the shopping list in the cure notices. It was an inappropriate use of a
cure notice to coerce a contractor to do something that is not requin:d by the contract.
We sustain PE's claim, but only for that portion of the amount claimed that relates to
the shopping list.

Unfortunately, PE gives us no help in estimating a reasonable amount caused by the
shopping list. The only support for this claim provided by PE was reference to a summary

145 ·
 at Rule 4, tab 3146. This is a one-page summary tharis identical to that in PE' s brief (app.
br. at 314 ). Rule 4 tab 3146 directs us to Note 8, Sutor Schedule 5-1 b, which is
/Mr. Rosenfeld' s 10 October 2014 Rebuttal Report. When we go to the report we find
Schedule 5-1 {R4, tab 3003 at 170). Although PE provides us no assistance, we tried to fill
in the blanks by going page by page through Schedule 5-1 and could not find Schedule 5:-1 b
or Note 8. We have done more than called for given it is PE's burden of proof. Although
we found entitlement above, we are unable to determine quantum, and thus make no award.

Delays in Issuance of NTPs ($63,021)

Although we found that there was no requirement for the AF to issue a design
NTP, it in factissued one on 25 July 2005 with an effective date of 13 July 2005
(finding 68). The AF issued a LNTP for earthwork on 27 March 2006 (finding 89).
The next LNTP was issued on 6 June 2006 for work affecting underground utilities and
various site work not including foundations (finding 94). The unlimited NTP was
issued on 10 July 2006 (finding 98). PE argues that this unlimited NTP should have
been issued in April 2006 when the 95% design drawings were finalized. We have
already found tb.at PE is entitled to 70 days of compensable delay in issuing the LNTP
for the VQ foundation work (see pages 198-99). PE fails to explain its position nor
does it cite to any documentary or testimonial evidence in the record in support of this
additional NTP claim. PE failed to meet its burden of proof on this aspect of its claim.
This NTP claim is denied.

Tiger Team Recovery Efforts ($230,342)

While we found that there was constructive acceleration and are willing to
compensate PE for associated costs, PE failed to develop the record sufficiently for the
Board to find that the "Tiger Team" costs were caused by the acceleration. PE only
refers to "Tiger Team" in two pages of its brief, pages· 314 and 473; without any
analysis supported by proof. PE failed to meet its burden of proof for this aspect of its
claim. This Tiger Team claim is denied.

Increase Mgmt. ofAcceleration-($107,181)

Having found constructive acceleration, and there being no AF response to this
claim we will accept PE's characterization of these costs. We find that the AF is liable
for the $107,181 cost caused by acceleration. We add burden:

Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $107,181
Markups
Bond 0.6375% $683
GL & BR Insurance 0.8316% $891
Subtotal $108,755
146
 Composite G&A 2.86% $3,110
Profit 10.00% $10,876
Total $122,741

Preparation of Revisions to REAs ($51,697)

This REA claim is similar to the "claim" costs denied above. In AEI Pacific,
Inc., ASBCA No. 53806, 08-1 BCA ~ 33,792, we discussed REA preparation costs:

The costs of professional and consultant services are
unallowable if they are incurred in connection with the
prosecution of a claim against the government.
FAR 3 1.2 0 5-47(f)( 1). In making this determination, we
look to see whether the costs were incurred "for the genuine
purpose of materially furthering the negotiation process."
Bill Strong Enterprises, Inc. v. Shannon, 49 F .3 d 1541, 15 50
(Fed. Cir. 1995), overruled in part on other grounds by
Reflectone; Inc. v. Dalton-, 60 F.3d 1572 (Fed. Cir. 1995).

Id. at 167,284. In AEiwe decided that because the "REA was submitted long after AEI
had ceased work on the .contract and AEI has not pointed to any on-going negotiation
process between the parties which would require such services" AEI' s REA preparation
costs were unallowable. Id. We follow this logic here. PE's REA's were submitted on
24 December 2008 after BOD (R4, tabs 1536-38). They deal with "Maladministration
of the Closure Inspection Process" (R4, tab 1536), "Tri-Arch Paint" (R4, tab 1537) and
"Differing Site Conditions along the High Temperature Hot Water Pipeline Alignment"
(R4," tab 1538). We denied PE's claim for the cost ofTriarch, so those REA costs
would notbe recoverable. We agreed with PE's claims relating to the HTHW differing
site conditions and closure inspection process. However, PE failed to put on any -
evidence that meets the criteria of AEI, that there was an "on-going negotiation process
between the parties which would require such services." Therefore, PE failed to meet
its burden of proof. This REA claim is denied.

Extra Warranty Work ($154,918)

PE fails to provide any details of what this work was, nor does it cite to any
documentary or testimonial evidence supporting this cla:im. PE failed to meet its burden
of proof. This extra warranty work claim is denied.

Response to Noise Level Concerns ($72,500)

The contract required PE to provide vibration isolation foi;- mechanical room
equipment (finding 178). The contract does not specify a measurable noise level for the
guest rooms. Mr. Rola seems to be the only person asserting that the noise level in the
147
TLF guest room above the mechanical room was unacceptable (finding 179). However,
there is no credible, objective proof that such was the case. Mr. Kissler's statement that
PE's contract did not require it to insulate the mechanical room was correct - all that is
required is '•vibration isolation" for the equipment (findings 178-79). There is no
allegation that PE did not provide vibration isolation for the equipment in the mechanical
room. Ultimately, the AF conceded that there was no noise problem above the
mechanical room (finding 179). We find Mr. Rola's· cone.ems were unjustified. The AF
is liable for the $72,500 incurred by PE in attempting to placate Mr. Rola. We apply
markup:

Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $72,500
Markups
Bond 0.6375% $462
GL & BR Insurance 0.8316% $603
Subtotal $73,565
Composite G&A 2.86% $2,104
Profit 10.00% $7,357
Total $83,026

Miscellaneous Other Work ($2,280)

PE fails to provide any details of what this work was, nor does it cite to any
documentary or testimonial evidence supporting this claim. PE failed to meet its burden
of proof. This claim is denied.

Jobsite Overhead/ConstructiveAcceleration/General Conditions ($4,614,438)

PE characterized this claim as "increased general condition costs" (app. br. at
474-75), however, we consider only increased general condition costs caused by
constructive acceleration. Constructive acceleration occurs when the government
requires a contractor to adhere to a performance schedule even though the contractor is
entitled to an extension due to excusable delay. Fraser Construction Co. v. United
States, 384 F.3d 1354, 1361 (Fed. Cir. 2004). There are generally five elements of
acceleration:

( 1) [T]hat the contractor encountered a delay that is
excusable under the contract; (2) that the contractor made a
timely and sufficient request for an extension of the contract
schedule; (3) that the government denied the contractor's
request for an extension or failed to act on it within a
reasonable time; (4) that the government insisted on
· completion of the contract within a period shorter than the

148
 period to which the contractor would be entitled by taking
into account the period of excusable delay, after which the
contractor notified the government thatit regarded the
alleged order to accelerate as a constructive change in the
contract; and (5) that the contractor was required to expend
extra resources to compensate for the lost time and remain
on schedule.

