Safety Training Systems, Inc. ( 2014 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of-- )
)
Safety Training Systems, Inc. ) ASBCA Nos. 57095, 57166
)
Under Contract No. W912ER-06-C-0018 )
APPEARANCES FOR THE APPELLANT: James F. Nagle, Esq.
Anne Marie Tavella, Esq.
Oles Morrison Rinker & Baker, LLP
Seattle, WA
APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.
Engineer Chief Trial Attorney
James D. Stephens, Esq.
Jeremy Becker-Welts, Esq.
Engineer Trial Attorneys
U.S. Army Engineer District, Middle East
Winchester, VA
OPINION BY ADMINISTRATIVE JUDGE SHACKLEFORD
ASBCA No. 57095 is an appeal from the deemed denial of a claim seeking an
equitable adjustment of$1,550,603.87 for increased costs under a contract to supply an
aircraft trainer to the King Abdullah II Special Operations Training Center (KASOTC) in
Yajooz, Jordan. ASBCA No. 57166 is an appeal from the final decision on the same
claim and they are consolidated.
A hearing was held in Tulsa, Oklahoma, and the record consists of the hearing
transcript (tr.), the government's Rule 4 file (R4, tabs 1-42), a government supplement
(Supp. R4, tabs S1-S33), appellant's Rule 4 submission (App. supp. R4, tabs S100-S285)
as well as initial and reply briefs from both parties. While only entitlement is before us,
with damages reserved, the parties were cautioned that if there is a claim for delay, the
extent of delay is part ofthe entitlement case (tr. 1/7-8, 10; Bd. Order dated 28 April
2010).
FINDINGS OF FACT
1. In early 2006, the U.S. Army Corps of Engineers, Transatlantic Programs
Center, (Corps or government) contacted Safety Training Systems, Inc., of Tulsa,
Oklahoma (STS) about the possibility of supplying the Kingdom of Jordan with an
aircraft training simulator. The plan called for STS to acquire a used airframe to modify
for anti-terrorist training. (Tr. 2/35-36)
2. STS met with the Corps, the Jordanian customer, and Stanley Consultants
(Stanley) in Muscatine, Iowa, on 9 March 2006. The meeting was in Stanley's offices
and STS later realized that this meeting was a 50% design review for Stanley, which was
performing the design for the whole site where the simulator would be installed
(tr. 2/38-40; app. supp. R4, tab S101). In that meeting the participants discussed several
types of airframes but settled on the Airbus A-300 (A300) (tr. 2/50).
3. Thereafter, on 14 May 2006 the Jordanian customer, KASOTC, informed the
Corps of Engineers that it requested STS to be the supplier of the A300 aircraft training
platform (app. supp. R4, tab Sl02). The Director of Procurement for the Jordan Armed
Forces reiterated that request on 16 May 2006 (app. supp. R4, tab S103).
4. Consequently, the contracting officer (CO) made a Determination and Findings
that it was appropriate to execute the procurement using other than full and open
competition since the customer in this Foreign Military Sales transaction had provided a
written directive to limit the procurement to STS (app. supp. R4, tab Sl03).
5. The Request for Proposals (RFP), issued on 2 August 2006, called for STS to
modify an A300 airframe to serve as a simulator for anti-terrorist training (R4, tab 3 at 4).
The offer was due on 16 August 2006 (R4, tab 3 at 1, 4, 20 of22; app. supp. R4,
tab Sl05; tr. 2/59). STS returned its offer on 3 August 2006 (R4, tab 10; tr. 2/60). In
compiling its bid for the project, STS located an A300 airframe in Arizona (tr. 2/51 ).
6. On 15 August 2006, the Corps awarded Contract No. W912ER-06-C-0018 to
STS. The award was in the firm fixed-price amount of $2,150,286 and called for the
delivery and installation of the A300 Airbus training platform in accordance with the
Scope of Work and to be complete at Yajooz, Jordan, by 1 September 2008. (R4, tab 3
at 1, 4-5) The amount of the award was the same amount as included in STS's proposal
(R4, tab 12). The contract was awarded as a commercial item based on the CO's
justification that "STS ha[ d] provided substantially similar items to private industry and
other government agencies" (R4, tab 12). However, because STS had previously
converted many different platforms (i.e., various airplanes and boats) there was no price
list and the government prepared an independent government estimate prior to awarding
the contract. In preparing the estimate, the government used the solicitation and
information found on STS's own website. The government's estimate came to
$2,257,498. Of that amount, $329,462 ($296,813 + $32,649 for profit) was allocated for
shipping. (R4, tabs 11, 12) The contract was modified twice for reasons unrelated to the
claim and those modifications increased the total contract price to $2,274,889.57
(R4, tabs 4, 5).
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7. The contract included FAR 52.212-4, CONTRACT TERMS AND CONDITIONS
-COMMERCIAL ITEMS (SEP 2005) which contained a Changes Clause (paragraph c) providing
simply that "[c]hanges in the terms and conditions of this contract may be made only by
written agreement of the parties" and a provision for excusable delays (paragraph f) which
states in part:
The Contractor shall be liable for default unless
nonperformance is caused by an occurrence beyond the
reasonable control of the Contractor and without its fault or
negligence such as, acts of God or the public enemy, acts of
the Government in either its sovereign or contractual
capacity, fires, floods, epidemics, quarantine restrictions,
strikes, unusually severe weather, and delays of common
carriers.
(R4, tab 3 at 6-7)
8. In addition the contract included FAR 52.247-34, F.O.B. DESTINATION
(Nov 1991), which provided in part that the contractor would "[d]eliver the shipment in
good order and condition to the point of delivery specified in the contract" and "[p]ay and
bear all charges to the specified point of delivery!' (R4, tab 3 at 15) The contract
incorporated by reference the clause prescribed at DFARS 252.247-7023,
TRANSPORTATION OF SUPPLIES BY SEA (MAY 2002), which required the contractor to
"use U.S.-flag vessels when transporting any supplies by sea under [the] contract."
Further the clause set forth a procedure to follow when the contractor wanted
authorization to ship in a foreign flag vessel instead of a U.S.-flag vessel, which included
submitting certain information to the CO.
9. STS's itemized list of costs used in preparing its bid shows that STS included
$313,774 for shipping the trainer (supp. R4, tab S12 at 2; tr. 21159). The shipping cost
included in the itemization did not differentiate the costs of the various phases of
shipping the A300 from Arizona to the company's plant in Tulsa, Oklahoma, or from
Tulsa to the port of embarkation or from the port of embarkation to the port in Aqaba,
Jordan, or from there to the trainer's final delivery point at the KASOTC in Yajooz,
Jordan (supp. R4, tabS 12 at 2; tr. 21144-45). Michael Wilson, vice president and general
manager ofSTS, testified that ofthe $313,774 in shipping costs included in STS's bid,
about $104,000 was for the cost of shipping from Arizona to Tulsa and about $230,000
was allocated to the leg from Tulsa to Yajooz (tr. 2/144), for a total of about $334,000.
