KBJ, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
KBJ, Inc. ) ASBCA No. 58512)
Under Contract No. NNC11CA18C )
APPEARANCE FOR THE APPELLANT: Joseph R. Spoonster, Esq.
Harpst Ross Ltd.
Uniontown, OH
APPEARANCES FOR THE GOVERNMENT: Scott W. Barber, Esq.
NASA Chief Trial Attorney
Laura A. Henry, Esq.
Tamika S. Laldee, Esq.
MacAllister A. West, Esq.
Trial Attorneys
NASA Glenn Research Center, OH
OPINION BY ADMINISTRATIVE JUDGE SCOTT
Appellant, KBJ, Inc. (KBJ), appealed pursuant to the Contract Disputes Act
(CDA), 41 U.S.C. §§ 7101-7109, from the contracting officer's (CO's) final decision
denying its $558,791.33 suspension and delay claim under the captioned contract to
replace two boilers at the National Aeronautics and Space Administration's (NASA's)
Glenn Research Center (GRC). The Board conducted a two-day hearing in Cleveland,
Ohio. We decide entitlement and quantum. For the reasons set forth below, we sustain
the appeal in part and otherwise deny it.
FINDINGS OF FACT
1. On 16 March 2011 NASA awarded the subject contract, a section 8(a)
set-aside, to KBJ in the firm-fixed-price of $3,621,900 (R4, tab 3 at 42, tab 5 at 59-60;
tr. 2/18). Under the contract, KBJ was to remove and replace Boilers 3 and 4 at GRC's
steam plant, based upon a design provided by NASA (R4, tab 5, attach. A at 122-102;
tr. 2/18). The boilers, which were about 18 feet wide, 30 feet long, and 28 feet tall,
operated 365 days of the year to provide heat and humidification to GRC's approximately
350-acre campus. They were critical to GRC's operations, including daily support of
significant research projects and experiments. The steam plant was very old and the
boilers needed to be upgraded to make the plant more cost-effective and functional.
(Tr. 1/23, 127-29, 174, 2/18-19)
2. To facilitate installation of the replacement boilers, KBJ was required to demolish
a portion of the existing masonry wall on one face of the steam plant building and, after
installation of the new boilers, reconstruct the wall with new energy efficient light panels
and an insulated overhead door. KBJ was also required to provide a new combustion air
system for the steam plant; replace two low pressure steam condensate collection and return
pumps with non-electric pressure-powered units with steam pressure equalization tanks;
install new conduit and wire for new boiler fans and blowers; install compatible starters for
the boiler in the motor control center; and replace low voltage electrical distribution panels
and associated feeders. (R4, tab 5, attach. A at 122-007 to -008)
3. On 11 February 2011, prior to contract award, NASA issued solicitation
Amendment No. 2, answering prospective bidders' questions (R4, tab 1 at 7-16).
Question 18 asked whether NASA would consider a schedule extension "due to the boiler
lead time," noting that the replacement boilers would be "delivered at just about the time
NASA wants them to be activated." NASA had responded that its "intention is for the
work to be complete per the solicitation." (Id. at 11)
4. The contract anticipated the presence of asbestos-containing materials during
work performance and required KBJ to remove them. It provided that the asbestos work
included the removal of 1,000 square feet of boiler insulation material. (R4, tab 5, attach.
A at 122-008, -102) Pre-bid Question No. 14 had asked NASA to confirm that the 1,000
square feet of boiler asbestos abatement included the ductwork extending from the
boilers. NASA responded that the "1000 sf should include abatement of all asbestos
necessary to remove boilers 3 and 4 safely." (R4, tab 1 at 10; tr. 2/89) Kevin Stiles was
NASA's project manager. At the time, he was employed by a private contractor that
worked for NASA. According to Mr. Stiles, NASA had allotted for 1,000 square feet of
asbestos for the project and, if additional asbestos were discovered, NASA planned to
modify the contract to add abatement of that asbestos. (Tr. 2/5-6, 58-59) We find that
the contract required KBJ to abate only 1,000 square feet of asbestos-containing boiler
insulation material.
5. Contract clause H.12 provided that "[t]he Superintendent is considered
essential to the work being performed under this contract" and it required that KBJ
identify a superintendent who "shall be dedicated solely to this contract and shall be on
site full time whenever work is being performed under this contract" (R4, tab 5 at 87).
6. The contract incorporated numerous Federal Acquisition Regulation (FAR)
clauses, including FAR 52.233-1, DISPUTES (JUL 2002); FAR 52.242-14, SUSPENSION OF
WORK (APR 1984); and FAR 52.243-4, CHANGES (JUN 2007) (R4, tab 5 at 67, 103). The
Suspension of Work clause provided in pertinent part:
(a) The [CO] may order the Contractor, in writing, to
suspend, delay, or interrupt all or any part of the work of this
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contract for the period of time that the [CO] determines
appropriate for the convenience of the Government.
(b) If the performance of all or any part of the work is,
for an unreasonable period of time, suspended, delayed, or
interrupted (1) by an act of the [CO] in the administration of
this contract, or (2) by the [CO's] failure to act within the
time specified in this contract (or within a reasonable time if
not specified), an adjustment shall be made for any increase
in the cost of performance of this contract (excluding profit)
necessarily caused by the unreasonable suspension, delay, or
interruption, and the contract modified in writing accordingly.
However, no adjustment shall be made under this clause for
any suspension, delay, or interruption to the extent that
performance would have been so suspended, delayed, or
interrupted by any other cause, including the fault or
negligence of the Contractor, or for which an equitable
adjustment is provided for or excluded under any other term
or condition of this contract.
7. NASA issued a notice to proceed to KBJ on 12 April 2011, which it received that
day (R4, tab 25; compl. ii 12). KBJ was to complete performance within 180 calendar days
from the issuance of the notice to proceed, i.e., by 9 October 2011 (R4, tab 5 at 67; tr. 1/76).
From the point NASA approved the contractor's submittals for the new boilers, the lead
time for boiler manufacture was typically four to six months (tr. 2/29).
8. KBJ submitted its initial construction schedule on 22 April 2011, which NASA
did not approve, in part because it was difficult to determine the critical path (R4, tab 26;
tr. 2/23-24). On 12 May 2011 KBJ resubmitted its schedule, which NASA approved on
13 May 2011 (ex. G-1; tr. 2/24). Under the approved schedule KBJ planned to begin
boiler asbestos abatement on 19 May 2011 and complete boiler demolition by 18 July
2011. Foundation construction for the replacement boilers was to be complete by 28 July
2011. KBJ planned to begin boiler assembly on 13 June 2011 and to have replacement
Boilers 4 and 3 on site on 12 and 26 August 2011, respectively. It planned to begin
replacement boiler installation on 15 August 2011 and to complete work on them by
14 October 2011. The contract performance period, as planned, was to end on
4 November 2011. (Ex. G-1; compl. ii 14; gov't hr. at 2; app. hr. at 2, ii 9).
9. On 26 May 2011 Mr. Stiles gave what he described as a direction to KBJ:
Regarding the Repair Steam Plant Project, I have been
instructed that we are to proceed as follows:
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We are free to mobilize at the Steam Plant to perform work
that can be started within a reasonable time frame after
installing the barricades and to perform work that does not
render any of the boilers non-functional at this point. We
cannot make boilers 3 or 4 non-functional until we have the
new boilers onsite (this includes removing the front wall).
