United States Claims Court.

No. 747-87C.

TITAN PACIFIC CONSTRUCTION CORP. v. The UNITED STATES.

July 18, 1989.

Lawrence Schor, Washington, D.C., at­torney of 'record for plaintiff. Schnader, Harrison, Segal & Lewis, of counsel.

Steven A. Hemmat, Washington, D.C., with whom was Asst. Atty. Gen. John R. Bolton for defendant. Richard A. Gallivan, Office of General Counsel, Dept, of the Navy, of counsel.

ON CROSS MOTIONS FOR SUMMARY JUDGMENT

OPINION

HARKINS, Senior Judge:

Titan Pacific Construction Corpora­tion, in a complaint filed December 7, 1987, seeks review of a decision of the Armed Services Board of Contract Appeals (ASBCA or Board) on appeals under a Navy contract awarded by the Naval Facili­ties Engineering Command, OICC Trident.1 Plaintiff invokes the Claims Court Tucker Act jurisdiction and Wunderlich Act stand­ards.2 The contract, awarded June 7, 1977, is not subject to the Contract Dis­putes Act of 1978.3 Review in the Claims Court of a decision of a contract appeals board is an appellate anomaly that results from enactment of the Contract Disputes Act of 1978 and the creation of the Claims Court in the Federal Courts Improvement Act of 1982. The standards and proce­dures applicable to this appellate function are those developed in the former Court of Claims. These procedures provide for the transfer to the court of the administrative record, and review of that record under the standards established by the Wunderlich Act and the Supreme Court in a trilogy of decisions. The Claims Court may not take new evidence or redetermine the facts; the issues are formed in motions for summary judgment.4

Plaintiff’s contract was for the relocation of ordinance facilities at the Naval Torpedo Station (now Naval Undersea Warfare Sta­tion), Indian Island Annex, Keyport, Wash­ington. The contract price was $7,928,200. The work included the construction of sev­eral new buildings and a 0.7 million gallon reservoir with an access road, alterations and additions to existing structures, instal­lation of a utility system, and relocations, improvements and extensions of approxi­mately 9 miles of roads. Earth work for the project consisted of clearing, grubbing, and stripping of approximately 120 acres of dense forest, approximately 150,000 cubic yards of excavation, and approximately 100,000 cubic yards of fill.

The project was divided into three dis­tinct phases, each with separate completion dates and different per day amounts for liquidated damages. Phase I was to be completed within 90 calendar days, Phase II within 390 calendar days, and Phase III within 600 calendar days, of the notice of award. The notice of award was June 11, 1977, and the completion date for Phase III initially was February 12, 1979. The se­quence of work in Phase III was in stages 1 and 2. Stage 1, was earthwork and road­work relative to six designated roads; stage 2 was all other Phase III work.

The contract was on standard forms and the general provisions included Standard Form 23-A clauses for Changes (1968 Feb), Differing Site Conditions (1968 Feb), Dis­putes (1964 Jun), Suspension of Work (1968 Feb), and Termination for Default — Dam­ages for Delay — Time Extensions (1969 Aug). For monitoring and control pur­poses, the Critical Path Method (CPM) was specified.

The Navy, during contract administra­tion, increased the contract price to $8,302,-­351. The completion date for Phase I was extended from July 20,1977, to October 20, 1977, The Phase I work was accepted on March 27, 1978 (158 days late), and liqui­dated damages of $3,950 were assessed. The completion date for Phase II was ex­tended from July 17,1978, to July 21,1978. The work was accepted on October 30, 1978, (101 days late), and $8,787 in liqui­dated damages were assessed. The Phase III work was extended from February 12, 1979, to May 20, 1979. The work was accepted as substantially complete on Feb­ruary 7,1980 (263 days late), and liquidated damages of $214,871 were assessed.

In its appeals to the ASBCA, plaintiff sought a total of 899 days for excusable delays, equitable adjustments in the amount of $6,850,874.32 and return of $232,510 withheld as liquidated damages. The appeal to the ASBCA was limited to entitlement issues. The administrative record submitted to the court includes tran­scripts of a 21-day hearing held during the latter part of 1984, and was contained in 21 boxes of materials and exhibits shipped directly from archival storage.

The ASBCA opinion, dated January 28, 1987, comprises 73 pages; it is a compre­hensive and detailed analysis of the facts and law applicable to the claims plaintiff submitted to the Board. The opinion in­cludes 151 findings of fact. The Board determined that as to Phase I, there were no excusable delays in the 120 days claimed, and that the $3,950 in liquidated damages was properly assessed. As to Phase II, the Board denied claims for time extensions amounting to 516 days, found that the Navy had contributed to the 101 calendar days delay to the revised comple­tion date, that fault of the plaintiff and its subcontractors precluded compensation for delay damages, and set aside the $8,787 assessed in liquidated damages.

On the Phase III claims, the Board ex­tended the completion date to September 29, 1979, allowed 121 calendar days delay for Phase III earthwork and 51 calendar days delay for completion of Phase III buildings. The assessment of liquidated damages for Phase III work for the period May 20, 1979, to September 29, 1979, was set aside. Plaintiff’s claims in this court are concerned only with review of the Board’s decision relative to Phase III work.

Wunderlich Act Review Standards

The motion papers reflect confusion as to the standards applicable and the scope au­thorized in a review of the administrative record before the Board on claims under the Disputes clause. Plaintiffs complaint states that relief is sought “exclusively” under 41 U.S.C. § 321 and plaintiff’s mo­tion states its appeal on questions of fact is limited to the “substantial evidence” stan­dard. Plaintiff, however, contends that some of the Board’s findings present mixed questions of fact and law, and that the court is free to make an independent re­view of the Board’s factual and legal con­clusions. Defendant argues that plaintiff’s “mixed fact and law” issues are predicated on assumptions of fact rejected by the Board, and that plaintiff seeks to retry the Board’s findings.

The Wunderlich Act, codified in two sections, applies to contract provisions re­lating to the finality of Board decisions on disputes arising under the contract on is­sues of fact and questions of law. Admin­istrative determinations of disputes of fact are conclusive and binding in a judicial review unless the decision is “fraudulent or capricious or arbitrary or so grossly erro­neous as to imply bad faith, or is not sup­ported by substantial evidence.”5 A Board’s decision on a question of law, how­ever, is not final and is not binding in subsequent judicial review.6

The term “substantial evidence” as ap­plied to factual issues is a term of art that has been given content in numerous deci­sions. The standard on which an adminis­trative record is to be judged goes to the reasonableness of what the agency did on the basis of the evidence before it.7 In Koppers, the Court of Claims collected the precedents and established guidelines for application of the “substantial evidence” requirement.8 The guidelines applicable to, and limitations on, the judicial review of the Board’s decision may be summarized to include the following:

The scope of judicial review is narrow, and is limited to whether there was sub­stantial evidence — such evidence as might convince a reasonable man — to support the conclusion reached by the agency officials.9

The entire administrative record is be­fore the court, and the plaintiff has the burden of establishing the fact that the record does not support the Board’s find­ing. It is not the court’s function to cure plaintiff’s deficiency “by an independent excursion along the administrative trail.”10

Substantial evidence is evidence which could convince an unprejudiced mind of the truth of the facts to which the evi­dence is directed. Evidence may be sub­stantial even if it is the sole evidence in a case, e.g., expert testimony. The amount of testimony, however, is not necessarily determinative, e.g., if the only evidence is a series of isolated statements in the record.11

Reasonable inferences fairly drawn from the evidence are for the administra­tive tribunal. Where two equally reason­able but contrary inferences might be drawn from the record, and each could be sustained as supported by substantial evidence, the one adopted by the Board should be sustained. Moreover, where conflicting testimony is in the record, the Board’s preference will, generally, not be disturbed unless the court can conclude that the findings are not supported by some evidence which qualitatively and, in appropriate circumstances, quantitative­ly, can be deemed substantial evidence when the record is viewed as a whole.12

In limited circumstances the court will decide an issue of fact not decided by the Board, or contrary to the finding made by the Board. Such action is not con­sidered unless the court first concludes that there is no substantial evidence to support the Board’s findings. The Board’s findings may be supplemented when evidence on the fact question is undisputed, and a contrary finding may be made when the overwhelming weight of the evidence points to one conclusion of fact.13

The substantial evidence rule requires consideration of both opposing evidence and evidence that supports the Board’s findings. The fact that there is evidence, considered of and by itself, to support the administrative decision is not suffi­cient where there is opposing evidence so substantial in character as to detract from its weight and render it less than substantial on the record as a whole. Where, however, the opposing evidence is not overwhelmingly in favor of the opposing view, the view of the facts adopted by the Board, if otherwise prop­er, will be sustained. If there is ade­quate and substantial evidence to sup­port either of two contrary findings of fact, the one adopted by the Board is binding on the court, whatever its own evaluation of the evidence might be.14

On questions of law, although the Board’s interpretation is not binding, its interpretation is entitled to careful con­sideration and accorded due respect in recognition of its special expertise.15

In Wunderlich Act reviews, the Court of Claims guidelines have been followed in this court.16

Disposition

Plaintiff identifies three of its claims as mixed questions of fact and law: (1) application of time extensions to Phase III project completion date; (2) acceleration of earthwork performance; and (3) is­suance of a constructive stop work order with regard to a change (PC 9). Plaintiff argues that when a finding is a composite of fact and law, it is not binding where an error of law induced the factual finding. In its analysis of the factual elements in these claims that allegedly contain mixed questions of fact and law, plaintiff argues that when all of the evidence on both sides of these issues is examined, plaintiff’s evi­dence in opposition to the Board’s findings is substantial. Plaintiff contends that when it shows the evidence in support of its position is substantial, the quality of its evidence shows the evidence relied upon by the Board was not substantial.

Plaintiff fails to appreciate that, in a Wunderlich Act review, the test is whether the Board’s contrary finding of fact is sup­ported by substantial evidence. If, on the issue as a whole, substantial evidence sup­ports both sides, the facts as found by the Board are binding. The Board, as the trier of fact, evaluates the evidence and the credibility of the witnesses. Here, plain­tiff’s evidence in opposition does not render the evidence in support of the Board’s find­ings less than substantial on the record as a whole. Plaintiff’s contentions, relative to claimed mixed questions of fact and law, would have the court retry factual issues that already have been resolved by the Board. Plaintiff’s position on these mixed questions is predicated on assumptions of fact that the Board has considered, and on the basis of substantial evidence, has re­jected.

The focal point of plaintiff’s ap­peal is the “like-time” theory of awarding time extensions. The “like-time” theory would require time extensions to be award­ed during months when the performance of delayed work is feasible. The ASBCA’s failure to apply properly the “like-time” theory, plaintiff asserts, is the common strand from which all issues in this appeal are drawn, particularly the determination of the completion date, the remission of liquidated damages and contract acceler­ation.

Contract administration granted time ex­tensions for Phase III work of 97 calendar days, 66 of which were for unusually se­vere weather conditions: 35 days for weather during the period June 7, 1977, to October 2, 1978; 18 days in the period March 30, 1979, to April 17, 1979; and 13 days in the period March 1, 1979, to July 31,1979. The 97-day extension revised the contract completion date for Phase III from February 12, 1979, to May 20, 1979.

The Board determined that plaintiff sus­tained no delays to its Phase III earthwork activities during 1977 due to unusually se­vere weather, and that earthwork and road­work were excusably delayed by abnormal weather for 60 calendar days in 1978 and for 4 work days in 1979. The Board con­cluded that Phase III earthwork was de­layed a total of 121 calendar days because of change orders, different site conditions, and unusually severe weather.17

Improper planning and incompetent workmanship was found to cause or to contribute substantially to delays in com­pleting the Phase III work. The Board found, however, that differing site condi­tions and unusually severe weather in 1978 were sufficient to prevent completion of the earthwork by the end of summer 1978, even if the work had been done properly. The 97-day extension in the winter season between February 12, 1979, and May 20, 1979, granted by contract administration was viewed by the Board “as tantamount to no time extensions at all”. To be mean­ingful, the Board concluded the time exten­sion should be computed from June 1,1979, when weather and soils conditions did not preclude earthwork. Accordingly, the Board allowed excusable delays from June 1, 1979, to September 29, 1979.

Plaintiff’s “like-time” argument stems from its conception of the contractual sig­nificance of the CPM as a tool for monitor­ing and control purposes. The Board de­scribed this tool a follows:

11. The Critical Path Method (CPM) is a management technique by which a project can be broken down into a num­ber of identifiable tasks or activities. These tasks are then sequentially inter­connected, reflecting various interdepen­dencies of the activities to provide an overall schedule to complete the project. The result of this scheduling process is a critical path through this schedule, which if postponed, will delay project comple­tion. All other paths through the project schedule can experience some postpone­ment because of acts of God, owner changes, or other factors without delay­ing the overall project completion. The amount of postponement which a path of activities can experience without delay­ing the completion of the project is called “float”. The more float a path of activi­ties has, the longer it can be postponed without delaying project completion. Float is defined in the contract specifica­tions as the difference between the early start and late start dates or between the early and late finish dates of any activi­ties. The contract specifications further provide:

Float or slack is not time for the exclusive use or benefit of either the Government or the Contractor. Exten­sions of time for performance required under the Contract GENERAL PRO­VISIONS entitled “CHANGES”, “DIF­FERING SITE CONDITIONS”, “TER­MINATION FOR DEFAULT — DAM­AGES FOR DELAY, TIME EXTEN­SIONS”, or “SUSPENSION OF WORK” will be granted only to the extent that equitable time adjustments for the activity or activities affected exceed the total float or slack along the channels involved.

Pursuant to the CPM specification, plain­tiff submitted the initial baseline CPM schedule on October 17, 1977; and the Navy on November 1, 1977, notified plain­tiff of corrections needed for acceptance. These changes were incorporated and, as so adjusted, the October 17, 1977, schedule became the final approved “as-planned” CPM network. In the Board proceedings, plaintiff’s delay/impact claims expert presented a revised “as-planned” schedule that he had adjusted for seasonal consider­ations, which produced a critical path that shifted from building construction to site and roadwork operations and projected a revised completion date of February 2, 1979 (10 calendar days earlier than the contract completion date of February 12, 1979). Plaintiff’s expert further presented analyses of how owner-caused and weather related days affected his as-planned sched­ule adjusted for wet and dry season re­straints to reach a conclusion that a CPM schedule as so adjusted would have a projected, completion date of October 29, 1980. These analyses were considered by the Board, but were not accepted.

Plaintiff’s “like-time” argument assumes that the final approved as-planned CPM network delineates procedures that are fixed and contractually binding without re­gard to actual operations on the project. The approved CPM network diagram is an administrative tool that is useful in orga­nizing and directing work, reporting progress, and for requesting progress pay­ments for work accomplished. Analyses made after project completion, however, that make adjustments to attain new and revised projected scheduling depend on theoretical contingencies. They are of lim­ited value.

Plaintiff's delay/impact claims expert did not present a comparison of either the Oc­tober 17, 1977, as-planned schedule, or his as-planned schedule adjusted for wet and dry season restraints, with actual activities on the project — the as-built schedule. The Board had before it the records that reflect actual field operations and was in a posi­tion to relate the as-built schedule to the expert’s theoretically adjusted as-planned schedule.

Plaintiff’s “like-time” analysis to attain a revised completion date, matches excusable delay to the as-planned work schedule and the time period in which the affected activi­ty was delayed. Plaintiff points out that there were excusable delays in 1977, 1978 and 1979, and argues that all time exten­sions should be matched to the period dur­ing which the delays occurred and the par­ticular earthwork activities affected.

In plaintiff’s analysis of 1977 earthwork, the as-planned CPM schedule provides the Seg/Ren building site work would take from June 22, 1977, to September 16, 1977, and stage 1 roads (which could require 56 days to complete) would be worked on from September 15 to October 15, 1977. Plain­tiff adds the 22 calendar days excusable delays allowed by the Board for changes and log-burning restrictions, to 6 days for unusually severe weather, to make total time extensions to earthwork for 1977 equal 28 days. These extensions were ap­plied to the Seg/Ren as-planned schedule to produce a Seg/Ren grading completion date of October 14,1977. This required all the stage 1 roadwork to be moved to a period beginning the next dry season, June 1,1978, with a corresponding impact on the start of Phase III stage 2 roadwork.

The as-planned CPM schedule for 1978 earthwork provided stage 1 roads would be completed from June 1 — October 15, 1978, and all earthwork and stage 2 roads would be completed during the June 1 — October 15, 1978, period. Plaintiff would apply the 60 days for severe rainfall and the 14 days due to change orders and differing site conditions allowed by the Board, plus 6 days for a differing site condition that had been allowed in contract administration, (a total of 80 calendar days), to the 56 days on the as-planned schedule to complete stage 1 roads, to attain a total of 138 days (includ­ing 2 holidays) for stage 1 roads. If the stage 1 roads were begun June 1,1978, the completion date would be October 16,1978. All additional planned 1978 earthwork and grading for stage 2 roads accordingly would have to be deferred until the next dry season — June 1, 1979.

For 1979 earthwork and roadwork, plain­tiff would apply 24 days allowed by the Board for weather and changes, plus 16 calendar days for the Board’s alleged mis­calculations on changes, for a total of 40 calendar days of allowable extensions in 1979. Plaintiff then adds to the 40 days the 210 calendar days in the as-planned schedule to complete the stage 2 roads, plus 5 holidays, for a total of 255 days for completion of stage 2 roadwork. .These days are applied in the summer season beginning June 1, 1979, to derive a revised contract completion date of February 10, 1980. This calculation would require re­mission of all remaining liquidated dam­ages assessed for the period September 29, 1979, to February 7, 1980.

Plaintiff’s calculations in application of its “like-time” theory disregard the facts found by the Board as to the sequence of work, the quality of work, and the effects of weather on the Phase III work in the years 1977, 1978 and 1979. The calcula­tions reflect a theoretical application to a CPM as-planned schedule that was not in­tended to be followed. The calculations disregard the facts that actually existed in on-site operations.

The Board resolved against plaintiff many factual contentions asserted by plain­tiff and its subcontractor as to site condi­tions, normal weather conditions to be an­ticipated during performance, and actual conditions that occurred. The Board made specific findings on the prudence of the subcontractor’s planned sequence of opera­tions, the quality and quantity of its equip; ment and personnel, and its competence to perform the earthwork at the project site. The Board’s findings of fact on these mat­ters show that plaintiff is responsible for much of the delay in the project, and that the “like-time” theory is not applicable to any period other than 1979 work as recog­nized by the Board. The Board’s findings of fact as to these matters are supported by substantial evidence in the record.

The principal earthwork and roadwork activities on the project, primarily, clearing, grubbing and grading, was subcontracted to Voudouris Construction Company (Vou­douris). Voudouris was not experienced in earthwork in the project area; it had never performed earthwork in Western Washing­ton before this project. Voudouris shut down its operation in mid-November 1978, and, because it could no longer financially continue, abandoned the subcontract.

The approved CPM as-planned schedule did not provide for seasonal restraints due to weather conditions. The Board found that, although plaintiff and Voudouris rea­sonably assumed that substantially all of the earthwork had to be performed be­tween June 1 and October 15 because of weather and soil conditions at the site, plaintiff’s “as-planned” CPM schedule indi­cated that Voudouris planned to perform a number of activities involving the moisture sensitive soils during the wet season, Octo­ber 15, 1977, to May 31, 1978, including stripping top soil, grading roads and turn­outs, grading building sites, and tank exca­vation.

The Board found that Voudouris com­menced grading the Seg/Ren site on Sep­tember 16, 1977, and continued through mid-October 1977. From October 6, 1977, to November 5, 1977, Voudouris was en­gaged in grading operations on Phase III, stage 1 roads — Freeman Street, County Road North and Craven Road.

With respect to plaintiff’s contention that abnormal rainfall had an adverse effect on Voudouris’ earthwork operations in 1977, the Board found that it was unable to conclude that either the earthwork and roadwork, or overall completion of Phase III, was delayed thereby. One of the rea­sons was that plaintiff’s and Voudouris’ testimony lacked credibility. Voudouris testified that rains in September, October, and November, 1977, caused his grading operation to be totally shut down from September 28 to October 3, on October 5 and 6, and from October 24 to November 2, 1977. The Board found that from Septem­ber 28 to October 6 and from October 24 to November 2, Voudouris was engaged in burning and logging activity, and that on October 3, 5, 6, 24 and 31, 1977, according to plaintiff’s records Voudouris’ workers actually were engaged in grading activity at the Seg/Ren building site and on County Road. Further, plaintiff’s CPM reports from March 15, 1978, through July 1978, stated that all Phase III buildings, road­work and utilities were on or ahead of schedule.

Voudouris’ lack of experience and incom­petence is reflected in the Board’s findings that improper equipment and procedures were used in the earthwork. The glacial till soils at the project site generally were slightly above optimum moisture content in their natural state and could be compacted to contract requirements in their natural, undisturbed state. An increase in the moisture content of the soils of more than 1 or 2 percent, however, would cause the upper several inches of undisturbed materi­al to be uncompactable. Once compacted and sealed, the depth of penetration of rainfall would be minimal; continuous rain for several days would undo the compac­tion to some extent.

Proper earthwork practice required a contractor to perform a sustained operation in each area — that is, an orderly progres­sion of clearing and grubbing, immediately followed by grading, crowning off the area so that water would run off, compaction with a smooth wheel roller, and, prefera­bly, applying base course and paving; and, particularly, to ensure, prior to the winter rainy season, that surfaces were sealed and drainage ditches were provided where nec­essary. The Board found that Youdouris’ planned use of a “sheeps foot” self-pro­pelled compactor rather than a smooth wheel roller for compaction of soils was improper.

Throughout 1978 some soils at the project did not dry out from the rainfall of the winter season of 1977-78. The Board found that that condition resulted principal­ly from Voudouris’ fault in not properly protecting the soils from the winter weath­er in accordance with contract require­ments and proper trade practice. If Vou­douris and plaintiff had followed proper procedures for protecting the disturbed ar­eas against the wet weather in the winter of 1977-78, the effect of that weather on its earthwork operations in spring and sum­mer of 1978 would have been minimal.

The Board found that earthwork was totally rained out in the summer 1978 for a total of 30 days. To allow for drying out of soils, the Board multiplied by 2, and allowed 60 calendar days of excusable de­lay due to unusual weather conditions in 1978. Voudouris’ inexperience or incom­petence contributed substantially to the time lost after the period of abnormally high rainfall. The board specifically found that:1

—Voudouris had equipment and crews adequate to do required earthwork under optimum conditions, but it did not have equipment and crews adequate for the work under conditions of normal rainfall as described in contract documents.

—Because of inadequate crews and equipment, plaintiff and Voudouris had scheduled critical, moisture sensitive earthwork between October 1978 and January 1979.

—Voudouris failed to grade, compact and seal areas which it had opened up and disturbed by clearing and grubbing, thereby allowing penetration of moisture from rainfall.

—Voudouris failed to crown or slope roads for surface run-off before leaving them overnight, and for longer periods.

—Voudouris failed to install required ditches and culverts to permit drainage of rain water.

—Voudouris failed to test lifts of fill for moisture content and compactability as required by the contract, and there­fore many areas had to be recompacted;

—Voudouris improperly left berms on the sides of roads, thereby allowing ponding of water to occur.

Voudouris’ substandard workmanship also impacted on claimed delays due to alleged differing site conditions encoun­tered on East Road. The Board found that Voudouris, in violation of contract specifi­cations, had placed at some locations fill material that had excessive fines and ex­cessive moisture content. Corrective work had to be redone in September and October 1978 because of fault on Voudouris’ part in installing material with excessive moisture and excessive fines, and in allowing water to pond by not properly grading, compact­ing, crowning and sealing the road surface.

In summary, the Board’s conclusion to apply the 121 calendar days of excusable delay for Phase III earthwork and road­work to the period commencing June 1, 1979, and ending September 29, 1979, on the facts of this case was an appropriate application of “like-time” methodology for determining the completion date. The “as-­planned” CPM schedule as adjusted in plaintiff’s argument has little resemblance to the facts of plaintiff’s actual earthwork and roadwork operations.

Acceleration Claim

In administering the contract, the Navy allowed 97 days for excusable delay and extended the completion date to May 20, 1979. Plaintiff argues the time extension to February 10,1980, under either its “like-­time” theory, or to September 29, 1979, as determined by the Board, entitles it to costs of accelerated effort in 1978 and 1979, because the Navy failed to issue the time extensions that properly were allow­able for excusable delay. Plaintiffs earth­work and roadwork were not completed until December 4,1979, and the project was not substantially completed until February 7, 1980. Plaintiff contends it is entitled to compensation for acceleration effort during 1978 and 1979 as a result of the Navy’s failure to grant meaningful extensions for excusable delays in “like-time” periods. In addition, the Navy’s failure to supply com­plete rainfall data is said to lead to a dis­torted view of normal conditions at the site, compromised planning for contract per­formance, and prevented plaintiff’s compli­ance with its as-planned CPM schedule. Plaintiff’s inability to maintain its construc­tion schedule caused the Navy to pressure plaintiff and its surety to accelerated ef­fort.

