Columbia State Bank (formerly Appeal of Castle-Rose, Inc.)

CourtArmed Services Board of Contract Appeals
DecidedJune 9, 2016
DocketASBCA No. 59531
StatusPublished

This text of Columbia State Bank (formerly Appeal of Castle-Rose, Inc.) (Columbia State Bank (formerly Appeal of Castle-Rose, Inc.)) is published on Counsel Stack Legal Research, covering Armed Services Board of Contract Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Columbia State Bank (formerly Appeal of Castle-Rose, Inc.), (asbca 2016).

Opinion

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- ) ) Columbia State Bank ) ASBCA No. 59531 (formerly Appeal of Castle-Rose, Inc.) ) ) Under Contract No. W912DW-10-C-0015 )

APPEARANCE FOR THE APPELLANT: Erich M. Paetsch, Esq. Saalfeld Griggs PC Salem, OR

APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq. Engineer Chief Trial Attorney Ian D. Clunies-Ross, Esq. Engineer Trial Attorney U.S. Army Engineer District, Seattle

OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN ON APPELLANT'S MOTION FOR SUMMARY JUDGMENT

This appeal arises from a contracting officer's (CO's) final decision (COFD) denying the claim of Castle-Rose, Inc. (CRI), for costs of a constructive change, differing site conditions, government-caused delays, and expert consulting fees incurred on a contract for construction of new buildings at the Howard Hanson Dam in Cumberland, Washington. 1 CRI has moved for summary judgment on entitlement as to each claim item. For the reasons stated below, we deny the motion.

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

1. On 19 May 2010, the U.S. Army Corp of Engineers, Seattle District (Corps or government) awarded Contract No. W912DW-10-C-0015 (contract) to CRI for the construction of an administration building and an addition to the existing maintenance building at the Howard Hanson Dam (HHD) Facility in Cumberland, Washington. The contract included multiple contract line item numbers (CLINs) for a total firm-fixed-price of $2,288,900. (R4, tab 3 at 3-4, 92) CRI was required to furnish all labor, materials and

1 CRI subsequently entered into Chapter 7 bankruptcy proceedings, and the Bankruptcy Court assigned its claim to Columbia State Bank, which entered its appearance as the real party in interest authorized to pursue the appeal on behalf of the bankruptcy estate (see SOF ~~ 23-24). 2 Citations to the Rule 4 file are to the consecutively-numbered pages unless otherwise indicated. equipment on the project in accordance with the drawings and technical specifications incorporated into the contract (id. at 3).

2. The contract incorporated the following standard Federal Acquisition Regulation (FAR) clauses: 52.233-1, DISPUTES (JUL 2002); 52.236-2, DIFFERING SITE CONDITIONS (APR 1984); 52.236-3, SITE INVESTIGATION AND CONDITIONS AFFECTING THE WORK (APR 1984); 52.242-14, SUSPENSION OF WORK (APR 1984); and 52.243-4, CHANGES (JUN 2007) (R4, tab 3 at 24 ).

3. FAR 52.236-2, DIFFERING SITE CONDITIONS (APR 1984) provides, in relevant part, that:

(a) The Contractor shall promptly, and before the conditions are disturbed, give a written notice to the Contracting Officer of ( 1) subsurface or latent physical conditions at the site which differ materially from those indicated in this contract, or (2) unknown 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 provided for in the contract.

(b) The Contracting Officer shall investigate the site conditions promptly after receiving the notice. If the conditions do materially so differ and cause an increase or decrease in the Contractor's cost of, or the time required for, performing any part of the work under this contract, whether or not changed as a result of the conditions, an equitable adjustment shall be made under this clause and the contract modified in writing accordingly.

4. FAR 52.243-4, CHANGES (JUN 2007) provides, in relevant part, that:

(b) Any 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 ....

(d) If any change under this 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

2 Contracting Officer shall make an equitable adjustment and modify the contract in writing.

5. FAR 52.242-14, SUSPENSION OF WORK (APR 1984) provides, in relevant part, that:

(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 Contracting Officer in the administration of this contract, or (2) by the Contracting Officer'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.

6. The contract also included "SPECIAL CONTRACT REQUIREMENTS" clauses, denoted by "SC." Clause SC-1, a variation of FAR clause 52.211-10, COMMENCEMENT, PROSECUTION, AND COMPLETION OF WORK (APR 1984), required CRI to complete work on the project no later than 365 days after receipt of the notice to proceed (R4, tab 3 at 35).

7. Clause SC-8, substantially similar to FAR 52.236-4, PHYSICAL DATA (APR 1984), provides, in relevant part, that:

(a) Physical Conditions: The indications of physical conditions on the drawings and in the specifications are the result of site investigations by surveys, test holes and soil exploration data. Soils boring logs are included with the drawings. This data is furnished for information only. Variations may exist in the subsurface between sample locations.

(R4, tab 3 at 37) Paragraph 1.5, of section 02300 of the contract specifications entitled "EARTHWORK," states that subsurface soil boring logs are depicted in the drawings and provide the best information available (id. at 296).

3 8. Clause SC-17, entitled "FIELD OFFICE OVERHEAD (Jul 2006)," required CRI to select an accounting practice in its bid that would be applicable to any change orders, modifications, and requests for equitable adjustment. CRI was required to select an accounting practice based upon either a per diem rate in accordance with clause SC-18, a percentage markup in accordance with clause SC-19, or some other allowable FAR accounting practice. (R4, tab 3 at 40) Pursuant to clauses SC-18 and SC-19, CRI is entitled to receive an equitable adjustment "for any change to the contract. .. for which the Government is responsible, and which causes either an increase or decrease in [CRI's] costs as to time or performance under the contract. Under such an equitable adjustment, [CRI's] field office overhead shall be an allowable cost, in accordance with [CRI's] accounting practice." (Id. at 40-41)

9. In a response, tracked as ID 3211560, to a potential offeror's pre-award inquiry "Is woody debris noted in the bor[ing] log to be hauled off?," the government stated that the "[ s]ite consists of spoil material from original Dam construction. There is no expectation to have significant over-excavation or to haul this material off." (R4, tab 5 at 1437)

10. On 27 May 2010, a Notice to Proceed (NTP) was forwarded to CRI to begin work under the contract, effective 1June2010. CRI acknowledged receipt of the NTP on 28 May 2010. (R4, tab 7)

11. On 23 July 2010, the government issued a Request for Proposal (RFP) to CRI, requesting a proposal to add work to the contract relating to the installation of a domestic water well and pump.

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