We will be allowed to take boilers out for short periods (as
long as the Steam Plant still remains operational) to replace
panels, run new lines, etc[.], and we can do other work in the
plant such as replace window[ s], panels, etc. But we cannot
take boilers 3 and 4 out of service completely unless we have
the new boilers in the Cleveland area.
As your schedule stands now, this direction will require some
changes.
(R4, tab 28) The direction (hereafter sometimes the "suspension directive") had not been
part of the contract (R4, tab 5; tr. 1/65). It suspended boiler work for an indefinite period.
According to Mr. Stiles, the reason for the suspension directive was:
[O]nce we approved the schedule, the NASA facilities
management team took a step back and looked at the schedule
again and said, well, do we really want to do this, especially
given the age of the steam plant.. ..
(Tr. 2/28) NASA reevaluated KBJ's construction schedule after NASA had approved it
because NASA was concerned that potential delays due to unforeseen conditions and in
the replacement boilers' fabrication would push the project into the winter. NASA then
would not have enough steam to fulfill its operational needs. (Tr. 2/28-29) The "thought
behind suspending the work on the two boilers until the new ones arrived on site[] was
essentially to minimize risk to NASA" (tr. 2/28).
10. On 8 June 2011 KBS submitted a schedule to Mr. Stiles based upon NASA's
direction to delay demolition of the existing boilers until the new boilers arrived in
Cleveland. KBJ advised that materials storage must be arranged and inquired whether
NASA would do so or whether KBJ should, subject to a change order. KBJ asked
whether boiler demolition could begin once the new boilers were in fabrication, which
would reduce the delay. It also stated that it would "proceed with the window
replacement, electrical panel replacement, fire protection installation and water line
installation later this summer in order not to extend our supervision duration and increase
our costs." (R4, tab 29 at 427)
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11. On 9 June 2011 KBJ resubmitted its schedule, under which boiler demolition
would begin on 5 September 2011, replacement boiler installation would begin
12 October 2011 and testing of the boilers would be completed by 11 January 2012, with
full project completion by 1 February 2012. KBJ stated that it would communicate with
Mr. Stiles later regarding revising the schedule based upon starting demolition when the
boilers were released for fabrication. (R4, tab 30)
12. On 13 June 2011 KBJ sent an alternate schedule to Mr. Stiles, based upon
starting boiler demolition upon release of the replacement boilers, under which KBJ
would begin demolition on 25 July 2011 and replacement boiler installation on
15 September 2011; complete boiler testing by 30 November 2011; and achieve full
project completion by 21December2011. (R4, tab 31)
13. On 16 June 2011 Mr. Stiles responded that KBJ's 13 June 2011 schedule was
unacceptable (R4, tab 32 at 440). NASA did not want to risk entering the winter months
without functional boilers (tr. 2/36-37). Mr. Stiles directed KBJ to provide a schedule
"detailing any work that [KBJ] would like to still accomplish this summer within the
steam plant" without rendering Boilers 3 and 4 completely inoperable (R4, tab 32 at 440).
14. KBJ responded to Mr. Stiles on 20 June 2011 that:
The activities that we would like to complete this year are as
follows:
1) install combustion air platform
2) install combustion air units, ductwork and piping
3) install new water line
4) install fire protection system
5) window removal and kalwall/louver installation
6) option 3, 4 and 5 electrical panel replacement
7) relocation of Siemens panels on east wall per drawing
ED-101, note 20
8) reroute mechanical and electrical systems on east wall for
wall opening
9) remove radiant heaters and gas piping on east and south
walls per drawing MD-102, note 28 & 29
Please review the above list. If it is acceptable [KBJ] will
I
finalize a work schedule.
(R4, tab 32 at 440)
15. Bilateral contract Modification (Mod.) No. 1, effective 27 June 2011, added
steam header replacement to the contract work for an additional $769,344 (R4, tab 6 at
5
144-45; tr. 2/40). Although, at the time, the contract performance period was to end on
4 November 2011, the modification stated that the period "remains at: August 31, 2012,"
apparently intended as an extension of the period (R4, tab 6 at 145). The modification
did not address NASA's 26 May 2011 suspension of boiler work. It concluded:
The Parties hereto acknowledge and agree that any and all
claims for equitable adjustment of the contract price and time
pursuant to the provisions of the clause(s) 52.243-04 entitled
"CHANGES", and Mutual Agreement are hereby fully
satisfied and discharged with respect to this Supplemental
Agreement Number One (01).
(R4, tab 6 at 145)
16. On 22 August 2011, NASA advised that KBJ was to have "100% dedicated
supervision" on the project (R4, tab 34 at 443-44 ). At this time, only part of one of the
activities listed by KBJ on 20 June 2011 had been completed (tr. 2/42). On 24 August
2011, Mr. Stiles inquired whether KBJ was "still planning to do any work inside the
Steam Plant before Spring, i.e. electrical panels" (R4, tab 34 at 443). KBJ responded on
25 August 2011 that, based upon the overall project schedule, it would cease work on the
electrical panel relocation shortly and would still install the waterline in September, with
a full-time superintendent in place. It would resume work in early 2012 "after NASA
provides a start date for demolition of boilers 3 and 4." (R4, tab 34 at 443) KBJ did not,
however, install the waterline until 2012 (tr. 2/43).
17. On 12 September 2011 Mr. Stiles notified KBJ:
For construction of the Steam Plant and Steam Header, the
dates below are the official guidance from [Facilities
Division]:
March 1, 2012: Boiler 3 demolition can begin
April 16, 2012: Begin South Header Replacement
June 1, 2012 (or upon completion of S. Header
Replacement): Begin North Header and boiler 4 demo
Oct 1, 2012: Boiler 4 complete, tested, running, etc.
(Assuming boiler 4 install will be first based on Physical
location in the Steam Plant)
Oct 15, 2012: Boiler 3 complete, tested, running, etc.