Id. In Fraser, the court cited Norair Eng'g Corp. v. United States, 666 F.2d 546, 548 (Ct.
Cl. 1981 ), that compressed "these five requirements into three essential elements-
excusable delay, an order to accelerate, and acceleration with attendant costs." Fraser, 384
F.3d at 1362. An "order to accelerate" is satisfied by the imposition or threat to impose
liquidated damages. States Roofing Corporation, ASBCA No. 54860 et al., I 0-1 BCA
, 34,356 at 169,665 (quoting Norair, 666 F.2d at 549) (An order to accelerate "need not be
couched in terms of a specific command. A request to accelerate, or even an expression of
concern about lagging progress, may have the same effect as an order."); Norair, 666 F.2d
at 549 ("In short, while the Government recognized that some delays were validly
excusable; it did not say which, and left it very clear that it disagreed with plaintiff as to the
amount; therefore, plaintiff could have been required to accelerate work beyond what it
thought was the proper rate (allowing for excusable delays) to avoid the risk of liquidated
damages."); Fischbach & Moore Int'! Corp., ASBCA No. 18146, 77-1 BCA, 12,300 at
59,228. We apply the three element test herein.

The AF extended the period of performance from 9 July 2007 to 27 December 2007
by Mod. 3 (finding 124). In our decision above, we found a cumulative excusable/concurrent
delay of 332 days (70 days for horizontal NTP, 28 days for cleari site concerns, 182 days for
unsuitable fill, organic material and asbestos pipe, and 20 days for Sherwin Williams paint
application in the VQ, and 32 days 129 of critical concurrent delay for SSNIR/Truss). The 332
days runs concurrently with the 171 days in Mod. 3 so we use 9 July 2007 as the starting
point in this analysis. The government may contend that, because of Mod 3's extension of·
time to perform, the acceleration only occurred after 27 December 2007. However, Mod 3
imposed de facto liquidated damages through the credit it required of PE. Therefore, PE was
entitled to 332 days excusable delay starting from 9 July 2007 for a delivery date of 5 June
2008. The first element is satisfied. The AF refused to extend the 27 December 2007
delivery date and informed PE that liquidated damages would commence on 28 December
2007 (finding 162). The second element is satisfied. PE claims $4,614,438 in direct costs it
incurred due to the acceleration. The third element is satisfied. We find that PE is entitled to
recover an amount for increased jobsite overhead/general condition costs caused by
constructive acceleration.

The $4,614,438 is made up of fourteen costs (three labor and eleven non-labor)
resulting from "[t]he ripple effect of multiple delays and impacts [which] forced Parsons to

129
See pages 153-54 ofthis decision.
149
 resequence, accelerate, and incur project management and administration costs far
exceeding those reasonably anticipated at bid time" (app. br. at 474). We will not repeat
the list here. The primary evidence supporting this claim are Rule 4, tab 3148, and PE's
hearing exhibit 19. Rule 4, tab 3148, consist~ of a summary sheet, twelve sheets of
accounting data and two graphs showing man hours and employees from 2005 to 2008.
Hearing exhibit 19 is an overall claim summary that includes pages supporting this claim
cited by PE in its brief. We held above that PE is entitled to recover increased costs
incurred due to the constructive acceleration. The data shown in Rule 4, tab 3148 and
hearing exhibit 19 and our finding of constructive acceleration proves that PE suffered
damage. The $4,614,438 130 is made up of$3,124,000 in labor costs and $1,490,438 in
non-labor costs (app. br. at 475). We deal with the labor costs first. We rely on one chart
in Rule 4, tab 3148 at 14 that shows staffing hours by date. We only allow PE to recover
for the costs incurred during the acceleration period. PE identified the acceleration period
as from 1 September 2007 to 31 May 2008 (app. br. at 482). The acceleration period is
indk:ated at the bottom of the chart. The chart shows the highest labor hours during the
acceleration period. We estimate from the chart that two thirds of the labor was caused by
the acceleration. 131 Therefore, we believe a fair and reasonable estimate of the labor costs
during the acceleration period is two thirds of the claimed labor costs or $2,080,584
(.666 x $3,124,000). As for the non-labor costs we do not have a chart or anything else to
assist us is determining fair and reasonable estimate of increased cost incurred during the
. acceleration period. However the acceleration period included winter months. It is clear
to us that the excusable delay caused PE to perform work during winter that it had planned
to perform in milder months. Mr. Cardinale testified about heaters "all over both
facilities" and scaffolding, tenting and equipment used to heat the buildings so work would
proceed (tr. 5/154). Therefore, we deny the non-labor costs except for the winter heat cost
of $493,196. The total amount we allow for jobsite overhead/general conditions is
$2,573,780 ($2,080,584 + $493,196). We apply the standard markups 132 to this amount as
follows:

Description Audit Determined Rate Amount w/Markup
Overhead/General Cond. $2,573,780
Markups
Bond 0.6375% $16,408
GL & BR Insurance 0.8316% $21,404
Subtotal $2,611,592
Composite G&A · 2.86% $74,692
Profit 10.00% $261,159
Total $2,947,443

130
PE states· that this amount is "excluding markups" (app. br. at 474).
131
If PE believes we have misinterpreted this data, it is because PE failed to adequately
explain it to us in its brief.
132
PE states that the claimed amount for jobsite overhead excluded markups (app. br. at 474).
150
 Added Costs Due to Rejection of "Structural Brick" Design ($1,906,401)