Wilson explained the discrepancy between what was included in the estimate ($313,774)
and the planned allocations total ($334,000) as follows:
3
Now, the reason that may not match this was because this was
our original breakdown of the bid, which has a variance in
there that we'll trade labor dollars, other things- we'll trade
what we might call, you know, part of our padding the bid to
tum it into other types of dollars: material dollars,
subcontractor dollars, or whatever.
So this was our preliminary numbers that went in, but it
may not have been how we actually ran the job.
(Tr. 2/145)
10. Following award, STS found that the cost oftransporting the plane from
Arizona to Tulsa and from Tulsa to Jordan was significantly more than originally
budgeted (app. supp. R4, tab S275; tr. 2/63-64, 3/7, 3/27-28). Despite the increased cost
of shipping from Arizona to Tulsa, STS was still under budget prior to signing an
agreement for shipping to Jordan because it was able to acquire the plane for a favorable
price (tr. 21168, 3114-17). On 19 September 2006, STS sought assistance from the
government which they said could be in the form of additional funds, making the
shipping FOB at STS' s dock, or arranging for the trainer to ship with other government
shipments going to the same area of the Middle East (app. supp. R4, tab S275; tr. 3/7).
11. Once the airframe was acquired, STS' s plan for supplying the trainer to
KASOTC was to disassemble it at the point of acquisition, move the parts to Tulsa,
perform modifications and ship the trainer to Jordan in pieces small enough to fit in
standard shipping containers (tr. 2/36, 3/28). After the parts reached Jordan, the trainer
would be reassembled at KASOTC (tr. 2/36). However, STS discovered after award that
cutting the trainer into pieces small enough to place in shipping containers would
compromise the structural integrity of the plane. Therefore, STS revised its shipping plan
to place the pieces in custom built crates. (Tr. 3/28, 33-35)
12. In an attempt to reduce the cost of shipping by use of a non-U.S. flagged
vessel, by email dated 7 March 2008, STS forwarded copies of the shipping quotes it had
received from both U.S. and foreign-flag vessels. The CO informed STS that it had not
provided all the information necessary. Nevertheless, she forwarded the quotes to the
Department of Transportation (DOT) for its opinion whether a foreign-flag vessel waiver
was appropriate, stating that the DOT was the expert. By email of 12 March 2008, the
DOT informed STS that it had not received a copy of the quotes. The DOT's email also
informed STS of the additional information that was necessary to process their request.
(App. supp. R4, tab Sl24)
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13. By email dated 25 March 2008, STS sought guidance from the government
regarding a perceived dilemma they faced with respect to the rising cost of shipping.
They had not entered into a firm commitment for shipping to Jordan and were hesitant to
begin the breakdown and crating process before doing so in the event the eventual
shipper had a different requirement for crating. By email of the same date, the CO
informed STS: "Your contract requires shipment with a US flag carrier as you know."
She also opined: "I would venture to say that if you delay the shipment, the prices will
only increase and then this could also affect your required delivery schedule." (App.
supp. R4, tab S125) The next day, by email of26 March 2008, STS "formally
request[ed] a waiver from having to use a U.S. Flag carrier ... based on the excessive cost
differences between the U.S. and Non-U.S. flag commercial vessel pricing." This email
attached a summary of the shipping quotes received by STS to date and other
information, but not necessarily all required information, relevant to a request for waiver
of the U.S.-flag shipping requirement. The lowest priced quote included on the list was
from Clark Manco International, Inc., at $803,346. Clark was a U.S.-flag carrier. The
quote consisted of $344,946 for Tulsa to Port Arthur, Texas, and $458,400 for Port
Arthur to Jordan. (App. supp. R4, tab S127)
14. The CO replied by email of27 March 2008 stating that:
I have reviewed all documentation provided. This is not a
case for a US Flag waiver because a US Shipper has the
lowest shipping proposal who is Clark Manco Int at
$458,4[00].00.
I would recommend the following to you. Lock this shipment
in with them as soon as possible because I do not see the rates
going down. You can truck to the port on any carrier you
wish, this in no way ties into the US Flag requirement so I
would quote it as STS in lieu of thru the shippers.
Tom and I have contacted some people in Jordan on trucking
rates from the port to the sight [sic] and will follow up with
you when the information is received.
(App. supp. R4, tab S128)
15. The CO's 16 April2008 email reiterated: "This situation is not a case for
waiver of US Flag. I again recommend you proceed at once to get the shipment booked
as required by your contract." However, to assist STS, the government did agree to
proceed "with arranging the shipment from the port in Jordan to the job site." The CO
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reminded STS that its failure to proceed with shipment could place them in default, a
circumstance the CO did not think either party wanted. (App. supp. R4, tab S145)
16. The cost of oil climbed from $70 a barrel at the time of contract award in
2006 to $125 a barrel in June of2008 and during that same period oftime, shipping costs
for dry goods more than doubled (app. supp. R4, tabs S282, S283; tr. 2/70-76).
17. As stated above, STS could not ship the trainer in standard shipping
containers but found it was necessary to custom crate the disassembled trainer
(finding 11). With the trainer crated for shipping, as of21 April2008, STS had narrowed
its shipping options down to one U.S.-flag ocean carrier, the marine vessel El Faro.
According to the Liner Booking Note, the trainer was to be loaded onto the vessel at the
Port of Beaumont, Texas, to be shipped sometime between the 20th and 30th of May 2008.
The port for discharge was Aqaba, Jordan, and the cost of the freight was a lump sum of
$834,807.00. (App. supp. R4, tab S 155 at 20) This amount increased to $943,364.50 due
to an overage ofthe freight (app. supp. R4, tabs S171, S172). Sometime between
21 April 2008 and 5 May 2008, STS finalized the contract to ship the trainer on the
El Faro (app. supp. R4, tabs S155, S156).
18. After STS had executed its contract for shipping the trainer, it received notice
that the El Faro was delayed and would not arrive at the Port of Beaumont for loading
until 17-20 June 2008 with arrival in Aqaba, Jordan, estimated for 10 July 2008
(app. supp. R4, tab S156). The date for the El Faro's arrival in Beaumont, Texas,
continued to slip to 26-29 June 2008 (app. supp. R4, tab S159), then to 30 June
(app. supp. R4, tab S161) and then to 1 July 2008 (app. supp. R4, tab S165). Eventually,
by 9 July 2008 the El Faro had arrived at the Port of Beaumont and was being loaded
(app. supp. R4, tabs S166, S167). Based on the most conservative original loading date
of 30 May 2008 to 9 July 2008, when the El Faro was finally in port for loading, STS
experienced about a 40-day delay from what was originally anticipated.