Where a contractor finishes the project within the contract time plus excus­able delays, the refusal to issue time exten­sions properly allowable may be the basis for a claim for acceleration costs. In order for plaintiff to be successful in its acceler­ation claim based upon a failure to grant time extensions for excusable delays, three conditions must be established: (1) that any delays giving rise to the orders were excus­able; (2) that the contractor was ordered to accelerate; and (3) that the contractor in fact accelerated performance and incurred extra costs.18

The record before the Board does not establish that items 1 and 3 of these requirements were satisfied. Plaintiff did not complete the work within the contract time plus the period for excusable delays. The Navy’s application of the 97 days ex­cusable delay to the February 12, 1979, contract completion date, even when found by the Board to be “tantamount to no time extension at all”, does not establish that the Navy required the work to be acceler­ated. Nor does the Board’s determination to apply the time for excusable delays to a period commencing June 1, 1979, and end­ing September 29, 1979, establish that “like-time” should have been applied in 1977 and 1978.

The Board found on the record that throughout 1978 the Navy pressed plaintiff to take actions, including the employment of larger crews and more equipment, to accelerate earthwork progress on the project. Also, the Board found that the Navy contacted plaintiff’s bonding compa­ny in efforts to apply pressure on plaintiff to accelerate.

The foregoing findings are suffi­cient to satisfy the requirement that an order to accelerate be present. An order to accelerate, for purposes of a claim, need not be couched in explicitly mandatory terms.19 The Board found, however, that plaintiff did not in fact accelerate its earth­work efforts at all in 1978. Plaintiff and Voudouris attempted to obtain additional grading equipment in 1978 but were unsuc­cessful because of a shortage due to heavy construction and timber activities in the area. Plaintiff and Voudouris were unable to obtain qualified personnel so as to main­tain double shifts, and in fact did not sub­stantially increase the number of personnel performing earthwork in 1978. The record does not support plaintiff’s contention that any significant expansion of man-hour ef­fort was made by Voudouris during 1978 in response to Government pressures.

Plaintiff’s new earthwork subcontractor in 1979 (Scalzo) did expand its earthwork forces and equipment. Scalzo flooded the area with men and equipment — employing twice as many dozers and front-end loaders as Voudouris had used, three times as many graders, scrapers, and water trucks, and four times as many compactors. In addition, Scalzo worked with eight dump-­trucks whereas Voudouris had used none. Scalzo worked in many areas simultaneous­ly at plaintiff’s insistence.

The Board concluded Scalzo’s acceler­ation at that time was necessary to correct the poor workmanship and make up the lost progress by Voudouris. The Board’s conclusion that the pressures exerted by the Navy were justified as legitimate ef­forts to overcome periods of nonexcusable delays and meet its contract operations is based on facts that have substantial sup­port in the record as a whole. Denial of plaintiff's acceleration claim was correct as a matter of law.

Constructive Stop Order

Before the Board, plaintiff con­tended that the grading operation on the Seg/Ren building site was delayed from August 2 to September 16, 1977, because the Navy was about to issue a change order, and that the change order (PC 9) was the major cause of delay of earthwork in 1977. PC 9 provided for the relocation of the parking area, the enlargement of an earth berm and the filling in of a ravine in connection with work in the Seg/Ren build­ing. By letter dated August 30, 1977, plaintiff was directed to proceed with clear­ing and grubbing for PC 9 work, and by letter dated August 30, 1977, to proceed with all PC 9 work, including grading. Voudouris elected to defer grading the new parking lot until summer 1978. Contract administration on April 6, 1978, gave an equitable adjustment of $58,000 and a time extension of 14 calendar days for PC 9 work. On December 2, 1981, the contract­ing officer granted an additional $26,064 for PC 9 work.

The Board found that no stop work order was issued in connection with PC 9. There was no documentation in the contract files, and internal memoranda of the Navy indi­cating that between August 3-24, 1977, Voudouris was working in the Seg/Ren area. Further, on November 16, 1977, plaintiff’s project manager informed the Navy that PC 9 would add 8 working days to the completion date. The Board conclud­ed that the 14 day time extension fully compensated plaintiff for the time to per­form the actual changed work in PC 9.

Plaintiff contends that the Board’s con­clusion is erroneous as a matter of law because it failed to recognize the case law relevant to a constructive suspension of work when a contractor is informed of an impending change order. Plaintiff argues that the Board’s failure to comment on the possibility that a constructive suspension occurred demonstrates that the Board failed to consider the entire record and failed to properly consider and decide if plaintiff had been constructively suspended under standards identified in Merritt-­Chapman.20 In that case, the Court of Claims concluded the Board there had failed to consider separately the issue of the length of the suspension with the inde­pendent problems of whether the suspen­sion caused loss or expense to the contrac­tor.

The Court of Claims noted that the Sus­pension of Work Clause presented three issues: (1) whether there has been a sus­pension for the Government’s convenience either total or partial, and either actual or constructive; if the answer is affirmative, then, separate issues to be resolved are (2) did the suspension delay the work for an unreasonable length of time; and, if so, (3) did this unreasonable delay cause addition­al expense or loss. The Merritt-Chapman case concerned a $16 million project to con­struct certain locks and dam in the naviga­tional development of the Ohio River, and the administrative record concerned four decisions issued by the Board. On the record in that case, the Court of Claims concluded the Board had failed to disentan­gle the question of the existence of a sus­pension from the independent issue of what damage the suspension caused or could have caused. Plaintiff contends that, sim­ilarly, in this case, the Board’s analysis fails to consider each element separately, and, instead, improperly rolls all the ques­tions into one.

On the facts, the situation in this case is not comparable to the Merritt-Chapman claim. No evidence in the administrative record indicates that the Board improperly intermixed the issue of whether plaintiff’s work was suspended, actually or construc­tively, with damage issues. The Board’s findings establish that the notice that PC 9 was impending did not cause Voudouris to suspend work in reliance thereon.

The Board specifically found completion of Phase III was not delayed because of PC 9 for any period of time longer than the 14 calendar days allowed. By August 2 or 3, 1977, Voudouris had substantially complet­ed all of the clearing and grubbing of the Seg/Ren site, and could have begun its grading operation in that area. The admin­istrative record shows that during the peri­od of alleged delay, Voudouris was continu­ously performing clearing and grubbing ac­tivities at the Seg/Ren site, Ziegemeir Street, the Truck Holding Yards, County Road, and East Road.

The Board found the conduct of Vou­douris and plaintiff shows that neither con­struction of the Seg/Ren building nor com­pletion of the overall project was delayed more than 14 calendar days by PC 9. Vou­douris’ diaries are silent concerning any further delay or impact because of PC 9. Neither Voudouris nor plaintiff informed the Navy of any such delay or impact while the work was proceeding. Look Ahead Reports by plaintiff during 1977 contained no allegation of delay arising out of PC 9, although such reports were required by the contract specification to include “delaying factors and their impact”. In the Look Ahead Reports from March 15, 1978, through July 1978, plaintiff stated that all Phase III buildings, roadwork and utilities were “on or ahead of schedule.”

The Board’s findings are supported by substantial evidence. On the facts of this case, the Board had no reason to make a separate finding that a verbal notice in August 1977 that PC 9 soon would be issued caused Voudouris to suspend work as a result.

Other Findings

In addition to the three questions of mixed law and fact in the Board’s findings, in its motion for summary judgment, plain­tiff challenged as erroneous specific find­ings of fact related to the calculation of time extensions. In addition, plaintiff as­serted the Board failed to make findings of fact relative to some claims for compensa­ble delays and for direct costs. In these issues plaintiff seeks to reargue matters already considered by the Board.

All of the information relative to the conclusions plaintiff now asserts is in the administrative record. The Board’s find­ings of fact on that information prevail in the absence of a showing they lack the support of substantial evidence. Defen­dant’s motion papers, and defendant’s con­tentions at oral argument address each of plaintiff’s alleged erroneous findings by the Board.

Plaintiff may not, in a Wunderlich Act review, retry factual issues resolved by the Board at the administrative level. There has been no showing that the Board’s find­ings of fact relative to those claims for additional time extensions and for other compensable delays are not supported by substantial evidence. Review of the admin­istrative record, for the reasons identified by defendant, establish that they have such support.

Conclusion

On the basis of the foregoing, defen­dant’s motion for summary judgment is ALLOWED; plaintiff’s motion for summa­ry judgment is DENIED. The Clerk is directed to dismiss the complaint. Defen­dant may recover its costs.

1

. Contract No. 68248-76-C-6020, 87-1 BCA If 19,626.

2

. 28 U.S.C. § 1491(a) (1982); 41 U.S.C. §§ 321-­22 (1982).

3

. 41 U.S.C. §§ 601-13 (1982).

4

. See Vista Scientific Corp. v. United States, 808 F.2d 50 (Fed.Cir.1986) (explanation of historical development); United States v. Carlo Bianchi & Co., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963) (aside from questions of fraud, a review­ing court is limited to the administrative record on a question arising under the disputes clause); United States v. Anthony Grace & Sons, 384 U.S. 424, 86 S.Ct. 1539, 16 L.Ed.2d 662 (1966) (where Board has not considered claim on merits, re­mand to Board for evidentiary hearing required to determine factual issues); United States v. Utah Constr. & Mining Co., 384 U.S. 394, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966) (Board’s findings of fact on issues properly before it are final and conclusive in subsequent breach of contract ac­tions).

5

. 41 U.S.C. § 321 (1982).

6

. 41 U.S.C. § 322 (1982); Fortec Constr. v. Unit­ed States, 760 F.2d 1288, 1291 (Fed.Cir.1985).

7

. United States v. Carlo Bianchi & Co., 373 U.S. at 715, 83 S.Ct. at 1413.

8

. Koppers Co. v. United States, 405 F.2d 554, 556-59, 186 Ct.Cl. 142 (1968).

9

. Sundstrand Turbo v. United States, 389 F.2d 406, 410, 182 Ct.Cl. 31 (1968); T.C. Bateson Constr. Co. v. United States, 149 Ct.Cl. 514, 518 (1960).

10

. Sundstrand Turbo v. United States, 389 F.2d at 422-23; Jefferson Constr. Co. of Florida v. United States, 364 F.2d 420, 424, 176 Ct.Cl. 1363 (1966), cert. denied, 386 U.S. 914, 87 S.Ct. 865, 17 L.Ed.2d 786 (1967).

11

. Koppers Co. v. United States, 405 F.2d at 558.

12

. Koppers Co. v. United States, 405 F.2d at 558.

13

. Id. at 559.

14

. Id. at 559.

15

. George Hyman Constr. Co. v. United States, 564 F.2d 939, 944, 215 Ct.Cl. 70 (1977); Hege­man-Harris & Co. v. United States, 440 F.2d 1009, 1011, 194 Ct.Cl. 574 (1971).

16

. See Gevyn Constr. Corp. v. United States, 11 Cl.Ct. 203, 205 (1986), aff’d, 827 F.2d 752 (Fed.­Cir.1987); Laka Tool & Stamping Co. v. United States, 7 Cl.Ct. 213, 216 (1984); Shuey Aircraft, Inc. v. United States, 3 Cl.Ct. 243, 245 (1983); Raytheon Co. v. United States, 2 Cl.Ct. 763, 767 (1983), aff’d, 730 F.2d 1470 (1984).

17

. Delays from change orders and work restric­tions totaled 22 calendar days for work during 1977, differing site conditions accounted for 10 work days of excusable delay in 1978, and change orders accounted for a total of 19 calen­dar days excusable delay In 1979 (14 work days = 20 calendar days).

18

. The Board in its analysis utilized the five conditions stated in Fermont Division, Dynamics Corporation of America, ASBCA No. 15806, 75-1 BCA ¶ 11,139 at 52,999-53,000. The Court of Claims in Norair observed that the two addition­al requirements — contractor request for exten­sion of time and denial of the request — in effect are equivalent to the requirement of an order to accelerate. Norair Engineering Corp. v. United States, 666 F.2d 546, 548, n. 5, 229 Ct.Cl. 160 (1981).

19

. Id. at 550.

20

. Merritt-Chapman & Scott Corp. v. United States, 439 F.2d 185, 192, 194 Ct.Cl. 461 (1971).

01-1 BCA P 31249 (G.S.B.C.A.), GSBCA No. 14744, GSBCA No. 14877, 2001 WL 43961

GSBCA

HENSEL PHELPS CONSTRUCTION CO., APPELLANT,

V.

GENERAL SERVICES ADMINISTRATION, RESPONDENT.

January 11, 2001

David P. Dapper of Wickwire Gavin, Los Angeles, CA; and Stephen B. Hurlbut of Wickwire Gavin, Vienna, VA, counsel for Appellant.

Dalton F. Phillips and Sharon J. Chen, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent.

Before Board Judges BORWICK, NEILL, and DeGRAFF.

NEILL, Board Judge.

These appeals concern two claims brought by Hensel Phelps Construction Co. (HPCC) regarding construction of a complex to house offices and laboratories of the National Oceanic and Atmospheric Administration (NOAA) in Boulder, Colorado. A substantial part of both claims includes a claim of HPCC's mechanical subcontractor for the project, Trautman & Shreve, Inc. (T&S). The first claim is for the costs associated with the installation of vibration isolation on certain piping. The parties disagree as to whether this was a contract requirement. The second claim is for a loss of productivity allegedly resulting from actions and inactions on the part of the Government and its agents. Because the two claims relate to the same project, we have consolidated them here for purpose of decision. For the reasons set out below, we conclude that the Government is liable for the majority of the costs sought by HPCC in the two claims.

Findings of Fact

1. On September 23, 1996, the General Services Administration (GSA) awarded a contract (the contract) to HPCC for the construction of a new building for NOAA in Boulder, Colorado. The contract award amount totaled $50, 002, 000. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1.¹ The contract stated that this new federal building was a facility designed to meet the specific needs of designated divisions within NOAA. The building was to embrace a gross construction area of approximately 372, 000 square feet. The first, second and third floors were to be fully above grade, while a garden level, partially below grade, was to be a partial floor plate composed of both occupied areas and major mechanical equipment spaces. Id., Vol. 1, Exhibit 1 at 01010-2. The building in its entirety was to be subdivided into four separate blocks or “buildings, ” namely, blocks A, B, C, and D.² Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 1). The blocks differed significantly among themselves based upon the character of the work that was to be performed in them. Block A was to consist primarily of laboratories. It also was to house on its ground level the major mechanical room where the chillers are located. Block D also contained equipment rooms and some laboratories. Blocks B and C were to be office-oriented with mostly offices and computer rooms. Transcript at 2452-53. In initiating construction of the building, HPCC followed a reverse sequence starting first with block D and then proceeding, in turn, to blocks C, B, and A. Id, at 823.

2. HPCC's contract contained the standard Changes clause required for construction clauses under the Federal Acquisition Regulation (FAR). 48 CFR 43.205(d) (1996) (FAR 48.205(d)). The August 1987 version of the clause, which was applicable at the time the solicitation was issued, contained the following provision which is of particular relevance to these appeals:

FAR 52.243-4 CHANGES (AUG 1987)

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

Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 (GSA Form 3506 at 30-31). During the life of the contract, the Government issued forty-five change orders involving T&S. Respondent's Supplemental Appeal File, Vol. 23, Exhibit G234 (Exhibit 12). The contract also contained the FAR Inspection of Construction clause. One provision of that clause of particular relevance to these appeals reads:

FAR 52.246-12 INSPECTION OF CONSTRUCTION (JULY 1986)

(d) The presence or absence of a Government inspector does not relieve the Contractor from any contract requirement, nor is the inspector authorized to change any term or condition of the specification without the Contracting Officer's written authorization.

Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 (GSA Form 3506 at 16).

3. Division 15 of the specifications in HPCC's contract with GSA for the construction of the new NOAA building is entitled “Mechanical.” In this section one finds the mechanical specifications for the NOAA project. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at TC-4. On October 10, 1996, HPCC and T&S entered into a subcontract totaling $7, 840, 014. Pursuant to this subcontract, T&S agreed to perform nearly all of the work called for in Division 15 of HPCC's contract with GSA. Of all the sections in Division 15, only the work in Sections 15325 (fire protection), 15981 (building automation system), and 15990(testing, adjusting and balancing) were reserved for award to a subcontractor other than T&S. Id., Vol. 4, Exhibit 3 at 3. T&S is one of the largest mechanical contractors in the state of Colorado. Transcript at 402.

4. By letter dated October 28, 1996, GSA's contracting officer (hereinafter the “contracting officer”) issued to HPCC a notice to proceed with the contract, with completion to be by November 8, 1998. Respondent's Appeal File, GSBCA 14744, Vol. 14, Exhibit G11.

5. The first contract GSA awarded for the design of the new NOAA building was eventually terminated for default in 1991. Shortly thereafter GSA awarded an architectural/engineering (A/E) contract to the firm of Fentress Bradbum and Associates (FBA). This contract was also beset with problems and came close to being terminated for default. Nevertheless, the decision was made not to terminate. FBA submitted a final design in the summer of 1994. Transcript at 427-31; Appellant's Supplemental Appeal File, Vol. 1, Exhibits 118, 119.

6. GSA retained CRSS Constructors (CRSS) as its construction manager and to act as GSA's representative during construction of the NOAA project. As GSA's representative on the project, CRSS was responsible for handling communications with GSA's consultants and with the contractor. This included processing requests for information (RFIs), negotiating change orders, providing construction phase engineering services, reviewing schedules, making field observations, and undertaking some inspection responsibilities. Transcript at 419, 2298-99.

7. A mechanical engineering firm, BCER, was retained to assist CRSS on technical matters. This was not the firm which had worked earlier with FBA. FBA had been assisted by the firm of Reigel Doyle & Associates (RDA). Transcript at 83.

GSBCA 14877: Vibration Isolation Claim

 I. The Isolation of Plumbing Piping

8. The president and chief executive of T&S testified regarding vibration isolation and provisions made for it in T&S's bid. This witness has had a wide variety of experience in the field of mechanical contracting. He started as a pipe-fitter apprentice in 1970 and gradually worked his way upward to the ranks of supervisory foreman, general foreman superintendent, and eventually project manager. In 1986, he became managing vice president in charge of all company operations. In 1991, he became company president. Transcript at 19-20.

9. This witness testified that vibration isolation consists of various means of reducing or eliminating the transmission throughout a structure of vibration from mechanical equipment, typically reciprocating equipment from heating, ventilation and air conditioning (HVAC) equipment such as a chiller. Common means of vibration isolation include rubber pads placed underneath equipment and pipe hangers incorporating spring isolators or, for smaller diameter pipe, rubber-in-sheer hangers which use a rubber isolator rather than a spring. Transcript at 27-30; Appellant's Trial Exhibits 1, 2A, 2b. The witness further explained that vibration isolation is commonly specified for HVAC piping because such piping is connected to reciprocating equipment and consequently requires vibration isolators to eliminate or reduce the transmission of vibration from the equipment through the pipes. Transcript at 33.

10. One matter of dispute in this appeal is whether vibration isolation was to be installed on plumbing piping as well as on HVAC piping. In preparing its estimates prior to submitting a final bid to HPCC, T&S did not believe that vibration isolation was required for plumbing piping. It therefore made no provision for the material or labor costs which would be associated with such a requirement. T&S's president and chief executive testified on this point. He explained that in all his years of experience in the field of mechanical contracting he has never personally seen a requirement for vibration isolation on plumbing piping systems. Speaking on behalf of T&S, one of the oldest mechanical companies in the state of Colorado, he contended that such a requirement had never been seen in the fifty year history of the company. Transcript at 32.

11. T&S's president and chief executive also explained that he is familiar with the company's estimating process and has worked in this area since becoming a project manager. Transcript at 20. In his position as president and chief executive officer of the company, he routinely is involved in the bidding process and particularly in the final review of company estimates prior to the submission of a final bid to a general contractor. He made such a review of the estimate supporting the bid submitted by T&S to HPCC for the NOAA project. He states that the estimate did not include any provision for the costs of vibration isolation of plumbing piping systems because, had these costs been included, this would have been called to his attention by the estimators as something out of the ordinary. Id. at 23-26, 64. He further testified that, as a result of this dispute, he has subsequently learned just how the company's senior estimator actually did estimate the cost of vibration isolation hangers for the project. Id at 68-69.

12. On February 5, 1997, T&S submitted an RFI to HPCC. HPCC, in turn, forwarded this RFI (number 305) to CRSS. This RFI posed the following question. It referenced a provision concerning the vibration isolation of horizontal pipes found in paragraph 3.1 of Section 15241 of the contract specifications. One section of the paragraph specifically lists a requirement for vibration isolation on various floors and levels of building blocks A, C, and D. Noticing the absence of any mention of block B, T&S asked: “Block B is not included in the vibration isolation for horizontal piping on specification 15241-9, 3.1. Is this the intent? Please advise.” Appellant's Supplemental Appeal File, GSBCA 14877, Exhibit 13. CRSS submitted RFI 305 to BCER (Finding 7) for reply. BCER replied with one word: “Correct.” This reply was passed back to T&S through CRSS and HPCC. Appeal File, GSBCA14877, Exhibit 1.

13. CRSS had in its employ, during the construction of the NOAA building, a field engineer who served as the company's mechanical inspector for the project. Like the T&S president, he too had never seen a requirement for vibration isolation on plumbing piping. Nevertheless, he testified that, after reading the contract's mechanical specification, odd as it might seem, it appeared to him that the contract called for vibration isolation of all piping. Transcript at 479-83. This inspector testified that he first noticed that T&S was not installing vibration isolation with plumbing piping after construction began on the building's first block, namely, block D. Since most of the work on the garden level of block D was mechanical he did not have occasion to observe that there were no isolators on plumbing piping until work started on the first level. He testified:

The first thing that they started was in Building D, and I think it was 11/1. And in the garden level - most of the garden level is mechanical room. When they start the first level where they have HVAC piping and plumbing, what I noticed was that they have all the isolators for the HVAC piping, but not for the plumbing.

Id. at 483-84. The inspector further testified that he mentioned the absence of isolators on plumbing piping to a T&S supervisor one day in a casual manner while returning to the office with him. The inspector's recollection of the brief discussion is vague. He testified that the individual with whom he spoke assured him that someone had already been contacted on this matter and that the isolation was not required. The inspector cannot recall what, if anything more, was said in this first discussion with the T&S supervisor. Id. at 483-85.

14. This same CRSS inspector testified that he does not recall whether he mentioned T&S's failure to install vibration isolation with plumbing piping to the official at CRSS to whom he reported. Transcript at 493. He did not bring the matter to the attention of the general contractor, HPCC. Id. at 496. Neither did he issue a field observation notice (FON) on the matter. Id. at 495 He explained that the purpose of a FON is to capture for the record the need to take corrective action on a particular item. He stated that it was his practice not to issue a FON immediately but first to mention his concern orally. If corrective action was not taken within a few weeks, then he would issue the FON. Id. at 495-96. In this case, he admits he did nothing on the matter for two or three months even though he was well aware that installation of plumbing piping without vibration isolation was continuing in both blocks C and D. Id. at 485, 497.

15. The CRSS inspector contends that he again brought up the issue of vibration isolation on plumbing piping in late September or early October 1997. He testified that he did so at the close of a meeting he attended with T&S's project director to discuss HVAC valves. He stated that, when discussion of the valves had concluded, he asked about vibration isolation for the plumbing piping. He further testified that the general contractor was represented at this meeting and that, in his opinion, in the final analysis, it was the responsibility of the HPCC's quality assurance staff to ensure that T&S installed plumbing piping with the requisite vibration isolation. Transcript at 485-88. The record contains a letter dated October 7, 1997, sent by the CRSS inspector to an HPCC official. It concerns “Vibration and Neoprene Wrap issues.” In it the inspector commented, among other things, on subsection 3.1 . D.2.a of section 15241 of the contract specifications (see Findings 30-31). He wrote: “All HVAC piping, all plumbing piping, including drain piping, all laboratory water piping (or other liquid piping) larger than 3/8” is required to get the isolators and neoprene wrap as per this specification sections [sic].” Appellant's Appeal File Supplement, GSBCA 14877, Exhibit 15.

16. The recollection of T&S's project manager is in conflict with that of the CRSS inspector concerning when the issue of vibration isolation on plumbing piping first arose. The project manager contends that T&S knew nothing of the Government's concern regarding the lack of vibration isolation on plumbing piping until it received a copy of a letter sent by CRSS to the general contractor (HPCC) dated October 31, 1997. Transcript at 100-02. The letter states: “ALL piping systems, unless specifically excluded, are subject to the requirements of Specification Section 15241, Noise and Vibration Control, not just the Hydronic Piping.”³ Appeal File, GSBCA 14877, Exhibit 3.

17. Like T&S's president and chief executive, T&S's project manager for the NOAA project had never before seen a requirement for vibration isolation on a plumbing system. He testified that in his thirty-one years of experience in the mechanical contracting field, which has included some special purpose buildings such as the NORAD facility in Colorado Springs, he had never seen a requirement for vibration isolation on plumbing piping. Transcript at 80. He readily admitted, however, that he had never worked on a project which included seismic measurement. Id. at 123. Accordingly, it is his testimony that when RFI 305 went forward in February 1997 (Finding 12), it was based upon T&S's understanding that the specification section, namely Section 15241, which contained the requirement for vibration isolation on horizontal piping in blocks A, C, and D, applied only to HVAC piping. Id. at 81-87, 154.

18. The record shows that, by letter dated October 10, 1997, CRSS advised the general contractor and, through HPCC, T&S as well, that the answer previously provided in February to RFI 305 (Finding 12) was “inaccurate and should not have confirmed the statement posed in the RFI.” 