Earlier in this decision we found that the AF was liable for the additional cost of
design and construction required to make the VQ resist progressive collapse. We found
the AF liable for $722,176 in design costs relating to progressive collapse. In its brief for·
this part of the claim PE stated its "structural engineers [had] to develop a series of costly
changes to other parts of the VQ building to support the (unnecessarily) heavy structure
against potential progressive collapse" (app. br. at 323). These construction costs are what
we found the AF liable f@, but we have yet to arrive at quantum. Rather than tracking
these construction costs directly, PE chose to quantify this claim with Mr. Tengler's
6 October 2014 estimate of cost savings for using the structural brick in place of the double
wall design (app. br. at 3223; R4, tab 3154). Mr. Tengler used the "RSMeans data base"
and took out "quantities of impacted work and applying time savings that would have been
realized" (tr. 4/98). We see no logical relationship between such an estimate of cost
savings and the actual increased cost of construction solely attributed to what was needed
to modify the VQ to resist progressive collapse. We note that the cost savings occasioned
by the change to structural brick addressed more than just progressive collapse
(finding 78). Mr. Bennett testified thatthe structural brick design change was intended in
part to address progressive collapse (finding 73). PE proved itself capable of tracking
costs for differing site conditions (unsuitable fill, organic layer, asbestos pipe and HTHW
installation problems) all of which occurred before the structural modifications to the VQ.
We do not understand why PE did not do the same for progressive collapse. We do not
accept Mr. Tengler's estimate of $1,906,401 as an accurate quantification of the additional
construction costs required to make the VQ resistant to progressive collapse. We agree
that PE is entitled to recover these construction costs, but it is PE's burden to prove the
amount. Mr. Tengler's estimate does not meet that burden. We have sustained entitlement
but deny the quantum claim based on Mr. Tengler's cost savings estimate of $1,906,401.
We are unable to calculate the amount PE is entitled to. This is another situation caused by
PE's insistence that we decide entitlement and quantum, while failing to present adequate
evidence on quantum.

Balance of Construction Delay

PE claims $449,943 for a 29-day delay in its quantum section discussing its
"Balance of Construction Phase" (app. br. at 483 ). PE failed to cite us to the location of its
discussion of this 29-day delay in its entitlement section. However, we were able to find it
in PE's analysis of its delay "Review Periods.'; 133 Apparently the 29 days is made up of
21 days in Review Period 7 (app. br. at 372-73 ), and 8 days in Review Period 8 (id. at
373.-75). The 21-day delay was "due to late installation of the standing seam metal roof'
(R4, tab 3004 at 43). The delay is depicted in Mr. Evans' Figure 15, Review Period 7

133
These Review Periods correspond to Mr. Evans' expert report (R4, tab 3004).
151
As-Planned and As-Built Schedule (id. at 42). Mr. Evans' expert report attributes this
21-day delay to a labor shortage caused by the delay in approval of the SSMR:

The Air Force apparently failed to consider the criticality of
the material approval and how it impacted the planning
efforts of Parsons and its metal roof subcontractor,·
Warburton's, Inc. When the submittal was approved on
April 19, 2007, Warburton's craft labor was already
committed to other projects, and labor availability for
McGuire AFB became an issue. Warburton' s personnel
stated in an interview that the uncertainty connected to the
· Air Force's approval of the submittal led to the labor
availability issue.

(R4, tab 3004 at 40) Mr. Evans contends that because of the labor shortage, Warburton's
crew had to complete the TLF before moving to the VQ (id. at 40-41). In his testimony,
Mr. Evans adds "getting material" as a reason for the 21-day delay (tr. 8/74-75). The ·
problem with the evidence supporting the 21-day delay is that Mr. Evans' report and ·
testimony is based on only one interview 134 and is therefore hearsay.· Hearsay evidence is
admissible before the Board and can be a permissible basis for expert opinion, but where
(as here) it has little or no corroborating or indicia of trustworthiness, it is entitled to little,
if any, weight. PE directs us to no contemporaneous documents or sworn testimony from
Warburton or anyone else to support the assertion that the delay in approving the SSMR
caused the labor shortage and that labor from some other source could not be brought in to
work on the VQ. 135 Mr. Evans may be correct in his conclusion, but PE does not meet its
burden of proof with the evidence presented. We deny the claim for the 21-day delay.

With respect to the remaining 8-day delay, Mr. Evans attributes it to the removal of
the catwalk in VQ wing A and redesign of the catwalks in wings Band C caused by
design changes needed to correct the VQ design to resist progressive collapse (app. br. at
374; R4, tab 3004 at 45). In our decision above we found the AF responsible for "the
additional cost of design and construction required to make the Baker 35% design resist
progressive collapse." This would include compensable delay. Unlike the 21-day delay
discussed above, there is record evidence supporting the 8-day delay. In her testimony,
CO Brown agreed that "in the 35 percent design, the shear walls in the different floors
didn't line up and they had to be moved in order to carry the loads down and meet the
progressive'collapse requirements" (tr. 12/109). In his testimony Mr. Rosenfeld agreed
that the catwalks had to be "redesigned when all that HV AC ducting had to be rerouted
into the attic in an effort to repair problems with the 35 percent design" (tr. 10/105).

134
In Appendix C to his expert report, Mr. Evans lists subcontractors interviewed. One
individual, Mr. Ken Francom, Warburton's SSMR subcontractor, is listed but that is
all, no affidavit or even contemporaneous notes of the interview (R4, tab 3004 at 68).
135
If there is such evidence in the voluminous record PE did not show it to us.
152
However, we ran across a stumbling block when we looked at other evidence. PE's brief
stated, "The redesign [of catwalks] was processed through RFI 24 7 (R4, tab 400) in the
late summer and fall of 2007" (app. br. at 374). When we looked at RFI 247 we noticed it
predicted a cost savings stating, "it is our intention to provide the government with a credit
commensurate with the reduction in scope requested (R4, tab 400 at 1). A cost savings
change does not preclude a claim for delay damages associated with that change.
However, the catwalk re-design was discussed in a 25 October 2007 coordination meeting
where the following comment was entered in the meeting minutes:

Update 10/25: Chuck corrected last week's statement and
explained that with the concept approval in hand, Parsons·
has completed the SOW and it is presently out/or bid. Shop
drawings will be the responsibility ofsuccessful bidder and
once in hand they will be submitted to the Gov for approval.
This is no longer on the Critical Path due to the reduction
in scope.

(R4, tab 401 at 2) (Bold added) For delay to be compensable, it must be on the critical
path. States Roofing, 10-1 BCA ~ 34,356 at 169,661 (citations omitted) (In order to
establish entitlement to delay damages, a contractor must demonstrate the extent of the
delay, the causal link between the government's alleged wrongful actions and the delay
and the resulting injury. The delay normally must be to work on the critical path, the
only work that affects overall completion of the contract work.). Since Mr. Evans did
not address the comment in the contemporaneous notes that the catwalk was no longer
on the critical path we are left with an unrefuted challenge to his allegation. Moreover,·
Mr. Evans' report gives no reason to believe that the catwalk activity was on the critical
path. Accordingly, we must deny PE's claim for the 8 days of compensable delay
·associated with the catwalks.

