P.J. Dick Inc. v. Principi

324 F.3d 1364, 2003 WL 1793206
CourtCourt of Appeals for the Federal Circuit
DecidedApril 7, 2003
DocketNos. 02-1290, 02-1401
StatusPublished
Cited by42 cases

This text of 324 F.3d 1364 (P.J. Dick Inc. v. Principi) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
P.J. Dick Inc. v. Principi, 324 F.3d 1364, 2003 WL 1793206 (Fed. Cir. 2003).

Opinion

MICHEL, Circuit Judge.

P.J. Dick Inc. (“PJD”) and the Secretary of Veterans Affairs (“Secretary”) each appeal different aspects of the September 27, 2001, decision of the Department of Veterans Affairs Board of Contract Appeals (“Board”) awarding $1,918,262 in damages to PJD for contract delays that were the fault of the government. P.J. Dick, Inc., VABCA Nos. 5597, et al., 2001-2 B.C.A. (CCH) ¶ 31,647, 2001 WL 1219552, 2001 VA BCA Lexis 12 (VABCA Sept. 27, 2001). For reasons of judicial convenience the two separately filed appeals were consolidated into a single proceeding before this court, with the Secretary’s appeal treated as the cross-appeal for purposes of briefing and argument. PJD appeals the Board’s denial of its claims for unabsorbed home office overhead damages. The Secretary appeals the Board’s conclusion that six separate contract changes (the “combined directives”) should be treated as occurring on the same date in calculating the extent of the resulting delay to contract completion. Although we affirm the Board’s conclusion that PJD was not on standby, we reverse the Board’s denial of PJD’s claim for unabsorbed home office overhead because the Board erred in its interpretation of the parties’ stipulation. Because the [1368]*1368Board also erred in analyzing six separate changes to the contract (occurring over ten months) as a single change effective on the date of the first change, we vacate the Board’s determination of the number of days of delay due to those changes. We therefore vacate the Board’s damages calculations and remand for recalculation in accordance with this opinion.

I

These appeals are related to a fixed-cost contract between the Department of Veterans Affairs (“DVA”) and PJD to construct the Clinical Addition to the DVA Medical Center in Ann Arbor, Michigan. Under the contract, PJD was due to complete the work by January 12, 1998. During the contract the government issued over 400 orders changing the contract and causing various delays to different aspects of the project. These modifications increased the contract price by over five percent and caused the DVA to grant 107 days of additional contract performance time. In accepting the additional days to complete the contract, PJD reserved its right to seek additional impact and suspension costs. PJD completed the contract on September 29, 1998, 260 days after the original contract completion date and 153 days after the revised date.

PJD presented to the government contracting officer (“CO”) claims for additional relief as a result of the delays to the contract. All of the claims were denied by the CO or were deemed denied by the CO’s failure to timely issue a decision. PJD timely appealed the CO’s denials to the Board, filing five delay appeals, an appeal for its contract balance, and an appeal for certain labor inefficiencies incurred by its electrical subcontractor. In essence,. PJD claimed it was entitled to a time extension for all 260 days of delayed performance and sought field and home office overhead damages for most of these delays.

The Board reached several conclusions that are relevant to this appeal.1 The Board granted PJD a time extension for 260 days and initially concluded that only sixty days were due under the contract’s Suspension of Work (“SOW”) clause, but upon PJD’s motion for reconsideration, revised that number upward to sixty-five days. The Board granted PJD field overhead for the days damages are due under the SOW clause, but determined that PJD was not entitled to damages for unabsorbed home office overhead (Eichleay damages) because: (1) the stipulation between the parties only addressed quantum and therefore did not remove the contractor’s burden to prove entitlement to Ei-chleay damages, and (2) PJD had not shown it was on stand by — one of several prerequisites for entitlement to Eichleay damages. A large portion of the extension (201 days) granted by the Board resulted from PJD’s claim for delays due to the “combined directives.” The “combined directives” were six separate contract change orders issued by the DVA over a ten-month period, all relating to installation of certain equipment in the Clinical Addition. Importantly for this appeal, the Board analyzed the effect of each of the changes as of the date of the earliest change, which gave PJD a larger delay than it would have received were the effects of the change orders analyzed separately on the dates the DVA issued them.

The Secretary and PJD each appeal different aspects of the Board’s decision. [1369]*1369The Secretary appeals the Board’s conclusion granting 201 days of extension for the “combined directives” delay. The dispute on this question is whether the language of the contract requires the Board to analyze the effect of each change separately. PJD appeals the Board’s denial of its claims for recovery of home office overhead. The primary issues here are whether the parties’ stipulation entitled PJD to recovery of home office overhead and, if not, whether PJD had shown the DVA placed it on standby. Both appeals were timely filed and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(10).

II

Although we review the Board’s interpretation of a contract de novo, the Board’s interpretation “is accorded careful consideration due to the board’s considerable experience in construing government contracts.” Wickham Contracting Co. v. Fischer, 12 F.3d 1574, 1577 (Fed.Cir.1994) (citation omitted). The relevant provision of the contract reads: “The Contracting Officer’s determination as to the total number of days of contract extension will be based upon the current computer-produced calendar-dated schedule for the time period in question and all other relevant information.” Specification § 01311.1.13(A) (emphases added). The Secretary agrees with the Board’s conclusion that the “time period in question” is “the date an action or activity occurred on which a time extension is based.” The Secretary argues only that the Board erred in its subsequent determination that the “time period in question” for all six of the changes included in the “combined directives” was November 1995 — the date the DVA issued the first of those change orders. We agree.

We conclude that the language of the contract required the Board to analyze the changes of the “combined directives” separately utilizing the most recent monthly update of the “computer-produced calendar-dated schedule.” The express language of the contract establishes that the “current” schedule “will be” the basis for determining the extent of the delay. By using “will” the contract indicates that this is the sole method of calculating the delay. The Board circumvented this language by crediting litigation arguments that the six unrelated changes issued over ten months had a unitary effect, making the “time period in question” the date the DVA issued the first change order. This was error because the language of the contract requires the use of the “current” computer schedule as the basis for making such a determination. In other words, regardless of what the testimony showed, under the contract, the only way of determining the effect of the changes was to analyze each of them using the current computer schedule. Thus, if the changes did have a unitary effect, it had to be demonstrated by the computer model, not the testimony PJD presented.

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Cite This Page — Counsel Stack

Bluebook (online)
324 F.3d 1364, 2003 WL 1793206, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pj-dick-inc-v-principi-cafc-2003.