Oct 15, 2012: Front wall must be reconstructed
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(R4, tab 35 at 445-46) Mr. Stiles reiterated NASA's requirement that the new boilers be
in the Cleveland area prior to demolition of the existing boilers. He asked that KBJ
submit an updated schedule based upon the dates provided. (Id. at 446)
18. Bilateral contract Mod. No. 3, effective 25 January 2012, for $35,731, added
work related to the steam header replacement and extended the contract completion date
to 31December2012. It stated that "claims for equitable adjustment of the contract price
and time pursuant to the [Changes clause] and Mutual Agreement are hereby fully
satisfied and discharged with respect to this Supplemental Agreement." (R4, tab 10)
19. KBJ submitted a revised schedule to Mr. Stiles on 22 February 2012 under
which it planned to conduct boiler asbestos abatement from 19 March 2012 to 28 March
2012, replace the south steam header from 16 April 2012 to 11 May 2012, replace the
north steam header from 14 May 2012 to 8 June 2012, demolish Boilers 3 and 4 between
4 June 2012 and 6 July 2012, and begin installation of Boilers 4 and 3 on 19 July and
2 August 2012 respectively. KBJ anticipated completing boiler testing by 3 October
2012, with a project completion date of 24 October 2012. (R4, tab 36)
20. On 24 February 2012, Mr. Stiles posed several questions and concerns to KBJ
regarding its 22 February 2012 schedule. Among other issues, Mr. Stiles asked ifKBJ
could start the project sooner, subject to proper superintendence. In its 5 March 2012
response, KBJ advised that it had been told that Boiler 3 demolition could start
immediately. It sought clarification, in view of Mr. Stiles' prior instruction that no
demolition could take place until the replacement boilers were in the Cleveland area.
(R4, tab 37; tr. 2/51-52)
21. Mr. Stiles replied on 6 March 2012 that KBJ could begin Boiler 3 demolition
as soon as possible, without the replacement boilers in the Cleveland area. He also
advised that KBJ should replace the north steam header prior to replacing the south steam
header, due to NASA's desire to leave Boilers 1 and 2 operational during unpredictable
April weather, and he asked for an updated schedule. (R4, tab 38 at 451)
22. Joseph Williams became KBJ's project superintendent between 13 and
20 March 2012 (see R4, tab 39 at 453, tabs 40-41; tr. 1114, 2/55-56).
23. KBJ sent an updated schedule to Mr. Stiles on 23 March 2012 with changes
they had discussed. As with the 22 February 2012 schedule, KBJ projected a project
completion date of 24 October 2012. (R4, tab 42)
24. KBJ planned to mobilize its asbestos abatement subcontractor, Neumeyer
Environmental Services (Neumeyer), during the week of 26 March 2012 (R4, tab 41 at
457). By mid-April 2012, KBJ had begun demolition of the existing boilers (tr. 2/60).
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25. On 17 April 2012 KBJ submitted to Mr. Stiles Request for Information No. 25
indicating additional asbestos at Boiler 3, attaching a report analyzing a sample, and
recommending that a more comprehensive survey be undertaken (R4, tab 43 at 462-69).
A 5 May 2011 report shows that NASA's original survey of Boiler 3 did not detect any
asbestos (id. at 471-74). Ultimately NASA confirmed that there was additional asbestos
at Boiler 3 (tr. 2/60).
26. The replacement boilers were delivered to the Cleveland area on or about
8 May 2012 (R4, tab 44; tr. 2/60-61).
27. KBJ submitted a 23 May 2012 proposal to abate the additional
asbestos-containing insulation discovered at Boiler 3 for $74,250. KBJ's proposal
included $67 ,500 in subcontractor costs plus five percent markups each for overhead and
profit. (R4, tab 47)
28. In response to Mr. Stiles' 24 May 2012 request for.a more detailed cost
breakdown, KBJ provided a 4 June 2012 proposal with more cost breakdown, at an
increased price of $74,568 (R4, tab 48 at 485, 488-92).
29. As the project progressed, KBJ continued to discover additional
asbestos-containing material in the boilers (tr. 2/63-64). By 5 June 2012, the project was
behind schedule due to the unforeseen asbestos (R4, tab 50).
30. On 11 June 2012, KBJ submitted three proposals for additional asbestos
abatement at Boilers 3 and 4. KBJ would abate the asbestos and demolish each boiler in
nine weeks, using five eight-hour shifts per week, for $826,885; or it would do so in
seven weeks, using five ten-hour shifts and one eight-hour shift per week, for $1,000,950;
or it would do so in five and a half weeks, using ten ten-hour shifts per week, for
$1,128,138. (R4, tab 52 at 500-14).
31. KBJ submitted two 21 June 2012 proposals to abate additional asbestos found
at Boilers 3 and 4 for $25,870 and $136,256, respectively (R4, tab 59). On 12 July 2012,
KBJ also submitted a $21,450 proposal to abate additional asbestos found at Boiler 3 (R4,
tab 60 at 541-44 ).
32. Commencing on 27 July 2012, NASA asked KBJ for a proposal to abate even
more asbestos (see R4, tab 61at545, tab 64 at 553, 555). The minutes of a 31July2012
construction progress meeting note a concern, which we infer KBJ raised, that "[a]ll the
'start/stop' is impacting the job, slowing down progress'" (R4, tab 62 at 549).
33. Bilateral contract Mod. No. 5, effective 2 August 2012, in the amount of
$258,937, covered additional work, including the abatement work in KBJ's 23 May,
21 June and 12 July 2012 proposals. The modification stated that it was entered into
8
under the Changes clause and mutual agreement and that it was a "Supplemental
Agreement for work within scope" (R4, tab 14 at 280). The contract completion date
remained 31December2012. Mod. No. 5 did not refer to the suspension directive or
cover any delays relating thereto. It stated that the parties "acknowledge and agree that
any and all claims for equitable adjustment of the contract price and time pursuant to the
[Changes clause] and Mutual Agreement are hereby fully satisfied and discharged with
respect to this Supplemental Agreement" (id. at 281 ).
34. On 3 August 2012 KBJ submitted a proposal for $639,898 to fully contain
Boilers 3 and 4 and completely abate the asbestos in the boilers (R4, tab 64 ).
35. Mr. Stiles warned KBJ on 6 August 2012 that proposed work done prior to
NASA's proposal acceptance would be at KBJ's risk (R4, tab 65). KBJ replied that day:
I think at this point we need to stop Neumeyer then .... we were
trying to keep the project going [i]n good faith. We have lost
time and money on all of this unforeseen asbestos. We have
paid for overtime to help get the project back on schedule. I
cannot absorb anymore additional cost. Neumeyer will be on
site tomorrow to finish a few things and clean up. I will not
bring him back on site until we reach an agreement on the
additional asbestos. At this point, we cannot go any further.
(R4, tab 66 at 561)
36. By letter to Mr. Stiles of 10 August 2012, KBJ stated that, at a 31 July 2012
meeting to discuss removal of additional asbestos, KBJ was "given a verbal to continue
working, to keep the project/schedule moving forward" and was asked to submit its
proposal by 3 August 2012; KBJ complied but on 6 August 2012 NASA advised that
KBJ would proceed at its own risk (R4, tab 68 at 565). KBJ stated:
As oftoday ... we still have not received direction from NASA
expressing their intentions on how to remedy [the asbestos]
issue. All this additional, unforeseen asbestos has caused
schedule delays, which in turn has pushed the completion
date beyond October 31, 2012. We need to receive a
response from NASA today. We will need to discuss the
schedule extension and additional costs associated with the
schedule extension.
(Id.)