19. On 14 July 2008, the El Faro sailed from the Port of Beaumont with an
estimated arrival at the Port of Aqaba of 7 August 2008 (app. supp. R4, tab S 169). Due
to multiple delays, the shipment arrived in the Port of Aqaba on 8 September 2008 (app.
supp. R4, tabs S170, S175, S176, S177, S183 at 2, tabs S185, S190). From Aqaba, the
trainer crates were transported and arrived at KASOTC on 11 September 2008 (app.
supp. R4, tab S 190). 1 From the original estimated arrival date of 7 August 2008 to the
1
The email at app. supp. R4, tab S 190, erroneously says the arrival at Aqaba was
8 August 2008 when it was actually 8 September and that arrival of the aircraft at
the project site was 11 August 2008 when it was actually 11 September. We know
it was erroneous in the context of other statements in that exhibit and other
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actual arrival date of 8 September 2008 in the Port of Aqaba, there was a 32-day delay in
transportation. This 32-day delay together with the earlier 40-day delay resulted in an
excusable performance delay of 72 days under the terms of the contract which includes
FAR 52.212-4(f) covering excusable delays due to common carriers (R4, tab 3 at 6).
There is no evidence that either the 40-day or the 32-day shipping delays were caused by
or were within the control of either STS or the government. While 52.212-4(f) excuses
default, the government has no liability under the clause for contractor expenses due to
such delay.
20. During the initial, pre-contract meeting with the government in Kansas, the
parties discussed the need for equipment and labor on site at KASOTC; however, the
discussion was general in nature and lacked specifics (tr. 2/42-44). STS's need for
equipment and labor was addressed in the contract as follows:
4. MOCKUP INSTALLATION: The Government shall
provide heavy lifting equipment and a minimum of 6 laborers
during the assembly of the fuselage structure on site.
(R4, tab 3 at 21)
21. By email dated 5 March 2007, STS wrote the government requesting
information regarding the lifting equipment. The email reads as follows:
Just thought that we should ask about the lifting equipment that
will be available in Jordan. Crane size/capacity, spreader bar,
lifting cables, etc. and the size and number of forklifts, scissor
lift. What about aircraft maint jacks and entry ramps/stairs up
to the entry doors. When you have an idea what will be
available could you forward that information on to us?
We are looking for a 50 ton crane, two 15,000 forklifts, four
large capacity aircraft jacks, 15 foot long spreader bar with a
20-25 thousand lb capacity. (Assorted lifting cables and
straps for the spreader bar.) To install the tail section we
would like to have a cherry picker along with the crane.
(Supp. R4, tab S5)
contemporaneous documents in the record indicating the expected arrival at Aqaba
was 8 or 9 September 2008. (See app. supp. R4, tabs S181, S187, S188)
7
22. By email dated 12 March 2007, the government's project manager,
Thomas A. Jackson, redirected the inquiry to Salem A. Fares, the resident engineer in
Jordan, writing:
We will need to speak with Colonel Maher on this subject.
When we had the design review in Muscatine, Colonel Maher
committed to provide labor and lifting equipment to assist in
assembly of aircraft training platform. I don't know if he
will remember or not. Based on the commitment of
Colonel Maher we added the following language to the
contract, "MOCKUP INSTALLATION: The Government
shall provide heavy lifting equipment and a minimum of
6 laborers during the assembly of the fuselage structure on
site." If the Colonel does not remember the discussion we
can use project funds to support the STS effort[.] Please let
me know how you want to handle the matter. We could even
ask STS to cover this and give them a mod to reimburse them.
(Supp. R4, tab S5)
23. In the minutes of a 7 June 2007 meeting between STS and Mr. Jackson, it was
recorded that "Tom Jackson requested a list of equipment needs for aircraft reassembly
and installation in Jordan. Mr. Jackson informed STS that all necessary equipment will
be provided by the contractor on site in Jordan, American International Contractors, Inc.
(AICI). A list was provided to Mr. Jackson by Mr. Russell Latham." Mr. Jackson was
requested to "[p]lease review the attached minutes and let me know ifthere is any
additional information you would like me to capture." The minutes of the meeting were
forwarded to the CO. (App. supp. R4, tab S 112) The first itemized list compiled by STS
reads as follows:
lea 50-70 ton crane, (readily available or full time)
lea 50-70 ton crane (for two days TBD)
2ea 10-20 ton fork lifts (full time)
lea Man lift, 20' height (full time)
1ea 3 ton fork lift (full time)
lea AC & DC portable power unit (gas or diesel) (full time)
lea Portable MIG Welder with C02 gas shielding and
equipment (full time)
lea Oxygen/Acetylene Rig (cutting torch) (full time)
3ea Large aircraft jacks
Handwritten at the end of the list was "stair up to aircraft." (Supp. R4, tab S31; tr. 2/205)
8
24. By email dated 23 January 2008, STS reiterated its first itemized list and
added the following:
lea Cherry Picker (bucket lift) (full time)
lea Air compressor (50/75 CFM@lOO PSI) to be powered
from generator if facility power is not available or it
could have it's [sic] own gas or diesel motor.
(Supp. R4, tab S 11; tr. 2/205)
25. While STS's 5 March 2007 email discusses the need for a spreader bar,
neither STS 's first itemized list nor its 23 January 2008 list included a spreader bar (supp.
R4, tabs S5, Sll; tr. 2/238).
26. As to the qualifications of the laborers to be provided in Jordan, STS wrote
the government by email of 11 September 2007, stating: '"Can you give me any ideas of
the labor types we can expect on site in Jordan? We are trying to define which items
could be best completed on site with local labor, i.e. painting, installation of aircraft
hardware, lifting, etc. What can we expect?" By email of the same day, the government
responded: '"We will have labor to assist the assembly. I was of the understanding that
we would support you with labor and you will be furnishing the skilled personnel."
(Supp. R4, tab S9) Russell Latham, STS's program manager, agreed at hearing that it
was anticipated that one of the contractor's four employees would spend most of his time
supervising the laborers (tr. 3/40-42).
27. The government contracted with a third-party, AICI, to provide STS with
mockup installation support. The contract between the government and AICI called for
AICI to: "[p ]rovide all equipment, support and materials to facilitate the transportation
and shipment for the A300 Mockup Aircraft from Aqaba to KASOTC including support
of installation and erection by STS." (App. supp. R4, tabs Sl80, Sl82) STS's original
estimate of the time needed for labor and equipment support was six to eight weeks
(supp. R4, tab S20; tr. 211 08).