HTHWHeat

While PE discusses this topic in its entitlement section, it does not include a
specific dollar amount and also does not have a separate section for HTHW heat in its
quantum section. The lack of a discussion in the quantum section is confusing. We
briefly comment on this topic below, but we conclude that the damages for "HTHW
Heat" must be included in other claims.

The contract is silent on PE's use of the HTHW to heat the buildings
(findings 137-38). In any event, regardless of any contractual obligation to allow PE to
use HTHW for heat, we agree that delays for which the AF is responsible pushed work
into winter and the AF is liable for heating required for work to proceed. In the
subcontractor change order and acceleration claims we agreed with claims involving
enclosure of the buildings and provision of temporary heat.

153
Standing Seam Metal Roof (SSMR) Approval Delay/Roof Truss Delay

PE experienced a delay caused by a conflict between VQ roof truss design and an
elevator shaft design (finding 125). PE estimated a potential delay in the 27 December
2007 delivery date ranging from 12 work days to 5 weeks (id.). A total of 1 year, 2 months
and 19 days elapsed between the first SSMR S1Jbmittal on 16 February 2006 (finding 151)
and final approval on 7 May 2007 (finding 156). Although other issues were discussed,
we find that the primary cause of the SSMR approval delay was the AF's continued
insistence that "oil canning" be eliminated. The requirement that oil canning be eliminated
was modified to "seriously minimized" by Amendment No. 1 to RFP 8234, dated 24
March 2005, because it was acknowledged that it is inherent in the product and eliminating
oil canning was impossible (finding 150). Therefore, we find that the AF's persistent
insistence that oil canning be eliminated, even 'after Amendment No. 1 (findings 150-56),
was unreasonable and the AF is responsible for the critical path delay associated therewith. ·
According to PE's scheduling expert only a small portion of the elapsed time between the
first SSMR submittal on 16 February 2006 and final approval on 7 May 2007 was on the
critical path. We rely on Mr. Evans' CPM analysis where he identifies 32 days of
concurrent delay caused by the SSMR and roof trusses in Review Period 6 (R4, tab 3004 at
3 8). In its brief PE states, "Exponent ultimately classified the truss and roof delays as
concurrent (R4, tab 3004 at 38), so that Parsons would have no right to delay damages but
the Air Force would have no right to assess liquidated delay damages for the 32 days at
issue in review period 6" (app. br. at 372; tr. 8/71). We adopt that view and extend the
performance period by 32 non-compensable days.

Exterior Insulation & Finish Systems (EIFS)1 36

PE claims that the AF was responsible f~r the delay associated with the use of
EIFS. In its brief PE states:

Parsons incurred significant extra expenses when it
had to install EIFS in cold winter conditions that would and
should have been avoided. The delays to the EIFS decision
delayed the start of scaffolding, which further delayed site
grading and landscaping around the building. Ultimately
Parsons also incurred months of costs for its architect of
record and other staff to debate the EIFS solution that was
ultimately accepted.

(App. br. at 312-13) (Citation omitted)

We see several problems with PE's argument. First, this entire string of events was
caused by two errors made by PE. ASI No. 8 corrected the 100% design that incorrectly

136
There was almost no discussion of this issue at the hearing.
154
required the installation of stucco over rigid insulation (finding 158). However, ASI No. 8
also contained an error relating to the window clearance (finding 160). Contributing to the
problem is Mr. Bennett's belief that RFP 8234 took precedence over the approved 100%
design developed by PE - it does not. Also, we disagree that the inherent nature of the
design-build contract gives PE the right to make unilateral changes to the final AF approved
100% for construction design. 137 The entire EIFS matter is simply the correction of two
mistakes by PE. We deny PE's claim relating to the use ofEIFS.

Project Closeout

PE claims $222,416 in direct costs (app. br. at 478) and $80,532 for 15 days of
compensable delay (id. at 483) as a result of what it contends was an unreasonably long
closeout inspection to reach BOD on 11 September 2008. 138

The PMP notified PE that "[ a]s minimum" seven AF organizations would "participate
in all final acceptance inspections." PE also knew it was responsible for providing
"sufficient advance notice for maximum participation by interested parties." _(Finding 67)
PE was required to conduct both pre-final and final inspections (finding 183}. The contract
sets up a procedure that envisions the final inspection concentrating on the pre-final
inspection results, "The [final] inspection shall concentrate on the items identified at the
pre-final inspection and recorded in the pre-final report" (finding 183). We conclude from
the record that the procedure envisioned by the contract involved a limited number of joint
inspections conducted by PE and the AF. What actually occurred was nothing like what the
contract envisioned.

PE submitted its 14-day notice of pre-final inspection, and associated 1440 item
punch list, for the TLF on 27 April 2008 (finding 185). PE had intended to provide the
notice for both the TLF and VQ, but the TLF was ready before the VQ and PE wanted
to end liquidated damages on the TLF (id.). CO Brown explained she would not accept
the notice because the inspections of the TLF and VQ had to occur together in order to
minimize AF travel expenses (finding 187).

PE submitted the 14-day notice of pre-final inspection for the VQ on 5 May 2008
(finding 188). CO Brown explained she would not accept the notice because of a
"cursory site tour" by AFCEE personnel (id.). There also seems to have been some
confusion on CO Brown's part about when SOW paragraph 3.2.2.2.2 required that the
Commissioning Final Report, the Test and Balance (TAB) Report be provided (id.).

Liquidated damages (LDs) started on 28 December 2007, the day after the
completion date set in Mod. 3 (finding 162). Since PE was incurring LDs as of

137
This is different from our decision that PE had the right to unilaterally make changes
to the 35% design ..
138
The amounts include markups (app. br. at 478, 483).
155
28 December 2007, we find that time was of the essence. AmerescoSolutions, Inc.,
ASBCA No. 56811, 10-2 BCA ~I 34,606 at 170,549 (construction contracts generally
contain a liquidated damages provision, and the assessment of such damages indicates time
is of the essence); Keith Crawford & Associates, ASBCA No. 46893, 95-1BCA127,388
at 136,519 (time is of the essence in a government contract when, as here, it contains a
fixed date for performance and provides for the assessment of liquidated damages if the
fixed date is exceeded); Maysons Piping Contractors. Inc., ASBCA Nos. 28446, 29036,
86-1 BCA ~ 18,626 at 93,595 (the imposition of liquidated damages is evidence of the
government's intent to hold appellant liable for its delayed performance under the contract,
i.e., time is of the essence). We conclude that the finding that "'time is of the essence" is a
two-way street. We see no reason why the government cannot be held accountable for
failure to act in a timely manner when time is of the essence. It is clear according to the
PMP that seven or more AF organizations had the right to participate in the final
acceptance inspections (finding 67). However, it is also clear to us that since time was of
the essence, the AF had an affirmative obligation to marshal its organizations and have all
interested parties conduct whatever inspection they desire without delay. To the contrary,
the record indicates that the AF had absolutely no sense of urgency, whatsoever, in regard
to completing closeout and ending LDs. There is nothing in the contract that requires that
closeout inspections must wait until both the TLF and VQ are ready. The TLF and the VQ
were listed in separate contract CLINs (finding 65). Under the~e circumstances it would
have been appropriate to apportion the LDs between the TLF and VQ and deal with TLF
BOD first, separate from the VQ. We did so under similar circumstances in Dick Pacifzc
Construction; Co., ASBCA No. 57675 et al., 16-1 BCA ~ 36,196 at 176,638.

