Corinthian-WBCM, a Joint Venture

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of - )
)
Corinthian-WBCM, a Joint Venture ) ASBCA No. 62379)
Under Contract No. N40080-15-C-0169 )
APPEARANCES FOR THE APPELLANT: Vivian Katsantonis, Esq.
Jonathan R. Wright, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
McLean, VA
APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq.
Navy Chief Trial Attorney
Sean P. Morgan, Esq.
Devin A. Wolak, Esq.
Anthony Hicks, Esq.
Trial Attorneys
OPINION BY ADMINISTRATIVE JUDGE HERZFELD
Corinthian-WBCM, a Joint Venture (Corinthian), has appealed the deemed denial
of a certified claim submitted to the United States Department of the Navy, Naval
Facilities Engineering Command (Navy). The Navy has moved to compel production of
certain documents. The Board resolved many of these issues during a March 23, 2021
status conference and in a subsequent March 24, 2021 Order. However, at the request of
Corinthian, the Board permitted each party to submit a supplemental brief regarding the
Navy’s motion to compel Corinthian to produce the information Corinthian relied on in
preparing its proposal. For the reasons stated below, the Board grants the Navy’s request
for this information.
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION
On September 30, 2015, Corinthian and the Navy entered a contract for
construction to widen Russell Road at Marine Corps Base Quantico, Virginia (Contract)
(R4, tab 2 at 151 (Contract No. N40080-15-C-0169); 1 compl. ¶ 1). The Quantico
1 Citations to the “R4” refer to the Rule 4 file submitted by the Navy on May 1, 2020, and
citations to the “app. supp. R4” refer to Corinthian’s Rule 4 supplemental file
submitted on June 1, 2020. The Navy numbered pages as “GOV00000151” and
Corinthian numbered pages as “JV_0002314” (for example), but we have dropped
the prefix and extra zeros. We just cite the numeric page number.
road-widening project was phase three of a four-phased project and required Corinthian
to include “the required signaling devices with camera equipment to control the
direction of traffic and the relocation of existing utilities such as telecom, water, sewer,
electric, and natural gas utility lines as necessary” (R4, tab 2 at 158; compl. ¶ 2).
During performance of the Contract, Corinthian submitted requests for equitable
adjustment under the Changes and Differing Site Conditions clauses that were
incorporated by reference in the Contract (R4, tab 2 at 174-75 (incorporating Federal
Acquisition Regulation (FAR) 52.243-4, CHANGES (JUN 2007), and FAR 52.236-2,
DIFFERING SITE CONDITIONS (APR 1984)); tabs 17, 19, 21, 23, 34, 36, 38).
The Changes clause permitted the Navy’s contracting officer to
by written order designated or indicated to be a change order,
make changes in the work within the general scope of the
contract, including changes— (1) In the specifications
(including drawings and designs); (2) In the method or
manner of performance of the work; (3) In the Government-
furnished property or services; or (4) Directing acceleration in
the performance of the work.
FAR 52.243-4(a)(1)-(4). The clause also states that:
[a]ny other written or oral order (which, as used in this
paragraph (b), includes direction, instruction, interpretation,
or determination) from the Contracting Officer that causes a
change shall be treated as a change order under this clause;
[p]rovided, that the Contractor gives the Contracting Officer
written notice stating (1) [t]he date, circumstances, and source
of the order and (2) [t]hat the Contractor regards the order as
a change order.
FAR 52.243-4(b). If any change under the Changes clause “causes an increase or
decrease in the Contractor’s cost of, or the time required for, the performance of any part
of the work under this contract, whether or not changed by any such order, the
Contracting Officer shall make an equitable adjustment and modify the contract in
writing.” FAR 52.243-4(d).
The Differing Site Conditions clause directed Corinthian to provide written notice
to the Navy’s contracting officer regarding “(1) [s]ubsurface or latent physical conditions
at the site which differ materially from those indicated in this contract, or (2) [u]nknown
physical conditions at the site, of an unusual nature, which differ materially from those
ordinarily encountered and generally recognized as inhering in work of the character
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provided for in the contract.” FAR 52.236-2(a). The Contract also includes the Site
Investigation and Conditions Affecting Work clause, which required Corinthian to take
“steps reasonably necessary to ascertain the nature and location of the work, and that it
has investigated and satisfied itself as to the general and local conditions which can affect
the work or its cost” and acknowledge satisfaction “as to the character, quality, and
quantity of surface and subsurface materials or obstacles to be encountered insofar as this
information is reasonably ascertainable from an inspection of the site, including all
exploratory work done by the Government, as well as from the drawings and
specifications made a part of this contract” (R4, tab 2 at 174 (incorporating by reference
FAR 52.236-3, Site Investigation and Conditions Affecting the Work (APR 1984))).