28. Three days after the. crates arrived at the trainer project site at KASOTC, there
was a serious accident that temporarily halted contract performance. On 14 September
2008, one of the AICI laborers drove a forklift into one of the crates as a means to open
the crate, while a second laborer pulled on the wooden crate. At that moment, a wooden
two by four plank separated from the crate and hit the second laborer in the head. As a
9
result ofthe accident, the laborer was critically injured. (App. supp. R4, tabs Sl91,
Sl94) 2
29. Foil owing the accident, by letter dated 21 September 2008, the CO asked that
STS provide its Safety Plan and Activity Hazard Analysis for the work activity incident
to the assembly of the A300 aircraft at KASOTC within one calendar day, 22 September
2008 (R4, tab 27).
30. STS's 22 September 2008 email response stated that the company was
committed to safety and had published safety procedures, but because the contract was a
commercial items contract, no safety plan or activity hazard analysis specific to the A300
KASOTC program was required. By letter dated 28 September 2008, the CO stated that
STS should submit critical safety documents no later than close of business the next day
or "[ f]ailure to do so could result in a shutdown of your performance on the site until
provided." At a minimum STS was to provide "STS's safety plan, crane critical lift plan,
hot work-welding procedures, high work and fall protection plan." (R4, tab 29)
31. STS's 29 September 2008 response reiterated the company's commitment to
safety, while pointing out that the laborers and equipment supplied on site were under the
supervision of the government and its subcontractor. Thus the onus for safety referenced in
the CO's letter was not the responsibility of STS. STS also stated that its company safety
policy and procedures were being supplied to the CO by separate mail. (R4, tab 30)
32. By letter dated 30 September 2008, the CO enumerated three areas where
STS's safety policy and procedures were inadequate. Further, the CO stated that STS's
employees continued to commit safety violations as they were proceeding ahead with
work for which no safety procedures had been identified or approved. STS was told that
in its schedule of operations it should identify the different phases of work such that no
work could start prior to approval of the proper procedures and further was admonished
that any delays in assembly due to STS' s failure in completing those requirements would
be the responsibility of STS. (R4, tab 31)
33. By unilateral modification issued on 3 October 2008, the CO changed the
contract to add a safety requirement. The modification did not compensate STS for the
change nor does the claim include costs associated with that change. (R4, tab 6)
34. With regard to safety, the contract provides that the contractor will comply
with "40 U.S.C. 3701, et seq., Contract Work Hours and Safety Standards Act"
2
While both parties propose findings that the laborer died as a result of this accident
(gov't br., finding 26; app. br., finding 37), the evidence cited by the parties does
not support that conclusion.
10
(R4, tab 3 at 9). Chapter 37 of 40 U.S.C. generally provides that contracts entered into by
the Federal Government are subject to certain health and safety standards and other
prohibitions and requirements.
35. However, 40 U.S.C. § 3701(b)(3)(A)(i)(III) contains an exception for open
market items. Further, 40 U.S.C. § 3707 (Contractor certification or contract clause in
acquisition of commercial items not required), specifically states that 40 U.S.C. § 3701et seq., does not apply to commercial contracts.
36. The safety clause unilaterally added by the CO was not a required clause. The
jobsite was closed for a total of six days as a result of safety issues (R4, tab 9 at diary log)
that were not caused by STS but by another government contractor.
3 7. AICI frequently supplied equipment that was either unsafe or did not properly
function. Because of this faulty equipment, STS experienced delays in reassembling the
trainer at KASOTC. (Supp. R4, tab S24; app. supp. R4, tabs S214, S220, S226, S227,
S228, S231; tr. 2/207-13)
38. Because the trainer arrived at the KASOTC jobsite 72 days later than planned
(finding 19), its arrival coincided with the Muslim religious holy period of Ramadan.
This meant that during this period, the laborers and heavy equipment operators supplied
by the government would not work six, eight-hour days per week as contemplated, but
only 6 six-hour days. Some weeks during Ramadan the laborers worked less than 6 days.
(R4, tab 17; supp. R4, tab S21 at 2; app. supp. R4, tabs S178, Sl80; tr. 2/223) The period
during which STS was supplied local labor also coincided with the Eid al-Fitr holidays
during which all laborers and equipment operators were off work and the KASOTC
jobsite was closed (app. supp. R4, tabS 180; tr. 2/224).
39. STS was under the impression that the government, through AICI, was
responsible for providing a spreader bar and lifting straps needed to lift the plane into
position (tr. 2/213-14). When asked about who had the responsibility for supplying the
spreader bar and lifting straps, the CO stated it was STS's responsibility. At the time
when STS requested the spreader bar and straps in October of 2008, government
representatives pointed out that the bar and straps were not on the list of items requested
by STS and the government had no way of knowing this would be required. (R4, tab 32;
app. supp. R4, tabs S222, S223, S228) STS made the spreader bar locally at additional
cost to STS (R4, tab 8 at 21; tr. 2/214, 221-22). STS obtained the straps locally in Jordan
at its own cost (app. supp. R4, tab S229; tr. 2/214). The lifting of the trainer into its
permanent position took place on 25 November 2008 (app. supp. R4, tabs S243, S247).
40. While the contract stated that the government would provide a minimum of
6 laborers, laborer was not defined and the skill level of the laborers was not specified
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(R4, tab 3 at 21) although when asked in September 2007, Mr. Jackson, the government's
project manager, said the labor would be able to assist in the assembly (finding 26). STS
had previously supplied aircraft trainers to commercial airlines, and in assembling and
delivering these trainers to those customers, the airlines assisted by supplying trained
personnel skilled in using basic hand tools including wrenches, crowbars, pliers and
socket sets (tr. 2/45-49). The laborers supplied by the government through AICI were
young, unskilled laborers with no apparent experience working with aircraft; nor were
they experienced with the tools necessary for assembling the trainer, and with the
exception of two laborers, they did not speak English.
41. Michael W. Wilson, an employee of STS, testified that during performance on
site he prepared a document, transmitted on 29 October 2008 to Graham Smith of STS,
which detailed the number of STS and labor man-hours lost to specific delays from
14 September to 13 October2008 (app. supp. R4, tab S231; tr. 2/219-22).
42. Due to delays caused by faulty equipment, the religious and local holidays,
and the lack of skilled laborers, STS alleges it incurred additional expenses in employee
labor costs and extended per diem (R4, tab 9 at 21). Also because of these delays, as well
as the 72-day delay in shipping, STS alleges its employees were called upon to work
during the colder months of fall and winter, leading to inefficiencies in performance as
they did not have proper cold weather gear (R4, tab 9).
43. STS prepared a spreadsheet (5 pages) of hours lost for various reasons
between 11 September and 31 December 2008 and included it in the REA. The
spreadsheet is uncontroverted. 3 (R4, tab 9) We find that the information contained in the
REA timeline and the information contained in the 29 October 2008 document is
generally consistent with the information in the REA spreadsheet. The spreadsheet
shows that appellant lost 1139 man-hours to various causes through 31 December 2008
and at 10 hours per man per day, that number converts to 113.9 man days and since about
4 employees were generally on the job, it further amounts to 28.5 calendar days.