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37. NASA ultimately determined that KBJ's 3 August 2012 proposal was too high
(tr. 2/71). NASA developed an 8 August 2012 internal estimate that the remaining
asbestos work should cost $326,364 (R4, tab 73; tr. 2/71-73). NASA also obtained a
13 August 2012 proposal from a different company to do the work for $183,750 (R4,
tab 72 at 575-77; tr. 2/72-73). NASA provided both figures to KBJ and advised that
NASA was willing to agree to its own estimated price for the asbestos work (tr. 2/72).
38. By letter to Mr. Stiles of 17 August 2012, KBJ stated:
We have agreed to accept NASA's offer of
$326,364.00 plus KBJ's mark up to fully contain boiler 3 and
4, and remove the remainder of the asbestos previously
identified. The price to complete the subject work is
$368, 788.... [O]nce we remobilize, we cannot encounter any
additional work stoppages.
(R4, tab 70 at 568) KBJ's markup included bond at 2%, overhead and profit at 5% each,
and project superintendent costs of $3,250 (id. at 569).
39. On 20 August 2012, KBJ agreed to accept NASA's $326,364.00 offer,
without the markup KBJ had originally added (R4, tab 71 ).
40. Bilateral contract Mod. No. 6, effective 29 August 2012, in the amount of
$326,364, added the remaining asbestos work, including full containment of the boilers.
It stated that it was entered into under the Changes clause and mutual agreement and that
it was a "Supplemental Agreement for work within scope" (R4, tab 16 at 315). The
contract completion date remained 31 December 2012. The modification did not refer to
the suspension directive or related delays. It stated that the parties "acknowledge and
agree that any and all claims for equitable adjustment of the contract price and time
pursuant to the [Changes clause] and Mutual Agreement are hereby fully satisfied and
discharged with respect to this Supplemental Agreement" (R4, tab 16 at 316). KBJ has
not alleged that there was any additional asbestos work beyond that covered by Mod.
No. 5 (finding 33) and Mod. No. 6.
41. By letter to CO Erick N. Lupson dated 19 September 2012, KBJ stated:
As a recap to our recent discussions over [Mod. No. 6], the
Project schedule, and time extension impacts to KBJ - this
letter confirms that NASA acknowledges that KBJ is not in
agreement with the new December 31, 2012 completion date
set forth in [Mod. No. 6]. In fact, KBJ has notified NASA
(via the revised schedule which was provided before [Mod.
No. 6] was issued and in our recent meetings) that in light of
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the additional asbestos abatement and associated critical path
delays, the Project cannot be completed until February 28,
2013.
KBJ reserves all rights associated with seeking an equitable
adjustment in both its contract price and contract time due to
the asbestos-abatement delays that were outside of KBJ' s
scope of work and control. KBJ is preparing and will be
submitting shortly a request for equitable adjustment for its
indirect time extension/delay costs that exceed the direct costs
of $326,360 [sic] contained in [Mod. No. 6]. KBJ is asserting
its right to further adjustment pursuant to [the Changes
clause].
(Ex. A-60)
42. By letter to the CO dated 4 October 2012, a Thursday, KBJ submitted a
certified claim for $558,791.33 and a time extension to 28 February 2013, stating that the
claim was comprised of a schedule analysis and damages calculated by its consultant,
"Timothy T. Calvey, PE, PSP, CPE" (R4, tab 20 at 388). The manner by which KBJ sent
the claim letter and the date the CO received it are not of record. We infer that, even if sent
by regular mail, he would have received it by Monday, 8 October 2012. The claim cited
the Changes clause but referred to NASA's work suspensions. KBJ stated that the claim
was based upon asbestos-abatement delays that were outside its scope of work and control,
and upon NASA's early project suspension in 2011. KBJ sought, inter alia, to recover its
general and administrative (G&A) costs associated with the "unanticipated NASA-caused
suspension of the work" (id. at 390). KBJ reiterated its contention that NASA had
acknowledged that KBJ did not agree with Mod. No. 6's 31December2012 completion
date. KBJ sought $53,833.33 in additional subcontractor and materials costs for the period
it was suspended, measured from 24 October 2012, which included its overhead and profit
at 5% each and bond at 2%. It also claimed $371,909 in home office overhead, calculated
at a daily rate of$1,047.63, multiplied by 355 days of alleged delay resulting from
NASA's project suspension due to "operability concerns with Boiler Nos. 3 and 4 during
the winter of 2011" (id. at 3 89). KBJ used the Eichleay 1 formula in calculating its
suspension and delay claim (id.; tr. 1143). Using the same $1,047.63 daily rate, KBJ also
sought $133,049 in home office overhead for 127 days of alleged asbestos-related delays
from "the post-suspension agreed upon completion date of October 24, 2012 through
[KBJ's projected] completion date of February 28, 2013" (R4, tab 20 at 393). KBJ
included a comparison of its initial schedule, the schedule following the suspension, and a
schedule reflecting the alleged additional asbestos impacts (id. at 392).
1 See Eichleay Corp., ASBCA No. 5183, 60-2 BCA ~ 2688 at 13,568, ajf'd on recon., 61-1
BCA ~ 2894, discussed below.
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43. The CO denied KBJ's claim on 30 November 2012, based principally upon
alleged releases in the contract modifications although, unlike in the modifications, the
release language he quoted referred to the Disputes clause as well as the Changes clause
(R4, tab 22 at 397). 2 On 18 January 2013 KBJ appealed to the Board, which docketed the
appeal as ASBCA No. 58512. On 16 October 2014 NASA terminated the contract for
default and asserted a monetary claim against KBJ (R4, tab 95). KBJ's appeal from that
decision, docketed as ASBCA No. 59785, is subject to separate proceedings.
44. KBJ proffered Mr. Calvey, vice president of Calvey Consulting, LLC,
identified in its claim, as an expert witness. He has a Bachelor of Science degree in
engineering, a Master's degree in business administration and, among other credentials, is
a registered professional engineer, certified professional estimator, and certified planning
and scheduling professional. He has over 30 years of pertinent professional experience.
He has lectured and published articles on construction claims, schedule analysis and
delays and has previously testified as an expert witness. As his expert report, he relied
upon his claim analysis and a Microsoft PowerPoint presentation that referred to exhibits.
He submitted his curriculum vitae, his agreement with KBJ, and his invoices. Over
NASA's objection, the presiding judge admitted Mr. Calvey as an expert in schedule and
damage analysis. (Tr. 1141-52, 97, exs. A-61, -62; Bd. corr., app. witness list) NASA did
not proffer an expert and did not engage in any discovery or ask to do so (see tr. 21121).
45. Mr. Calvey opined that the project's critical path consisted of demolishing the
existing boilers, new piping installation, new boilers installation, connecting piping to the
boilers, boilers insulation, and starting the boilers, and that delaying removal of the
existing boilers would impact the project's completion date. (Tr. 1/72-74) KBJ's
superintendent, Mr. Williams, and NASA's Mr. Stiles, similarly testified that the
project's critical path consisted of demolition of the existing boilers and installation of
the replacements (tr. 1114-15, 2/89). We find that the project's critical path consisted of
the demolition, followed by the replacement, of Boilers 3 and 4.