The demand that both the TLF and VQ be available at the same time violated time
being of the essence. The AF's 28 inspections violated time being of the essence (finding
189). The AF's inspection delay in order to minimize travel expenses violated time being of
the essence (finding 187). CO Brown's delay based on an unexplained "cursory site tour"
violated time being of the essence (finding 188). Mr. Williams statement that because the
furniture was not yet delivered "there is no rush to accomplish the pre-final on the TLF"
violated time being of the essence (finding 186). Mr. Ro la's concerns over mechanical room ,-
noise was not based on contract requirements·, was unreasonable and violated time being of
the ·essence (findings 194, 196). Fluctuating numerous punch lists violated time being of the
essence (findings 190-92, 198). We will not hold PE liable for delay and liquidated damages
for the time while it awaited inspection when the AF had no concern over the time it took to
complete contract closeout when LDs were accruing.

Fourteen days from 27 April 2008 was a Sunday so the first working day was
Monday 12 May 2008. The AF could have started pre-final at the TLF on that day ..
Fourteen days from 5 May 2008 was Monday 19 May 2008. The AF could have started
pre-final at the VQ on that day. The parties agree that BOD is 11 September 2008
(finding 197). We accept Mr. Cardinale's assessment that there had been 28 separate
inspections during that time (finding 189). We accept PE's chronology of inspections and
punch lists (findings 192, 198). We take into consideration Mr. Rothwell's opinion that, if

156
everything was coordinated, the AF team should be able to complete an inspection in
"approximately a week" (finding 189). We also recognize that PE does not quarrel with
the individual punch list items. but rather the excessive time taken during all the
inspections by various AF entities from various locations across the country (finding 198;
app. br. at 336). We find that the time it took for the AF to complete its inspections and
reach BOD was unreasonable and violated its obligation imposed by time being of the
essence. A&D Fire Protection, Inc., ASBCA Nos. 53 I 03, 53838, 02-2 BCA 132,053 at
158,448 (work required by over-zealous inspectors in multiple punch lists is compensable);
HG. Reynolds Co., ASBCA No. 42351 et al., 93-2 BCA 125,797 at 128,375 (citation
omitted) ("The Government is entitled to conduct a strict and intensive inspection to
ensure that it is getting what it is entitled to under a construction contract. However, if as
in the matter before us. the contractor's work is subject to multiple inspections to differing
standards by different officials, an equitable adjustment should be granted for any delay or
increased costs occasioned thereby."); Hull-Hazard, Inc., ASBCA No. 34645, 90-3 BCA
~ 23,173 at 116,306 (quoting WF. Kilbride Constr., Inc., ASBCA No. 19484. 76-1 BCA
~ 11,726 at 55,884) ("'[I]f inspection procedures are confusing and vacillating, and the
contractor's work is subjected to multiple inspections to differing standards by different
officials, an equitable adjustment should be granted under the Changes clause for any
delay or increased costs.").

PE accepts that the '"reasonably allowed duration of the close out" was "April
through June 2008" (app·. br. at 478). However, we found above that closeout
inspections could have started on 12 May 2008 for the TLF and 19 May 6008 for the_
VQ. Therefore we conclude that the closeout should have rim from mid-May 2008
through June 2008. This means that BOD should have occurred at the end of June
2008. PE claims $222,4 I 6 for "general overhead and direct charged costs commencing
in July 2008 through final completion in September" (id.). We accept this amount as
reasonable. The AF is liable for $222,416 in direct costs for failing to complete
closeout in a timely manner.

Now we deal with PE's claim for closeout compensable delay. The first problem
we encounter relates to dates. Based on our 332 days of excusable delay the delivery date
was 5 June 2008. One could argue that LDs could start on 6 June 2008 unless PE proves
more excusable delay. Since PE agrees that BOD should have occurred by 30 June 2008,
'arguably PE could be liable for LDs from 5 June 2008 to 30 June 2008. However, since
BOD in fact occurred on 11 September 2008, arguably there could be 72 days of excusable
delay from 1 July 2008 through 11 September 2008. PE asks for 15 days of delay. None
of this was litigated or briefed and we do not attempt to sort it out.

PE's brief only adds to the confusion. In its Quantum section, PE clearly claims
$80,532 for 15 days of compensable delay (app. br. at 483). In its entitlement section PE
states; ''At trial, however, Dick Cardinale explained that the final Test-and-Balance [TAB]
and commissioning reports should properly be treated as conditions to final acceptance and
not preconditions to BOD" (app'. br. at 345). PE then said, ''Based on this unchallenged

157
 evidence, Mark Evans revised his analysis by re-characterizing 15 days of concurrent
delay as AF delay. (Tr. 8/92:3-10)." (Id.) However, we look at Exponent's expert report
and see 16 days delay allocated to PE and 15 days of delay allocated to the AF and they do
not appear to be concurrent (R4, tab 3004 at 49-50). Later in the entitlement section PE
writes, "Under this revised allocation of delays, Parsons believes that Table 14 in the
Exponent report (R4, tab 3004 at 50) should be revised so that only 4 days are allocated to
Parsons, while the remaining 27 days are allocated to the Air Force in review period 1O"
(app. br. at 379-80). From this we gather that maybe PE should be claiming for 27 days of
compensable delay. We are not, however, responsible for figuring out what PE might have
claimed.

In any event, we also see contemporaneous documents establishing that, at the time,
both parties believed that the TAB, and Commissioning reports were pre-conditions to
BOD. PE developed a schedule that clearly showed this (finding 184). Paragraph
3.2.2.2.2 Delivery/Warranty states that all inspections and commissioning requirements
will be completed before final inspection (finding 183). The as-planned and as-built CPM
schedules shown in Exponent's report show TAB and Commissioning reports delivered
before BOD (R4, tab 3004 at 49). Therefore, the record does not support Mr. Cardinale's
testimony to the contrary. The confusion in the record, particularly PE's argument in its
brief that the 15 days was previously considered by its expert to be concurrent delay (app.
br. at 345, 377), causes us only more confusion. It is PE's burden to prove this delay claim
in a clear and unambiguous manner. PE failed in this regard. We deny PE's claim for
compensable closeout delay.