Appeal File, GSBCA 14877, Exhibit 2. T&S's project manager testified that T&S understood this revision of the Government's original reply to RFI 305 to mean only that vibration isolation was required on HVAC piping in block B. Transcript at 100-03; Appellant's Supplemental Appeal File, GSBCA 14877, Exhibit 18 at 1. This in itself was extremely upsetting to T&S since it involved going back and retrofitting the HVAC piping which had already been installed in block B — some of which was quite large. Specifically the retrofit for these pipes required supporting the piping from below while the hanger rods extending from the ceiling were cut to permit insertion of an isolator spring before reassembling the hanger and reattaching it to the ceiling. Transcript at 88-89, 155-56.

19. Given the record before us, we find that it was not until October 1997, as the Government focused on the provision in Section 15241 which had originally led the contractor to submit RFI 305 in early February of that year, that an even larger issue began to emerge. As we have already seen (Findings 16-17) and will see below in greater detail, T&S believed that Section 15241 on noise and vibration control dealt only with hydronic or HVAC piping. In its letter of October 31, 1997, to the general contractor, CRSS rejected that interpretation when it wrote: “ALL piping systems, unless specifically excluded, are subject to the requirements of Specification Section 15241, Noise and Vibration Control, not just the Hydronic Piping.” Appeal File, GSBCA 14877, Exhibit 3. T&S's project manager testified that this communication was even more devastating for T&S than the retraction of the answer to RFI 305. This communication would involve a retrofit far more extensive than that required to install vibration installation on HVAC piping already installed in block B. According to T&S's project manager, the installation of plumbing piping first began in April 1997. By the end of October 1997, a good percentage of the plumbing piping had already been installed in blocks D, C, and B and a little had also been installed in block A. Transcript at 96, 111, 156-57.

20. T&S's project manager testified that, following receipt of CRSS's letter of October 31, he and others attempted to convince CRSS's inspector and other CRSS officials that their application of Section 15241 to plumbing piping was incorrect. It is his recollection that CRSS conferred with its BCER consultant who, in turn, insisted on conferring with the firm responsible for writing the specification. Transcript at 107-09. Nevertheless, by letter dated November 5, 1997, and by a second letter dated November 14, the contracting officer indicated that he was in agreement with CRSS on the matter and directed HPCC to install the isolation on all plumbing piping. Appeal File, GSBCA 14877, Exhibits 4, 7. HPCC, in turn, formally advised CRSS of its disagreement and reserved its right to claim additional compensation under the contract's changes clause. Id., Exhibit 6.

21. Much of T&S's argument regarding the inapplicability of Section 15241 to plumbing piping turns on the fact that this particular section is said to include requirements for mechanical and electrical systems. The project manager testified that it is customary in the mechanical construction field or the “MEP business” to distinguish among “mechanical, electrical, and plumbing.” Transcript at 134. Given the presence of a section in the specification dealing with plumbing systems and the distinction found elsewhere in Division 15 of the contract between “mechanical” and “plumbing, ” he considered that Section 15241, which was expressly said to deal with “mechanical and electrical systems, ” was applicable to hydronic or HVAC piping but not plumbing piping. Id. at 133-140. The testimony of T&S's president and chief executive supported the use of these distinctions in the trade. He explained that while the term “mechanical” is used in a “global” sense to describe generally the work of mechanical contractors, when used to describe the systems with which these contractors are concerned, it refers to HVAC as opposed to other systems such as plumbing or fire protection. Id. at 70-71.

22. The author of Section 15241 was called to testify at the hearing for these appeals (the hearing). She had served as an acoustic and vibration consultant to FBA during the design phase of the NOAA project. In early November 1997, she was contacted by an FBA representative and asked to comment on the reference in Section 15241 to a requirement therein for vibration isolation on “all piping.” An FBA “Memorandum of Contact” summarizing her conversation with the FBA representative states that she replied that “all piping” was all-inclusive except where specifically indicated in the specification as, for example, the express exclusion of fire suppression systems from this requirement. She is further quoted as saying that this requirement for vibration isolation was highly unusual but nevertheless a requirement. Copies of this memorandum of contact were provided to CRSS by FBA. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 152. At the hearing this witness confirmed that she had been contacted by FBA on this matter and that the report of her conversation as provided in the FBA memorandum was accurate. Transcript at 457-59.

23. This same witness testified that her direct involvement with the preparation of Division 15 was limited to drafting Section 15241 on vibration isolation. She did not draft any other sections of Division 15 and, as a matter of fact, in May 1996 left the firm which was assisting FBA in the design of the NOAA project. Transcript at 457-61, 475-76. When asked about any possible distinction between the term “mechanical” and “plumbing, ” she testified that there is no distinction between the terms from a “design responsibility” standpoint. Id. at 447-48. She did, however, admit that she was aware of a distinction sometimes made between the terms from a mechanical contractor's standpoint so far as project implementation is concerned. Id. at 467-68. She likewise admitted that she was aware that in other sections of Division 15 there is a distinction made between mechanical or HVAC piping and plumbing piping. Id at 468. Nevertheless it is her contention that this is a distinction made between various complex mechanical systems for purposes of ensuring their proper coordination. She notes, for example, that it would be impractical to set out drawings for all these systems on a single sheet of paper. Hence the need to distinguish between systems for purposes of coordination. Id.

24. The author of Section 15241 on noise and vibration control also testified that it was her intent that this section should apply to all sections of Division 15. She readily admits the initial provision of this section, which lists related sections of Division 15, does not include any reference to plumbing piping sections in Division 15. Nevertheless she contended that this initial listing is not said to be all-inclusive. Transcript at 466. Finally, she testified that although she has in fact said that the requirement for vibration isolation is highly unusual, it is not that unusual when one is dealing with special purpose buildings such as the one in question. Id. at 474.

25. T&S's vice president and operations manager was also called to testify regarding vibration isolation for plumbing systems. This witness has worked in the construction industry for well over thirty years. During that time he has worked as a sheet metal apprentice, as a journeyman, as a foreman, and as a project supervisor. He has also occupied management positions of considerable responsibility in various well-established mechanical construction firms. He confirmed that in the past he had worked on “some fairly sophisticated projects” which included laboratory facilities and other facilities with sensitive equipment. Nevertheless, he testified that, in the course of his career, he had never encountered a project in which plumbing piping was isolated for vibration. Transcript at 293-97. He also, like his colleagues, argues that, in the field of mechanical contracting, a definite distinction is made between mechanical and plumbing systems. The record contains excerpts from the 1994 editions of the Uniform Mechanical Code (UMC) and the Uniform Plumbing Code (UPC) which T&S's operations manager provided to HPCC in January 1998. This material was forwarded by HPCC, in turn, to a Government official shortly thereafter. It confirms that the UMC, which is published by the International Conference of Building Officials, is expressly designed “to provide complete requirements for the installation and maintenance of heating, ventilating, cooling and refrigeration systems.” An excerpt from the UPC, which is published by the International Association of Plumbing and Mechanical Officials, defines “plumbing system” as :

all potable water supply and distribution pipes, all plumbing fixtures and traps, all drainage and vent pipe, and all building drains, including their respective joints and connection, devices, receptacles, and appurtenances within the property lines of the premises and shall include potable water piping, potable water treating or using equipment, fuel gas piping, water heaters and vents for same.

Appeal File, GSBCA 14877, Exhibit 9 at 1-4, 26-29.

The Contract Provisions

26. Division 15 of the contract between HPCC and GSA contains forty-six different sections. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at TC-4. These sections cover a wide variety of systems such as HVAC, fire protection systems, plumbing systems, laboratory special gases and piped systems, natural gas piping systems, condenser water filtration system, water treatment system, and building automation system. Id.

Some of the sections of Division 15 having particular relevance to these appeals are as follows. For the sake of brevity, we will, with few exceptions, summarize them here rather than set them out verbatim.

27. Section 15010: BASIC MECHANICAL REQUIREMENTS. The first provision in this section provides a summary of the section contents and also states: “This Section shall form part of and be incorporated into all Division 15 Sections.” Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15010-1. Although the whole of Division 15 is labeled “Mechanical, ” Section 15010, the very first section in the division, distinguishes in some provisions between “mechanical” and “plumbing” as, for example, in paragraphs 1.06(C)(1) and 3.02(a). Indeed, subparagraph 3.02(a)(10) of this section refers to the need to examine and compare “mechanical, plumbing and fire protection Drawings and Specifications.” Id. at 15010-5, 15010-7. This section also provides a general definition for “pipe, tube and fittings” as “Pipe, tube, pipe fittings and tube fittings used for the conveyance of liquid and gaseous fluids.” Id. at 15010-6.

28. Section 15145: HANGERS AND SUPPORTS. The first provision of this section likewise provides a summary of the section contents. The section is said to include hangers and supports “for mechanical systems piping and equipment.” It also lists two other sections of Division 15 as related to this section, namely, the section dealing with noise and vibration control (Section 15241) and that concerning hydronic piping (Section 15510). Paragraph 3.1 of this section expressly states: “Specific hanger requirements are specified in the Section specifying the equipment and systems.” Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15145-1, 15145-3.

29. Section 15241: NOISE AND VIBRATION CONTROL. The first provision of this section leads off with the statement: “This Section includes noise and vibration control equipment, devices and requirements for mechanical and electrical systems and equipment....” It then lists fourteen other sections of Division 15 as related to Section 15241. The first two sections relate to basic mechanical requirements, materials, and methods. The remaining twelve sections, however, concern matters which (with the possible exception of a section relating to air compressors) on their face obviously relate to the building's HVAC system. These sections treat such matters as room air conditioning units, air handling, metal ductwork, duct accessories, air outlets and inlets, air terminals, air-cooled reciprocating chillers, water-cooled centrifugal chillers, split system air conditioning systems, and terminal heat transfer units. In this initial listing of ostensibly related sections, no mention is made of the section dealing with plumbing piping or laboratory piping, or of Section 15145 dealing with hangers and supports. Also, unlike the first provision of Section 15010 (Finding 27), there is no provision in this first paragraph of Section 15241 or elsewhere in the section which expressly states that the section forms part of and is to be incorporated into all sections of Division 15. Instead this introductory provision to Section 15241 simply advises the reader to “[r]eview all Sections of Division 15 and 16 for additional requirements that may relate to the work of this Section.” Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15241-1. Paragraph 3.3 of Section 15241 also contains background noise criteria which must be met and testing procedures to ensure compliance with these requirements in various areas of the building. Id at 15241-12 to 15241-14.

30. One provision of Section 15241 which merits particularly close scrutiny appears in paragraph 3.1, which deals with the locations where vibration isolation is required. Subparagraphs D and E read as follows:

D. Horizontal Pipe Vibration Isolation

1. Building Area: Block A / All Levels

Block C / Garden Level

Block D / Garden Level

and Levels 1 and 2

All piping in the areas listed above shall be vibration isolated as follows:

a. Greater than 1-1/2 in. Diameter Pipe: The first 50 feet of piping from the connected equipment or all the piping within the mechanical equipment room, whichever length is greater, shall be isolated by Type 8 isolation hangers. The Type 8 hangers shall have the same minimum static deflection as specified for the isolation mounts of the connected equipment. Piping in all other locations shall be isolated by hangers of Type 6. All hangers of Type 6 shall have a minimum static deflection of 0.70 in. All hangers shall be located as close to the overhead supports as possible.

b. 1-1/2 in Diameter Pipe or Less: Provide minimum 1/2 in. thick resilient neoprene pipe wrap around all piping as each rigid pipe hanger.

2. All piping not specified within the building areas outlined above shall be vibration isolated as follows:

a. Greater Than 1-1/2 in. Diameter Pipe: The first 50 ft. of piping from the connected equipment or all the piping within the mechanical equipment room, whichever length is greater, shall be isolated by Type 8 isolation hangers. The Type 8 hangers shall have the same minimum static deflection as specified for the isolation mounts of the connected equipment. For piping in all locations, provide resilient neoprene pipe wrap at all rigid pipe hangers.

b. 1-1/2 in. Diameter Pipe or Less: Provide minimum 1/2 in. thick resilient neoprene pipe wrap around all piping at each rigid pipe hanger.

3. All emergency fire sprinkler piping is exempt from the vibration isolation procedures. No equipment, hangers, isolators, or any other suspension apparatus shall be suspended from or make contact with the emergency fire sprinkler piping.

E. Vertical Pipe Riser Vibration Isolation: Provide pipe riser vibration isolation at all vertical pipe riser support locations within the first 50 ft. of piping from the connected equipment. Refer to the Drawings for detail. Provide Type 3 - Spring Isolators with minimum static deflection of 0.75 in. when the piping is under full load capacity. Provide sliding guides on the piping.

Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15241-9 to 15241-10.

31. Section 15410: PLUMBING PIPING. The summary provided in paragraph one of this section explains that the section deals with plumbing piping systems. This first provision of Section 15410 lists six other sections of Division 15 as related to this section. Among the sections listed in this initial provision is Section 15510, which deals with hydronic piping. Section 15241, dealing with noise and vibration control, however, does not appear in this initial listing of related sections. Neither is Section 15241 listed anywhere else in this section — not even in Paragraph 3.11, which deals with “Hangers and Supports Installation.” Paragraph 3.5 of this section, which deals with “Piping Installation, General” is a very brief provision and simply states: “Basic piping installation requirements are specified in Division 15 Section ‘Hydronic Piping.”’ Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15410-1, 15410-7, 15410-10.

32. Section 15415: LABORATORY PLUMBING. The first paragraph of this section indicates that the section includes the piped service systems within the laboratory suite areas. Ten sections of Division 15 are identified as related to this section 15415. Among these are Section 15145, dealing with hangers and supports; Section 15410, dealing with plumbing piping; and Section 15510, dealing with hydronic piping. No reference is made in this list of related sections to Section 15241, dealing with noise and vibration control. Paragraph 2.03 of this section relates to hangers and supports but contains no reference to Section 15241 or vibration isolation. Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15415-1, 15415-4.

33. Section 15510: HYDRONIC PIPING. The summary at the start of this section explains that the section includes piping systems for hot water heating, chilled water cooling, condenser water, make-up water for these systems, blow-down drain lines and condensate drain piping. Piping materials and equipment specified in the section are said to include pipes, and pipe hangers and supports. This summary provision at the start of Section 15510 also identifies ten other sections of Division 15 as relating to this section. Among the sections listed is the above mentioned Section 15410 which deals with plumbing piping. Section 15241, dealing with noise and vibration control, does not appear in this list of related sections. Appeal File, GSBCA 14744, Vol. 2, Exhibit 1 at 15510-1. Paragraph 3.2 of Section 15510 is entitled “Piping Installations.” It is a lengthy provision covering over four pages. Id. at 15510-9 to 15510-14. It is followed by paragraph 3.3, which is entitled “Pipe Hangers and Supports.” Subparagraph 3.3.B. concerns the installation of pipe attachments and reads as follows:

1. Adjustable steel clevis hangers for individual horizontal runs less than 20 ft. in length.

2. Adjustable roller hangers and spring hangers for individual horizontal runs 20 ft. or longer, and as required on horizontal runs less than 20 ft. in length where required to accommodate and properly control pipe extension.

3. Pipe roller complete - MSS Type 44 for multiple horizontal runs, 20 ft. or longer, supported on a trapeze.

4. Spring hangers to support vertical runs.

5. Refer to Division 15 Section “Noise and Vibration Control” for additional requirements.

Id. at 15510-14.

Contractor's Interpretation

34. The principal witness to explain appellant's interpretation of the sections of Division 15 relating to the installation of vibration isolation was T&S's project manager for the NOAA project. He testified that in discussions following receipt of CRSS's letter of October 31 advising that all piping systems, not just the hydronic piping system, were subject to the requirements of Section 15241, he and other company representatives strenuously attempted to convince CRSS and GSA representatives that their interpretation of the contract was incorrect. Transcript at 107-12. Explaining T&S's position on the matter, he argues that the question of proper pipe installation should begin with Section 15145 of Division 15, dealing with hangers and supports. There one is told that specific hanger requirements are specified in the sections specifying the equipment and the systems. Accordingly, in his opinion, one should then turn to the sections of Division 15 dealing with the various systems to determine the applicable requirements regarding hangers and supports. Only in the case of hydronic piping, Section 15510, is one expressly advised, in a specific provision of that section dealing with hangers and supports, that the provisions of Section 15241 on noise and vibration control apply. According to T&S's project manager, therefore. Section 15241 unquestionably applies to the installation of hydronic piping. This, in his opinion, is confirmed in a review of the text of Section 15241, which is said to include the requirements for “mechanical and electrical systems and equipment.” See Finding 27. According to this witness, in view of the traditional distinctions in the trade regarding mechanical, electrical, and plumbing work, the omission of any reference to plumbing in this phrase convinces him that Section 15241 does not apply to plumbing systems. This is further confirmed in his mind by the absence of any mention of plumbing sections among the specification sections identified at the start of the Section 15241 as “related.” Transcript at 103-06.

35. T&S's project manager further testified that, in turning to the specific hanger support requirements dealing with systems other than hydronic piping, such as plumbing piping and laboratory piping, one finds no references to Section 15241 such as those readily found in the section dealing with hydronic piping. In Section 15410, which deals with plumbing piping, no reference is made to Section 15241 in the list of related sections appearing at the start of the section. Neither is any reference made to Section 15241 in a specific provision on pipe hangers and supports or elsewhere in Section 15410. Similarly, he testified to the absence of any reference to Section 15241 on vibration isolation in Section 15415, which deals with laboratory piping. Transcript at 106-07.

The Government's Interpretation

36. It is the position of the contracting officer that Section 15241 is all-inclusive except where specifically indicated in the specifications. In a decision issued on April 8, 1999, after this appeal was already docketed, he stated that this position is based upon a detailed review of the specification and discussions with the drafters of the documents. Respondent's Supplemental Appeal File, Vol. 27, Exhibit G237. A letter in the record dated March 30, 1998, from the contracting officer to HPCC sheds light on the rationale behind the Government's position. The contracting officer notes that Section 15010 of Division 15 is specifically said to “form part of and be incorporated into all Division 15 Sections.” He further points out that it is in this same section that a definition of “pipe, tube, and fittings” is given as “pipe, tube, pipe fittings and tube fittings used for the conveyance of liquid and gaseous fluids.” Hence, where Section 15241 calls for vibration isolation of “all piping” in paragraph 3.1 D.1&2, the piping should be understood as inclusive of all piping as defined in Section 15010, i.e., that “used for the conveyance of liquid and gaseous fluids.” Appeal File, GSBCA 14877, Exhibit 10.

II. Isolation of HVAC Riser Piping

37. Another issue regarding vibration isolation on which the parties are in disagreement concerns the isolation of HVAC riser piping. Paragraph 3.1 E of Section 15241 calls for vertical pipe riser vibration isolation “at all vertical pipe riser support locations within the first 50 feet of piping from the connected equipment.” See Finding 30. T&S's president testified that this requirement was understood by T&S as applicable to any HVAC riser connected to equipment since vibration from the equipment would be transmitted through the pipe not the air. The “first 50 feet, ” therefore, was understood as fifty linear feet of piping. Transcript at 36-37. T&S's project engineer for the NOAA project testified that he read this requirement in the same manner. Vibration isolation was put on HVAC risers at support locations within the first fifty feet of piping from connected equipment. However, in October or November of 1997, this became a matter of disagreement. T&S's project engineer testified that at that time CRSS's inspector advised him that vibration isolation should be installed on all risers within fifty feet of equipment whether or not they are connected to the equipment. The project engineer stated that after three to four days of exhaustive argument, he was directed by the CRSS inspector to install vibration isolation on all the vertical HVAC risers and compressed air and vacuum lines for vertical plumbing already installed in blocks C and D. The status of work in these two blocks at the time was considerably advanced. The project engineer testified that by this time there was drywall covering the majority of the lines. It was necessary, therefore, to go back underneath the access flooring and cut small openings in the drywall in order to be able to get to the risers and install vibration isolation. Id. at 191-94.

38. CRSS's inspector in his testimony confirmed that he had discussed the vibration isolation on HVAC risers with T&S's project engineer. He readily admitted that he specifically told the engineer that vibration isolation should be installed on all vertical risers within fifty feet of piping from connected equipment. He explained that his insistence on vibration isolation on all HVAC risers was based on details shown on plans for the HVAC system which called for every pipe coming out of the riser through the floor to have a two-inch spring vibration isolator. He further explained that he did not make T&S put similar isolation on the plumbing risers because this was not shown as it was for HVAC risers. When asked on cross-examination about the HVAC plan to which he had referred in direct examination, the CRSS inspector replied that he had not reviewed the plan in preparation for his testimony and could not recall which drawing contained the detail regarding HVAC risers. Transcript at 488-92.

39. T&S's project manager testified that he too was told by CRSS's inspector that vibration isolation was required on all risers and not just on the first fifty linear feet of the piping connected to equipment. On cross-examination this same witness readily admitted that part of his job included submitting written protests to the Government when directed to do work not covered by the contract. Nevertheless, he cannot recall having submitted such an objection regarding the CRSS inspector's insistence on additional vibration isolation for risers. Transcript 152-53, 161.

III. Installation of Sheet Metal Shields and Neoprene Pads at Roller Hangers

40. In addition to the installation of vibration isolation on plumbing piping and HVAC riser piping, appellant also contends that the Government's insistence that sheet metal shields and neoprene pads be installed at roller hangers was also not required under the contract. Certain large diameter pipes called for in the NOAA project were to be supported by roller hangers. These hangers support the pipes from above but allow for lateral movement of the pipe, as a result of expansion and contraction, on a roller incorporated into the bottom of the pipe hanger. Between the bottom of the large pipe and hanger roller is a metal shoe. Although the contract specifications called for spring vibration isolators to be used with roller hangers, the parties eventually realized that the two were incompatible since the spring isolator would allow the roller hanger to move rather than the pipe to move on the hanger's roller. Transcript at 366; Appellant's Trial Exhibit 5. T&S's vice president and operations manager testified that there were RFIs on the matter and meetings to discuss the RFIs. T&S was finally directed to remove the spring isolators on the hanger rollers already installed and to use on those roller hangers and all additional roller hangers an alternative form of vibration isolation. The alternative method involved inserting between the metal shoe and the hanger roller two sheet metal shields separated from each other by a neoprene pad. Transcript at 369-70; Appellant's Trial Exhibit 6; Appeal File, GSBCA 14877, Exhibit 8 at 8, 18-19. T&S contends that the retrofit of roller hangers to remove the isolator springs and replace them with the sheet metal shields and neoprene pad constituted a compensable change. Transcript at 371 -73.

IV. HPCC's Claim

41. By letter dated October 2, 1998, HPCC submitted a certified claim to the contracting officer in the amount of $582, 140. Included in HPCC's claim was a T&S claim for $479, 730. Both the general contractor's claim and that of its subcontractor, T&S, concerned additional costs said to have been incurred as a result of disagreements over vibration isolation required under the contract. Appeal File, GSBCA 14877, Exhibit 11.

42. T&S's portion of appellant's claim explains that the subcontractor's claim involved five areas of disagreement or concern. The first and primary issue was the Government's insistence that the contract required installation of vibration isolation on the building's plumbing system. The second area of disagreement was on whether the contract required isolation on all vertical riser HVAC piping. A third area of concern to T&S was the recovery of costs associated with another alleged change, namely, the Government's directive to install shields with neoprene lining between them above the roller in roller pipe hangers. The fourth item underlying T&S's claim was recovery of the costs of complying with all of these vibration isolation demands not just to the extent that they related to the base contract but also to the extent that they applied to work called for in change orders already negotiated and settled before the Government made these demands known to T&S. Fifth and finally, T&S sought reimbursement for the incremental costs directly attributed to the initial incorrect response of the Government to RFI 305, namely, the cost of retrofitting HVAC piping in building B with vibration isolation. Appeal File, GSBCA 14877, Exhibit 11 at 33-34.

43. In addition to the usual markup of T&S's claim, HPCC's portion of the October 2 claim involved the general contractor's costs of quality control and scheduling support associated with the vibration isolation work said to be in excess of base contract requirements. Appeal File, GSBCA 14877, Exhibit 11 at 2-3.

44. When no contracting officer's decision was rendered on the October 2 claim within the time specified by law, counsel for HPCC, by letter dated January 15, 1999, filed at the Board a notice of appeal from a deemed denial of the claim. In a decision dated April 8, 1999, however, the contracting officer confirmed denial of the claim and wrote:

Due to the all-inclusive provisions of Section 15241, it is the decision of the Contracting Officer that the contract documents clearly detail the requirements and locations for vibration isolation. The claim is therefore rejected in its entirety.

Respondent's Supplemental Appeal File, Vol. 27, Exhibit G237.

45. HPCC's claim of October 2, 1998, incorporated T&S's claimed vibration isolation costs through September 18, 1998. Appeal File, GSBCA 14877, Exhibit 11 at 38. T&S has since updated its claim by $ 1097 to a total of $480, 827. Appellant's total claim as it currently stands is, therefore, broken down as follows:

Appellant's Supplemental Appeal File, Vol. 2, Exhibit 188 at 1 (unnumbered).

T&S's Component of Appellant's Claim

46. T&S's claimed costs break down as follows:

Appellant's Supplemental Appeal File, Vol. 2, Exhibit 188 at 3 (unnumbered).

47. In order to track costs incurred in installing vibration isolation for which T&S contends the Government is responsible, T&S established a cost code, namely 99258, to which all field labor and material costs associated with the added vibration isolation work were coded. Only costs for vibration isolation work that was deemed by T&S to be outside the scope of contract requirements were coded to this account. This included the retrofitting of HVAC piping in block B. Transcript at 94-96, 194-95, 307-12. T&S's project manager and operations manager both testified that when the disputed vibration isolation work was performed by a crew member, the foreman would ensure that this code was used in making the appropriate entry on the individual's time card. Time cards were subsequently reviewed for accuracy by the general foreman as well as the project manager before being entered in the company's accounting system. Id. at 95,307-08.