This appeal involves seven of Corinthian’s requests for equitable adjustment that
invoked, among other clauses, the Changes and Differing Site Conditions clauses. These
seven requests for equitable adjustment (REA) make up Corinthian’s certified claim on
appeal. (R4, tab 39 at 4379) As pertinent to the motion to compel, we discuss two of
these REAs.
For REA No. 3, 2 Corinthian requested an equitable adjustment for additional
re-design costs and time to comply with Virginia’s storm water regulations after the
Navy’s refusal to allow Corinthian to purchase nutrient credits from the Virginia
Department of Environmental Quality (compl. ¶ 38, ex. B; R4, tab 19; app. supp. R4,
tab 91, tabs 95-96 at 2518-37). Corinthian’s REA No. 3 stated that Corinthian “based its
proposed design upon the purchase of Nutrient Credits” from the Virginia Department of
Environmental Quality (compl., ex. B; R4, tab 19 at 334; app. supp. R4, tab 96 at 2518;
see also compl. ¶ 38 (“The JV planned its proposed design of the Project’s stormwater
management features with the intent to purchase nutrient credits to satisfy the VDEQ
stormwater quality requirements for the Project, as permitted by VDEQ, the RFP and the
FAR.”)).
For REA No. 4, Corinthian requested an equitable adjustment based on a differing
site condition, asserting that the water line at the east end of the project was located and
configured differently from the as-built drawings provided by the Navy and the on-site
conditions (compl. ¶¶ 44-52, ex. C; R4, tab 21 at 359; app. supp. R4, tab 82). Corinthian
contends that this differing site condition resulted in Corinthian expending additional
costs and time in adding 88 linear feet to the water line (compl. ¶ 46). In its
correspondence with the Navy, Corinthian stated that “all the additional water line work
required . . . was never considered in our bid” (R4, tab 21 at 362).
2 Corinthian and the Navy refer to the REAs as REA Nos. 2-8 because that is the
numbering system used by Corinthian in its claim and in this appeal. We will
continue to refer to each aspect of Corinthian’s claim using the REA number.
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In the Navy’s first set of requests for production of documents, number 19, the
Navy requested that Corinthian “[p]roduce all support [worksheets (in native format),
notes, historical data, takeoffs, vendor/subcontractor quotes, pricing guides or other
documents] for CCI-WBCM’s final proposed price” (app. opp’n to resp. mot. to compel,
ex. 1 at 5 (Corinthian opp’n)). Corinthian objected to producing these documents based
on relevance and to the extent the REAs included in the Rule 4 files constituted
sufficiently responsive documents (id., ex. 2 at 11). The Navy moved to compel the
production of these documents, among others, asserting that this document request sought
Corinthian’s bid information including pricing information (Navy’s mot. to compel and
request for extension of deadlines and hearing date, and appendix (Navy mot.) at 18;
Navy’s reply in support of its motion to compel and request for extension of deadlines
and hearing date (Navy reply) at 5).
DECISION
I. Legal Standard
The Contract Disputes Act (CDA) permits a member of an agency board of
contract appeals to “authorize depositions and discovery proceedings” for appeals before
the board. 41 U.S.C. § 7105(f). Under Board Rule 8(c)(3), the “Board may upon motion
order . . . [a] request for production, inspection, and copying of any documents, electronic
or otherwise, or objects, not privileged, which reasonably may lead to the discovery of
admissible evidence[.]”
“Although not binding on the Board, we also look to the Federal Rules of Civil
Procedure (FED. R. CIV. P.), and decisions addressing those rules, for guidance in
discovery disputes.” Sand Point Servs., LLC, ASBCA Nos. 61819, 61820, 21-1 BCA
¶ 37,785 at 183,378 (citing Thai Hai, ASBCA No. 53375, 02-2 BCA ¶ 31,971 at 157,920;
Ingalls Shipbuilding Div. Litton Systems, Inc., ASBCA No. 17177, 73-2 BCA ¶ 10,205at 48,094). FED. R. CIV. P. 34(a) permits a party to serve document requests on another
party “within the scope of Rule 26(b)[.]” FED. R. CIV. P. 26(b) permits discovery
“regarding any nonprivileged matter that is relevant to a party’s claim or defense and
proportional to the needs of the case[.]” FED. R. CIV. P. 26(b)(1); see also Drone
Technologies, Inc. v. Parrott S.A., 838 F.3d 1283, 1299 (Fed. Cir. 2016); Sand Point
Servs., 21-1 BCA ¶ 37,785 at 183,379 (discussing Rule 26(b)). In assessing
proportionality, Rule 26(b) considers “the importance of the issues at stake in the action,
the amount in controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely benefit.” FED. R. CIV. P.