Design Notice to Proceed (NTP)

PE contends that it is entitled to a 14-day delay in issuing the design NTP (app. br. at
362). We disagree. First, there was no requirement for a design NTP (finding 68). Second
the NTP issued on 25 July 2005 stated that its effective date was the date of DO 13 which
was 13 July 2005 (finding 68). Third, Mr. Binks signed the 25 July 2006 NTP
acknowledging receipt and we find Mr. Hillestad's testimony that PE agreed with the
effective date credible (finding 68). PE is not entitled to a 14-day delay in the design NTP.

Submittals

PE attributes delay to the AF in approving its submittals. However, PE's analysis
is fundamentally flawed. PE contends that submittals have to be processed within
14 calendar days (app. br. at 133). PE relies on a document at the very end ofRFP 8234,
SOW Attachment Sb, Section 01300 Submittals, Paragraph 3.02 Timing of Submittals,
paragraph B, "Allow 14 calendar days for review by the Government of each submittal
item" (id.; R4, tab 2 at 1787). We, however, rely on Section O1330 - Submittal
Procedures. This specification provides that submittals first go to the QC -Manager and
allows 15 working days for approval. If the submittal requires CO approval, the CO has an
. additional 20.working days from receipt to approve the submittal. This procedure applies

158
to resubmittals. (Finding 21) Therefore, the submittal approval requirement, without
resubmittal, ranges from 15 working days to at least 3 5 working days or seven weeks
depending on who approves the submittal. Because PE used the incorrect approval times
and the lack of testimony on the details of each submittal, including resubmittals, PE failed
to meet its burden of proof on all of its submittal delay arguments.

Schedule De lay/Extended Overhead ($3, 184,150)

We addressed the individual components of this claim earlier in this decision.
The results are reflected in the table below:
(

Claim I PE Days PE Amount Decision Decision
Days Amount
NTP Delay[ 14o1 83 $161,194 70 $135,955
Clean Site Delay Included in 28 $75,055
earthwork
Earthwork Differing 226 . $1,995,993 182 $1,607,356
Site Conditions
Triarch (paint) 32 $496,488 20 $310,297
Balance of Constr. 29 $449,943 0 0
Closeout 15 . $80,532 0 0
Total $3,184,150 Total $2, 128,663( 141 1

Incomplete Wage Determination & OSI Investigation ($393,195)

We have carefully read PE's 37 pages of unnumbered facts in its initial brief, the
AF's 277 PFFs in 42 pages in its brief and PE's 17 pages of reply brief- all devoted to
the DBA compliance and OSI Investigation issues. ·we conclude that we need not
attempt to delve into this aspect of the appeal in anywhere near that level of detail.

There are three distinct parts of the original claim: {l) Omissions of wage
classifications in WD NJ20030002; (2) the AF's review of PE's payrolls 142 ; and (3) the OSI
investigation. W~ deal with the OSI investigation first. PE invites us to find a link between
the investigation and the AF's review of PE's payrolls, "It is of course difficult to prove
what was in the minds of AFCEE or the OSI investigators, but we believe the evidence
permits the Board to infer a relationship between those activities" (app. reply br. at 206).
PE's argument seems to be that the payroll reviews and investigation were in retaliation for
PE's notice that it was going to submit a multi-million dollar claim. However, Ms. Hom's ·
testimony and the ROI persuade us that the investigation was initiated by the OSI as a result

140
PE identifies this as Design Impact.
141
This amount has already been added into the recovery and should not be added again.
142
· As noted in footnote 1, the AF payroll review claim is dealt with in anothet decision
issued simultaneously.
159
 of information provided by non-government confidential sources and not the AF (findings
208-09). PE h~s not proven that the AF is in any way responsible for the OSI investigation
or that it should be liable for PE's costs to defend itself against the OSI investigation. That
aspect of this claim is denied.

Next we deal with the WD omissions. The AF first noticed payroll classifications
that were not on WD NJ20030002 in early 2008 (finding 204). This fact is perplexing to us
because all of the workers on this project were getting paid. Each-worker was supposed to
be paid a wage identified in the WD. This information was needed for PE and its
subcontractors to bid on the contract or at a minimum perform the contract. We do not see
· · how either PE or its subcontractors could miss the fact that classifications needed to
perform the work were not in WD NJ20030002. As a result of payroll reviews in 2008 the
AF notified PE that classifications for carpenter, plumber, journeyman and pipefitter were
in payrolls but not in WD NJ20030002 (finding 205). Eventually letters of inadvertence
were issued for bricklayers, stonemasons, marble masons, cement masons, plasters, tile
layers, terrazzo workers, elevator mechanics, carpenters, insulators, millwrights, soft floor
layers, and drywall finishers/tapers (finding 207).

-We start by looking· at the FAR to see if it benefits contractors. PE argues that the
AF violated FAR 22.404-3 that required the AF to "[i]mmediately upon receipt" review
wage determinations and inform DOL of any changes needed to correct errors (app. br. at
386-87). We agree that this regulation benefits PE and its subcontractors because it is
supposed to ensure that they know what wages to use in establishing their bids and
performing the contract. We also agree that the AF did not catch the omissions in the WD
and arguably violated the regulation. This situation is, however, much different than was
the case with the payroll reviews because PE and its subcontractors were in a better
position to catch these omissions than the AF. It was PE and its subcontractors who knew
what types of workers would be used, not the AF. We also consider that DCAA in its
audit noted that DOL DBA rates are posted onDOL's website and were easily accessible
to PE (R4, tab 213 at 34). We are not going to hold the AF liable for this part of the claim
because PE and its subcontractors were in the best position to see this omission, should
have identified the omissions very early either in bidding or the creation of their payrolls
and notified the AF of the omission. We see no harm to PE and deny this claim.

Subcontractor Change Order Price Escalation ($290,634)

According to PE, this claim "represents the additional cost incurred by Parsons on
subcontractor change orders because the work was performed in a period significantly
later than anticipated due to Government-caused delays. The calculation is being applied
only to the subcontractor change orders that are considered to be the responsibility of ·
Parsons." (App. br. at 486) (Citation omitted) In our earlier denial of PE's buyout claim
we explained why PE was not entitled to escalation due to competition from China and
Hurricane Katrina. The same logic applies here. Also, PE fails to explain why the AF
should be liable for escalation based on change orders that it admits are the responsibility

160
 of PE. Additionally, this claim was not well developed in the entitlement secti,on of PE's
brief. PE has not met its burden of proof and we deny this claim.