48. At the hearing, T&S's portion of appellant's claim was explained by T&S's vice president and operations manager. He stated that the company's claim of $163,566 in labor costs associated with vibration isolation work which was considered to be over and above contract requirements is based on the total of labor costs listed in the project control analysis under cost code 99258. Similarly, T&S's claim of $90,027 for material associated with this same work is based⁴ upon data in the same cost code. Transcript at 307-12. A copy of the project control analysis in the record confirms the operations manager's explanation. Appellant's Supplemental Appeal File, Vol. 2, Exhibit 186 at 24. Appellant has also provided for the record source documents supporting the entry of labor and material costs in cost code 99258 and the summarization of that data in the aforementioned project control analysis. Id, Exhibits 182, 187.

49. T&S's operations manager also testified that the claim for $13,954 for “subcontracts” represented the costs of vibration testing by an independent contractor. He explained that not all of the cost of this testing was assigned to testing of the vibration isolation in dispute. Rather, fifty-seven percent was deemed to be allocable to the installation of the disputed isolation. This was based upon the fact that fifty-seven percent of the pipe hangers purchased for the project were hangers used for the installation of the plumbing system. Transcript at 329-30.

50. T&S's operations manager further testified that the costs claimed for equipment, small tools, other costs, consumables (such as fuel and saw blades) and project management (project manager, project engineer, etc.) were calculated as a percentage of T&S's direct labor costs incurred in performing the added scope of work. This calculation was based upon the ratio between T&S's total project costs for each category and T&S's total direct labor costs on the project. For example, to calculate T&S's claim for equipment cost, the witness took T&S's total project cost for rental equipment and divided it by T&S's total project cost for field labor in order to determine what percentage equipment costs represent vis-a-vis the labor dollars on the project. The result was 17.27%. He then multiplied T&S's claim of $163,000 for field labor associated with vibration isolation to determine an equipment cost proportionate to this labor cost. T&S's operations manager explained that this methodology for calculating the cost of labor-driven categories such as these is consistent with T&S's practice. He also noted that, in his experience working with other well established mechanical contractors he had used the same methodology. Transcript at 331-42. A GSA auditor familiar with appellant's claim was called to testify regarding the claim. In the course of his testimony he explained that it is the custom of GSA normally to view tool and equipment costs as time-related. Nevertheless, he readily acknowledged that such costs could possibly be viewed instead as labor-related. Id. at 2603.

51. As to the $53,977 sought by T&S under the heading “Foreman & Superintendent, ” T&S's operation manager testified that the figure was arrived at using the average union formula for the man-loading projects. Because this too is a labor-driven issue, the amount calculated for the costs of foremen and superintendents is arrived at by multiplying the cost of field labor by certain agreed-upon percentages. He further explained that this is “pretty much the standard” and in fact was used in the negotiation of change orders under instant contract. Transcript at 342-47,353. Appellant has submitted for the record, and T&S's operations manager explained in some detail, the provisions of one of the union agreements dealing with the man-loading formula. Id. at 347-49; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 197.

52. Finally, T&S's operations manager testified that the percentage markups for warranty (one percent), overhead (twelve percent), and profit (ten percent) are the same markups that the Government consistently allowed on change orders involving T&S's work throughout the NOAA project, while the claimed bond markup (.7 percent) is less than that claimed and allowed by the Government (1.2 percent) during the project. Transcript at 349-57; Respondent's Supplemental Appeal File, Vol. 5, Exhibits CR136 at 27, CR206 at 10.

53. T&S's claim, as presented to GSA and as set out above in Finding 45, does not contain a break-out according to the various vibration isolation issues that comprise the claim. See Finding 46. During his direct examination, however, T&S's operations manager was asked to describe how the claim could be broken out if expressed in terms of those issues. In late 1997, after T&S was directed to proceed with the installation of the disputed vibration isolation, T&S's operations manager and the company's project manager for the NOAA project together prepared estimates of what the additional work would cost in terms of material and labor. These estimates were included in a cost proposal on vibration isolation which was put forward by HPCC in early 1998. Appeal File, GSBCA 14877, Exhibit 8. Using these estimates, T&S's operations manager at the hearing placed the cost of retrofitting the horizontal hydronic piping in block B at approximately $65,000. Id. at 11; Transcript at 360-61. The cost of installing vibration isolation on vertical risers was estimated to be approximately $4000. The balance of T&S's $480,827 claim was said to consist of the cost of installing vibration isolation on the building's plumbing system (including the retrofit of plumbing piping already installed without this isolation). Transcript at 361-65.

HPCC's Component of Appellant's Claim

54. HPCC's own costs relating to its vibration isolation claim are as follows:

Appellant's Supplemental Appeal File, Vol. 2, Exhibit 188 at 2 (unnumbered).

55. Appellant's chief witness for the costs incurred by HPCC as a result of the controversy regarding vibration isolation was the general contractor's project manager for the NOAA project. This witness has worked in the construction business for many years and in various capacities. He has worked for HPCC for seventeen years, starting as a field engineer and later moving up to the position of superintendent and project engineer. For the last twelve years he has served as a project manager for HPCC. He testified that throughout the many years he has worked in construction, he has never seen a requirement for vibration isolation on plumbing piping. Transcript at 237-42.

56. HPCC's project manager testified that the general contractor's direct costs associated with the vibration isolation dispute were limited to additional quality control and schedule support primarily during an eight-month period from November 1997 to June 1998. During this period, HPCC's two quality control inspectors monitored the retrofitting of piping already installed in blocks D and C and the further installation of the disputed isolation in blocks D, C, B, and A. HPCC estimated that the additional quality control during this period was approximately forty hours a month. The labor rate of $45 an hour is one established early in the project and used consistently to price quality control work in change orders negotiated during the project. 

Transcript at 247-54; Appeal File, GSBCA 14877, Exhibit 11 at 3. The claim for additional scheduling support was based on an estimated eighty hours. The support was deemed necessary in view of an increase in contract scope of almost a half million dollars. According to HPCC's project manager, the Government's insistence on additional vibration isolation added several new activities which required analysis and entry into the critical path schedule (which is the major portion of the schedule support effort) and subsequent tracking from month to month. The labor figure of $75 an hour represents HPCC's costs for that schedule support. Transcript at 254-55, 272; Appeal File, GSBCA 14877, Exhibit 11 at 3. HPCC's project manager also testified that the labor burden of 49.36 percent, and the small tool, overhead, and profit markup used for the general contractor's component of the isolation claim, are those consistently used in negotiating contract change orders. Transcript at 255-59.

57. As to appellant's overall claim, HPCC's project manager testified that the markup often percent commission on subcontractor costs has been previously accepted by GSA on fully executed contract modifications. So likewise with regard to the markups for general liability and builder's risk insurance, performance and payment bond, and tax payable to the City of Boulder. Transcript at 259-61. Indeed, this witness confirmed that these same last three markups were allowed when the Government audited HPCC's related labor productivity claim. Id. at 261-62; Appellant's Supplemental Appeal File, Vol. 2, Exhibit 190 at A-l to A-4.

Discussion

The Isolation of Plumbing Piping

Appellant reads Section 15241 on noise and vibration control as applicable only to the building's HVAC or hydronic piping system. The Government, instead, contends Section 15241 is applicable to all systems not expressly exempt from the specification. We find appellant's interpretation to be the correct one.

The principal disagreement between the parties centers on the meaning one is to give to the term “mechanical” as that term is used in Division 15 of the contract specifications. GSA is of the opinion that it is to be understood at all times in an univocal sense as inclusive of all systems normally falling within the purview of mechanical contracting and not just HVAC systems. Appellant instead insists that in mechanical contracting, “mechanical” primarily connotes the HVAC systems — as distinct from plumbing and other systems. The truth of the matter is that, within Division 15, the term is used in both the broad sense and the more restrictive sense. Perhaps the strongest support for the Government's position is in the one-word title of Division 15, namely, “Mechanical, ” or in the reference to “mechanical systems” in Section 15145. Findings 3, 28. Yet Division 15 does, on occasion, depart from this use of the term “mechanical” in its broad sense in favor of a more restricted use. In the very first section of Division 15, namely Section 15010, which deals with “Basic Mechanical Requirements, ” there are provisions which distinguish “mechanical” and “plumbing.” One provision goes so far as to refer to “mechanical, plumbing and fire protection drawings and specifications” (emphasis added). Finding 27. A critical question arises, therefore, when one encounters the term “mechanical” in the introductory paragraph of Section 15241, where it is stated that this section applies to noise and vibration equipment, devices and requirements for “mechanical and electrical” systems and equipment. See Finding 29.

Evidence of trade practice and custom is an acknowledged part of the initial assessment of contract meaning. Metric Constructors. Inc. v. National Aeronautics and Space Administration. 169 F.3d 747, 752 (Fed.Cir. 1999); accord Gholson, Byars & Holmes Construction Co. v. United States. 351 F.2d 987 (Ct. Cl. 1965) (the language of a contract is to be given effect according to its trade meaning notwithstanding that in its ordinary meaning it is unambiguous). So far as trade practice and custom are concerned in this case, the evidence provided regarding vibration isolation of plumbing piping and the distinction made in the trade between “mechanical” and “plumbing” work has proven to be particularly useful.

T&S is one of the oldest and largest mechanical contractors in Colorado. Finding 3. The cumulative professional expertise of T&S's president, vice president, and project manager and HPCC's project manager is extensive. Findings 8, 17, 25, 55. These officials, when called to testify, consistently contended, in what we deem to be a highly credible manner, that they had never seen a requirement for vibration isolation on a plumbing system. Findings 10, 17, 25, 55. T&S's officials also explained that “mechanical” in the field of mechanical contracting is primarily used to connote HVAC systems, as opposed to other systems with which a mechanical contractor may be involved. Findings 21, 25.

We realize that the testimony of these witnesses on these issues should be weighed carefully since it could be deemed to be self-serving. However, we find the testimony of these individuals convincing not only because of their apparent credibility but because their testimony regarding trade usage and custom is supported by the documentation and the testimony of others not necessarily sharing their interests. CRSS's field engineer and mechanical inspector testified that he too had never seen a requirement for vibration isolation on plumbing piping. He also, while testifying, distinguished the work in the mechanical room on the garden level of block D from the plumbing and HVAC piping on the first level. Finding 13. Indeed, even the principal author of Section 15241, although claiming that there is no distinction between “mechanical” and “plumbing, ” from a “design responsibility” standpoint, nevertheless admitted that such a distinction is possible for contractors so far as implementation is concerned. Finding 23. Further, excerpts from the UMC and the UPC provided by T&S's operations manager likewise support the contention that in the trade “mechanical” is often understood as relating to HVAC and is seen as distinct from plumbing. Finding 25. Finally, we note a similar distinction made by one of the Government's expert witnesses in an exhibit included in his report. This individual was recognized by the Board as an expert in schedule analysis with a component of that analysis relating to labor inefficiency. Transcript at 2346. The exhibit in question deals with RFIs submitted during the course of the project. It is identified in the expert's report as “Plumbing/Mechanical RFI Log.” In addition to listing RFIs individually, this exhibit also categorizes the RFIs by the “discipline” said to be involved. Principal among the disciplines mentioned are one for “plumbing” and a separate one for “mechanical.” Respondent's Supplemental Appeal File, Vol. 23, Exhibit G234 (Exhibit 3).

We, therefore, find nothing unreasonable in T&S concluding from the start that Section 15241 used the term “mechanical” in the more restrictive sense and that the section, therefore, did not apply to plumbing systems but only to hydronic piping of the building's HVAC system. The correctness of T&S's conclusion is particularly enhanced by the abundant references in the preliminary paragraphs of Section 15241 to other sections of Division 15 — nearly all of which concern the HVAC system and none of which refer to sections of Division 15 that deal with other piping systems such as plumbing piping or laboratory piping. Finding 29.

It is not, however, merely the wording of Section 15241 which supports the correctness of appellant's position regarding its application. T&S's perception of the applicability of this section in terms of the overall context of Division 15 also strikes us as preeminently reasonable. See Findings 34-35. Not surprisingly, as the subcontractor responsible for the installation of nearly all of the various piping systems called for in Division 15, T&S gave particular attention to Section 15145 concerning hangers and supports. It is this section which expressly provides that hanger requirements are listed in those sections specifying equipment and systems. Finding 28. In reviewing those sections specifying equipment and systems for the three principal types of piping, namely, Section 15410 (Plumbing Piping), Section 15415 (Laboratory Plumbing), and 15510 (Hydronic Piping), there is no reference to Section 15241 (Noise and Vibration Control) in any of the three sections other than in Section 15510 (Hydronic Piping). See Findings 31-33. Indeed, the single reference in Section 15510 to Section 15241 does not even appear in the introductory paragraph of the section. Rather, it appears in one of the final paragraphs of this section, namely paragraph 3.3, which deals with pipe hangers and supports. Finding 33. This, in the mind of T&S officials, only serves to confirm their contention that Section 15241 relates only to the HVAC system.⁵ We find this conclusion as to the applicability of Section 15241 when seen in the context of other sections of Division 15 relating to the various required systems to be well reasoned and amply supported by the contract specification as written.⁶

In contrast, the Government's position regarding the applicability of Section 15241 is incorrect precisely because it ignores the context in which the T&S officials have interpreted the applicability of that section. The Government contends that “all piping” as the term is used in paragraph 3.1 of Section 15241 is “all-inclusive” and that the section, therefore, applies to all horizontal piping regardless of the system in which it is used. Finding 36. This interpretation ignores the apparent intent and the meaning experienced mechanical contractors would attribute to other sections of Division 15, which relate to the individual systems and their specific requirements. We of course agree with the Government that the definition of “pipe, ” as given in Section 15010, applies to the term as it is used in Section 15241 or, for that matter, in any other section of Division 15. From this it does not follow, however, that when the term “piping” is qualified with the term “all” that this phrase cannot be restricted by the context of the section itself. Since we find T&S's conclusion that Section 15241 applies only to hydronic piping to be reasonable, the term “all piping, ” as appearing in that section, can and should be understood as referring to all hydronic piping and not necessarily as inclusive of all piping in other systems as well.

One argument raised by the Government and perhaps worthy of note is that reference to the exclusion of emergency fire sprinkler piping from the requirement for vibration isolation in paragraph 3.1 of Section 15241 would be superfluous if the intent of the specification was to make this section applicable only to hydronic piping. We find the argument less than convincing. The particular provision is safety-related. The contractor is advised that no equipment, hanger, isolators or other suspension apparatus may be suspended from or make contact with sprinkler piping. Finding 30. We see no reason why, for safety reasons, it would not be advisable to include such a provision in Section 15241 even if the provision is applicable only to hydronic piping.

When asked about the absence of a reference at the start of Section 15241 to a section in Division 15 which relates to plumbing piping, the principal author of Section 15241 replied that this initial listing of related sections was not said to be all-inclusive. Finding 24. This is of course correct. The introductory paragraph does in fact advise the reader to review all sections of Divisions 15 and 16 for additional requirements that may relate to the work of this section. Finding 29. Nevertheless, the author's response strikes us as unduly defensive. If the requirement for vibration isolation of plumbing piping was as unusual as she admits it to be, one would certainly expect the sections dealing with plumbing piping to be highlighted in the listing of related sections appearing at the beginning of Section 15241. Furthermore, we find this initial listing significant not only for what is absent from it but also for what it actually contains. The majority of the sections which are listed as related concern the building's HVAC system. Finding 29. If the author's intent was, as she states, to make this section equally applicable to all piping systems (Findings 22, 24), this extraordinary emphasis on sections relating to HVAC and the absence elsewhere in the section of any reference to its applicability to other piping systems not only fails to reflect this alleged intent but is in fact misleading. In short, if Section 15241 was intended to apply to plumbing piping, then in both wording and format, the section clearly falls short of this purpose. Perhaps this is attributable to the author's lack of direct involvement in the preparation of any section of Division 15 other than Section 15241. See Finding 23. Whatever the reason may be, we remain convinced that, as written and viewed in context with the sections of Division 15 relating to other piping systems, Section 15241 applies only to HVAC or hydronic piping.

Although the parties are in disagreement as to the interpretation of provisions in Section 15241, neither contends that these provisions are ambiguous. Contracts are not necessarily rendered ambiguous by the mere fact that the parties disagree regarding the meaning of their provisions. Brunswick Corp. v. United States. 951 F.2d 334, 337 (Fed. Cir. 1991). In this particular case, we do not find the requirements in paragraph 3.1.D of Section 15241 calling for vibration isolation on “all piping” to be ambiguous. As already noted, from the text of the section itself as well as from cross-references in this section to related sections and from the absence in other sections of cross-references to this section of Division 15, we agree with HPCC and T&S that Section 15241 relates to hydronic piping and does not include plumbing piping. Admittedly, the term “mechanical” is used in the specification in more than one sense. This, however, in and of itself, does not necessarily render the specification ambiguous or preclude a careful reader from understanding the proper meaning of the term from the context in which it appears.⁷

Respondent complains that there is insufficient evidence in the record that T&S in preparing its bid did in fact rely on the assumption that the requirements in Section 15241 were applicable only to hydronic piping. Given the conclusion we reach here that the section is applicable only to hydronic piping, such a showing of actual reliance is hardly necessary. Nevertheless, nothing in the record persuades us that T&S did in fact change its position on this issue. T&S's president was involved to some degree in the bidding process and, since the start of this dispute, has made it his business to look into how the company's bid was prepared. Finding 11. He remains convinced that T&S, in preparing its bid, did not believe that vibration isolation was required on plumbing piping. Finding 10. Other testimony from this witness as well as from other experienced T&S and HPCC employees supports the conclusion that it would be highly improbable that a mechanical contractor would assume that vibration isolation would be required for plumbing piping. Findings 9-10, 17, 25, 55.

If anything, the evidence in the record for this appeal strongly suggests that it was not the general contractor or its subcontractor which suffered a change of mind on the need to install vibration isolation on the plumbing piping, but rather the Government together with its consultants and representatives. T&S contends that the initial dispute regarding the need for vibration isolation took place prior to October 1997 and was limited to the requirement to install it with HVAC piping in block B. This dispute eventually led to the revision of the Government's answer to RFI 305 in early October 1997. Findings 16-18. The evidence persuades us that it was this initial controversy that spurred the Government into a more thorough examination of Section 15241 which eventually led it to conclude incorrectly sometime in October that vibration isolation was required by this section not just for HVAC piping in block B but for all piping systems throughout the building — including plumbing piping. Finding 19.

Only the testimony of CRSS's inspector suggests any concern on the part of the Government about the lack of vibration isolation on other than HVAC piping prior to October 1997. We have serious difficulty, however, with the credibility of this witness. Given his position and responsibility, it is nothing short of astounding that he would do nothing regarding this alleged deficiency for two or three months notwithstanding his being well aware that the installation of plumbing piping without vibration isolation was continuing throughout this period. Nevertheless, the only documentary evidence of his alleged concern is a letter to HPCC dated October 7. He himself testified that, before that time, he did not advise the general contractor of his concern, issued no FON on the matter, and does not recall whether he even advised his supervisor at CRSS of the problem. Findings 14-15. The inspector's suggestion at the hearing that contract compliance was ultimately the responsibility of the general contractor's quality assurance team hardly explains his prolonged silence on such a significant issue. See Finding 15. It also is a puzzling remark in view of the fact that it was still his responsibility to issue a FON when required.

Given the record before us, therefore, we are persuaded that the position of HPCC and T&S on the absence of any requirement for vibration isolation on plumbing piping has been consistent from the outset. Any change in position on this issue is attributable to Government rather than the general contractor or its mechanical subcontractor.

Accordingly, we conclude that appellant and its subcontractor, T&S, correctly and consistently interpreted the contract as not requiring vibration isolation on plumbing piping and that the Government's insistence on the installation of this isolation constituted a contract change for which appellant is entitled to compensation.

Isolation of HVAC Riser Piping

The contract provision regarding the isolation of HVAC riser piping is relatively straightforward. It reads:

Provide pipe riser vibration isolation at all vertical pipe riser support locations within the first 50 ft. of piping from the connected equipment. Refer to the Drawings for detail.

Finding 30. T&S's project engineer testified that CRSS's inspector insisted that vibration isolation be installed on all vertical HVAC risers and compressed air and vacuum lines for vertical plumbing already installed in blocks C and D. Finding 37. The inspector agrees that this was a matter of disagreement with T&S's project engineer but states that he insisted on the installation of vibration isolation only on the vertical HVAC risers but not the plumbing risers. He further contends that he did so because, upon consulting a contract drawing he saw that all HVAC risers but not the plumbing risers were shown as having this isolation. Finding 38. The Government contends that appellant has not contested the inspector's determination based upon the drawing and that this determination should, therefore, be assumed to be correct. Respondent's Posthearing Brief at 100.

We are not prepared to make such an assumption. As already noted, we found the testimony of this inspector on other matters lacking in credibility. We find his testimony regarding the requirement for isolation on risers equally lacking. When pressed on cross-examination regarding the drawing, this witness replied that he had not reviewed the contract in preparation for his testimony and that he could not even recall which drawing contained the alleged detail regarding HVAC risers. Finding 38. We find the testimony of T&S's project engineer on these matters considerably more credible and enlightening.

Where, however, does this leave us? The scant evidence provided to us by the Government is insufficient to convince us that a contract drawing or drawings conflicted with the plain meaning of the written specification. The inspector's insistence on the installation of vibration isolation not just on risers actually connected to equipment but on other risers situated within fifty feet of such equipment does not appear, therefore, to have been required by the contract. Nevertheless, nothing in the record indicates that this dispute between the T&S representatives and the CRSS inspector was elevated to a higher level or ever made the subject of a written notice. Finding 39.

The appellant contends that the inspector's insistence on the installation of additional vibration isolation on the risers constitutes a constructive change. Appellant's Posthearing Brief at 77. We think not. Typically, under the Changes clause, for a claimant to prevail on such a theory, it must demonstrate that the additional work was actually called for or ratified by the contracting officer or by someone authorized to act on his or her behalf. Michael Weller, Inc. v. Office of Navajo and Hopi Indian Relocation. GSBCA 10627-NHI, et aL., 94-2 BCA ¶ 26, 849, at 133, 611. affd sub nom. Michael Weller. Inc. v. Bavasi. 132 F.3d 53 (Fed. Cir. 1997) (table); Jordan & Nobles Construction Co.. GSBCA 8349 et al., 91-1 BCA ¶ 23, 659, at 118, 511 (1990); Fan Inc., GSBCA 7836, et aL., 91-1 BCA ¶ 23, 364, at 117, 186 (1990); Gricoski Detective Agency. GSBCA 8901, et aL., 90-3 BCA ¶ 23, 131, at 116, 144. There is no evidence here that this in fact occurred. The contract inspection clause expressly states that the Government's inspector is not authorized to change contract requirements without the contracting officer's written authorization. Finding 2. Appellant has not convinced us that this disagreement between the T&S employees and the inspector became the subject of a specific challenge elevated to a level above the inspector or that the inspector had the requisite authority to insist on such a change in contract requirements. Accordingly, we deny this portion of appellant's claim.

Installation of Sheet Metal Shields and Neoprene Pads at Roller Hangers

We can find nothing in respondent's posthearing brief which would suggest that GSA opposes this claim. Neither do we have the same objection to this claim, based as it is on a theory of constructive change, as we do with regard to the claim for the cost of installing vibration isolation on risers. The record contains unrebutted testimony by the vice president and chief of operations for T&S that the problem concerning the vibration isolation of roller hangers was the subject of RFIs and meetings discussing those RFIs. Finding 40. Unlike the dispute regarding the isolation of risers, the issues raised regarding roller hangers were resolved in accordance with a formal procedure which undoubtedly operated with the consent and support of the contracting officer.

RFI 305

Counsel for GSA contend that appellant's claim relating to RFI 305 (Findings 12, 17-18) represents a claim for equitable adjustment under the contract's Changes clause. Respondent's Posthearing Brief at 102. At the hearing, however, counsel for appellant repeatedly represented to the Board and to GSA counsel that the contractor's claim for costs resulting from a change in the reply given to RFI 305 is not based upon any alleged change in requirements. Transcript at 142-46. The testimony of T&S's project manager on cross-examination supports this contention. T&S clearly seeks only the incremental costs of having to go back and install vibration isolation on horizontal HVAC piping which had already been installed in block B without isolation per the guidance provided in the Government's first reply to RFI 305. Id. at 146-48. The theory of recovery on this portion of appellant's claim is a simple one. The Government's representatives, at the contractor's request, provided an interpretation of a specification which was ultimately found to be incorrect. Because the contractor relied upon this guidance to its detriment, GSA is expected to make the contractor whole for any damages resulting from the incorrect interpretation. We find the claimant's expectation reasonable under the circumstances.

GSA suggests that T&S's reliance upon the guidance provided in the first response to RFI 305 was unreasonable. According to counsel, both T&S and BCER, which provided the initial response, simply failed to read carefully an unambiguous contract provision. We disagree. The omission of any reference to block B in paragraph 3. I.D.I of Section 15241 does, in our opinion, give rise to a reasonable question as to whether this is a deliberate omission. If it is obvious that, in the absence of a reference to block B in 3. I.D.I, the provisions of 3.1.D.2 should be seen as applicable to block B, then that also raises an additional and equally reasonable question of precisely why the vibration isolation for piping in block B is not to be treated in the same manner as piping in blocks A, C, and D. See Finding 30.