46. Mr. Calvey testified that KBJ originally planned to demolish Boilers 3 and 4
prior to the delivery of the new boilers and that NASA's suspension directive that
Boilers 3 and 4 must remain functional until the replacement boilers were in the
Cleveland area resulted in a project delay (tr. 1165, 67; finding 9). He stated that KBJ did
not know when it could start work again until NASA's 12 September 2011 notification
that it could begin demolition of Boiler 3 on 1 March 2012 (tr. 1/79; finding 17).
Mr. Calvey stated that the new boilers had been assembled and payment for the assembly
had occurred in August 2011, so the boilers could have been installed per KBJ' s original
2
The CO stated that KBJ had reduced its claim from $558,791.53 to $508,000.00 but
KBJ characterized the latter figure as a counter settlement offer in response to an
informal offer from NASA (R4, tab 21).
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schedule but for the NASA-imposed delay in boiler demolition (tr. 1/69, 81-82). Relying
upon KBJ' s contemporaneous schedules, Mr. Calvey opined that the delay in Boilers 3
and 4 demolition pushed the project completion date from 4 November 2011 to
24 October 2012 (tr. 1/82-83), a total of355 days.
47. Concerning the alleged delay stemming from NASA's suspension directive,
CO Lupson testified that, from his understanding, there had been other work that had to
be performed prior to the boilers' demolition (tr. 11158). However, he mentioned only
window work and other work that "wasn't really related to the boilers," stating that he
could not be specific because he lacked the technical expertise (tr. 11165).
48. Mr. Stiles noted that KBJ had identified nine activities other than boiler work
that it could perform during 2011 (tr. 2/36; finding 14). He acknowledged that some of
that work could have been impacted by the boiler work, but testified that the majority of
it could have been completed in 2011 (tr. 2/90).
49. KBJ' s superintendent Williams countered that the nine activities could not
have been accomplished in 2011. Although he arrived in March 2012, he testified that he
was aware of the 2011 site conditions and, because the boiler room work had not been
performed, conditions were the same in March 2012 as they would have been in
September 2011 (when NASA notified KBJ of the date it could begin boiler demolition).
(Tr. 21110-15; finding 17)
50. We find that NASA's suspension directive to KBJ to refrain from demolishing
Boilers 3 and 4 until the replacement boilers were on site delayed the project's critical
path work by 109 days as set forth below. We do not accept Mr. Calvey's reliance upon
KBJ' s contemporaneous schedules to determine the length of the delay. The record
supports a different calculation. NASA informed KBJ that it could begin demolition of
Boiler 3 on 1March2012 (finding 17). KBJ's contemporaneous schedules projected a
completion date of 24 October 2012 (findings 19, 23 ). The difference between the
1 March 2012 and 24 October 2012 dates is 23 7 days, longer that the original 180-day
contract performance period. Mr. Calvey did not explain how all of those extra days
were attributable to NASA's suspension of boiler activities. We attribute the delay
between NASA's 26 May 2011 directive to KBJ not to demolish the existing boilers and
its 1 March 2012 demolition commencement date, a total of 280 days, to the government.
That delay was indefinite for 109 days, from 26 May 2011 until NASA's 12 September
2011 notice to KBJ that it could begin Boiler 3 demolition on 1 March 2012. It was for a
definite period thereafter. We attribute the delays between 1 March 2012 and the start of
Boiler 3 demolition to KBJ. KBJ's 5 March 2012 inquiry to NASA about the
requirement that replacement boilers be in the Cleveland area before demolition of
Boilers 3 and 4 could begin suggests that the replacement boilers were not yet on site
(finding 20). However, Mr. Calvey testified that the new boilers had been assembled in
Ir
August 2011 (finding 46). KBJ gave no explanation why they could not have been
13
brought to the Cleveland area upon, or at a reasonable time after, NASA's 12 September
2011 notice that KBJ could begin demolition on 1March2012. KBJ has not explained
the delay in delivery of the replacement boilers until May 2012. It was only able to start
demolition work sooner because NASA revoked its instruction that the replacement
boilers first be in the Cleveland area (finding 21 ).
51. We find KBJ responsible for the delay in the non-boiler work KBJ identified
to NASA on 20 June 2011 as work that could be performed while the boiler work was
suspended (finding 14). Although Mr. Williams testified that the work could not have
been performed in 2011 (finding 49), he was not KBJ' s superintendent until March 2012
(finding 22), and we credit KBJ's contemporaneous statement about the work that could
be performed in 2011. KBJ has presented no evidence that the delay in completing that
work was caused by NASA. The record is insufficient for us to calculate that delay.
Regardless, the project's critical path was driven by the boiler work (see finding 45). We
find that this non-boiler work was not on the critical path and was insubstantial in
comparison to the contract work as a whole.
52. Mr. Calvey opined that NASA delayed the project by its "lack of decision on
the asbestos and the added scope of asbestos that was not included in the original contract
scope" (tr. 1/96), and that this delayed the critical path work and extended the project's
completion date from 24 October 2012 to 28 February 2013 (tr. 1189, 95-96), a total of
127 days. He did not apportion this delay between the delay in issuing the contract
modifications to add the asbestos work and the time necessary to perform that additional
work. The contract required KBJ to abate 1,000 square feet of asbestos-containing boiler
insulation material (finding 4 ). Because KBJ could not complete boiler demolition, a
critical path item, without abating the asbestos, we attribute the delays caused by the
additional asbestos encountered to NASA. We accept Mr. Calvey's unrebutted testimony
that NASA's delay in deciding how to address the additional asbestos and the added
abatement together delayed the project by 127 days.
53. NASA contends that KBJ could obtain replacement work during the delay
period because, on 7 June 2012 it selected KBJ for an $86,125 project (R4, tab 75 at 584;
tr. 2176-77); on 3 August 2012 KBJ bid $525,805.52 on a GRC project, although its bid
was unsuccessful (R4, tab 76; gov't br. at 19); and on 19 September 2012, NASA
selected KBJ for a $171,574 project (R4, tab 77 at 606). The total $783,504.52 value of
these projects, including the largest one for $525,805.52 that KBJ was not awarded, was
$783,504.52. This is less than half the $3,621,900 value of the subject steam plant
contract as originally awarded (finding 1).
14
Quantum
54. KBJ submitted proposals from its subcontractors seeking additional
compensation for being delayed until 2012 (ex. A-56). Mr. Calvey added the
subcontractors' requested amounts to arrive at the $53,833.33 subcontractor and materials
costs sought by KBJ in its claim (tr. 1/102; finding 42). We find the subcontractor'
proposals insufficient to show either that their labor and material costs actually increased
or the extent of any such increase. Because KBJ offered no other evidence on these
points, it has failed to prove any subcontractor cost escalation.