Unpaid Contract Balance ($347,526)

The AF extended the period of performance twice, 126 days in Mod. 2 and 171
days in Mod: 3) (findings 92, 124 ). The contractual delivery date after Mod. 3 was
27 December 2007 (finding 124). PE was assessed liquidated damages from 28 December
2007 (finding 162). The $347,5_26 is the total amount of liquidated damages assessed from
28 December 2007 to BOD on 11 September 2008, a total of258 days at $1,347 per day.

We found a total of332 days of excusable compensable delay (NTP 70, Clean
Site 28, Earthwork 182, Paint 20) plus 32 days of critical concurrent delay ·
(SSlVIR/Truss). The delivery date in effect when the majority of th~se days occurred
was 9 July 2007, established in Mod. 2 (finding 92). Therefore, we run the 332 days
from 9 July 2007 for a delivery date of 5 June 2008. In our decision on contract
closeout we agreed with PE that BOD (substantial completion) should have occurred no
later than end of June 2008; We commented earlier that we would have accepted an
earlier BOD date. Liquidated damages may not be assessed after BOD, notwithstanding
remaining punch list items. Dick Pacific, 16-1 BCA ,r 36,196 at 176,636-37. Therefore,
the AF had no right to assess liquidated damages and the $347,526 must be returned.
We sustain the contract balance claim in this amount.

CDA Jurisdiction/Interest

One final matter that requires addressing is the source of our jurisdiction to
consider this appeal since the government agency with which Parsons contracted, the
Air Force Services Agency, is a non-appropriated funds instrumentality (NAFI). Until
recently, the source of our jurisdiction to entertain appeals involving NAFis was not the
CDA, but the portion of our charter that allowed us to consider appeals to which the
· parties had contractually agreed to the Board's authority to resolve their disputes. See,
e.g., Computer Valley International, Ltd., A_SBCA Nos. 39658, 40496, 94-1 BCA
,r 26,297 at 130,796; D 'Tel Communications, ASBCA No. 50093, 97-1 BCA ,r 29,251 at
145,504. This was consistent with "the NAFI doctrine," controlling law from the
United States Court of Appeals for the Federal Circuit (the Federal Circuit) that held
that the CDA did not grant the Court ofFederalClaims or the Boards of Contract
Appeals jurisdiction over matters involving NAFis (and neither did the Tucker Act).,
See, e.g., Furash & Co. v. United States, 252 F.3d 1336, 1342-44 (Fed. Cir. 2001). An
important consequence of the lack of CDA jurisdiction is that we had no basis to award
interest in appeals involving NAFis.

The continued viability of the NAFI doctrine with respect to appeals brought
pursuant to the ,CDA was called into question by the recent en bane decision of the
Federal Circuit in Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en bane). In

161
Slattery, the Federal Circuit concluded that the NAFI doctrine no longer applied to
lawsuits brought in the Court of Federal Claims pursuant to the Tucker Act. 635 F.3d at
1321. It has since been argued that the same logic that dictated the end of the NAFI
doctrine for Tucker Act suits should also apply to suits and appeals brought pursuant to
the CDA, notably, in the Federal Circuit appeal of Minesen Co. v. McHugh, 671 F.3d
1332 (Fed. Cir. 2012). In Minesen, however, the Federal Circuit "decline[d] to decide the
issue" because it was a "complex" matter that did not need to be addressed due to the
circumstances in that case. 671 F.3d at 1337. There was.a dissent in Minesen, which
approached the appeal in a manner that required resolution of the question of whether the
CDA was applicable and which found that Slattery ended the NAFI doctrine as applied to
the CDA. See 671 F.3d at 1345 (Bryson, J., dissenting). There has been no further
guidance from the Federal Circuit and we have not yet decided this question of law,
ourselves, though we have recognized its pendency. See CP ofBozeman, Inc., ASBCA
No. 58491, 15-1BCA136,035 at 176,013; Harry Richardson, ASBCA No. 57582, 12-1 .
BCA 134,902 at 171,618. In the appeal before us here, however, the issue must be
addressed and, as will be seen, we are of the opinion that the reasoning in Slattery
compels us to conclude that the CDA applies to NAFis, such as the one here.

Until Slattery, the foundational underpinning of the NAFI doctrine - as applied to
both the Tucker Act and the CDA - was that the law required payments for breaches of
contract to be paid by appropriated funds and that NAFis did not have access to such
funds. See, e.g., United States v. General Elec. Corp., 727 F.2d 1567, 1570 (Fed. Cir.
1984); Furash, 252 F.3d at 1342; Pacrim Pizza Co. v. Pirie, 304 F.3d l291 (Fed. Cir.
2002). The Federal Circuit in Furash further explained that Congress intended the NAFI
doctrine to apply "in the same fashion to the CDA as it does to the Tucker Act." 252 F.3d
at 1343. In Pacrim Pizza, the Federal Circuit emphasized that the decision in Furash,
extending the NAFI doctrine to the CDA, rested largely upon the CDA's enumerating
certain NAFis to which the CDA applied and therefore implying that the CDA did not
apply to non-enumerated NAFis. 304 F.3d at 1293. Slattery changed all that.

In Slattery, a Tucker Act case, the Federal Circuit's revisiting of the NAFI doctrine,
inter alia, rejected the notion that Congressional enumeration of some NAFis as being
excepted from the NAFI doctrine meant that non-enumerated NAFis were thus subject to it.
635 F.3d at 1313-14. In large part, because the enumerated/non-enumerated distinction was
critical to finding Congressional intent to limit Tucker Act jurisdiction, 63 5 F .3 d at 1311,
and because the Federal Circuit held that, without an explicit withholding of jurisdiction by
Congress, there would be Tucker Act jurisdiction over contracts entered on behalf of the
United States, the court determined that the NAFI doctrine was no longer applicable to
. cases brought pursuant to the Tucker Act. Id. at 1320-21.