44. While the spreadsheet is uncontroverted and essentially unexplained in the
record, we analyzed the spreadsheet to determine the causes cited for lost hours so as to
determine whether such causes are due to the government. On the left side there is a
3
There is an obvious error on the entry for 20 September 2008 which shows that STS had
four employees who planned to work 10 hours each for a total of 40 hours.
However as a result of safety issues they lost 40 hours and inexplicably also lost 6
hours supervising laborers. If STS planned to work 40 man-hours that day, it
could not have lost 46 man-hours during the same period. We recognize the
discrepancy but because of the de minimus impact we do not correct the sums of
the columns in the spreadsheet when discussing them in this opinion.
12
column entitled "STS- Lost hours/reason." The sum of the hours lost in that column is
60 and appellant alleges the 60 hours were lost due to the Corps. No reason is included
in the column and we have not been directed to anywhere in the record outside the
spreadsheet where we might find the reason. But, if we look to the far right column, the
last one on each sheet entitled "Events" we find reasons across from each date.
Following is a summary of the information with respect to the 60 man-hours- the date,
the number of hours lost and the event:
14 September 2008 16 Accident
22 September 2008 10 Site Laborers had to obtain site passes which
took time. Ramadan was also in effect
23 September 2008 10 Ramadan - only six hours per person
worked today
02 October 2008 12 EID- Local holiday, none of the site laborers
came to work today.
29 October 2008 12 Bad weather - Thunder and Lightning
Total Hours 60
(R4, tab 9, attached spreadsheet)
45. The next column is entitled "STS- Lost Hours Due to BFE Equipment,"
which we assume summarizes the hours lost due to malfunctioning and improper
government-furnished equipment. The total claimed is 336 man-hours and we find STS
has demonstrated 336 hours were lost due to equipment problems including the accident
in early September 2008.
46. The next column is entitled "STS- Supervision Hrs." and it totals 743 hours.
Appellant alleges these hours were lost supervising the laborers. However, STS expected
to use one of its four employees as a supervisor of the laborers most ofthe time (tr.
3/41-42) and thus we find no credible proof that this supervision exceeded that which was
planned and was presumably included in its offer.
47. On the right halfofthe spreadsheets are two columns recording time lost by
laborers and equipment operators provided by the Corps through another contractor
(AICI). The first is entitled "ACOE- Lost Hours I 'event"' and the second is entitled
"ACOE- Lost Hours I Ramadan & Eid." The lost hours event column totals 408
man-hours and the lost hours Ramadan column totals 846 hours. STS did not pay these
13
workers so we presume the lost hours here are used to show an effect on STS employees,
which was not proved and/or as a number that figured into the loss of efficiency claim,
but that is also unexplained.
48. The contract was completed and the Jordanian customer took delivery on
10 February 2009 (supp. R4, tab S29).
49. By letter dated 6 July 2009, STS submitted a request for equitable adjustment
(REA) in the amount of$1,550,603.87 of which $1,000,619.16 was for unforeseeable
shipping costs, $389,970.35 for the alleged failure of government equipment and labor, and
the remaining $160,014.38 was for alleged government-caused delays (R4, tab 8 at 1, 24).
The CO denied the request on 23 October 2009 (R4, tab 7).
50. The contractor then converted its REA into a certified claim dated
10 November 2009 (R4, tab 9). By letter dated 27 January 2010, STS appealed the
deemed denial of its claim (R4, tab 1). The appeal was docketed as ASBCA No. 57095.
The CO subsequently issued a final decision denying the claim on 1 March 2010 (R4, tab
2). Appellant timely appealed the final decision which was docketed on 29 March 2010
as ASBCA No. 57166. Without objection the Board consolidated the two appeals.
DECISION
Appellant's REA consists of three areas for which damages are sought:
Unforeseeable Shipping Costs-$1 ,000,619 .16, Failure of Government Equipment and
Labor-$389,970.35, and Government-Caused Delays-$160,014.38, for a total of
$1,550,603.87. Each is discussed and decided below.
I. Unforeseeable Shipping Costs
While the contract was awarded on a sole source basis pursuant to an RFP, it was
a fixed-price contract with no escalation provisions, which called for STS to deliver the
trainer FOB destination. Thus the risk of rising costs was on the appellant. It is
undisputed that STS incurred more shipping costs than it included in its offer and the
resulting contract. Appellant's bid included $313,774 for shipping and, insofar as we can
determine, it consisted of the cost of shipping the frame from Arizona to Tulsa, from
Tulsa to the port of embarkation, from there to the port at Aqaba, Jordan, and on to the
installation site at Yajooz.
Soon after acquiring the airframe, STS knew its costs would exceed what was
included in its bid, so it sought a waiver of the requirement of a U.S.-flag carrier and in
the context of seeking that approval it was found that the lowest quote was in fact a
U.S.-flag carrier, essentially mooting the point.
14
Appellant advances several theories for escaping its responsibility for the
increased costs and the government opposes all those theories on the basis that appellant
has failed to prove the necessary elements of each.
Commercial Impracticability
Generally, "commercial impracticability is a subset of the doctrine oflegal
impossibility that excuses performance when costs become excessive and unreasonable
due to an unforeseen supervening event not contemplated by the contracting parties."
Spindler Construction Corp., ASBCA No. 55007, 06-2 BCA ~ 33,376 at 165,462. The
law excuses performance, or where government contracts are involved, grants relief
through a change order, where the costs of performance amount to commercial
senselessness. It does not grant relief just because performance cannot be achieved most
economically. Natus Corp. v. United States, 371 F.2d 450,457 (Ct. Cl. 1967).
We stated in Shubhada Industries, Inc., ASBCA No. 54016, 08-1 BCA ~ 33,733
at 167,019, as follows:
The doctrine of impossibility does not require a showing of
literal impossibility, but only of commercial impracticability,
but appellant must show that a supervening event, after it
entered into the contract, made performance impracticable;
the event's non-occurrence was a basic assumption upon
which the contract was based; the occurrence of the event was
not its fault; and appellant did not assume the risk of
occurrence.
Appellant's theory of commercial impracticability fails on three of the four points.