55. KBJ seeks to recover unabsorbed overhead costs pursuant to the Eichleay
formula. Mr. Calvey computed a $1,047.63 daily overhead rate (R4, tab 20 at 390;
tr. 1/99). NASA does not challenge this calculation or offer an alternate one. We adopt
the unchallenged $1,047.63 daily overhead rate and, as we discuss below, conclude that
KBJ is entitled to recover 109 days of unabsorbed overhead costs resulting from NASA's
suspension of demolition of Boilers 3 and 4.
DISCUSSION
Preliminary Evidentiary Issues
I. NASA's Objection to Admission of Mr. Williams' Disputed Testimony
At the hearing, NASA objected to testimony by Mr. Williams regarding whether
work KBJ identified to NASA on 20 June 2011 could have been accomplished in 2011.
Because Mr. Williams was hired in March 2012, NASA argued that he lacked requisite
personal knowledge to give such testimony. The presiding judge overruled NASA's
objection. (Tr. 2/109-12) In its brief, NASA renews its objection to Mr. Williams'
testimony regarding events prior to March 2012 as outside his personal knowledge,
citing, inter alia, FED. R. Evm. 70l(a) (gov't br. at 62-63).
FED. R. Evm. 701(a) provides that lay opinion testimony must be "rationally based
on the witness's perception." Under FED. R. Evm. 602, a "witness may testify to a matter
only if evidence is introduced sufficient to support a finding that the witness has personal
knowledge of the matter," but "[e]vidence to prove personal knowledge may consist of
the witness's own testimony." Although we may look to them for guidance, the Federal
Rules of Evidence are not binding upon the Board. Board Rule 10(c ); Laguna Constr.
Co., ASBCA No. 58324, 14-1BCAi!35,748 at 174,947-48. In keeping with Board Rule
lO(c), in addition to appropriate evidence admissible under the Federal Rules, the Board
will consider evidence admissible in the sound discretion of the presiding judge.
15
In any event, NASA has not demonstrated any prejudice to it resulting from the
Board's admission of the disputed testimony. The Board was not persuaded by it and
gave weight instead to KBJ's contemporaneous evaluation of the work it could do in
2011(findings14, 51). We deny NASA's objection.
II. NASA's Objection to Board's Admission of Mr. Calvey as an Expert
The Board's pre-hearing order provided that if a party offered expert testimony, it
was to provide a statement setting forth the expert's area of expertise; the subject matter
of the expert's testimony; and a summary of the expert's opinion and the basis therefor in
the form of an expert's report. The order referred the parties "generally" to FED. R. C1v.
P. 26 and FED. R. EVID. 702-705. KBJ, then proceedingpro se, timely submitted its
witness list one month before the hearing, stating that: Mr. Calvey would "provide expert
testimony on schedule analysis and damage calculations;" the claim contained a summary
of his opinions; and they were "based on the project schedules, daily logs, project
correspondence and company financial records." KBJ provided a summary of
Mr. Calvey's credentials and included a copy of his curriculum vitae. KBJ also
submitted a copy of its hearing exhibits. Exhibit A-61, "Calvey Consulting Charts," was
a printout of his PowerPoint presentation. (See finding 44)
Prior to the hearing NASA objected to the designation of Mr. Calvey as KBJ's
expert witness on the ground that the information in its witness list did not satisfy FED. R.
CIV. P. 26's expert report requirements. KBJ then submitted a list of Mr. Calvey's
publications, cases in which he had testified as an expert, and information regarding his
compensation related to this appeal (see finding 44 ). NASA renewed its objection at the
hearing (tr. 1/44, 46, 49-51 ). The presiding judge overruled it, allowing Mr. Calvey to
adopt the schedule analysis and damages calculation in KBJ's claim and exhibit A-61 as
his expert report under the circumstances of this appeal (tr. 1/47-49, 51 ). NASA renewed
its objection in its post-hearing brief (gov't br. at 63-67).
Like the Federal Rules of Evidence, although we may look to them for guidance,
particularly in areas our rules do not specifically address, the Federal Rules of Civil
Procedure do not apply to the Board. Circle, LLC, ASBCA No. 58575, 15-1 BCA
ii 36,025 at 175,965. As noted, under Board Rule lO(a), evidence may be admitted in the
presiding judge's discretion. While Mr. Calvey did not provide a signed expert report
so-designated, we conclude that the materials he submitted satisfied the Board's
pre-hearing order and that the presiding judge had ample basis for admitting him as an
expert witness. NASA did not engage in discovery or ask to do so regarding Mr. Calvey,
who was identified in KBJ's claim. (Finding 44)
16
We deny NASA's objection to the presiding judge's admission of Mr. Calvey as
an expert witness. 3
KBJ's Entitlement to an Equitable Adjustment
KBJ seeks subcontract escalation costs and unabsorbed overhead for the delay
resulting from NASA's suspension directive that Boilers 3 and 4 could not be demolished
until replacement boilers were in the Cleveland area, which was not a contract
requirement (finding 9). It also seeks unabsorbed overhead for the delay due to the
several occurrences of additional asbestos beyond the 1,000 square feet covered by the
contract (finding 4).
NASA alleges that: KBJ has failed to establish that NASA's suspension directive
unreasonably delayed project completion; KBJ caused concurrent delays; NASA fully
compensated KBJ under the clear and unambiguous Mod. Nos. 5 and 6 for
asbestos-related impact and delay costs and those claims are barred by the doctrine of
accord and satisfaction; KBJ is not entitled to increased subcontractor costs; and KBJ has
not established entitlement to Eichleay damages.
KBJ disputes NASA's contentions and asserts that its asbestos-related delay
claims were not addressed or resolved by the contract modifications. It contends that the
modifications did not put it on notice that NASA intended them to encompass matters
other than direct costs of the subject changed work.
KBJ has not proved that its subcontractor costs increased (finding 54) and that
unsupported aspect of its claim fails. Accordingly, we address only KBJ' s unabsorbed
overhead claims. Mod. Nos. 5 and 6, and the release language they contain, do not refer
3
NASA also makes procedural objections. It objects to the duplication in KBJ's
exhibits of documents already contained in NASA's Rule 4 file (gov't hr. at
67-68). KBJ bore the extra duplication costs and, when there has been
duplication, we have relied upon the Rule 4 file. NASA also objects to having
been required to file its post-hearing brief first, which it agreed to do at the close
of the hearing at the presiding judge's request. Because KBJ, a small business,
was then appearing prose, the judge determined that having NASA file the first
brief would be most helpful to the Board and serve as briefing guidance to KBJ.
KBJ later retained counsel but the Board declined NASA's request that it alter its
briefing order. NASA argues that this placed it "in an inequitable position
regarding the ultimate burden of proof' (gov't hr. at 69). The order of briefing
does not alter KBJ's burden of proof. Moreover, NASA was not prejudiced. It
had ample opportunity in its reply brief to respond to KBJ's arguments. NASA's
procedural objections are denied.
17
to the suspension directive or cover alleged delays relating thereto (see findings 33, 40)
and NASA does not so claim. We address those delays first.