Since, as discussed above, the application of the NAFI doctrine to the CDA
largely piggybacked on the numerated/non-enumerated distinction shared by both the
CDA and the Tucker Act, the Federal Circuit's rejection of that distinction in Slattery
leads us to the conclusion that there remains no basjs for continuing to apply the NAFI

162
doctrine to CDA appeals. 143 This is the logic that underlies the relevant portion of
Judge Bryson's dissent in Minesen, see 671 F.3d at 1343-44, and we find it persuasive.
To be sure, we recognize that Judge Bryson's dissent was a dissent, but the majority in
Minesen did not reject this portion of its logic; it just never needed to address it. The
government argues that the Minesen majority declined to overrule its prior cases
applying the NAFI doctrine to the CDA, meaning that such cases were still controlling
(gov't supp. reply br. at 2), but the government makes too much of the Minesen
majority's inaction: it did not decide to leave the old precedent in place, it merely took
no action on the NAFI doctrine at all. See 671 F .3d at 1336. Moreover, the Slattery
court expressly overruled the relevant portion of Kyer v. United States, 369 F.2d 714
(Ct. Cl. 1966) and the s·ubsequent cases which relied upon Kyer, upon which the NAFI
doctrine was founded. Slattery, 635 F.3d at 1320. Furash, which applied the NAFI
doctrine to CDA appeals, is just such a case, see Slattery, 671 F.3d at 1310, making it
arguable that the Federal Circuit directly overruled it in Slattery. In the end, we
conclude that eliminating the NAFI doctrine's application to CDA appeals shows
greater fidelity to the Federal Circuit's direction in Slattery than allowing it to remain,
and nothing in Minesen requires a different outcome or suggests otherwise.

As a final consideration, we note that we can discern no good reason for agencies
relying on directly appropriated-funds to be subject to CDA interest when those that are
NAFis are not. To that end, we have less reason to believe that Congress intended the
rules to differ between NAFis and other government agencies, and we have less reason
to believe that this decision would be in any way contrary.to public policy.

This appeal is within our CDA jurisdiction, and as a consequence, PE is entitled
to CDA interest, which runs at the statutory rate from the time that it submitted its
claims.

143
We understand that in other venues, the government has argued that a distinction
between the language in the Tucker Act, applying it to contracts "with the United
States," and the language in the CDA, applying it to contracts "with executive
agencies" constituted an additional reason to treat NAFis differently under the
CDA than under the Tucker Act. The government has not made that argument
here. Moreover, none of the Federal Circuit cases applying the NAFI doctrine to
the CDA relied upon that distinction. Post Slattery, we will not search for new
bases to keep the NAFI doctrine alive that were never before a basis for that
. doctrine. Moreover, the distinction in statutory language is a distinction that we
find to be one without a difference here.
163
 CONCLUSION

For the reasons stated in this decision, we sustain in the total amount of $10,519,082
and deny the rest of PE's claims. CDA interest shall run from 29 June 2012, the date of PE's.
claim.

Dated: September 5, 2018

CRAIG S.
Administr ive Judge
Armed Services Board
of Contract Appeals

I concur in result (see separate opinion) . I concur in result (and join in
Judge Shackleford's opinion)

~ /

RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
· Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals

164
 OPINION BY AOMINISTRATIVE JUDGE SHACKLEFORD
CONCURRING IN RESULT

We agree with the amounts awarded in the opinion by Judge Clarke and thus to
that extent we concur in the result. We differ, however, over the role that FAR 31.201-2
plays in proving damages and Judge Clarke_'s interpretation of this provision.

Generally, with respect to the costs it claimed, appellant stated in its post-hearing
brief as follows:_

Once the costs have been shown to have been
incurred, the issue becomes_ whether the contractor's
claimed costs are allowable. FAR 31.201-2 states that the
costs are allowable if they comply with the following
requirements: reasonableness, allocability, and consistency
with the cost accounting standards (CAS) or generally
accepted accounting principles, the terms of the contract and
any limitations set forth in FAR 31.2 (especially the cost
principles at 31.205). We shall address each of these
requirements as it applies to this appeal.

(App. br. at 427) Thereafter appellant sought to show how the evidence met each of those
requirements (id. at 427-31).

The government placed less reliance upon FAR 31.201-2, citing traditional Board
and court precedent as follows:

The contractor has the burden to show that its claimed
costs were incurred as a result.of, or were caused by the
Government's changes. [Citations omitted.] This
causation requirement is similar to that recognized under
the well settled law of damages: "Recoverable damages
cannot be proved by a naked claim for a return of costs
even when they are verified. The costs must be tied in to
fault on defendant's part." River Construction
Corporation v. United States, 159 Ct. Cl. 254, 270 ( 1962).

(Gov't br. at 466) (citing Stewart & Stevenson Services, Inc., ASBCA No. 43631, 98-1
BCA 'tl 29,653 at 146,925, affirming 97-2 BCA 'tl 29,252).

While vye do not contend here that FAR 31.201-2 never has a place in an analysis of a
monetary claim based upon a change ( directed or constructive), or a differing site condition, or
a ciaim for delay damages, or breach damages, we believe that Judge Clarke's total reliance on
that provision as the basis for proof of damages was unnecessary and was inconsistent with our
establishe~ case law and that of our appellate court.
165
 More particularly, we take great issue with that portion of the damages analysis
which leads up to the conclusion that PE has satisfied its burden to prove its claimed costs
were reasonable when the government challenged all costs hut failed to challenge the
reasonableness of any specific cost in the claim, stating "Such a blanket challenge to all·
costs is insufficient to satisfy FAR 3 l.201-3(a)." This finding has no place in our analysis
of the damages, as the reasonableness of the amounts is appellant's burden to show,
unaided by the government's failure to challenge the reasonableness of specific costs.

Once a CO's final decision is appealed to this Board, the parties start with a clean
slate and the contractor bears the burden of proving liability and damages de nova.
Wilner v. United States, 24 F.3d 1397, 1401-02 (Fed. Cir. 1994) (en bane). Further,
"[t]he claimant bears the burden of proving the fact ofloss with certainty, as well as the
burden of proving the amount of loss with sufficient certainty so that the determination
of the amount of damages will be more than mere speculation.'·' Lisbon Contractors,
Inc. v. United States, 828 F.2d 759, 767 (Fed. Cir. 1987) (quoting Willems Indus., Inc.,
v. United States, 295 F.2d 822, 831 (Ct. Cl. 1961)).

Notwithstanding FAR 31.201-2 and -3, which directs how COs and the DCAA
should evaluate costs, our review of the record leads us to conclude that for the damages
awarded by Judge Clarke, appellant proved liability on the part of the government,
proved the costs were incurred and were reasonable with "sufficient certainty" such that
the amount of damages awarded is "more than mere speculation." There was no
requirement nor need to follow FAR 31.201 to evaluate this claim and thus, we concur
in the result but not the analysis.

Dated: September 5, 2018

RICHARD SHACKLEFORD
Administrative Judge
Acting Chairman
Armed Services Board
· of Contract Appeals

I concur

J.DOlJTy
Administrative Judge
Vice Chairman
Arpied Services Board
of Contract Appeals
166
 I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 58634, Appeal of Parsons
Evergreene, LLC, rendered in conformance with the Board's Charter.

Dated:

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

167