26(b)(1).
“Relevancy for purposes of Rule 26 is broadly construed.” Katz v. Batavia
Marine & Sporting Supplies, Inc., 984 F.2d 422, 424 (Fed. Cir. 1993). “The information
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sought during discovery in a civil case need not be admissible at trial and need only be
reasonably calculated to lead to discovery of admissible evidence.” Afro-Lecon, Inc. v.
United States, 820 F.2d 1198, 1203 (Fed. Cir. 1987). “However, the potential for
discovery abuse is ever-present, and courts are authorized to limit discovery to that which
is proper and warranted in the circumstances of the case.” Katz, 984 F.2d at 424.
II. The Proposal Information Is Relevant And Should Be Produced
Corinthian must produce the information it relied on in preparing its proposal
because the documents are relevant and proportional to its claims in this appeal.
Corinthian’s REAs include claims for changes and differing site conditions. It is not
unusual for a contractor’s bid documents to be relevant and, in some circumstances,
necessary in disputes involving changes and differing site conditions claims.
In particular, the Navy seeks Corinthian’s bid documents, asserting that the
documents are relevant and put into play because Corinthian’s REAs necessarily depend
on Corinthian’s bid information (Navy reply at 5; Navy’s supp. brief at 1-5 (Navy supp.
resp.)). Corinthian asserts that the documents are not relevant, arguing that none of the
“REAs comprising the claim in this appeal involve the contents or amounts of the JV’s
bid” (app.’s brief concerning relevance of bid documents (app supp. resp.) at 4).
Corinthian points to several Federal district court decisions that concluded a party
need not produce its bid information (app. supp. resp. at 3-4 (discussing A&G Tree Serv.,
Inc. v. Tenn. Valley Auth., 2007 WL 977172, at *2 (E.D. Tenn. Mar. 23, 2007) and
Accurate Controls, Inc. v. Cerro Gordo County Bd. of Supervisors, 2009 WL 427374,
at *4 (N.D. Iowa 2009))). However, in both cases, the district court concluded that the
bid documents were not relevant to the claims in each case. A&G Tree, 2007
WL 977172, at *2 (noting that, in light of counterclaims of overbilling during contract
performance, the bid “documents are irrelevant to any defenses or claims that the
defendant asserts in this dispute”); Accurate Controls, 2009 WL 427374, at *4
(concluding that the bid information “would not be relevant to any issue in this case, nor
would it lead to the discovery of admissible evidence”).
Here, Corinthian’s requests for equitable adjustment underlying its claim make its
bid information relevant. The information is also proportional because it directly relates
to Corinthian’s arguments. 3 For REA No. 4’s differing site condition portion of the
claim, Corinthian seeks an equitable adjustment because Corinthian alleges that it
discovered that an existing water line differed from the as-built drawings provided by the
3 Corinthian argues that the Navy’s refusal to produce the proposals of the other offerors
in the procurement amounts to a concession that this information is not relevant
(Corinthian opp’n at 16). However, as noted above, we disagree because we find
there is a basis for discovery of Corinthian’s bid information.
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Navy in the Solicitation (compl. ¶¶ 44-52, ex. C; R4, tab 21 at 359-62). And, as noted
above, Corinthian stated that it relied on the Navy’s mistaken drawings when preparing
its bid (R4, tab 21 at 362).
In such claims for differing site conditions, typically a contractor must show that it
reasonably relied on the contract documents in preparing its bid. Stuyvesant Dredging
Co. v. United States, 834 F.2d 1576, 1581 (Fed. Cir. 1987) (“The contractor also must
show that it reasonably relied upon its interpretation of the contract and contract-related
documents and that it was damaged as a result of the material variation between the
expected and the encountered conditions.”); ECC Int’l LLC, ASBCA Nos. 61176, 62029,
2021 WL 1382834 (“To receive an equitable adjustment to the Contract, ECCI must
demonstrate that it reasonably relied upon its interpretation of the Contract.”); Renda
Marine, Inc. v. United States, 66 Fed. Cl. 639, 655 (2005) (“[A] contractor must prove
that, when interpreting the bid data . . . it [not only] examined the contract documents and
reasonably interpreted them, but [also] . . . that it relied on its interpretation when
calculating its bid.”) (internal quotation and citation omitted), aff’d, 509 F.3d 1372 (Fed.