Despite the contention of GSA counsel that the Government should not be liable for the consequences of the incorrect answer to RFI 305, the contracting officer himself has candidly testified that he believes that the Government owes T&S compensation for the retrofit required as a result of the incorrect answer provided to RFI 305. Transcript at 549.

Quantum

It is, of course, well established that the ascertainment of damages or of an equitable adjustment is not an exact science. The amount sought by a claimant need not be ascertainable with absolute exactness or mathematical precision. What is essential is that evidence be presented which is sufficient to enable a court or jury to make a fair and reasonable approximation. Electronic & Missile Facilities. Inc. v. United States. 416 F.2d 1345 (Ct. Cl. 1969); Specialty Assembling & Packing Co. v. United States. 355 F.2d 554 (Ct Cl. 1966); Wunderlich v. United States. 351 F.2d 956 (Ct. Cl. 1965); dark Concrete Contractors. Inc. v. General Services Administration, GSBCA 14340, 99-1 BCA ¶ 30, 280, at 149, 746. The evidence presented by appellant on the quantum of its claim regarding vibration isolation more than adequately meets this requirement. Indeed, GSA had made no effort to rebut this evidence but rather has chosen to focus its energies on the threshold issue of whether appellant is entitled to payment of the claimed quantum.

T&S's vice president and operations manager and HPCC's project manager both testified in a competent and credible manner regarding their companies' components of appellant's claim. Findings 47-52, 55-57.

T&S's establishment and use of a specific cost code obviously facilitated the systematic and reliable gathering of data regarding labor and material costs associated with the company's claim. Findings 47-48. Indeed, we conclude that it thus served as a reliable vehicle for identifying the costs associated with all five aspects of T&S's vibration isolation claim. See Finding 42.

We likewise find T&S's segregation of testing costs associated with the added vibration isolation work to be reasonably based. Finding 49. The same is true of the method used for calculating the costs of labor-driven items such as equipment, small tools, consumables, and project management as a percentage of direct labor costs associated with the added scope of work. The testimony of T&S's operations manager and the GSA auditor convinces us that this is an acceptable accounting method. See Finding 50. Indeed, as counsel for appellant points out, the approach is not without precedent. E.g., John Driggs Co.. ENGBCA 4913, 88-2 BCA ¶ 20, 530. T&S's calculation of the appropriate percentage, based upon the ratio of the total particular class of costs to the total project labor cost, appears to us to be reasonable provided the item in question is, as is the case here, labor-driven. As to the calculations of claimed amounts for foreman and superintendent, as

well as the standard markups for warranty, overhead, and profit, these also appear to be acceptable since they follow a methodology previously agreed to by the parties in negotiating contract changes (Findings 51-52) and GSA offers no reason why use of the same methodology here would be inappropriate.

As to the HPCC components of the overall claim, we find the estimates of additional time required for quality control and scheduling as well as the pricing of the same to be reasonably based. This is especially true with regard to the rate for quality control which is the same as that used in negotiating change orders involving similar services. As for the labor burden, markups for commission on subcontractor costs, general liability and risk insurance, bond, and tax, as appellant points out, GSA had previously agreed to similar rates in connection with negotiated change orders. Finding 56-57. As in the case of T&S's markups, in the absence of any specific objection from GSA, we see no reason why they should not be allowed here.

In view of our conclusion that T&S is not entitled to recover for the cost of installing vibration isolation on all HVAC vertical risers, we do not award appellant the entire amount claimed in GSBCA 14877. T&S's operations manager testified that he and the project manager had estimated that the cost associated with the installation of vibration isolation on vertical risers would amount to approximately $4000. Finding 53. We, therefore, have removed $4000 from the subtotal of $387,568 shown on T&S's portion of appellant's claim. See Finding 46. After application of the usual markups for overhead, profit, and bond to this reduced subtotal, we calculate T&S's portion of the claim to be $475,864. Substituting this revised figure for T&S costs of $480,827 shown in appellant's breakdown of its claim (Finding 45), we calculate that appellant is entitled to an award of $577,777, which with these adjustments is now broken down as follows:

GSBCA 14744: Labor Productivity Claim

I. Appellant's Claim

T&S's Evaluation of Impact and Acceleration Costs

58. By letter dated November 24, 1997, T&S provided HPCC, as general contractor, with an evaluation of additional costs already incurred and anticipated for completion of the NOAA project. These costs were said to result from directed acceleration of work and from the impact on base labor caused by “multiple changes, scope revisions and lack of proper timely information.” In its submission, T&S estimated that the acceleration costs and cumulative change impact costs would come to a total of $2, 290, 984. T&S noted that, of this amount, $ 1, 014, 262 represented the estimated cost breakout for directed acceleration. T&S observed, however, that because the acceleration took place while the work was being impacted by various delays and disruptions, it was extremely difficult to separate acceleration costs from impact costs. The quantification method used by T&S was that used in the Modification Impact Evaluation Guide of the Army Corps of Engineers. Included with this request was a copy of T&S's baseline entitlement schedule, the impacted base-line schedule extended, and the acceleration schedule — all of which, according to T&S, demonstrated that this subcontractor had been required to have substantially more men on site than was originally expected in order to accelerate the work and keep the project on schedule. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 47.

59. By letter dated November 24, HPCC forwarded to CRSS's project manager T&S's proposal of the same date regarding acceleration and impact costs. Included in HPCC's package was an overall project mitigation schedule (two diskettes). HPCC's forwarding letter stated:

As we have discussed as a group several times, there has been an impact on the project due to mechanical changes. It has been very difficult to assess. Even with this enclosed material in hand, we request a meeting with all prominent parties as early as next week to discuss the impact and costs and identify additional information needed to completely understand and evaluate costs and schedule.

Respondent's Supplemental Appeal File, Vol. 15, Exhibit G81.

Discussion of HPCC's Request

60. In early December 1997, HPCC and T&S representatives met with the contracting officer and other GSA and CRSS representatives to discuss the request for acceleration and impact costs. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 49. Through HPCC, T&S provided additional supporting documentation requested by CRSS. Respondent's Supplemental Appeal File, Vol. 15, Exhibit G84. By letter dated December 11, CRSS's project manager wrote to HPCC regarding T&S's proposal. He first observed that, in combining the request for acceleration costs with a request for impact or inefficiency costs, T&S had, in effect, made it impossible to resolve these claims. He stated that the two must be handled separately and that any claim for acceleration costs must be supported by a schedule showing the additional resources allocated to specific activities in quantities sufficient to remove the negative float and maintain the current completion date. As for the impact claim, the CRSS project manager noted, among other things, that the methodology used to quantify this portion of T&S's request was unacceptable since it did not take into account other factors which could account for labor overruns, such as errors in bid preparation, coordination with other trades, labor shortages, and time lost on unacceptable work. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 51.

61. In a second letter to HPCC, also dated December 11, 1997, the CRSS project manager advised that the mitigation or recovery schedule recently submitted by HPCC required a narrative to explain each of the various revisions. It was also pointed out that, pursuant to the contract, any revision to activity manpower such as those in this proposed schedule revision required the performance of a time impact analysis. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 52.

62. When asked by HPCC to respond to the two CRSS letters of December 11, T&S pointed out that separate figures had been provided for acceleration and impact costs. The company vice president further observed that he could well understand why CRSS and GSA were finding it difficult to understand how best to quantify the impact of the pervasive changes made in the contract work. He suggested that perhaps some thought should be given to converting partially T&S's subcontract into a cost reimbursement-type contract in order to relieve the contractor of the high degree of risk associated with the numerous changes. In any event, T&S declined to provide further information, pointing out instead that the information now being sought by CRSS had already been famished. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibits 53-54, 56.

63. On January 5, 1998, T&S and HPCC officials met with the contracting officer and other representatives of GSA and CRSS. T&S's proposal regarding acceleration and impact cost was again discussed at some length. The minutes for that meeting state:

GSA informed HPCC and Trautman & Shreve of what needs to be provided to GSA for their review:

- Corps of Engineers Modification Impact Acceleration Guide (this must be acceptable to GSA)

- Proposal

- Daily Logs from Trautman & Shreve

- Trautman & Shreve basis of original bids & estimates[.]

GSA handed out the necessary information and stated that if reasonable value can be determined[, ] Trautman & Shreve will be compensated. A form 1411 will be transmitted to HPCC and T&S.

Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 57.

64. During the month of January 1998, HPCC, as agreed during the meeting of January 5, provided to the contracting officer through CRSS a copy of the Modification Impact Acceleration Guide of the Corps of Engineers, a copy of its pricing proposal of November 24 accompanied by a prepared standard form 1411, a copy of T&S's daily reports, and confidential information regarding T&S's original bid and estimates. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 61; Respondent's Supplemental Appeal File, Vol. 15, Exhibits G106-G107.

The Acceleration Issue

65. At this same meeting on January 5, T&S officials asked if they should continue acceleration. This led to a discussion of whether T&S had in fact been directed to accelerate. T&S suggested that the matter be “defined” within the next few days. Appellant's Supplemental Appeal File, GSBCA14744, Exhibit 57. This discussion regarding acceleration prompted GSA's project manager to send a memorandum to the contracting officer. The memorandum, dated January 6, noted that the statement made at the meeting by T&S's chief executive officer that T&S was directed to accelerate its work was untrue. Rather, the GSA project manager wrote that T&S's project manager in the summer of 1997 announced that the company was bringing additional people to the project to perform work instead of having employees work overtime. According to the GSA project manager, this decision on the part of T&S did not result from any request from either CRSS or GSA. The GSA project manager's memorandum also noted that acceleration had been requested only for the underground plumbing in block B and that this had been covered by contract modification PS-34. Respondent's Supplemental Appeal File, Vol. 15, Exhibit G95.

66. By letter dated January 9, 1998, the contracting officer provided HPCC with the requested clarification of the acceleration issue. He noted that early in the discussion regarding the HVAC changes covered by Change Request (CR) 85, T&S had advised that it would add additional resources to the project to mitigate the effect of these changes. The contracting officer noted that GSA did not object to this approach but that, in the final analysis, it was the responsibility of the contractor to prosecute the work in accordance with the detailed construction schedule so as to meet the project completion date of December 11, 1998. Nevertheless, the contractor was invited to submit cost and pricing data in support of its pending pricing proposal to see if the costs sought are “reasonable, allowable and allocable to the changes.” Respondent's Supplemental Appeal File, Vol. 15, Exhibit G98.

67. T&S was distressed by the contracting officer's letter of January 9. In a letter dated January 13 to HPCC's project manager, T&S's vice president and operations manager wrote: “Verbally, the Government and CRSS have been very supportive of our extraordinary efforts (and expenditures) aimed at bringing this drastically changed project in on schedule. In writing, however, Trautman & Shreve is being abandoned.” The contracting officer's letter was seen by T&S as an implied denial by the Government of any responsibility whatsoever for impacts to the project schedule. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 63.

68. In an attachment to his letter of January 13 to HPCC, T&S's operations manager offered for the record some key points for consideration. He contended that T&S was, in fact, directed to accelerate the schedule to mitigate impacts caused by the HVAC changes called for in CR85 and that this direction was given after it became clear to all concerned that this was the most beneficial recourse for the owner. He asked for an immediate meeting with the owner to determine whether this acceleration should continue. If it were not to continue, then, in his opinion, the contractor should be given time extensions in view of the direct and indirect impacts of CR85. T&S's operations manager also noted that because the project completion date of December 11, 1998, did not reflect either the direct or indirect impacts to the present contract schedule created by CR85, a final revision of that schedule could not be done without prior agreement on how the impacts of CR85 were to be accommodated. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 63. T&S's letter and attachment of January 13 were forwarded to the contracting officer by HPCC by letter dated January 14. M, Exhibit 66.

69. By letter dated January 30, T&S's operations manager wrote HPCC again on the issue of acceleration or schedule extension as an alternative to acceleration. He listed twenty-three change order requests (CORs) previously submitted by T&S which had led to various change orders. He pointed out that each COR had included a request for an extension of time (and related costs) but that during negotiations CRSS's representative had requested that extension and/or acceleration costs be handled in a separate change order. Upon review of the twenty-three CORs identified in this letter, T&S concluded that it was entitled to 108 days of extension for the changes in question. Not included in these CORs was COR 155 (which dealt with HVAC system changes). Under that COR alone, T&S contended that it was entitled to an additional sixty days of extension. The letter provided what were said to be schedule fragnets (see Finding 95) for the twenty-three listed CORs. The letter closed with the observation that these time extensions should be born in mind by CRSS and GSA as they proceeded to evaluate the acceleration and cumulative impact costs being sought. Respondent's Supplemental Appeal File, Vol. 16, Exhibit G113. By letter dated February 4, HPCC forwarded this submission of T&S to CRSS with the request that a decision be made promptly on whether GSA wished to extend the contract or accelerate to compensate for the schedule impact. Id., Exhibit G115.

70. Even before receiving T&S's submission of January 30, CRSS's project manager advised HPCC, in a letter dated February 3, 1998, that GSA had approved a $50,000 payment on an activity number listed on a pending pay request submitted by HPCC. The item in question related to “Costs associated with Directed Acceleration and Impacts” and amounted to a total of $2,290,984. HPCC was directed to enter the $50,000 into its pending pay request. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 70. A letter in the record from the CRSS project manager to the GSA contracting officer sheds some light on this payment. The letter states:

CRSS rejected the first Hensel Phelps pay request dated February 2nd because it included costs for what the contractor believes to be costs for accelerating CR #85. This scope is not negotiated or reflected in a contract modification. However CRSS and GSA agree to pay $50,000 toward the contract modification on this pay request.

Respondent's Supplemental Appeal File, Vol. 16, Exhibit G117. Attached to this letter is a GSA Form 184 (Construction Progress Report), which has the following explanatory note bearing the initials of the CRSS project manager:

The $50,000 payment does not have a contract modification, but it is expected that the resolution of the impacts relating to CR 85 will be decided by the contracting officer in 2 or 3 weeks. The $50,000 is a good faith progress payment in relation to CR 85.

Id. Following this payment, HPCC requested that GSA pay additional funds on the T&S acceleration issue. By letter dated March 3, 1998, the contracting officer advised the general contractor that no additional payments would be made “pending resolution of the issue as a whole.” Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 72.

71. At the hearing, the contracting officer testified that the $50,000 payment he approved at this time was based upon recommendations received from the Government's scheduling consultant. He explained that he had asked for an analysis in order to determine, at least in rough terms, what his maximum exposure on this issue would be. The consultant concluded that CR85 did support an extension in contract performance. The contracting officer recalled that this was said to be approximately nineteen days. To mitigate the effect of this extension and bring the contract completion date back to December 11, the consultant is said to have recommended additional labor. The cost of this labor was estimated to be fifty or sixty thousand dollars. The amount in question was for only schedule impact, not cumulative impact. Transcript at 2097-98, 2135.

72. The record contains a letter to CRSS's project manager from the Government's scheduling consultant. It is dated February 9 and discusses the impact of CR85. It concludes that CR85 impacted the critical path of the baseline schedule by forty-seven days. See Respondent's Supplemental Appeal File, Vol. 19, Exhibit G198. At the hearing, the contracting officer when shown a copy of this letter was uncertain if he had ever seen it. Transcript at 2136. He later testified that the letter was simply provided to document his earlier discussions with the scheduling consultant. Id. at 3090. The letter's contents are not altogether consistent with the contracting officer's testimony. The letter speaks of a schedule impact of forty-seven days rather than nineteen and is based upon a completion date of November 4 rather than December 11, 1998.⁸

Revision of the Project Mitigation Schedule

73. In mid-February, after consultation with T&S, HPCC submitted to CRSS a revision of the N11A schedule, i.e. the project mitigation schedule, proposed to CRSS on November 24, 1997 (Finding 157). Appellant's Supplemental Appeal File, Vol. 2, Exhibit 166.

Further Discussion Regarding HPCC's Request for Acceleration and Impact Costs

74. By letter dated March 10, 1998, the GSA contracting officer advised HPCC that HPCC had failed to provide the factual data necessary to justify or even negotiate the equitable adjustment requested. Referring back to CRSS correspondence with HPCC in December 1997 (Findings 60-61), the contracting officer stressed the need to separate the request for acceleration costs from that for the costs of base labor impact. On acceleration, he stated that CRSS had performed an independent schedule analysis which showed an impact to the contract completion date. Nevertheless, he reminded HPCC that it could not be compensated for extra costs unless GSA first received the time impact analysis required under the contract. On the request for compensation for a base labor impact of the mechanical changes occasioned by CR85, he noted that the Modification Impact Evaluation Guide of the Corps of Engineers is not recognized by GSA and, indeed, no longer used by the Corps. Furthermore, he noted that HPCC's response to the CRSS letter of December 11 had not addressed the issue of costs not attributable to the owner and the projection of costs into the future. In view of these considerations, the contracting officer advised HPCC that GSA would not proceed further with review and negotiation of the present pricing proposal until these concerns were addressed in detail. This letter also rejected T&S's earlier proposal that the parties consider converting, at least in part, the current contract into a cost reimbursement type contract. The contracting officer pointed out that this was impossible since the Government was not in privity with T&S. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 75.

75. The contracting officer's letter of March 10, 1998, was distributed and discussed at some length at a meeting held on March 11 and attended by the contracting officer and representatives of T&S, HPCC, CRSS, and other representatives of GSA. The minutes for that meeting state:

T&S stated that they thought they had provided all the necessary information to GSA. GSA responded that they agree that there is an impact to the project, but there is not sufficient information to quantify that impact. Appellant's Supplemental Appeal File, Vol. 2, Exhibit 169. During this meeting, the participants discussed what method of assessment should be used to assess the base labor impact. CRSS confirmed the unacceptability of the Corps' method. The participants also discussed the fact that, aside from a handful of modifications, most had been signed with zero-day impact. CRSS questioned why schedule impact was not addressed at the time. HPCC representatives suggested that this was due to the absence of any time impact analyses. It was, therefore, suggested that the modifications be readdressed for schedule impact. Id.

76. Relying on representations made by GSA officials at the meeting of March 11 that they agreed there was an impact but were unable to quantify it, T&S prepared a submission shortly after the meeting. The submission proposed a specific methodology for analysis of impact on base contract work. T&S proposed the use of inefficiency percentages set forth in the Mechanical Contractors Association of America (MCAA) labor productivity bulletin to compute the value of impact and acceleration to both its changed and base contract work. It was noted that this method had been used before this Board. Before proceeding further on the matter, however, T&S sought confirmation from GSA that the proposed MCAA approach was acceptable at least in concept. Respondent's Supplemental Appeal File, Vol. 16, Exhibit G130. T&S's submission was forwarded to CRSS by HPCC by letter dated March 19, 1998. Id., Exhibit G 131.

77. A letter from the contracting officer dated March 20, however, advised HPCC that the contractor's underlying assumption that GSA believed that the base contract work had in fact been impacted was incorrect. The contracting officer wrote:

GSA has acknowledged that the manhours associated with the direct costs of CR-85 resulted in a schedule impact. This schedule impact is to the approved baseline schedule. GSA, through CRSS, has requested that Hensel Phelps provide an acceleration plan to mitigate this impact. This represents the total acknowledgment of entitlement to date.

The position of the Contracting Officer is that Hensel Phelps has yet to document an impact to base labor, and therefore no entitlement to inefficiency costs has been established nor recognized.

Appellant's Supplemental Appeal File, Vol. 2, Exhibit 171. The letter concluded with the suggestion that the contractor's time would be better spent attempting to prove entitlement rather than in proposing methods for calculating quantum. Id.

78. Later in March, HPCC forwarded to CRSS a hefty supplement (137 pages) to the submission on impact analysis already prepared by T&S and provided to CRSS by HPCC with its letter of March 19 (Finding 76). Respondent's Supplemental Appeal File, Vol. 16, Exhibits G133-G134. Thereafter, HPCC, on its own behalf and on behalf of T&S, asked for the opportunity to meet with CRSS and GSA on March 31 to discuss this supplemental submission. Id., Exhibit G136. The meeting was inconclusive. Appeal File, GSBCA 14744, Exhibit 3 at 13. A subsequent meeting was held on April 14 to discuss again the status of CRSS's review of HPCC's submissions. Little was accomplished. GSA and CRSS were not ready to discuss their assessment of the submissions. T&S asked twice whether any further information was necessary. CRSS replied that, at this point, there did not seem to be a need for further information, but that if a need did arise, T&S would be notified. Both HPCC and T&S spoke of the need to resolve this matter promptly. The amount being sought, over a million dollars, was said to represent work that had been in place since this dispute arose and which was continuing to be financed by the contractor. T&S's suggestion that it should be paid interest on this amount was rejected as impossible in the absence of a formally certified claim. Appellant's Supplemental Appeal File, Vol. 2, Exhibit 174.

CRSS's Comments on Revised N11A Schedule

79. To assist GSA and CRSS in their evaluation of the proposed N11A schedule and in response to their request, HPCC incrementally progressed and impacted (as necessary) the N11A service schedules for each month from October 1997 through February 1998. On March 25, 1998, schedule data disks were provided for evaluation. The balance of reports and plots, along with an extensive narrative, was submitted in early April. On April 3rd the parties met to discuss the submission. Respondent's Supplemental Appeal File, Vol. 18, Exhibit G152a at 6. By letter dated April 22, CRSS provided comments and suggested changes for the proposed mitigation schedule. Among several items provided for in the schedule but which CRSS wished to delete was one dealing with the installation of vibration isolation and another dealing with mechanical work impacts. Id., Exhibit G141. T&S objected to these and other proposed deletions and questioned how the Government could insist on the deletion of the mechanical work impact when Government representatives during a meeting only the week before had said that they needed additional time to review the HVAC piping impacts issue (Finding 78). T&S contended instead that the schedule, as revised and proposed, was realistic and did in fact address the work that was actually being performed. Id., Exhibit G145.

The Contracting Officer's Rejection of Appellant's Proposal

80. By letter dated May 7, 1998, the contracting officer rejected in its entirety HPCC's claim regarding acceleration and impact costs. He explained that GSA had used cause and effect as the standard to determine whether the contractor was entitled to the adjustment sought. He farther explained that the information provided by HPCC “contained errors and/or inaccuracies” and “failed to show that any relationship exists between the direct mechanical impacts of the changed work and the unchanged work.” Appellant's Supplemental Appeal File, Vol. 1, Exhibit 176. The contracting officer's rationale for denying HPCC's proposal, although reasonably clear from the context of his letter, is perhaps more clearly expressed in a letter written later requesting an audit of HPCC's certified claim. He wrote: “As we have discussed, the contractor has not been able to prove a causal relationship between the change orders executed by GSA and the claimed base labor impact.” Id., Exhibit 179.

81. Not surprisingly, once GSA had rejected HPCC's request for impact and acceleration costs allegedly incurred to ensure that the project remained on schedule, HPCC, in a letter to the contracting officer, drew his attention to the fact that in monthly schedule update narratives it had been consistently noted that GSA's failure to respond to pending time extensions had forced the contractor to constructively accelerate mechanical work. Accordingly, the contracting officer was asked to address the previous request of February 4 regarding time extensions totaling 108 days (Finding 69). Respondent's Supplemental Appeal File, Vol. 18, Exhibit G149. The contracting officer's reply to HPCC's inquiry was to state that there simply had been no requests for time extensions. He reminded HPCC that the contract requires the submission of a time impact analysis within fourteen calendar days after the commencement of a delay and that, in cases where the analysis is not timely submitted, it is mutually agreed that the particular change order delay or contractor request does not require a contract time extension. Appellant's Supplemental Appeal File, Vol. 2, Exhibit 177. By letter dated June 8, HPCC took issue with the contracting officer and pointed out that the contractor had on several occasions both in writing and orally notified GSA of schedule impacts specifically related to mechanical scope changes and problems. Id., Exhibit 100.

GSA's Acceptance of the N11 A Schedule

82. By letter dated June 4, the contracting officer advised HPCC that the N11A schedule was accepted subject to certain exceptions. For purposes of this decision, one exception of particular significance read:

GSA does not accept any responsibility for added resources that the Contractor has decided to add to the project. As a reminder, under the Contract, the Contractor is required to furnish sufficient forces and work such hours and shifts as necessary to ensure the prosecution of the work in accordance with the detailed construction schedule. If the Contractor is unable to maintain the progress established in the detailed construction schedule, the Contractor shall take any and all steps as may be necessary to improve the project progress without additional costs to the Government.

Respondent's Supplemental Appeal File, Vol. 18, Exhibit G151.

83. At the hearing, the Government called a witness whom the Board accepted as an expert in construction scheduling. Transcript at 2166-76. While commenting on the N11A schedule, he explained that in the spring of 1998 HPCC ceased presenting a sequential set of updated schedules to the owner as its billing tool. Instead, HPCC resubmitted reconstructed schedule updates going back to November 1997 and then, beginning with May 1998, updated just this retrospective schedule. He opined that the resultant N11A schedule was referred to as the “mitigation schedule” because it was purported to be the schedule that should have been prepared had T&S's original claim submittal of November 1997, including acceleration, been incorporated into the contract schedule. Transcript at 2785-86, 2799-817.