As to the first element, the instability in the cost of shipping the trainer to Jordan did not
make contract performance impracticable. As discussed in Raytheon Co. v. White, 305
F.3d 1354 (Fed. Cir. 2002), "[w]hether performance of a particular contract would be
commercially senseless is a question of fact." !d. at 1367 (citing Maxwell Dynamometer
Co. v. United States, 386 F.2d 855, 870 (Ct. Cl. 1967)). "A contractor is not entitled to
relief 'merely because he cannot obtain a productive level sufficient to sustain his
anticipated profit margin."' !d. (citing Natus Corp., 371 F.2d at 457). Appellant's
assertion in its brief that the contract was impracticable because shipping costs increased
544% is flawed because it compares only its original transportation estimate to the
amount it eventually spent on transportation. Commercial impracticability is more
appropriately determined by comparing the total contract price to the cost of
performance. See, e.g., Soletanche Radio Nicholson (JV), ENG BCA Nos. 5796, 5891,
94-1 BCA ,-[ 26,4 72 at 131,779 (extreme difference in total cost and time of performance
15
justified finding of commercial senselessness); Federal Electric Corp., ASBCA
No. 12449, 69-2 BCA ~ 7796 at 36,195 (law excuses performance if the "costs of
performance" amounts to commercial senselessness); accord Ace Services, Inc., GSBCA
Nos. 11771, 11830, 93-2 BCA ~ 25,848 at 128,619 ("[t]ribunals look to the increased
cost of performance of a contract, taken as a whole, as a guide in determining whether the
rise is excessive and unreasonable.").
Here, the contract price including change orders was $2,274,889.57. We do not
know exactly what the total cost of performance was, but taking appellant's word that it
lost $2 million on the contract (app. br. at 33), yields an estimated cost of performance of
$4,274,889 or about a 47% increase in costs and this figure includes increases from all
causes, shipping from Arizona to Tulsa and Tulsa to Texas and any losses it incurred on
the ground in Jordan set forth elsewhere in the claim. This increase is far short of 544%
alleged by appellant and under the current case law, this 4 7% cost overrun does not
establish commercial impracticability caused by the alleged supervening event-the
increase in overseas shipping costs. See Raytheon Company, 305 F.3d at 1368 (finding a
contract with a 24%, or even a 57% overrun does not by itself establish commercial
impracticability).
Secondly, there is no evidence that the parties' agreement included a basic
assumption that transportation costs would not change; on the contrary, it would
be wholly unreasonable of any contractor to assume that the price of oil and
associated transportation costs would remain constant. Likewise, as to the fourth
element, a fixed-price contract assigns any increase in costs to the contractor, thereby
insulating the government from price fluctuations, just as it did here. Spindler Constr.,
06-2 BCA ~ 33,376 at 165,462-43, see also Demusz Mfg. Co., ASBCA No. 55310, 07-1
BCA ~ 33,510 at 166,054.
CO's Abuse of Discretion
Appellant's main support for arguing the CO abused her discretion was her
inclusion of FAR 52.247-34, F.O.B. DESTINATION in the contract. Appellant cites to
FAR 47.304-3, SHIPMENTS FROM CONUS FOR OVERSEAS DELIVERY, which states that
unless there are valid reasons to the contrary, acquisition of supplies originating within
CONUS for delivery outside CONUS shall be made f.o.b. origin and that justification for
offers other than f.o.b. origin shall be recorded and documented in the contract file.
Appellant maintains that the lack of evidence indicating the CO followed this section of
the FAR was an abuse of discretion.
In addressing appellant's argument, we look to FAR 4 7.301-1, GENERAL, at
paragraph (a), which states that "[t]ransportation and traffic management factors are
important in awarding and administering contracts to ensure that ( 1) acquisitions are
16
made on the basis most advantageous to the Government." We are also mindful that
FAR 47.304-1 at paragraph (f) adds: "[w]hen acceptance must be at destination,
solicitation shall be on an f.o.b. destination only basis." Therefore, the CO's primary
duty in determining whether the contract was to be awarded f.o.b. origin or f.o.b.
destination was to ensure that the decision was the most advantageous to the government.
While there is no evidence that the CO recorded and documented the steps taken to
ensure that the government's position was the most advantageous, it is clear that the CO
achieved the primary goal of FAR Subpart 47.3-TRANSPORTATION IN SUPPLY
CONTRACTS, which is to obtain a result most advantageous to the government. We also
note that by the very nature of the acquisition, the delivery and installation of a working
trainer at Yajooz, Jordan, the trainer could not have been accepted at origin as STS's
duties did not end at its Tulsa plant. In accordance with the contract, it was also STS's
duty to deliver and install the trainer in Yajooz, Jordan (finding 6). Therefore, pursuant
to FAR 47.304-1(f), which provides that when acceptance must be at the destination, the
solicitation should be on an f.o.b. destination basis, we find that the CO properly
complied with the terms of the FAR with the inclusion of the f.o. b. destination clause.
Further, even if the CO failed to fully consider FAR Subpart 47.3 prior to issuing the
solicitation, it is immaterial. FAR Subpart 47.3 exists primarily as a benefit to the
government, not STS; therefore, it creates no cause of action for the contractor. See
General Dynamics C4 Systems, Inc., ASBCA No. 54988, 08-1 BCA ~ 33,779 at 167,193.
We also find no merit in appellant's argument that the CO abused her discretion by
not granting STS's request for a waiver of the U.S.-flag requirement. As we found in the
findings above, there is no evidence that a waiver of the U.S.-flag requirement would have
provided STS with any monetary relief since a U.S.-flag carrier was in fact the lowest
priced carrier quoting to STS.
Mutual Mistake
STS seeks reformation of the contract based on the fact the shipping costs
increased allegedly 544% which was not anticipated by either party. Citing Dairy/and
Power Cooperative v. United States, 16 F.3d 1197, 1202 (Fed. Cir. 1994), appellant
correctly cites the four requirements that must be proven to recover on a theory of mutual
mistake: "( 1) the parties to the contract were mistaken in their belief regarding a fact;
(2) that mistaken belief constituted a basic assumption underlying the contract; (3) the
mistake had a material effect on the bargain; and, (4) the contract did not put the risk of
mistake on the party seeking reformation" (app. hr. at 39). Appellant argues that it is
entitled to contract reformation on the basis that both parties believed that transportation
costs to Jordan would be less than $300,000 and that "the contract does not specifically
place the risk of such a drastic increase in the price of shipping on STS. The failure to
allocate such a risk supports the argument that neither party anticipated the increase in
shipping costs." (App. br. at 40) We disagree. Again, a firm fixed-price contract assigns
17
any increase in costs to the contractor, thereby insulating the government from price
fluctuations. Spindler, 06-2 BCA ~ 33,376 at 165,462-43, see also Demusz Mfg.,
07-1 BCA ~ 33,510 at 166,054.