Cir. 2007). Thus, Corinthian’s bid information is relevant to its differing site conditions
claim.
Corinthian’s REA No. 3 based on the Changes clause also makes its bid information
relevant. For REA No. 3, Corinthian states that it based its project plan on purchasing
nutrient credits from the Virginia Department of Environmental Quality to comply with
Virginia storm water regulations, but that the Navy changed its requirements disallowing
Corinthian from pursuing that plan. (Compl., ex. B; R4, tab 19, at 334; see also compl.
¶ 38) “The general rule is that ‘where a contractor seeks recovery based on his
interpretation of an ambiguous contract, he must show that he relied on this interpretation in
submitting his bid.’” Fruin-Colnon Corp. v. United States, 912 F.2d 1426, 1430 (Fed. Cir.
1990) (quoting Lear Siegler Mgmt. Servs. Corp. v. United States, 867 F.2d 600, 603 (Fed.
Cir. 1989)); Lasers Mfg., Inc., ASBCA No. 55436, 10-1 BCA ¶ 34,388 at 169,813 (“Even if
we were to find that LMI’s interpretation was within the zone of reasonableness, it could
not prevail because it presented no evidence of how it interpreted these provisions during
bidding.”). It remains to be seen whether the Contract was ambiguous on this point. See
Moore & Cowart Contractors, Inc., ASBCA No. 54014, 04-1 BCA ¶ 32,557 at 161,032 (“A
finding of prebid reliance is necessary only where the contract is ambiguous.”). But, for
now, the Navy seeks information that is “reasonably calculated to lead to discovery of
admissible evidence” if there is ambiguity. Afro-Lecon, 820 F.2d at 1203. At this time and
based on the REAs here, the Navy should have the opportunity to receive responsive
discovery. 4
4 The Navy also argued that the Audit and Records clause of the Contract dictated
Corinthian to produce its bid information, among other documents (Navy mot.
at 4-5, 15-16). It does not. As pertinent to the Navy’s argument, this clause
permits the contracting officer or an authorized representative to audit a contractor
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Ultimately, weighing both proportionality concerns and given the underlying
issues in Corinthian’s claim relating to the Changes and Differing Site Conditions
clauses, the Board concludes that Corinthian must produce the bid information that it
used to prepare the estimates in its proposal.
CONCLUSION
For the foregoing reasons including the facts of this appeal, the Board grants the
Navy’s request for the bid information Corinthian relied upon in preparing its proposal.
Dated: May 19, 2021
DANIEL S. HERZFELD
Administrative Judge
Armed Services Board
of Contract Appeals
(Signatures continued)
if the contract “is a cost-reimbursement, incentive, time-and-materials, labor-hour,
or price redeterminable contract” (FAR 52.215-2(b)) or the agency “required the
contractor to submit certified cost or pricing data in connection with any pricing
action relating to this contract[.]” FAR 52.215-2(c). Here, the Contract was a
fixed-price construction project, which means that 52.215-2(b) is inapplicable (R4,
tab 2 at 153-56). Nor has the Navy provided any evidence that Corinthian had to
otherwise supply certified cost and pricing data, which means that 52.215-2(c) is
inapplicable. See KEPA Servs, Inc. v. Dep’t of Veterans Affairs, CBCA No. 2727
et al., 15-1 BCA ¶ 35,942 at 175,666 (“Because the audit provision of
FAR 52.215-2(c) applies only if the contractor ‘has been required to submit
certified cost or pricing data, and because Kepa has not and, at least in the present
circumstances of these appeals, will not have to submit certified cost or pricing
data, the clause does not currently give the VA a contractual right to audit.”);
Aerospatiale Helicopter Corp., DOTBCA No. 1905 et al., 89-1 BCA ¶ 21,559at 108,579 (requiring appellant to submit to audit under predecessor audit clause
because appellant “submitted cost and pricing data to the Coast Guard . . .
triggering the obligations flowing from that submission”).
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I concur I concur
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
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. 62379, Appeal of Corinthian-
WBCM, a Joint Venture, rendered in conformance with the Board’s Charter.
Dated: May 20, 2021
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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