HPCC's Certified Claim

84. On July 1, 1998, in response to the contracting officer's rejection of May 7, HPCC submitted a certified claim in the amount of $3, 354, 571. The T&S calculations incorporated into the claim are based in great part on T&S's original submission of November 24, 1997, except that the methodology formally used by the Corps of Engineers in its Modification Impact Evaluation Guide had been discarded in favor of that followed in the MCAA Bulletin. Appeal File, GSBCA 14744, Vol. 4, Exhibit 3. By letter dated July 7, 1998, the contracting officer advised appellant that the claim submittal lacked the information necessary to evaluate it. In early August he advised appellant that cost and pricing data would be required to support the claim and that the claim would also have to be audited. Appeal File, GSBCA 14744, Vol. 4, Exhibits 4-5. Appellant and T&S attempted to respond to me contracting officer's request for additional data. In late August, the contracting officer advised HPCC that an additional sixty days would be required to evaluate the certified claim. In late October 1998, the contracting officer advised HPCC that the audit of appellant's claim would not be complete until November 16th. The date for the final decision was, therefore extended to December 17th. Id., Exhibits 7, 10. At this point in time, HPCC filed an appeal from a deemed denial. The appeal was docketed but proceedings were stayed at the request of counsel for the parties until December 17. On that date, however, the contracting officer advised HPCC that because of the complexity of appellant's claim, he was again extending the time for his final decision. This time the decision date was extended to April 10, 1999. Id., Exhibit 12. The Board's stay having expired, proceedings resumed. By letter dated April 8, 1999, the contracting officer issued his decision confirming denial of HPCC's claim. Respondent's Supplemental Appeal File, Vol. 27, Exhibit G236.

II. Events Leading Up To HPCC's Claim for Impact and Acceleration Costs of July 1, 1998

T&S's Estimate

85. In preparing its estimate of the cost to perform its scope of work on the NOAA project, T&S used a computer-based estimating system. T&S's estimators determined the quantity of materials required to perform the work and those quantities were then entered into the computer. The software then calculated an estimated baseline number of man hours required to install those materials based upon labor units developed by the MCAA. Transcript at 704-05.

86. The MCAA labor units used to develop estimated man hours for installing materials represent a baseline from which contractors determine the actual number of hours required to perform a given task.⁹ Once the baseline hours are calculated, mechanical contractors using MCAA-based estimating systems then discount the number of hours derived from using the MCAA labor units when calculating the amount of a bid. In other words, a mechanical contractor's estimate is typically based upon some percentage of the labor hours derived by applying the MCAA labor units to material quantities. Transcript at 704-06, 784, 2200-02, 2253, 2283-85.

87. T&S's president and chief executive officer testified that T&S has never bid a project at 100% of MCAA-derived man hours. Typically, T&S estimates projects in Colorado at between .5 and .7 of MCAA-derived man hours, although it has profitably performed projects estimated as low as .45 and as high as .85 of MCAA-derived man hours. Transcript at 706-07, 784. Indeed, according to one of the Government's own witnesses, a mechanical estimator for CRSS, .7 of MCAA-derived man hours represents a “benchmark” for estimating mechanical work. Id. at 2202.

88. T&S's estimate for its bid to HPCC for the mechanical portion of the NOAA project included 50, 159 man hours. Respondent's Supplemental Appeal File, Vol. 7, Exhibit G3 at 5-5; Transcript at 1515-20. This represented 56% of the number of man hours generated by T&S's estimating system using the undiscounted MCAA labor units or, as the witnesses at the hearing described it, T&S estimated and bid the mechanical portion of the work to HPCC at “.56 MCA.” Transcript at 714, 2122.

89. Prior to formulating its bid to HPCC for the NOAA project, T&S met with HPCC to agree upon a plan for constructing the project which called for the flow of work to proceed from building to building, beginning with block D and followed by blocks C, B and A. The agreed-upon plan also called for the work in each building to proceed from the first floor, followed by the second floor and then the third floor to ensure an even, unobstructed flow of work that could be performed as efficiently as possible. Transcript at 709.

90. In determining the appropriate discount to apply to the MCAA-derived man hours in its estimate, T&S's management and senior estimator considered numerous factors affecting T&S's labor productivity. These factors included the availability of key personnel to supervise and manage T&S's labor force, T&S's prior experience with HPCC, the anticipated timing and sequence of work as previously discussed with HPCC, the availability of labor, the complexity of the project, the location of the project, and the ability to prefabricate materials in the contractor's shop rather than on the project site. Transcript at 703, 709, 711, 714.

91. Prior to award of the contract for the NOAA project to HPCC, both CRSS and FBA prepared estimates of the anticipated cost of construction. In terms of labor hours, CRSS estimated that the scope of work that became part of T&S's subcontract with HPCC would require 41, 951 man hours, while T&S's bid to HPCC was based on its estimate that it would take 50,159 man hours for the same scope of work. This suggests, if anything, that T&S's bid included more hours than CRSS believed were necessary to perform the same scope of work. However, on a dollars-to-dollars basis, T&S's bid for the mechanical labor ($1,586,155) and CRSS's estimate for the same mechanical labor ($1,595,362) were within 0.5% of each other. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 120; Respondent's Supplemental Appeal File, Vol. 7, Exhibit G3; Appellant's Trial Exhibit 10; Transcript at 1501-16, 1522.

92. Similarly, FBA's estimate dated June 5, 1994, reflected a total of $7,629,898 for all HVAC and plumbing labor and materials included within the scope of T&S's subcontract. This amount compares favorably to T&S's contract figure of $7,840,014 and reveals a difference of only about 2.8%. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 120 at 35-48; Appellant's Trial Exhibit 10; Transcript at 1573-76.

Development of the Baseline Schedule

93. HPCC's contract with GSA required it to develop and maintain a detailed construction schedule. The schedule was to be computer generated and updated monthly. The contract provides:

Once the “baseline” Detailed Construction Schedule has been approved and accepted by the Government, there will be no changes, modifications, or alterations, except that described within Section 3.9, performed by the contractor without explicit written permission by the Government.¹⁰

Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01311-1. In particular, the contract expressly provided: “The updated Construction Schedule submitted by the Contractor shall not show a completion date later than the specified Contract Duration, subject to any time extensions approved by the Government” Id. at 01311-13.

94. The changes, modifications or alterations in the baseline schedule which were permitted under the contract are described as follows:

3.11 CONSTRUCTION SCHEDULE REVISIONS

A. Updating the Construction Schedule to reflect actual progress made up to the date of a Schedule Update shall not be considered revisions to the Construction Schedule.

B. If it appears the Construction Schedule no longer represents the actual prosecution and/or progress of the work, the Government will request, and the Contractor shall prepare and submit a revision to the Construction Schedule.

C. The Contractor may also request revisions to the Construction Schedule in the event the original logic was not workable. If the Contractor desires to make changes in the Construction Schedule to reflect revisions in his method of operating and scheduling of work, the Contractor shall notify the Government in writing at least fourteen (14) calendar days prior to the next Schedule Update, describing the revision(s) and setting forth the reasons thereof. If deemed necessary by the Government, a written Time Impact Analysis as detailed in Section 3.13¹¹ shall be provided by the Contractor. Accepted revisions will be incorporated into the next monthly Schedule Update.

D. Requests for revisions of activity manpower, activity costs, or redistribution of activity costs shall be made in accordance with the requirements of this section ( [as provided in] 3.12).

Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01311-15.

95. Some of the key contract provisions regarding time impact analysis which are relevant to this dispute are as follows:

3.12 TIME IMPACT ANALYSIS FOR CHANGE ORDERS, DELAYS, AND CONTRACTOR REQUESTS

A. When Change Orders are initiated, delays are experienced, or the Contractor desires to revise the Construction Schedule per 3.12C, the Contractor shall submit to the Government a written Time Impact Analysis, illustrating the influence of each Change Order, delay, or Contractor request on the current Contract Completion Date. The preparation of Time Impact Analysis shall include a Fragmentary Network (Network Analysis) of the new and existing activities directly affected by the change demonstrating how the Contractor proposes to incorporate the Change Order, delay or Contractor request into the Construction Schedule. The Time Impact Analysis shall demonstrate the time impact based on: (1) the date the Change Order is given to the Contractor or the date the delay occurred; (2) the status of construction at that point in time; and (3) the event-time computation of all affected activities. The event times used in the Time Impact Analysis shall be those included in the latest Construction Schedule Update or as adjusted by mutual agreement.

B. Activity delays shall not automatically mean that an extension of the Construction Duration is warranted or due the Contractor. It is possible that a Change Order or delay will not affect existing critical activities or cause non-critical activities to become critical. A Change Order or delay may result in only absorbing a part of the available total float that may exist within an activity chain of the Network, thereby causing no effect on the Contract Completion Date.

C. Float¹² is not for the exclusive use or benefit of either the Government or the Contractor. Contract time extensions will be granted only to the extent the equitable time adjustments to the activity or activities affected by the Change Order or delay exceeds the total (positive or zero) float of a critical activity (or path) and exceeds the Contract Completion Date.

....

E. In cases where the Contractor does not submit a Time Impact Analysis within fourteen (14) calendar days, it is mutually agreed that the particular Change Order[, ] delay or Contractor request does not require a Contract time extension.

Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01311-15, 01311-16.

96. The contract required HPCC to submit within two weeks of contract award a preliminary plan covering the first ninety days of contract performance. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01311-3. Within sixty calendar days following notice to proceed, HPCC was required to submit for approval its proposed baseline schedule. Id. at 01311-6. Pending development of the baseline schedule, the preliminary schedule was to be updated on a monthly basis. Id. at 01311-5.

97. On or about December 9, 1996, T&S submitted a proposed schedule for the mechanical work to HPCC with the file name “NOAT” for HPCC's use in preparing the project baseline schedule. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G14. Discussions ensued between HPCC and T&S over the development of the baseline schedule as it affected T&S's portion of the work. These discussions ultimately culminated in the submission to GSA of a baseline schedule that was acceptable to both HPCC and T&S. Transcript at 815-18, 1293-94, 1960-62, 3026, 3111-14. It is unclear from the record precisely when HPCC submitted its proposed baseline schedule to the Government. Presumably it was no later than February 1997, for a letter in the record dated March 3, 1997, from T&S to HPCC, indicates that by that time the proposed baseline plan had already been reviewed by GSA and the contractor and subcontractor were working on requested revisions. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G22. T&S's project manager testified that the final baseline schedule, referred to as the “NOA1” schedule, was approved by GSA in March 1997. Transcript at 818, 3025.

98. The NOA1 schedule called for the four buildings or “blocks” to be constructed more or less sequentially, beginning with blocks D and C, followed by blocks B and A. While there was considerable overlap between blocks D and C, and between blocks B and A, the schedule called for T&S's work in blocks D and C to be well advanced before T&S was required to perform any above-ground work in blocks B and A. Thus, T&S anticipated being able to move its piping crews gradually from blocks D and C into blocks B and A as work in the former buildings neared completion. Transcript at 1011, 1294-9 5; Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 10).

99. Although that portion of the NOA1 schedule which governed T&S's work differed in some respects from T&S's proposed NOAT schedule, the schedules were consistent with some basic assumptions on which T&S's bid was based. In particular, the NOA1 schedule did not require any greater number of man hours than were included in T&S's bid, and the total amount of time T&S was required to be on the project was not significantly different.¹³ Transcript at 818-19, 3026-27, 3111-12.

100. The record contains the narrative portion of numerous monthly updates of the baseline schedule provided by HPCC up to and including April 1998. Nearly all of these updates refer to potential or actual impacts attributable to various mechanical (i.e., HVAC or plumbing) design changes. Those covering the months following September also refer to acceleration of contract performance to mitigate schedule impact of these changes. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibits 24, 29, 36, 41, 46, 48, 55, 71, 73; Vol. 2, Exhibits 84, 93.

101. Updates of the baseline schedule were also provided to the Government by HPCC on diskette. The Government's expert in construction scheduling testified that he undertook a comparative analysis of all available updates submitted over the course of the contract. Transcript at 2723-35; Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 14). The first of these updates, “update I, ” filed after approval of HPCC's baseline schedule in March 1997, was submitted in early April of the same year. It is based upon data available as of April 1 (schedule data date). The contractual completion date on this schedule was the same as that shown on the approved baseline schedule, namely, November 4, 1998. This update of the schedule, however, showed twenty-six working days of negative float and a resulting projected (as opposed to “contractual”) completion date of December 11. Transcript at 1411, 2729-30, 3015.

T&S's Work Plan

102. In developing the baseline schedule, it was T&S's goal to lay out and schedule its work as efficiently as possible in order to achieve maximum productivity from its workers. As contemplated in the baseline schedule, T&S's plan was to assign crews for each system (HVAC piping, domestic water, natural gas, special gases, and storm drains and sanitary waste) to blocks D and C. Upon completion of blocks D and C, these crews were to move to blocks B and A. T&S anticipated that crews would begin work at the garden (bottom) level of the building and, as the work was completed, would make their way upward to the upper levels of each building. Transcript at 823-3 8, 1011, 2842-45; Appellant's Trial Exhibit 7; Respondent's Supplemental Appeal File, Vol. 26, Exhibit G235 (Exhibit 57).

103. T&S's planned crew flow was designed to maximize efficiency. For example, T&S's plan was designed to minimize material handling, as it allowed T&S to stock a floor with all of the materials needed for that floor at once and helped insure that workers at all times had sufficient materials to keep the job moving. Transcript at 836-37.

104. Similarly, T&S's plan also assumed that the company would have access to each floor and an opportunity to complete the bulk of its piping work before other trades started the installation of their work, since the HVAC and plumbing pipes must be installed to fit in the limited amount of ceiling space available. Transcript at 841-42.

105. Because T&S's plan assumed that each crew would complete its work on a given floor before moving upward to the next floor, it did not anticipate having members of a particular crew working on more than one floor at the same time. This was intended to minimize the amount of supervision required for each crew. Transcript at 837-38, 898-99. In addition, T&S's plan was based upon the assumption that the makeup of its crews would be the same throughout each building in order to maximize the efficiency of each crew. Id. at 835.

106. T&S's plan was also based upon the assumption that the plans provided by the Government were complete and reasonably coordinated. Transcript at 843, 845.

Identification of Errors in the Plumbing Design

107. The contract specifications required HPCC to prepare coordination drawings. HPCC, however, subcontracted the responsibility for these drawings to T&S. Coordination drawings are intended to show the final layout of the various mechanical, electrical, and plumbing pipes, conduits, and ducts in the ceiling spaces and elsewhere; the contract drawings prepared by the project designers only show the layout of these systems schematically. In other words, the coordination drawings are prepared to make sure that the various systems will, in fact, all fit into the limited amount of space available. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01040-1; Transcript at 845-47, 947-50. The purpose of preparing coordination drawings is to take the mechanical, electrical, and plumbing design, as shown by the engineer in the contract drawings, and to fit that design into the building space as depicted by the architect on the contract drawings. Transcript at 847.

108. T&S started preparation of the coordination drawings in January 1997 and almost immediately discovered major discrepancies in the information shown in the contract's plumbing drawings. T&S's project manager testified that in his thirty-one years in construction he had never seen a set of contract drawings as badly coordinated as the drawings on the NOAA project. Transcript at 850-53. Many of these discrepancies involved conflicts in pipe sizes from drawing to drawing. For example, a plumbing line running the length of a building might be depicted on multiple sheets of the plans. However, the size of the pipe depicted on one sheet would not match the size of that pipe shown on another sheet. Id at 851-52. CRSS itself had discovered several discrepancies of this nature when it reviewed the bid drawings in July 1996, but apparently no corrections were made at that time. Appellant's Supplemental Appeal File, Vol. 3, Exhibit 202 at 5-8; Transcript at 2631-34.

109. T&S's project manager advised HPCC of “an inordinate amount of design deficiencies in the contract drawings, ” provided specific examples of these deficiencies, and asked for assistance in scheduling a meeting to discuss the problem. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G20. A meeting was scheduled for February 11, 1997. CRSS arranged to have its BCER consultant present as the meeting but advised GSA that this was deemed to be an extra service because the “massive” coordination issues exceeded the company's contract scope. GSA replied that, if the issues proved massive and outside the level of effort of CRSS's contract, then this would be a matter for the attention of the design architect, FBA. CRSS was, therefore, directed to give FBA the opportunity to attend the upcoming meeting as well. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 121.

110. BCER, the consulting engineering firm retained by CRSS, had not assisted with the original design of the plumbing and mechanical systems. The engineering firm of record which had worked with FBA on the project's original design was RDA (Finding 7). At the meeting held on February 11, 1997, to discuss the deficiencies already detected in the plumbing drawings (Finding 109), a BCER representative pointed out that his firm would be limited in the help it could render to resolve the deficiencies since it was not involved in the actual design of the systems and its engineers, therefore, did not know the original design parameters of the job as RDA's engineers would. Transcript at 860-61.

111. In an effort to resolve the various problems encountered in the contract plumbing drawings used to prepare the necessary coordination drawings, T&S submitted multiple RFIs and met frequently during the month of February with HPCC, CRSS, and design consultants. T&S's project manager testified that after the February 11 meeting, there was a meeting “where they brought Doyle in to do some talking.” Transcript at 862. At one held on February 27, representatives of CRSS and BCER discussed the possible need for a general review of the mechanical/plumbing drawings as a whole for purposes of facilitating replies to the various RFI/coordination issues being raised. T&S's project manager testified that such a review, which is typically done before drawings are put out for bid, would have identified discrepancies in the various contract drawings. He further testified, however, that the proposed review was never undertaken. Id. at 864-65. In a letter dated March 4, 1997, to HPCC, T&S's project manager warned that delay in resolving the RFI/coordination issues was threatening the coordination drawing process. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G24. The warning was repeated in a second letter, dated March 7. Id., Exhibit G28. By letter dated March 6th, HPCC had already advised CRSS of the need to expedite a resolution of these mechanical and plumbing drawing issues in order to “minimize cost and schedule impacts and to continue the coordination effort.” Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 20. A coordination drawing status sheet in the record supports this concern of HPCC and T&S that the coordination process keep pace with the contract schedule. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G29.

112. By the month of March 1997, T&S was already installing underground plumbing in blocks D and C and sleeves and imbeds through the project as pours were being made. Transcript at 869-70; Respondent's Supplemental Appeal File, Vol. 25, Exhibit G235 (Exhibit 40). During that time, however, it was discovered that a perimeter drain system had been omitted from the contract plumbing drawings. T&S's project manager testified that this had a profound impact upon the installation of underground plumbing in blocks D and C. Transcript at 870-75: see also Respondent's Supplemental Appeal File, Vol. 14, Exhibit G32.

113. By the month of April 1997, construction on block D was already above ground and T&S was at work on the garden level. Transcript at 895; Respondent's Supplemental Appeal File, Vol. 25, Exhibit G235 (Exhibit 26).

Events During the Month of April 1997

Installation of Plumbing Piping

114. When T&S began the installation of above-ground plumbing piping in April 1997, it did not have a completed plumbing system design from which to work. Many RFIs regarding discrepancies in the plumbing drawings remained to be resolved. Indeed, as late as early May, T&S's project engineer wrote HPCC that plumbing drawings were still under revision and a review of these revisions disclosed that there were still items in these revised drawings which would require further clarification/direction through the RFI process. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. l, Exhibit 21. As a result, T&S was unable to implement its plan to have its plumbing piping crews complete work on a given floor before moving to the floors above. Instead, T&S was required to move its men from location to location within the building, installing piping in areas where the design was reasonably complete, while awaiting information concerning areas where the design had not yet been finalized. Transcript at 895-97, 1223.

The Perimeter Drain System Change (CR22)

115. By mid-April, T&S had submitted its estimate for a change dealing with the perimeter drain system (Finding 112) but still was unaware of whether GSA planned to extend the project completion date or call for acceleration of work to avoid any delay associated with the change. T&S's estimate included a schedule impact of thirty-eight calendar days. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G31. HPCC incorporated T&S's information into an overall cost proposal covering the perimeter drain system and the extension of the contract schedule for an additional thirty-eight calendar days. It submitted the proposal to CRSS under cover of a letter dated April 25. This letter also advised CRSS that, as requested, a change request accelerating the completion date from December 11 to November 24 would be submitted under separate cover. Id., Vol. 1, Exhibit CR22 at 14-18.

Events During the Month of May 1997

T&S's Proposal Regarding Plumbing Design Changes

116. By letter dated May 6, 1997, T&S forwarded a change estimate to HPCC based upon changes made thus far in the plumbing design by the firm which prepared the original plumbing and mechanical design, namely RDA. The cover letter identified twenty-eight specific drawings which had already been revised. It also noted that there were still items in these revised drawings which would require further clarification or direction through the RFI process. The change estimate for direct costs amounted to $112, 904 and anticipated a schedule impact of twenty-three days. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 21.

Problems with the HVAC Design

117. A project update dated May 9 and prepared for the contracting officer by GSA's project manager, advised that T&S had reported that it was seeing the same problems on HVAC contract drawings that it had found with the plumbing drawings. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 126. By letter dated May 12, 1997, to HPCC, T&S's project manager detailed some of these deficiencies. He wrote:

Specifically, the pipe sizes changing on risers from floor to floor or drawing to drawing; main sizes which are not consistent on a particular run of pipe and lines which cannot be traced to succeeding drawings. These are items which need to be clarified to allow the coordination process to continue in a productive manner.

Several RFI's . . . have been written concerning some of these situations, however, many more will need to be submitted to clarify all our questions.

Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 22.

Revisions of the Original Plumbing Drawings

118. At an RFI review meeting held on May 20 to discuss mechanical drawing revisions, an engineer from RDA made several changes in the HVAC and plumbing drawings. Some of these were in response to nine specific RFIs pending at the time. CRSS directed T&S to incorporate these changes into coordination drawings. In a letter dated May 21, 1997, T&S advised HPCC that it would revise completed coordination drawings to reflect these changes and would incorporate them into future drawings as well. The letter acknowledged the need to proceed immediately with this task in view of work which was already on-going. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G38.

GSA's First Call for Acceleration

119. It was also during this month of May 1997 that HPCC advised CRSS of the possibility of a twenty-two day delay of the project as a result of a revised underground plumbing design for block B. The general contractor proposed an acceleration plan to minimize the impact of this change on the succeeding activities and the project's critical path. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G40. GSA's project manager recommended acceptance of the proposal on the ground that the estimated acceleration cost would be below HPCC's claimed project delay costs of $26, 000 per day. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 128. On June 13, the contracting officer issued a unilateral contract modification authorizing the acceleration at a cost not to exceed $11, 000.¹⁴ Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR51 at 1.

Events During the Month of June 1997

HPCC's Pay Request Number 8

120. On June 3, CRSS received HPCC's pay request number eight. The following day, the CRSS project manager forwarded this request to the contracting officer with a recommendation that it be paid. The CRSS forwarding letter noted that the current updated schedule narrative which was submitted with the request showed December 11, 1998, as the projected completion date. The letter, however, reassured the contracting officer that acceptance of the pay request would not indicate acceptance of this late date. Rather, the CRSS project manager wrote that the delay in completion shown on the updated schedule (i.e., from November 4 to December 11) was still under review by CRSS and GSA. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 130.

Continuing Problems with Coordination Drawings

121. During the hearing, T&S's project manager testified regarding a particular problem confronting the crews installing the plumbing piping in blocks D and C during the month of June. While the piping was being installed, T&S was of course continuing its efforts to prepare reasonably complete coordination drawings for use by its workers in the field. However, by early June, T&S concluded that the coordination drawings that had already been released for use by its workers in the field had become obsolete due to the many clarifications and changes subsequently issued by the Government. On occasion, workers relying on unrevised earlier drawings would install “something which would have to come back out.” Consequently, on June 11, T&S recalled all existing coordination drawings from the field until they could be revised to reflect the latest changes. Revised drawings were reissued to the field on June 24. The preparation and issuance of other consolidated drawings and, when necessary, the revision of those subsequently issued continued after this date until their final approval on July 21. Transcript at 1032, 1986.

122. As a result of problems encountered with the preparation of reliable coordination drawings, T&S's workers in the field proceeded cautiously and, for a brief period in June, without any coordination drawings at all. During this time piping continued to be installed based upon frequent consultations between crew foremen and T&S's field engineer located in the company's trailer on site. When necessary, the engineer would provide the foremen with informal sketches. Often information was relayed from T&S's engineering staff to the field by walkie-talkie. As a result, these foremen, whom T&S had originally planned to use as “working” foremen, were generally unable to work actually side by side with their crews but rather found themselves caught up almost on a fall-time basis in this coordination process with the project management office. This situation contributed to a growing problem with workers' morale. Transcript at 901-07.

HPCC's Proposal on Plumbing Changes (CR34)

123. By letter dated June 11, 1997, HPCC submitted to CRSS a cost proposal for a contract modification covering the various revisions made in the contract plumbing drawings. The proposal was based upon T&S's change estimate of May 6 (Finding 116). HPCC sought a modification in the amount of $ 127,390. An attached change order pricing summary listed subcontractor and other direct costs (ODC) at $112,904. The final figure of $127,390 is the result of the general contractor's various markups of T&S's earlier proposal of May 6. Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR34 at 13-14. The contracting officer was advised of HPCC's proposal in a project update dated June 13. The update noted that HPCC had also advised that there would be a similar proposal based upon deficiencies in the HVAC drawings as well. The update also noted that, because these additional costs were in excess of projected contingencies for the project, additional funding would be required as well. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 132.