Appellant's attempt to define the mutual mistake as the erroneous belief that
transportation could have been accomplished for $300,000 is faulty given that
transportation costs were not fixed at the time of contract award; therefore the parties
could not have had an erroneous belief as to an existing fact regarding the cost of
shipping. The only transportation "fact" that existed at the time of contract award was
that it was STS's responsibility to ship the trainer to Jordan. There were no "facts"
regarding the cost of shipping except that they would be borne by STS. STS 's prediction
or judgment as to the cost of shipping in the future, even if erroneous, is not a "mistake"
but was a business decision. See AECOM Government Services, Inc., ASBCA No.
56861, 11-1 BCA ~ 34,667 at 170,773.
II. Increased Costs Due to Government Provided Equipment and Labor
STS argues that FAR 52.245-2, 4 GOVERNMENT PROPERTY (FIXED-PRICE
CONTRACTS) (MAY 2004), which specifies the rights and responsibilities of the parties in
the event that the government supplies equipment to be used by the contractor in contract
performance, should be inserted into the contract per the Christian doctrine. See G.L.
Christian & Associates v. United States, 3 12 F .2d 418, reh 'g denied, 320 F .2d 345
(1963), cert. denied, 375 U.S. 954 (1963) (where an omitted clause is required by the
procurement regulations as applicable to a contract, and the clause expresses a significant
strand of public procurement policy, it is incorporated into that contract by operation of
law.).
However, this was a Commercial Items contract and the contract terms and
conditions for such contracts seem to be in large part governed by FAR 52.212-4,
CONTRACT TERMS AND CONDITIONS- COMMERCIAL ITEMS and FAR 52-212-5,
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE
ORDERS- COMMERCIAL ITEMS, and we find nothing in those regulations, and the parties
have pointed to none, that compel the inclusion of a government property clause. We
therefore decline to incorporate one by operation of law and thus the contract contains no
express warranties with respect to government-furnished property. We therefore look to
4
Appellant's brief cites to FAR 52.245-1; however, as appellant is discussing
government-furnished equipment, we believe FAR 52.245-2 is the intended
clause. As this contract was awarded on 6 August 2006, the May 2004 version of
the clause and regulation were in effect as set forth in the 1 July 2006 edition of
the FAR. FAR 52.245-1, PROPERTY RECORDS (APR 1984) is concerned with
which party is responsible for record keeping with respect to government property.
18
the clause in the contract and the surrounding circumstances to determine if an implied
warranty is applicable.
Ekco Products Co. v. United States, 312 F.2d 768 (Ct. Cl. 1963), involved a
contract to manufacture cartridge cases. Prior to award, Ekco made an offer to provide
the cartridges, but stated it would require five Head Turning Machines to perform the
contract and that it could procure and install the five machines or alternatively the
government could provide them, in which case Ekco wanted the opportunity for prior
inspection and acceptance of the machinery from government reserves. The government
agreed to furnish the five machines. Ekco was informed that the machines were coded
for the condition they were in and the meaning of the code was explained to Ekco, but
otherwise no representations were made as to the condition of the Head Turners. The
contract did not include a government-furnished property clause. The machines broke
down continuously. The Court stated:
We must decide whether the arrangements thus agreed
upon between the parties imposed a warranty obligation on
defendant as to the condition of the machines. Was there a
warranty of fitness for use on the facilities? There is no
express warranty stated in the contracts between the parties.
Nor is there any disclaimer of warranty in either contract. If a
warranty existed, then, it must be implied ....
Defendants owned and kept title to the Head Turning
Machines during the entire period of production. Use and
possession of the facilities, however, were given to plaintiff.
The bailor-bailee relationship thus created was for the benefit
of both parties. Defendant was able to induce plaintiff to
accept the contract obligations and manufacture the cartridge
cases; plaintiff expected to receive its profit upon successful
completion of the contract. The law applicable to this
situation is clear. Where there is a bailment for the mutual
benefit of the parties, there is imposed on the bailor, in the
absence of a special contract or representation, an obligation
that the thing or property bailed for use shall be reasonably fit
for the purposes, or capable of the use known or intended.
There is no question in this case but that plaintiff needed
these machines to manufacture the cartridge cases, and that
defendant gave the machines to plaintiff expressly for this
purpose. Whether the 0-2 symbol created a warranty is
unimportant to decide; the arrangement itself between the
19
parties gave rise to the warranty on the machines. [Footnote
omitted]
312 F.2d at 771-72.
Similarly, here STS needed the government-furnished equipment to complete the
work and the government-furnished this equipment expressly for that purpose. It would
be unreasonable to expect appellant to have inspected the equipment prior to a~ard and
prior to even arriving in Jordan to assemble the airframe. Accordingly, we find an
implied warranty that the equipment would be fit for the intended purposes and in many
instances it was not.
When the government agreed to provide the equipment and labor to assemble the
trainer, STS had a reasonable expectation that the equipment would be fit for use and the
labor would be able to perform the task. It was simply not enough that six laborers
showed up at the jobsite. Based upon our findings, the laborers lacked many of the basic
and necessary skills to assist in the assembly of the trainer (finding 40). The government
had a responsibility to provide labor that could assist in the assembly of the aircraft and
they were less skilled than promised (finding 26).
Specifically addressing the heavy lifting equipment, while a complete list of
necessary equipment may have been helpful for planning purposes, the government
agreed to provide heavy lifting equipment and from the evidence, it is evident that the
equipment provided was often not suited for its intended purpose (finding 37). The
government did not know, prior to contracting, what equipment would be necessary to lift
the trainer into place. The fact that the spreader bar was not on STS' s initial list of items
necessary for lifting does not change tpe fact that the government agreed to provide
lifting equipment on s~te, and the Corps does not dispute that the spreader bar and lifting
cables were necessary equipment for lifting. In other words, the addition of the spreader
bar to the list of government-supplied equipment did not change the government's
bargain with STS. At the time the CO signed the contract, she did not know what
equipment was necessary to perform the task of lifting the trainer, nevertheless, the
government agreed to these terms; therefore, the government cannot now claim that they
did not agree to provide the spreader bar, a necessary piece of heavy lifting equipment.
We find that STS has provided ample evidence that the laborers had inadequate skills,
and much of the equipment was not suited for its intended purpose.
Prior to award, the government knew and agreed that STS would require
equipment on site to aid in assembling the aircraft (findings 20, 22). The contract
stipulates that "[t]he Government shall provide heavy lifting equipment and a minimum
of 6 laborers during the assembly of the fuselage structure on site" (finding 20).
Following contract award, STS notified the government that it would require many items
20
which, on their face, do not appear to be "heavy lifting equipment" including an AC &
DC portable power unit, a portable MIG welder with C02 shielding, an oxygen/acetylene
rig (cutting torch), and a staircase up to the aircraft (finding 23). The government agreed
with the terms of STS 's request as evidenced by its contract with AICI to "[p]rovide all
equipment, support and materials .. .including support of installation and erection by STS"
(finding 27). Therefore, we find the government's attempt to now limit its responsibility
to only "heavy lifting equipment" is unavailing. Had the government notified STS prior
to its arrival in Jordan that nothing other than "heavy lifting equipment" would be
provided, STS could have supplied its own equipment, thus potentially avoiding many of
these faulty equipment delays. We believe from the evidence, it was never the intention
of the parties to limit government-supplied equipment to only "heavy lifting equipment."