In addition to direct costs of contract performance, "a government contractor
incurs indirect costs which are not attributable to one contract in particular but arise
because of its general operations." West v. All State Boiler, Inc., 146 F .3d 1368, 13 72
(Fed. Cir. 1998). Home office overhead costs are:
[T]hose that are expended for the benefit of the whole
business, which by their nature cannot be attributed or
charged to any particular contract. In contracting with the
government, a company necessarily includes a portion of
home office overhead expenses, which it calculates based on
the contract's duration, in its estimate of costs to perform the
contract.
Altmayer v. Johnson, 79 F.3d 1129, 1132 (Fed. Cir. 1996) (citations omitted). A
contractor recovers these costs by allocating them on a proportionate basis among all its
contracts. All State Boiler, 146 F.3d at 1372; B. V. Construction, Inc., ASBCA No. 47766et al., 04-1 BCA ii 32,604 at 161,358. Suspension or delay of contract performance
results in an interruption in payment for direct costs, which in tum causes an interruption
in payment for overhead; however, overhead costs continue to accrue regardless of direct
contract activity. This interruption in the stream of payments causes a portion of home
office overhead costs to be unabsorbed. Nicon, Inc. v. United States, 331F.3d878, 882
(Fed. Cir. 2003); Wickham Contracting Co. v. Fischer, 12 F.3d 1574, 1577 (Fed. Cir.
1994 ). The Eichleay formula estimates "proportionate home office overhead that may be
unabsorbed due to suspension." B. V. Construction, 04-1 BCA ii 32,604 at 161,358. It
approximates unabsorbed home office overhead costs "by calculating a daily overhead
dollar amount for the contract in question and multiplying that figure by the number of
days of delay." Altmayer, 79 F.3d at 1132-33.
Recovery of unabsorbed overhead under Eichleay, however, is an extraordinary
remedy. Charles G. Williams Constr., Inc. v. White, 271 F.3d 1055, 1058 (Fed. Cir.
2001 ). The contractor must meet three prerequisites. It must show that ( 1) there was a
government-caused delay to contract performance of uncertain duration that was not
concurrent with a delay caused by the contractor or some other reason; (2) the delay
extended the performance time, or the contractor completed the work on time but
incurred additional costs because it had planned to finish earlier; and (3) the contractor
was required to be on standby during the delay.
Concerning concurrent delay, "[t]he contractor generally cannot recover for
concurrent delays for the simple reason that no causal link can be shown: A government
act that delays part of the contract performance does not delay the general progress of the
18
work when the prosecution of the work as a whole would have been delayed regardless of
the government's act." Essex Electro Eng'rs, Inc. v. Danzig, 224 F.3d 1283, 1295 (Fed.
Cir. 2000) (citation and internal quotation marks omitted). Moreover, only work on the
critical path can delay contract completion. Webb Electric Co. ofFlorida, Inc., ASBCA
No. 54293, 07-2 BCA ~ 33,717 at 166,940, ajf'd, Webb Electric Co. ofFlorida v. Griffin,
299 F. App'x 958 (Fed. Cir. 2008). In evaluating a contractor's entitlement to recover for
government-caused delays, the contractor is not charged for its concurrent delays that do
not affect work on the critical path. Fischbach & Moore International Corp., ASBCA
No. 18146, 77-1BCA~12,300 at 59,224, ajf'd, Fischbach & Moore International Corp.
v. United States, 617 F .2d 223 (Ct. Cl. 1980).
As to standby, "[t]he proper standby test focuses on the delay or suspension of
contract performance for an uncertain duration, during which a contractor is required to
remain ready to perform." Interstate General Government Contractors, Inc. v. West,
12 F.3d 1053, 1058 (Fed. Cir. 1993). When the period of delay is uncertain "and the
contractor is required by the government to remain ready to resume performance on short
notice, the contractor is effectively prohibited from mitigating such overhead costs by
making reductions in home office staff or facilities." Id. at 1057-58. A contractor meets
the standby requirement when the CO "has issued a written order that suspends all the
work on the contract for an uncertain duration and requires the contractor to remain ready
to resume work immediately or on short notice." P.J. Dick, 324 F.3d at 1371.
Alternatively, a contractor can establish standby by indirect evidence, which requires a
showing that: (1) the government-caused delay was substantial and of indefinite
duration; (2) during the delay, the contractor had to be ready to resume work on the
contract immediately, at full speed; and (3) there was an effective suspension of much, if
not all, of the contract work. Id.
When a contractor has established the prerequisites to applying Eichleay, it has
made a prima facie case of entitlement. The burden of production then shifts to the
government to show that it was not impracticable for the contractor to take on
replacement work and mitigate its damages. The contractor, however, retains the
ultimate burden of persuasion that it was impracticable for it to obtain replacement work.
Nicon, 331 F.3d at 883; P.J Dick Inc. v. Principi, 324 F.3d 1364, 1370 (Fed. Cir. 2003);
Melka Marine, Inc. v. United States, 187 F.3d 1370, 1376 (Fed. Cir. 1999). We address
whether KBJ is entitled to unabsorbed overhead for the alleged NASA-caused delays.
I. Suspension of Boiler Demolition
The project's critical path began with the demolition of Boilers 3 and 4 (finding
45). Under KBJ's original approved schedule, it planned to complete demolition of those
boilers prior to the delivery of the replacement boilers (finding 8). On 26 May 2011, less
than two weeks after NASA approved KBJ' s schedule, it instructed KBJ not to demolish
the boilers until the replacement boilers were in the Cleveland area. The directive
19
suspended the boiler work for an indefinite period. (Finding 9) NASA did not allow KBJ
to begin demolition of Boiler 3 until 1 March 2012 (finding 17). This extended the
contract's performance period past the original 4 November 2011 project completion date.
NASA's directive delayed contract performance substantially, by 280 days (finding 50),
100 days longer than the 180-day period in which KBJ was initially required to complete
the contract work (finding 7).
NASA concedes that its directive was an exercise of its authority under the
Suspension of Work clause (gov't br. at 22; gov't reply br. at 3), but it argues that it did
not suspend all work and KBJ's failure to perform other available work in 2011
(findingl4) concurrently delayed the project. We found KBJ responsible for the delay in
completing the non-boiler work it had identified as possible to perform in 2011, but that
this work was not on the critical path (finding 51). Because the non-boiler work was not
on the critical path, KBJ' s delay in performing that work did not concurrently delay the
prosecution of the project as a whole.
Accordingly, KBJ has met the first two prerequisites for recovery under Eichleay:
there was a government-caused delay of uncertain duration, not concurrent with a
relevant contractor-caused delay, that extended the contract's performance time. Because
there was no written suspension order by the CO, KBJ must establish the third
prerequisite, standby, through indirect evidence.
Regarding the first standby factor, as we have stated, NASA's suspension
directive delayed contract performance substantially, for an indefinite period. However,
on 12 September 2011 NASA provided a date certain for the resumption of boiler work
(finding 17), such that the delay was only indefinite for the 109 days preceding NASA's
notice (finding 50). After the notice, KBJ could not be on standby because the delay then
was for a definite duration. P.J Dick, 324 F.3d at 1371 ("where the government
suspends all work on the contract, but tells the contractor work will begin again on a date
certain, the contractor cannot be on standby").