Meeting Regarding Perimeter Drain Change and Extension of Schedule

124. On June 17, 1997, the contracting officer, other GSA officials, and representatives of CRSS met with representatives of HPCC. The purpose of the meeting was to discuss HPCC's pending proposal regarding the perimeter drain and the requested thirty-eight day extension of the contract schedule. During that meeting, GSA's project manager complained that the required time impact analysis in support of the requested extension had not been submitted until June 11, thus leaving the Government little time to understand and analyze the delay. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 143 at 18 (unnumbered). The record, however, contains correspondence between CRSS's project director and the company's scheduling consultant which shows that, as far back as mid-May, the alleged delay had been the subject of study and analysis. The schedule consultant had advised CRSS at the time that, in her opinion, after an analysis of HPCC's submission, the contractor was entitled to a 146-day delay and that the proposed thirty-eight day delay was, therefore, “very reasonable.” Id., Exhibit 127. Shortly before the meeting of the parties on June 17, CRSS's project manager, based upon this consultation and consultation with his in-house schedulers, recommended to the contracting officer that GSA acknowledge the thirty-eight-day delay stemming from the “excavation and perimeter drain redesign/relocation impacts.” Id., Exhibit 131. During the meeting of June 17, a spokesman for HPCC explained that the contractor's own analysis had indicated that the delay in question should have been 121 days but that through various mitigation efforts the schedule impact had been reduced to thirty-eight days. HPCC suggested that GSA place the results of the CRSS analysis “on the table” for purposes of comparison. GSA declined. Id., Exhibit 143 at 19 (unnumbered).

125. The HPCC representatives left the meeting of June 17 convinced that the parties had finally agreed the contractor was entitled to the requested thirty-eight day extension and that negotiations of a change order would begin promptly. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G43. A memorandum for the record prepared by the GSA project manager confirms that agreement had in fact been reached. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 143 at 19 (unnumbered). A memorandum dated June 22 from the contracting officer to GSA's project manager indicates, however, that the GSA project manager was apparently far from satisfied with the outcome and had suggested the agreement be changed. In his memorandum to the GSA project manager, the contracting officer stated that it was his understanding that agreement had been reached on the thirty-eight day delay. He added:

I believe that any change in the agreement at this time will lead to a great deal of ill will and may in fact endanger the project. At the least, it would probably lead to a delay claim in the range of 121 days. Please Reconsider.

Id., Exhibit 134. GSA's project manager did reconsider. By reply memorandum dated June 23, he advised the contracting officer that he concurred with his assessment that the agreement should remain unchanged in view of the real prospect of a delay claim for a considerably longer period of time. Id., Exhibit 143 at 16 (unnumbered).

Meeting Regarding Impact of Plumbing and HVAC Design Changes

126. On June 24, GSA's project manager together with representatives of CRSS met with representatives of HPCC and T&S. Also at the meeting was a representative of the original A/E firm, FBA. At this meeting, GSA and CRSS were advised by HPCC that, owing to the ongoing changes in design, there was potential for a schedule impact. The contractor contended that sixty percent of the plumbing and HVAC piping had been changed. Concern was expressed regarding RFI responses. Some of these responses were said to be in conflict with parameters laid out by RDA. For example, BCER was reputed to have stated that plans should take precedence while RDA had stated that riser diagrams should take precedence. In addition, due to revisions in piping, some sleeves already in place were incorrectly sized. The contractor requested that RDA perform an overall design review. GSA's representative agreed that CRSS should contact RDA on the matter but voiced concern regarding the firm's availability. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 137. An update on this same meeting prepared by GSA's project manager provides some additional detail. He wrote:

Plumbing is being removed and reinstalled due to new pipe sizes. Pipe sizes conflict between riser diagrams and plan. Trautman & Shreve was instructed to follow the plan view by BCER because it was a hard bid job. When Reigel/Doyle reissued me 24 plumbing drawings, they said that the riser diagrams took precedence.

Id., Exhibit 138.

127. Several of the participants at the meeting on June 24, 1997, including representatives of both the Government and the contractors, recall that, during the meeting, the possibility of delay owing to changes in the plumbing and HVAC piping design was discussed. Various options to mitigate this delay were discussed. The contractors' representatives advised GSA that the options available were to extend the project completion date, add additional manpower, and/or work overtime. Agreement was eventually reached that the preferred method of mitigating the schedule impacts would be for T&S to add manpower rather than extend the contract schedule. Transcript at 924-26, 1245-47, 1332-35, 2047-52, 2310-12. GSA's project manager testified that during the meeting representatives of the contractor actually advised him that they would be adding people to mitigate the impacts associated with the changes in the drawings. Id. at 2047-48. Following the meeting on June 24, the GSA project manager reported to the contracting officer that the contractor was adding additional manpower to mitigate the effects of these anticipated schedule delays. Id. at 2051. T&S's operations manager testified that in June T&S did in fact begin acceleration to overcome schedule impacts. Id. at 1576.

128. The testimony of GSA's project manager regarding the decision made at the meeting of June 24 to add manpower to the project is particularly significant. While under direct examination, he explained that during the meeting a T&S representative stated that there was additional work which had been added as a result of correcting some of the piping sizes and that additional people would be brought on to take care of that work. Transcript at 2032. Upon cross-examination, this witness agreed that during the meeting the contractor had expressly stated that the manpower was being added for the purpose of mitigating the impact of the various plumbing and mechanical changes that were in the process of being made. Id. at 2047. He was then asked if he understood that this would be done at the Government's expense since it was to mitigate the effect of Government-directed changes. He replied:

Well, I guess there's a couple [of] issues there. Once, certainly for a change there - it's up to the contractor to decide how he elects to prosecute the work. And under this contract, the contractor is required to furnish whatever people, facilities, offices, or to work whatever shifts necessary in order to ensure that the work progresses in accordance with the detailed construction schedule.

Id. at 2048. When confronted with testimony given previously in a pretrial deposition, however, the GSA project manager agreed that, when T&S proposed to add manpower to mitigate the effect of the changes in mechanical design, there was general agreement without any objection that this was the best way to proceed. Id. at 2049. The cross-examination then continued as follows:

Q. Okay. And you understood, did you not, at the meeting in June where this proposal was made that there were going to be costs associated with that acceleration effort, didn't you? Costs to the Government.

A. Yes I did.

Q. Okay. You didn't think the contractor was doing it on his own nickel?

A. That is true.

Q. Now, given that state of mind, did you discuss it with the contracting officer? It was part of your responsibilities, wasn't it, to report to the contracting officer on — as — in your role as project manager was to report issues that were developing in the course of the project?

A. Yes. That was my responsibility. And we did have discussions on the project on a frequent basis.

Q. And in the course of those discussions, you told [the contracting officer] didn't you, that the contractor was adding additional manpower to mitigate the effects of the scheduled delays?

A. Yes.

Q. And did [the contracting officer] direct you to tell the contractor not to do that; tell the contractor that he should not be adding additional manpower?

A. No. Id. at 2050-51.

T&S's Proposal Regarding HVAC Design Changes (CR85)

129. On June 27, shortly after the meeting of June 24, T&S provided HPCC with an initial price proposal covering the costs associated with the HVAC design changes. The costs included in the proposal are said to be net (i.e., reflecting deductions for deleted work). They are all said to be direct costs and cover such matters as project management, supervision, and administration in processing revisions; project engineering in researching and preparing RFIs and questions; revising coordinated drawings already complete; incorporating revisions into the contract documents; computer augmented drafting and design (CADD) drawing revisions to the contract documents; and meetings attended by staff in resolving these issues. The proposal advised that any indirect cost/time impacts resulting from the multiple changes would be priced accordingly. The schedule impact of the proposal was said to be 129 days. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G44.

T&S's Request for Notice to Proceed

130. On June 30, T&S's project manager again wrote to HPCC. His letter referenced the letter of three days earlier, which listed the direct costs associated with the HVAC design revisions and a prior letter of May 6 (Findings 116, 129) setting out the costs associated with the revision of the contract plumbing design. His point was a simple one. T&S must have, without further delay, “written Notice to Proceed to continue with the installation of changed work into the project including research and coordination, drawing revision and CADD work associated.” Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 27.

Planned Review and Approval of Coordination Drawings

131. In a schedule narrative provided by the general contractor at the close of June, reference was made to the revisions to the HVAC piping and the evaluation of the impact they might have on the contract schedule. These modifications were said to affect most of the piping. HPCC reported that coordination drawings incorporating the revisions would be submitted for approval by the consulting engineer and this evaluation would be complete within the next two weeks. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 29.

Events During the Month of July 1997

Notice to Proceed Given

132. HPCC promptly referred to GSA T&S's request for notice to proceed. GSA's response was equally prompt. In a letter dated July 1 to HPCC, the contracting officer agreed that the issues raised by T&S did involve changes in mechanical scope and had resulted in considerable design efforts on the part of T&S to keep the job moving. He wrote:

Please accept this letter as an official notice that HPCC and Trautman and Shreve are authorized to proceed with these efforts, and that GSA understands that there will be additional costs associated with these efforts.

Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 28.

Perimeter Drain Change and Extension of Contract Schedule (CR22)

133. On that same date, July 1, the contracting officer signed a contract modification providing for the thirty-eight day extension of the contract schedule agreed to in principle and subsequently negotiated in detail during the latter half of June (Findings 120, 124-25). Respondent's Supplemental Appeal File, Vol. 1, Exhibit CR22 at 1A.

Meeting Regarding Revisions of Mechanical Work

134. On July 15, 1997, representatives ofGSA (including the contracting officer), CRSS, HPCC, and T&S met for the purpose of discussing the several matters related to the revisions of the mechanical work on the NOAA project. At that meeting, HPCC and T&S representatives spoke of their concern regarding the mechanical and plumbing revisions made to the contract documents as a result of the RFI process and various job site meetings with the mechanical consultants, BCER and RDA.¹⁵ The HPCC and T&S spokesmen explained that the only set of documents containing all revisions to date was the one maintained by T&S at the job site. HPCC's representative stated that he believed one of the mechanical consultants should be tasked with the responsibility of preparing a revised set of documents including all revisions. T&S's spokesman urged that a decision be made promptly regarding the party responsible for. this task. He explained that T&S's crews continued to be delayed by the need to call the project engineer several times a day to verify whether what was being installed was accurate. The T&S representative also wished to know why the mechanical consultants had not given their final approval to the T&S documents as expected two weeks earlier (Finding 131). The contracting officer replied that he had already approved retention of RDA for whatever was required for the review and approval process. T&S's project manager stated that a meeting to review the drawings had been scheduled for the previous week but had still not taken place. CRSS's project manager agreed to look into the matter and expedite the review process. Discussion then turned to having the revised documents officially “stamped” by one of the mechanical consultants upon completion of the project. Minutes of the meeting state that the contracting officer observed mat “GSA might have to assume responsibility for the design themselves [sic] considering the difficulties encountered in this area to date.” HPCC's representative then asked if the contracting officer would provide a letter relieving HPCC and T&S of any design responsibility for the project. The contracting officer agreed to do so. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 30.

135. At this same meeting on July 15, HPCC and T&S officials advised the contracting officer and GSA's and CRSS's project managers that T&S was experiencing “major impacts” as a result of the multiple revisions to the HVAC and plumbing piping designs. T&S's spokesman pointed out, however, that it was not yet possible to “get our arms around” the magnitude of the impacts. The contracting officer responded by stating that he understood that it would be difficult to summarize the effect of multiple change impacts at that time but acknowledged that T&S would submit a cost proposal once T&S was in a position to quantify the impacts. Transcript at 961-63, 1549; Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 30.

T&S Urges Formal Notice of Impact

136. On July 16, T&S's project manager, following up on remarks made during the meeting of the previous day, wrote HPCC regarding the need to give formal notification of the cost and time impacts anticipated by T&S. He wrote:

The major revisions to the Plumbing and HVAC Piping recently made by the consultants in addition to the 200 plus Information Requests submitted to date are the major source of these impacts. The impacts associated with the direct costs of these revisions have been submitted as required. [See Findings 116, 123, 129.] However, the impacts to the overall Mechanical work resulting from the cumulative effect of multiple changes and revisions have not been addressed in these proposals.

Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 32.

T&S Tasked with Incorporating all Mechanical/Plumbing Revisions in Contract Drawings

137. The meeting which T&S wished to have with the mechanical consultants to secure final approval of design changes and revisions appears to have taken place finally on or about July 21. T&S's project manager testified that the meeting was attended by representatives of T&S and HPCC and engineers from RDA and BCER. The purpose of the meeting was to review the changes that had been made to date by the two firms and to make sure that there were no remaining conflicts.¹⁶ Transcript at 943, 955. T&S's project manager further testified that those present appeared to be in agreement on the contract drawing changes.¹⁷ Id. at 943, 955. One remaining problem, however, concerned the issuance of revised contract drawings. At the time, only T&S possessed a set of drawings which reflected all of the changes that had been made to the plumbing and mechanical piping — some of which were simply penciled markings made by RDA's representative. HPCC as general contractor was eager to have official revised drawings to release to other subcontractors for use in their own work as it might relate to or interrelate with T&S's work, and for pricing related changes. T&S desired to be out from under the burden of being the sole source of information for these other subcontractors on the most current set of contract drawings relating to mechanical, electrical, or plumbing installations. This desire on the part of HPCC and T&S for official revised contract drawings led to a discussion regarding who would prepare the drawings for release. Neither BCER nor RDA was willing to undertake the task. Id. at 944-56.

138. On July 22, a meeting was held in T&S's on-site trailer at the NOAA project. The meeting was attended by representatives of CRSS, BCER, HPCC, and T&S. After considerable discussion, T&S was directed to proceed with incorporating all the mechanical/plumbing revisions made to date into the contract documents. It was agreed that this would include all revisions made by BCER which would be provided in electronic format to T&S on July 28. Once complete, the revised documents would be transmitted to BCER, which would maintain them from that time forward, incorporating any future changes which might occur.¹⁸ Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 34.

Partnering Meeting of July 25

139. T&S's operations manager testified that at a regularly scheduled partnering meeting on July 25, 1997 which was attended by representatives of GSA (including the contracting officer), NOAA, CRSS, HPCC, and T&S, the parties discussed the fact that T&S had roughly doubled its anticipated manpower to deal with the impact of the mechanical changes. In response, GSA's project manager is said to have acknowledged T&S's efforts and expressly stated his appreciation to T&S for having done so. Transcript at 1560-61, 1576-79; Respondent's Supplemental Appeal File, Vol. 14, Exhibit G52.

HPCC Gives Formal Notice of Impact

140. By letter dated July 31, HPCC, acting in response to T&S's urging (Finding 136), formally advised CRSS that it was experiencing an impact due to the cumulative effect of multiple mechanical changes. Enclosed with HPCC's notice was a copy of T&S's earlier letter to HPCC regarding this matter.¹⁹ Appellant's Supplemental Appeal File, GSBCA 14744, Vol.1, Exhibit 34.

Events During the Month of August 1997

Concerns with Impacts on Contract Schedule

141. A joint memorandum prepared by representatives of GSA, CRSS, and HPCC on the scheduled partnering session regarding the NOAA project held on July 27 shows that one subject of particular concern was the project schedule. Specifically, this involved the scheduling of work due to the mechanical changes while controlling impacts to cost and to the completion date. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G52 at 3. T&S's operations manager, who was in attendance at the session, recollected at the hearing that, at the time of the partnering meeting, given the impact on base labor of the various changes and the numerous RFIs, it was generally recognized that the contract schedule would be affected and that, even with acceleration, there would still be problems. Nevertheless TfeS, although aware that a considerable number of days would have to be recovered, still had no idea of precisely how many days were involved. Consequently, according to the joint memorandum on the session, it was agreed that the contractors would prepare an impact schedule. Transcript at 1577-80. Indeed, one of the action items in the memorandum of the session calls for the resolution of the mechanical schedule impact issue by August 8. Respondent's Supplemental Appeal File, Vol. 14, Exhibit G52 at 5.

142. On August 1, T&S submitted to HPCC four versions of an impact schedule, namely, TSI1, TSI2, TSI3, and TSI4. Each version of the schedule incorporated the impacts of the antecedent version and then incorporated additional impacts from other changes under consideration as well. For example, TSI2 included all impacts from various changes identified as included in TSI1 and added others as well. Among those added to TSI2 were the impacts associated with the revisions of the plumbing design. TSI3 included the impacts already incorporated into TSI2 and added others — among which were the impacts associated with the HVAC revisions. Together, these four preliminary analyses or schedules indicated that the contract's baseline schedule, as thus revised, showed a total of 174 days of impact. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 35.

HPCC Submits Revised Schedules and Proposal Regarding HVAC Design Changes (CR85)

143. By letter dated August 6, HPCC forwarded to CRSS T&S's various revised schedules as well as T&S's price proposal of June 27 regarding direct costs associated with the HVAC changes (Finding 129). The material was furnished in anticipation of a meeting scheduled for the following day with CRSS officials to discuss schedule impacts. HPCC's forwarding letter expressly stated: “Again, the total impact for costs and schedule is not in this package.” Appellant's Supplemental Appeal File, Vol. 1, Exhibit 143.

Negotiations on Plumbing Design Changes (CR34)

144. On August 7, representatives of GSA and CRSS met with HPCC's and T&S's project managers to discuss HPCC's cost proposal for a contract modification covering the various revisions made in the contract plumbing drawings. See Findings 116, 123. A price negotiation memorandum prepared by CRSS explains that negotiations on this proposal had been delayed until a proposal was submitted on HVAC changes (Finding 143). Only direct costs were negotiated. Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR34 at 5.

Meeting to Discuss Schedule Impact

145. Also on August 7, as previously agreed, representatives of HPCC, T&S, CRSS, and GSA met to discuss T&S's analyses of schedule impacts. Minutes of the meeting indicate that the schedule delays of concern to the parties involved far more than the multitude of changes in the plumbing and HVAC design. T&S is said to have presented a chronology of events leading to the schedule delays. Some of these events and items were listed as follows:

Better than 60% of the plumbing and HVAC piping has been changed.

-Numerous RFI's have changed pipe size, and some complete runs of piping, most of these changes increased the pipe sizes.

-Change Request 39 -Revised Roof Drainage (Re configuration of Roof Drains)

-Risers (incorrect Plan Views or not shown on drawings - routing and size changes have been made)

-Resizing with RDA [Reigel Doyle & Associates]

-Condenser Water Piping - Major Changes

-Cooling Tower and Underground Piping (piping to equipment not shown on drawings)

-No piping shown to FCU's [fan coil units]

-Re configuration of CRAC [computer room air conditioning], Chiller and Boiler rooms

Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 37 at 1; Transcript at 1561-65, 1581-82.

146. Notwithstanding the goal set at the earlier partnering session to resolve the mechanical schedule impact issues by August 8, matters remained far from resolved at the conclusion of the meeting on August 7. The meeting minutes state that T&S would examine the issue of whether the schedule could be accelerated through continued increase in manpower and CRSS and its consultant would review the schedule and impacts. In the meantime, CRSS and HPCC agreed to negotiate the direct costs associated with all of the various changes under discussion. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 144.

T&S Formally Advises HPCC of Manpower Increases

147. By letter dated August 29, T&S's project manager advised HPCC of T&S's specific increases in manpower to mitigate some of the delays associated with the many changes which had occurred to date. The letter states that the baseline schedule for the period of June through September indicated average man-loading of twenty-four men for plumbing, piping, and off-site fabrication activities. At the time, however, T&S actually had thirty-nine men on site and seven working in the fabrication shop. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 38. T&S's project manager testified that he wrote this letter out of a growing concern over the absence of any express direction from GSA to provide additional manpower. He explained that, as far back as June, T&S had begun to add manpower to the project. The number of workers had increased over the following months. He claimed that, prior to his letter of August 29, he had orally requested several times a written directive from GSA but had received nothing. Transcript at 995-98.

Events During the Month of September 1997

Negotiations on HVAC Design Changes (CR85)

148. In a final negotiation session on September 10, CRSS, HPCC, and T&S representatives reached agreement on a contract modification covering direct costs associated with HVAC drawing revisions. The following day, CRSS submitted Change Request (CR) 85 to HPCC with a final concurrence. Respondent's Supplemental Appeal File, Vol. 4, Exhibit CR85 at 1A. On September 17, T&S submitted its final proposal to HPCC based upon the agreement reached in the final negotiation session. Included in T&S's proposal is an adjustment of labor costs for the changed work based upon the MCAA labor inefficiency factors. Id at 13, 62-63. The proposal also notes that the changes in question will require an extension of forty-six days. The description of the costs proposed by T&S is the same as that provided in T&S's original proposal to HPCC on June 27 (Finding 129). They are all said to be direct costs. Id. at 27. HPCC in turn, by letter dated September 23, submitted this proposal of T&S as part of its own final proposal to CRSS. HPCC's cover letter for the proposal expressly stated that the proposal did not include costs associated with schedule delays and that these costs would be submitted upon completion of the schedule review. Id. at 22. Upon receipt of HPCC's filial proposal, CRSS forwarded it to the contracting officer with the request that the change be covered in the next modification to the contract. Id. at 1A.

149. At HPCC's request, T&S entered the ninety-five man-days of schedule impacts associated with the HVAC piping revisions into the project baseline schedule which included the thirty-eight day extension having a project finish date of December 11, 1998. By letter dated September 29, T&S's project manager advised HPCC's project manager that this resulted in a finish date of February 9, 1999. He also provided HPCC with a compact disc containing the revised schedule (IMP5). Respondent's Supplemental Appeal File, Vol. 14, G59.

Events During the Month of October 1997

T&S's Schedules Sent to CRSS

150. By letter dated October 2, HPCC forwarded T&S's revised schedule IMP5 to CRSS and asked for a meeting on the matter no later than October 8. The letter also advised CRSS that HPCC reserved the right to submit costs associated with the expected extension at a later date. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 40.

Negotiations on Plumbing Design Changes (CR34)

151. On October 8, representatives of GSA and CRSS met again with HPCC's and T&S's project managers to resume negotiations on HPCC's cost proposal for a contract modification covering the various revisions made in the contract plumbing drawings (Findings 116, 123). Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR34 at 5. T&S's project manager, who participated in these negotiations, testified that there was no discussion during the course of the negotiations about T&S entitlement to compensation resulting from the impact of the changes on unchanged work. Id.; Transcript at 901.

CR85 Issued

152. On October 14, the contracting officer issued modification PS-53, which covered CR85. The modification expressly stated: “Number of calendar days of contract time extension and costs related to the time extension will be included in a future Modification.” The findings of fact for the modification stated that the modification was issued because of design deficiency. An explanatory note states further that the A/E firm which prepared the contract documents was responsible for the CR and that if the documents had been correct the modification would have added only $20, 000 to the base bid but that because work was proceeding while RFIs were answered, labor inefficiencies occurred which inflated the price to $307,308. Respondent's Supplemental Appeal File, Vol. 4, Exhibit CR85 at 2A, 4A.

Only Direct Costs in CR85

153. CRSS's assistant project manager who participated in negotiations leading to CR85 testified that it was her understanding that HPCC intended to negotiate only direct costs for this CR and that any claim for indirect costs resulting from multiple changes would be priced separately. Transcript at 2630. The price negotiation memorandum for the same CR, which she drafted and signed, confirms that the negotiations involved only direct costs. Respondent's Supplemental Appeal File, Vol. 4, Exhibit CR85 at 6A. Similarly, T&S's operations manager testified that, in the final negotiation session for CR85 in which he and the project manager for CRSS participated, it was explained to him that CRSS did not want to include in this or other individual change requests anything for impact on base labor or for acceleration. Rather, this would be treated later as a separate and single item. He testified that a similar explanation was provided to him by the CRSS's assistant project manager when she participated in negotiations with him on subsequent change orders. Transcript at 1598-99.

GSA's Call for Acceleration

154. CRSS, after examining T&S's IMP5 schedule, raised several questions. This led to a subsequent revision (IMP8) of the schedule and a meeting of HPCC and T&S with GSA and CRSS representatives on October 15. A question raised at that meeting but not resolved was whether GSA wished to extend the project's contractual finish date or accelerate the mechanical work. Appellant's Supplemental Appeal File, GSBCA 14744, Vol. 1, Exhibit 42; Respondent's Supplemental Appeal File, Vol. 15, Exhibit G66. By letter dated October 17, CRSS advised HPCC that GSA “will accelerate the schedule to mitigate the impact caused by the HVAC conflicts detailed in Change Request No. 85.” The letter further advised that the method of acceleration would be that stated by T&S, namely, addition of manpower without overtime. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 147. A copy of CRSS's letter to HPCC was promptly provided to T&S by HPCC's project manager. Id., Exhibit 148.

CR34 Sent to Contracting Officer

155. By letter dated October 28, CRSS forwarded to the contracting officer CR34 with the request that the change be covered in the next modification to the contract. Backup documentation prepared by CRSS for the modification states that it was occasioned by a design deficiency. This was further explained with the note: “The contract drawings contained incorrect pipe sizes. The A/E is 100% responsible for this change.” Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR34 at 6.

Vibration Isolation Dispute

156. By letter dated October 31, 1997, CRSS advised HPCC that vibration isolation was required on all plumbing piping. Finding 16. T&S disagreed strongly with CRSS's interpretation of the pertinent contract provisions and requested an immediate partnering meeting to resolve matters. HPCC endorsed the request and asked CRSS to schedule a meeting no later than November 4. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 151. The contracting officer's directive of November 5 (Finding 20) following a meeting on the previous day led to a formal notice from HPCC to CRSS dated November 12, advising that the general contractor reserved the right to additional costs and/or schedule impacts created by GSA's reading of the applicable contract specifications. Id., Exhibit 153.