We place great weight in the pre-dispute conduct of the parties in determining the parties'
intent. Logistic Services International, Inc., ASBCA No. 38616, 90-1 BCA ~ 22,346 at
112,294; see also Monterey Mechanical Co., ASBCA No. 51450,01-1 BCA ~ 31,380 at
154,949. Here, the parties' conduct prior to the dispute demonstrated that both parties
believed that the government would provide more equipment than just heavy lifting
equipment and where that equipment is faulty, the government is liable for delays caused
thereby.
The REA describes the claim for hours lost due to faulty equipment, supervision
of laborers as well as the claim for the cost of purchasing and leasing equipment as
follows:
In total STS lost 1,139 man-hours (113.9 days)
because of the failure of the government to timely provide
equipment and labor. Of those hours 60 were lost to delays
caused by the Corps, 336 were lost because of problems with
the furnished equipment, and 743 were lost supervising the
laborers. These additional hours constituted a direct cost
impact on STS, as it had to compensate its employees for this
time. The employees received $311.00 per day in per diem
and a labor rate of$27.50 per hour. The total cost to STS for
per diem and labor caused by the Government's failure to
provide adequate labor support was $3 23,215.24. The total
cost for labor and per diem for delays caused by the
Government-furnished equipment was $41,786.95.
Additionally STS was also forced to purchase and rent
equipment while on site that should have been provided by
the government.
(R4, tab 8 at 21)
21
, Based upon our findings appellant is entitled to recover the cost expended to
obtain equipment needed to assemble the airframe in Jordan. The rest of this claim for
faulty equipment and supervision of laborers is more problematic however. While we are
confident, based on our findings that the labor provided by the government was
inadequate and often absent due to religious and local holidays, and while we are equally
confident, based on our findings, that the equipment was frequently faulty, the evidence
supporting the effect of same on project duration is spotty at best.
In its brief appellant proposes findings to establish the truth of the assertion quoted
above from the claim with regard to lost hours due to faulty equipment and inadequate
labor and cites to the very same page of the REA quoted above (app. br. at 27-28). No
attempt is made to demonstrate the impact of the causes of delay on the project schedule
if there in fact was one. We can only speculate as to when the work would have been
completed but for the delays due to faulty equipment and supervision of laborers. Prior
to, and at the hearing we advised the parties that the extent of delay is a necessary
element of an entitlement case. Appellant bears the burden of proving both government
fault and the length of that delay. We stated in American Ordnance LLC, ASBCA
No. 54718, 10-1 BCA ~ 34,386 at 169,795, as follows:
The government argues that, even if entitlement is
found for the contractor, American Ordnance is not entitled to
damages for delay because it both concurrently delayed
production by delaying submission of its ECP to use NT -60,
and failed to reasonably calculate its delay (gov't br. at
139-46). As discussed in Fox Construction Inc., ASBCA
No. 55265 et al., 08-1 BCA ~ 33,810, a "delay connotes a
time period [that] completion of a project must be extended to
account for slow-down or unanticipated events" (id. at
157,3 79). The burden of proof is upon the contractor to
establish both government fault and the length of that delay:
To recover delay damages, a contractor has the burden
of demonstrating that the specific delays were due to
government-responsible causes, that the overall
completion was delayed as a result, and that any
government-caused delays were not concurrent with
delays within the contractor's control. The mere fact
that a contractor took more time than it thought it
should take is in itself meaningless. "The length of
time is meaningful only in relation to the effect it had
on the project operations." Law v. United States, 195
Ct. Cl. 370, 384 (1971); Jefferson Construction Co. v.
22
United States, 368 F.2d 247, 256 (Ct. Cl. 1966) (noting
it is the contractor's burden to show "where the work
was delayed because of the lack of approval").
Although appellant has neither asked for nor proven a specific time extension, in
light of our findings of faulty labor and equipment, we will try to analyze the facts as we
have found them to ascertain if a reasonable basis for determining the proper time exists.
Our analysis begins with the recognition that STS thought it could finish the on site work
in four to six weeks and the contract completion date established by the contract was 1
September 2008. We have no credible proof that the anticipated duration was reasonable
but we assume it would have taken at least all six weeks. Thus, in order to finish by 1
September 2008, appellant would have had to arrive on site with the crated airframe no
later than six weeks prior to 1 September or by 21 July 2008. We also know that the ship
arrived a combined 72 days later than anticipated (40 days late arriving for loading and
32 days longer en route than anticipated). The 72-day late arrival was excusable but not
compensable and extended the contract completion date to 12 November 2008. Of the 60
man-hours claimed due to the Corps, we find entitlement to 48 man-hours or about 1.2
calendar days assuming 4 STS employees. We exclude the weather delay as it is not
excusable under these circumstances absent a showing that such weather was unusually
severe. The 336 man-hours lost due to equipment issues computes to 33.6 man days and
since there were usually 4 STS employees, that computes to about 8.4 calendar days.
Together the two further extended the completion date by about 10 days or to 22
November 2008. We further find that such delays were not concurrent with other delays.
We do not find entitlement to a time extension for labor supervision because
appellant planned to use one employee almost full time supervising the labor and we do
not know the extent to which the hours claimed were part of the planned supervision or
whether it was in excess of it. Thus we find entitlement to the claimed delay costs from
13 November 2008 through and including 22 November 2008 or 10 days.
III. STS' s Loss of Efficiency
STS alleges that because the government hindered performance and interfered
with STS's performance, the contractor's performance was pushed into November and
December without proper clothing or gear causing a loss of efficiency.
The Jordanian customer took delivery on 10 February 2009 (finding 48). We
found that shipping delays amounted to a total of 72 days for which neither party can be
held responsible (finding 19). The government did not cause performance to be pushed
into November and December, the late shipping did that. Appellant has not proved that
the government is responsible for STS' s loss of efficiency.
23
CONCLUSION
Appellant is entitled to compensation for 10 days of delay and the cost of
acquiring equipment while on the jobsite. In all other respects, the claim is denied. The
matter is remanded to the parties to resolve quantum in accordance with this decision.
Dated: 23 January 2014
RICHARD SHACKLEFORD
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
``~i.-6GMJ\
MARK N. STEMPLER -= MICHAEL T. PAUL
Administrative Judge Administrative Judge
Acting Chairman Acting Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 57095, 57166, Appeals of
Safety Training Systems, Inc., rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
24