As to the second standby element, NASA's suspension directive anticipated that
KBJ would remain on site, performing other tasks, until the boilers arrived (finding 9).
NASA acknowledges that "NASA's Project Manager expressly directed Appellant to
proceed with all other work that could be performed" (gov't reply br. at 34 ). Thus, in
effect, KBJ had to keep workers on site during the delay and be ready to resume boiler
work immediately. As we found, the delay originating with NASA's 26 May 2011
directive delayed the project's critical path work by 109 days (finding 50).
Regarding the third standby element, NASA alleges that KBJ was not on standby
because it could perform other work, referring to the work identified by KBJ on 20 June
2011 (finding 14 ), which we found could have been performed during the delay in boiler
work (finding 51). However, a contractor's work force need not be completely idle to be
20
on standby. Altmayer, 79 F.3d at 1134; see also P.J. Dick, 324 F.3d at 1371. A contractor
can be on standby when it was only able to continue performance of insubstantial work on
the contract. Id. at 1372-73. We found that the non-boiler work KBJ could have
performed was insubstantial in comparison to the contract as a whole (finding 51 ). The
contract was for the replacement of Boilers 3 and 4 (finding 1), and that work could not
commence during the suspension of boiler demolition. KBJ has thus met the third standby
element.
The burden therefore shifts to NASA "to show that it was not impractical for the
contractor to take on replacement work." P.J. Dick, 324 F.3d at 1370. NASA points to
three projects, two of which KBJ was awarded and one on which KBJ bid unsuccessfully
(see finding 53). It is insufficient merely to show that a contractor could take on some
other work during the delay period. See Melka, 187 F.3d at 1377 (court improperly
focused upon contractor's "ability to take on any other work during the delay period").
The critical factor is not whether a contractor can obtain additional work, but rather a
contractor's "ability to obtain a replacement contract to absorb the indirect costs that
would otherwise be unabsorbed solely as a result of a government suspension on one
contract." All State Boiler, 146 F.3d at 1377. We conclude that the projects NASA
identified do not amount to replacement work. The two projects awarded to KBJ were
for $86,125 and $171,574, far less that the $3.6 million value of the subject steam plant
contract as awarded. Even including KBJ's $525,805.52 bid for the project it was not
awarded, the three projects' value totaled $783,504.52, less than half the value of the
steam plant contract. (Finding 53)
NASA has not met its burden. Accordingly, we find KBJ entitled to recover for
109 days of unabsorbed overhead under Eichleay.
IL Additional Asbestos
We found that issues surrounding the additional asbestos encountered in the
boilers delayed the project for 127 days (finding 52). However, we must first address
NASA's dispositive contention that KBJ's claim, with regard to those delays, is barred by
the doctrine of accord and satisfaction.
Modification Nos. 5 and 6, which added the additional asbestos work to the
contract, each concluded with the same acknowledgment that "claims for equitable
adjustment of the contract price and time pursuant to the [Changes clause] and Mutual
Agreement are hereby fully satisfied and discharged with respect to this Supplemental
Agreement" (findings 33, 40). NASA urges that this language unambiguously
discharged any KBJ claim for asbestos delay costs. KBJ has not alleged that there was
any additional asbestos work beyond that covered by Mod. No. 5 and Mod. No. 6
(finding 40).
21
As we have stated:
Release and accord and satisfaction are separate
affirmative defenses. ..A release is a contract whereby a
party abandons a claim or relinquishes a right that could
be asserted against another.'' An accord and satisfaction
occurs when "a claim is discharged because some
perfonnance other than that \vhich was claimed to be
due is accepted as full satisfaction of the claim."
Although the defenses are distinct. "an agreement may
constitute both a release and an accord and satisfaction.
either of which may bar future claims."
Optex Systems, Inc., ASBCA No. 58220, 14-1BCAii35,801 at 175,097 (citations omitted).
In this case, we conclude that the term "release" is the more apt. A release "is
interpreted in the same manner as any other contract term or provision," Bell BC! Co. v.
United States, 570 F.3d 1337, 1341 (Fed. Cir. 2009), which is to say that it is interpreted
as a whole, to harmonize and give a reasonable meaning to all of its parts. See NVT
Technologies, Inc. v. United States, 370 F.3d 1153. 1159 (Fed. Cir. 2004 ). If a release's
terms are clear and unambiguous, we are to give them their plain and ordinary meaning,
without resort to extrinsic evidence. Bell BC!, 570 F .3d at 1341. If a "release is
ambiguous as to its scope of coverage, we construe its language to effect the parties'
intent at the time they executed the release." Dureiko v. United States, 209 F.3d 1345,
1356 (Fed. Cir. 2000); see also Optex Systems, 14-1BCAii35,801at175,097 ("[I]fthe
words defining the scope of the release are ambiguous in their application to a
contractor's claim, courts and boards will ascertain the parties' intent by examining the
parties' conduct leading up to the modification.").
Here, Mod. Nos. 5 and 6 each added additional asbestos abatement to the contract
work. Prior to its execution of Mod. No. 5, apparently in connection with asbestos
abatement, KBJ had expressed a concern to NASA about "start/stop" impacting the job
and slowing progress (finding 32), but if it was not satisfied that Mod. No. 5 had
compensated it adequately for delays, it did not add any exception to the modification's
release language. Both Mod. Nos. 5 and 6 clearly provide, without exception, that the
parties "acknowledge and agree that any and all claims for equitable adjustment of the
contract price and time pursuant to the [Changes clause] and Mutual Agreement are
hereby fully satisfied and discharged with respect to this Supplemental Agreement."
(Findings 33, 40) IfKBJ had intended to except asbestos-related delays and to contest
the modifications' 31December2012 contract completion date, as indicated in its
19 September 2012 letter to the CO (finding 41), it did not do so.
22
Accordingly, KBJ's claim for compensation and time due to delays occasioned by
additional asbestos encountered in the boilers is barred by release.
Quantum
KBJ is entitled to recover 109 days of unabsorbed overhead costs resulting from
NASA's 26 May 2011 directive suspending demolition of Boilers 3 and 4. We have
accepted KBJ's unchallenged calculation of a $1,047.63 daily overhead rate under the
first two steps of the Eichleay formula (finding 55). Multiplying that rate by the 109 days
of entitlement, the third step of the Eichleay formula, we find KBJ entitled to an equitable
adjustment of $114,191.67
DECISION
The appeal is sustained in part and denied in part. We award KBJ $114,191.67
plus interest pursuant to the CDA, 41 U.S.C. § 7109, running from 8 October 2012, the
date we infer the CO received KBJ's claim (finding 42), until paid.
Dated: 3 March 2016
dministrative Judge
Armed Services Board
of Contract Appeals
I concur
ff~:'1ff4--~-----'--------=-----
MARK N. STEMPLER RICHARD SHACKLEFORD
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
23
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. 58512, Appeal of KBJ, Inc.,
rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
24