Events During the Month of November 1997

157. On November 24, 1997, T&S submitted to HPCC an evaluation of the additional costs said to have been incurred to date and estimated for the remainder of the project as a result of the acceleration of work and the impact to base labor from multiple changes, scope revisions, and lack of proper and timely information. Respondent's Supplemental Appeal File, Vol. 15, Exhibit G79. By letter of the same date, HPCC forwarded T&S's evaluation to CRSS together with a copy of a proposed overall project mitigation schedule (two diskettes). This schedule was designated as N11A. Id., Exhibit G81. It represented additional mechanical resources to prevent delays due to changes in scope as well as noncritical schedule revisions. Id., Vol. 18, Exhibit 152a at 6.

Events During the Month of December 1997 CR34 Issued

158. On December 4, 1997, the contracting officer signed contract modification PS-65, which covered CR34. The modification had been previously signed by HPCC on October 20. Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR34 at 1. At the bottom of page two of the modification, which is a facsimile of GSA Form 1137, the following language appears:

Number of calendar days of contract time extension required due to above changes. (Full justification of any extension should be provided). If no change in the time of performance results from these changes, write “None”. This does not effect [sic] the total contract completion date.

Id. at 2. To the right of this statement, the word “None” appears. Id.

Additional Considerations

T&S's Starting Dates

159. Under HPCC's approved baseline schedule, T&S was scheduled to start above-ground HVAC and plumbing activities in block D in early May 1997. Appellant's Trial Exhibit 7. Above-ground work on block C was scheduled to start in early March and above-ground work on block B was to start in late June. Because the ground or garden level of block A contained the major mechanical room where chillers were located, above ground at this level was scheduled to begin in January 1997 but work on the first level and subsequent levels was not scheduled to begin until after mid-August. Transcript at 2453; Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 11R).

160. In preparing update number one of the approved baseline schedule in early April (schedule data date of April 1), HPCC incorporated into the schedule the thirty-eight day calendar impact which T&S estimated to be associated with the change dealing with the perimeter drain system (Finding 115). This had the effect of delaying all of T&S's scheduled work not yet done by a period of similar duration. For example, T&S's above-ground work in block D, which was scheduled to begin in early May, would thus begin in early June. Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibits 16, 25).

161. Based upon his analysis of the project's as-built schedule, GSA's expert on construction scheduling testified that all of the subcontractors began work in advance of the approved baseline schedule and that T&S was no exception. This witness further testified that, according to daily reports prepared by T&S, on April 14, 1997, T&S was “working on piping on building D, garden level . . . .” Transcript at 2828-30, 3038; Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 26). This witness clarified his position regarding acceleration of work with the following statement:

Now, I'm not here to say that the contractor has no right to accelerate the job. That's not what I'm saying at all. I'm saying that if the contractor chooses to do that, the Government should not be responsible for the impact and the effects of doing that.

Transcript at 2853.

The On-going Labor Shortage

162. The problem created for T&S by the need to revise the project's plumbing and HVAC design was exacerbated by a developing labor shortage in the region. T&S was reluctant to leave any of its workmen without work for any period of time for fear that the workers would find other jobs and replacements would not be found. Accordingly, simply idling its work force while awaiting information on the final designs was not an option for T&S. Transcript at 767, 896, 1227-28.

163. Nor was it feasible for HPCC, as general contractor, to direct its other subcontractors to stop work in areas where T&S was unable to proceed due to the lack of a completed design. HPCC and its other subcontractors were facing the same labor shortage as T&S and were likewise facing a contract completion date that did not officially change until the modification covering CR22 was issued on July 1, 1997. Transcript at 924-25, 1223-28, 1302-03.

The Magnitude Versus the Timing of the Piping Changes

164. T&S's project manager was questioned during the hearing concerning the magnitude of the plumbing piping changes made during construction. He explained that there were various changes in piping size as well as addition and subtraction of piping. If one were to look at the total amount of change, sixty-five percent of the plumbing system was affected. He readily added, however, that the net change was not a huge number. Rather, the major impact of these changes was their timing. The changes occurred at a critical time when T&S was in the midst of preparing coordination drawings and working with other subcontractors in sleeving and imbedding the project. Transcript at 891-92.

HPCC's Decision to Proceed Despite Delays Encountered by T&S

165. At the hearing, HPCC's project manager was asked whether early in the project, in anticipation of getting a thirty-eight day extension of the contract schedule in connection with the perimeter drain system change (Findings 112, 115, 124-25, 133), his company advised its subcontractors that additional time would be available to perform their work. He replied that this was not done and would not have been done until the proposed extension was made official with the issuance of a contract modification. He readily admitted that the proposed extension was common knowledge before official approval in July and that in April a thirty-eight day delay had actually been incorporated into the contract schedule, thus moving the projected completion date from November 4 to December 11, 1998 (see Finding 101). Nevertheless, work in progress was still not delayed. HPCC's project manager explained that, up to June 27 when negotiations on CR22 finally concluded and the way was open to the issuance of a contract modification on July 1 officially establishing the thirty-eight day delay, it was still far from clear whether the delay would be granted. Prior to that time, HPCC had offered GSA two options. One was to delay performance by thirty-eight days. The other was to avoid delay through partial acceleration (see Finding 115). HPCC was aware that there was internal disagreement within GSA - primarily between the contracting officer and the project manager - on which course to follow. This disagreement was not resolved until late June (see Findings 124-25). Accordingly, the HPCC project manager explained that, prior to that time, he lacked the confidence to advise his subcontractors either officially or unofficially that there would be an extension. Transcript at 1326-27, 1441, 3100-03.

166. HPCC's supervisor responsible for coordinating me trades at the NOAA project site confirmed the critical impact which the timing of the piping changes had on the general contractor's plan for proceeding. He testified that when it became clear that design issues with respect to plumbing piping would make it impossible for T&S to move forward with installation according to the originally planned sequence, the company interrupted this sequence. When it was impossible to finish a particular scope of work owing to a lack of required information, crews would move on and return to complete the work once the information was available. In these situations, other trades were permitted to enter that particular work site to install as much of the other work as possible — unless even that was impossible because installation was dependent upon the completion of the T&S work which was temporarily on hold. Transcript at 1223-24, 1241. In short, HPCC made a choice between impacting all of the other subcontractors as a result of the design deficiencies or impacting T&S. Id. at 1223-27, 1250-52. HPCC's on-site coordinator testified that, although this decision would sometimes require T&S to work around and over or through the other trades and their work, he nevertheless considered it to be a prudent decision. He explained:

Because I've done a lot of work with Trautman & Shreve over the years, and I know what they're capable of doing. They're a qualified contractor, and that it really was a benefit to the project, I think, because it kept the issues in the right area where they needed to be.

Id U. at 1252.

167. T&S, therefore, proceeded with its planned installation when and where possible. Often crews returning to a site to complete work begun earlier found themselves working side by side with other subcontractors and under greater restrictions than originally planned. In addition, crews would periodically be called to work “hot spots, ” i.e., places where HPCC needed work to be completed without further delay so that a follow-on trade could continue to pursue its work. Transcript at 896-97, 1299-302.

168. Because T&S's crews were being spread out over multiple floors, T&S was required to provide more supervision than it had planned. This constituted yet another reason why T&S was forced to abandon its plan to use working foremen. See Finding 122. These workers thus became “non-working” foremen whose responsibilities were restricted to supervising crews split up and working in various areas, procuring materials, and obtaining and coordinating information as it became available. Transcript at 898-99, 903-04, 1223.

Additional Design Deficiencies

169. While most of the discrepancies in the plumbing and HVAC drawings were resolved while T&S was working in blocks D and C, as the work shifted to blocks B and A at the start of 199 8, T&S continued to encounter discrepancies in other drawings, particularly the laboratory gas piping systems. As in the case of plumbing and HVAC drawings, the location and size of various piping runs did not match from drawing to drawing, the need for pipe size reduction would not be shown, or some laboratory piping lines might not be shown on the drawings at all. This required the submission of additional RFIs, further delayed installation, and led to frequent conflicts with other trades, particularly the electrical subcontractor and the contractor responsible for installation of cabinets in the laboratories. Transcript at 1175-88.

The RFI Process

170. At the hearing, the Government's expert in schedule analysis stated that the RFI process did not have any significant impact on T&S's field labor productivity. He and his associates calculated that T&S had submitted a total of 506 RFIs. Of these, 291 (57.5%) required nothing more than clarifications and no further action on the part of GSA. On the other hand, 215 (42.5%) led to contract changes. He further concluded that 444, or 88%, of the RFIs were answered on time or within seven days of the date the information was requested. Of the remainder, 43, or 8.5%, of the RFIs were answered within two to four weeks of the date requested, and 12, or 3.5%, were answered later than four weeks after the date requested. Of the last category, 7 of the 12 RFIs led to changes. Respondent's Supplemental Appeal File, Vol. 23, Exhibit G234, Summary Report at 3.

171. On cross-examination, this same expert admitted that his staff, in undertaking this analysis of T&S's RFIs, made no attempt to determine whether the answers provided to the RFIs were correct or required further clarification. Follow-up RFIs would simply have been treated as just another RFI. Transcript at 2488. The expert farther explained that, based upon information provided by GSA's and CRSS's project managers, he operated on the assumption that once an RFI had been answered, HPCC or T&S could proceed with the work in question without farther delay. Id. at 2498. The record reveals that T&S frequently found it necessary to submit follow-up RFIs. E.g., Respondent's Supplemental Appeal File, Vol. 6, Exhibit G2 at 133, 135, 151, 154, 163, 184, 195. One RFI in particular, RFI 744, was submitted in early June and sought clarification on forty-seven items as a direct result of an RFI meeting which had been held on May 20 with a representative of RDA in attendance to discuss nine pending RFIs. Id at 254-61. Similarly, in late July, after another joint session with RDA and BCER engineers in attendance to resolve RFI issues (Finding 137), at least six follow-up RFIs were submitted. Id. at 300-04, 306. Indeed, it is interesting to note that this expert witness during cross-examination did not even appear to be aware of the protracted effort required after the initial meeting with RDA in May to resolve RFI issues relating to the plumbing and HVAC design. When asked about a meeting with RDA and BCER in July, the witness recollected only that this was a follow-up meeting to discuss whether RDA would prepare and reissue contract drawings. Transcript at 2500-01. He likewise was unaware of any conflict in advice given on the plumbing and HVAC designs by the consultants for BCER and RDA. Id, at 2491-92. As to the problems encountered by T&S in contract drawings for the lab gas piping system, this witness was of the opinion that the matter was not even in question in this case. Id. at 2495.

T&S's Labor Overrun

172. T&S contends that it budgeted a total of 71, 033 man hours for the NOAA project. This consists of 50, 159 man hours, as originally bid (Finding 88), plus a subsequent increase of 20, 874 man hours (nearly 42%) for change order work and for the installation of additional vibration isolation per the Government's directive. Transcript at 1941-42. T&S also claims, based upon its labor distribution report (Appellant's Supplemental Appeal File, Vol. 4, Exhibit 208), that it expended a total of 125, 449 man hours on the NOAA project. When the total of 71, 033 budgeted man hours is compared to this overall as-built figure of 125, 449 man hours expended on the project, a resulting labor overrun of 54, 416 man hours is found to exist. Transcript at 1939-43; Appellant's Trial Exhibit 28.

III. Appellant's Calculation of its Claim for Labor Productivity Losses and Other Damages

The Testimony and Report of Appellant's Expert

173. At the hearing, HPCC stated that its claim for labor productivity losses and other damages amounts to a total of $2, 072, 061.09. Of this amount, $ 1, 745, 148.28 represents costs claimed by T&S; the balance represents direct costs and markups claimed by HPCC. See Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement).

174. In support of its claim, appellant submitted a written expert's report and called upon that expert to testify at length regarding his analysis of the claim. The expert was Steven Huyghe, President and Chief Operating Officer of A.W. Hutchison & Associates. Mr. Huyghe was qualified without objection from the Government as an expert in construction (with an emphasis on mechanical construction specifically), construction scheduling, and construction labor productivity. Transcript at 1699-1700, 1734; Appellant's Trial Exhibit 11.

175. Mr. Huyghe has been employed in the construction industry since 1964, and has over the years performed work as a laborer, pipe fitter apprentice, project engineer, assistant superintendent, scheduler, project manager, and vice president and president of numerous construction firms, with the majority of his hands-on project management experience involving heavy mechanical projects, such as wastewater treatment and process plants. Mr. Huyghe holds a degree from Purdue University in construction management and is licensed as a general contractor. Mr. Huyghe has previously qualified and testified as an expert witness in the evaluation of lost labor productivity in various courts throughout the United States. Transcript at 1700-32; Appellant's Trial Exhibit 11.

176. Mr. Huyghe was retained by T&S to evaluate the construction of the NOAA project and to assess the extent to which T&S's labor productivity losses were attributable to the acts or omissions of the Government. Transcript at 1735-38; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205.

177. In performing his evaluation, Mr. Huyghe conducted a thorough review of the project records; visited the project site on multiple occasions; reviewed T&S's original plan for performing its work; conducted extensive interviews with HPCC's and T&S's project personnel; and prepared a detailed as-built schedule based upon documentation available to him, which plotted the project's progress in time from day to day. Transcript at 1741-47, 1763-67; Appellant's Trial Exhibit 12; Appellant's Supplemental Appeal File, Vol. 1, Exhibit 113. Mr. Huyghe also prepared as-built manpower curves based upon data contained in T&S's labor distribution report. The curves show the amount of labor being expended over time in the performance of both base contract and change order work. Transcript at 1773-77; Appellant's Supplemental Appeal File, Vol. 4, Exhibit 208. This data is displayed graphically in demonstrative exhibits prepared by Mr. Huyghe and used by him at the hearing. Appellant's Trial Exhibits 15, 16.

178. The as-built schedule was developed by Mr. Huyghe and his staff by manually plotting actual events and activities on a floor-by-floor, building-by-building basis for the entire duration of the project. In preparing the as-built schedule, Mr. Huyghe relied upon the daily logs prepared by HPCC, T&S, and other subcontractors; project photographs; project correspondence and other contemporaneous project documents; and multiple interviews with project personnel that worked in the field. Transcript at 1763-67; Appellant's Trial Exhibits 12, 14, 17. Preparation of the as-built schedule and manpower curves allowed an examination of the relationship between the actual events taking place on the job site and the amount of manpower being expended by T&S's plumbing and pipe fitters. Transcript at 1776-77; Appellant's Trial Exhibits 14-16.

179. Once his as-built schedule was prepared, Mr. Huyghe was able to correlate increases in T&S's manpower with the various unanticipated events in the life of the project, such as the detection of design deficiencies in contract drawings, the preparation and revision of coordination drawings, the release of other trades onto the site to mitigate the impact of the design deficiencies, the disruption created by the Government's insistence on the installation of vibration isolation on plumbing piping, and increases in change order and punch list work. Transcript at 1789-1813; Appellant's Trial Exhibits 15-16, 18.

Use of the MCAA Labor Inefficiency Factors

180. In order to assess the impact on T&S's productivity due to the unanticipated conditions encountered by T&S in installing plumbing and HVAC piping, Mr. Huyghe relied upon six of the sixteen standard factors affecting labor productivity identified in the MCAA publication entitled Factors Affecting Labor Productivity (MCAA Bulletin PDS 2 (1996), hereafter referred to as the “MCAA Manual”). Transcript at 1836-38, 1841-1842; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 200: see also Finding 76.

181. The MCAA Manual identifies sixteen potential factors affecting a mechanical contractor's labor productivity and, based upon the experience of its members, sets forth the expected loss of efficiency on a percentage basis depending on whether the pervasiveness of each individual factor is “minor, ” “average, ” or “severe.” For example, the MCAA Manual describes the effects of “stacking of trades” and the potential loss of productivity factors as follows:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 200. As set forth in the MCAA Manual, these loss of productivity factors are a tool for identifying and pricing change orders, as well as the effect of change order work on other unchanged work: “The values are a percentage to add onto labor costs for change orders and/or original contract hours.” Id. at 1; Transcript at 1836-37, 2393.

182. Mr. Huyghe concluded that six of these MCAA factors could have affected T&S's labor productivity on the NOAA project, namely, “stacking of trades, ” “morale and attitude, ” “reassignment of manpower, ” “concurrent operations, ” “dilution of supervision, ” and “learning curve.” Transcript at 183 6-3 8, 1841 -42; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 200. In addition to the manual's description of the factor “stacking of trades, ” already set out in the previous finding, the MCAA Manual provides the following descriptions for the other five factors selected for use by Mr. Huyghe:

“Morale and Attitude” Excessive hazard, competition for overtime, over-inspection, multiple contract changes and rework, disruption of labor rhythm and scheduling, poor site conditions, etc.

“Reassignment of Manpower” Loss occurs with move-on, move-off men because of unexpected changes, excessive changes, or demand made to expedite or reschedule completion of certain work phases. Preparation not possible for orderly change.

“Concurrent Operations” Stacking of this contractor's own force. Effect of adding operation to already planned sequence of operations. Unless gradual and controlled implementation of additional operations made, factor will apply to all remaining and proposed contract hours.

“Dilution of Supervision” Applies to both basic contract and proposed change. Supervision must be diverted to (a) analyze and plan change, (b) stop and replan affected work, (c) take off, order and expedite material and equipment, (d) incorporate change into schedule, (e) instruct foreman and journeyman, (f) supervise work in progress, and (g) revise punch lists, testing and start-up requirements.

“Learning Curve” Period of orientation in order to become familiar with changed condition. If new men are added to project, effects more severe as they learn tool locations, work procedure, etc. Turnover of crew.

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 200 at 2.

Division of Project into Three Periods for Purposes of Assessment

183. Because the impacts on T&S's productivity varied over time and from building to building, Mr. Huyghe divided the project into three separate periods and evaluated the impacts on T&S's plumbing and HVAC crews separately for each building and each time period. Period one covered from mid-April 1997 (commencement of above-ground piping) through June 1997; period two from July 1997 through February 1998; and period three from March 1998 through the end of the project. Transcript at 1759-61, 1783, 1789-815; Appellant's Trial Exhibits 20-25. This, according to Mr. Huyghe, permitted him to take into consideration specific events in making his evaluation of T&S's productivity losses. Transcript at 1784.

184. The three time periods were chosen to reflect the different events and impacts taking place on the project during each time period. Thus, period one represents the time frame during which the mechanical design deficiencies first restricted T&S's ability to follow its plan. During this period of time T&S was attempting to complete the plumbing and HVAC coordination drawings in the face of continuous revisions emanating from BCER and RDA even as work in the field progressed. Transcript at 1789-91; Appellant's Trial Exhibits 18, 19. Period two represents the time frame during which T&S began adding manpower to the project in an effort to mitigate the potential delays arising out of the design deficiencies. At the same time, T&S was tasked with responsibility for completing coordination drawings and preparing revised contract drawings, and faced the added burden of retrofitting vibration isolation on previously-installed HVAC and plumbing piping. Period two also includes the early stages of above-ground piping in buildings B and A, where T&S's ability to perform its work was restricted by the need to reassign manpower to complete the vibration isolation work in buildings D and C, even as the other subcontractors moved forward with their work. Transcript at 1791-1805; Appellant's Trial Exhibits 18, 19. Period three represents the time frame when T&S was attempting to complete its work in buildings D and C even as more change order work was added to its scope. Indeed, Mr. Huyghe concluded that T&S performed more change order work than base contract work in these buildings during this time period. In buildings B and A, T&S maintained its increased manpower to mitigate delays due to the continued restriction of its progress, even as additional changes continued to be made to correct design deficiencies. Transcript at 1806-15; Appellant's Trial Exhibits 18-19. Impact Upon Base Work of Plumbing and Piping Crews

185. Mr. Huyghe's principal task was to assess the impact of unanticipated changes and other events on the productivity of T&S's plumbing and HVAC piping crews in performing base contract work, and then only as to the crews' performance of rough-in work.

To do this, Mr. Huyghe determined the total number of as-planned or “budgeted” man hours which were to have been performed by these crews during each period of time. Consequently, in determining the number of base contract man hours that were potentially impacted by the Government's actions, he excluded from the 50, 159 man hours originally bid (Findings 88, 172) all man hours in T&S's estimate for the NOAA project for below-grade piping,²⁰ finish work, shop fabrication, etc. The number of potentially impacted as-planned or budgeted hours came to a total 36, 055.61 man hours. Transcript at 1831-33, 1850; Appellant's Trial Exhibit 20; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 1, Tab C at 14, Tab B at 25, Tab A at 34.

Distribution of Budgeted Base Contract Hours

186. Once the total number of potentially-impacted budgeted man hours was established for each building, it was then necessary to distribute those man hours over each of the three relevant time periods. Because T&S's as-planned hours were not allocated by time period, Mr. Huyghe distributed the hours in proportion to the total actual base contract man hours incurred during each time period shown by T&S's project records. This resulted in the following allocation of T&S's as-planned man hours by building and by period:

Transcript at 1833-35;Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 1, Tab C at 14, Tab B at 25, Tab A at 34.

The Expert's Actual Assessment of Impact on Base Labor of Plumbing and Piping Crews

187. Once the number of as-planned or budgeted hours was determined for each building and each period, Mr. Huyghe then made his own assessment of the impact of the Government's actions on T&S's productivity by evaluating the impact of each of the six productivity factors identified in the MCAA Manual on T&S's as-planned man hours for each building and each time period. As to each factor, Mr. Huyghe testified that his assessment was based upon his knowledge and understanding of the project which was derived from his numerous interviews with project personnel, his extensive review of the project documents, his construction and analysis of an as-built schedule, his experience in the construction industry, and his expertise in assessing labor productivity losses. Transcript at 1835-36, 1838-41, 1857; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205; Appellant's Trial Exhibits 18-25.

188. For example, during period two, in building D, Mr-Huyghe concluded that T&S suffered a loss of efficiency attributable to the Government of 10% due to reassignment of manpower because of the need to constantly move members of T&S's plumbing and HVAC piping crews from location to location and floor to floor to work on “hot spots.” These were the areas where work could be performed because the design was sufficiently complete, or where work had to be performed to avoid interference with other on-going work. Accordingly, Mr. Huyghe concluded that T&S had suffered productivity losses during this period due to reassignment of manpower in building D of 573.64 hours. He arrived at this figure by multiplying the number of budgeted man hours for work in building D (5736.49 hrs) during the period in question (period two) by 10%. Transcript at 185 8-61; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 3. Mr. Huyghe made similar assessments regarding conditions in the four buildings during me three periods using all, or at least some, of the six MCAA loss-of-productivity factors he had selected for purposes of his evaluation. His report contains individual sheets for each evaluation factor for each building. Included on these sheets is a textual explanation in support of his estimate of the labor productivity loss experienced during each of the periods of measurement.²¹ As a result of this analysis, Mr. Huyghe concluded that the base work of T&S's plumbing and piping crews suffered a total productivity loss, for which the Government was responsible, totaling 19, 335 man hours. Transcript at 1853-99; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 1-9, Tab C at 14-20, Tab B at 25-30, Tab A at 34-39; Appellant's Trial Exhibits 21-25.

A Separate Assessment for Impact of Vibration Isolation Work

189. Because of the significant impact of GSA's directive in November 1997 requiring T&S to install vibration isolation on all plumbing piping, including previously-installed piping, Mr. Huyghe separately evaluated inefficiencies associated with this event. He estimated the impact this event had on the base contract work of T&S's plumbing and pipe fitting crews from late November 1997 through July 1998, when most of the installation of the isolators in question was finally completed. Transcript at 1904-06. With respect to the additional loss of productivity caused by the Government's vibration isolation directive, Mr. Huyghe concluded that in buildings D and C only “dilution of supervision, ” “learning curve, ” “morale and attitude, ” and “reassignment of manpower” had an additional effect on T&S's base contract work, and only “dilution of supervision, ” “learning curve, ” and “morale and attitude” had an effect in buildings B and A. Based upon his assessment of these factors, Mr. Huyghe determined that the base contract work of T&S's plumbing and piping crews suffered a total productivity loss, for which the Government was responsible, totaling 5441 man hours. Transcript at 1910-15, 1920-29; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 10-13, Tab C at 21-24, Tab B at 31-33, Tab A at 40-42; Appellant's Trial Exhibits 26, 27.

Comparison Of Mr. Huyghe's Percentages With Those Recommended by MCAA

190. Although Mr. Huyghe used the MCAA inefficiency factors to make his analysis, he did not use the percentages recommended with the factors to reflect “minor, ” “average, ” or “severe” disruption. See Finding 181. Rather, he determined what he considered to be the appropriate percentage for the factor in question based upon his knowledge of the circumstances actually existing during the period in question (i.e., periods one, two or three) and the building in question (i.e., D, C, B, or A). The percentages which he used, when compared to those recommended by MCAA, tend, on the whole, to be conservative. By far the majority of his estimates fall between the percentages recommended on the MCAA chart for either “minor” or “average” disruptions. Appellant's Trial Exhibits 21-27.

Impact on Base Finishing Work and Equipment Setting of Fitters and Plumbers

191. In addition to losses of productivity suffered by T&S's plumbing and piping crews installing various piping systems, Mr. Huyghe also concluded that base finishing type work and equipment setting performed by T&S's fitters and plumbers on the project also suffered some labor productivity loss, at least in the area of “morale and attitude.” He estimated that this impact amounted to a total of 304 hours. This estimate, unlike those discussed above regarding rough-in pipe installation, is not based upon the number of budgeted or planned hours for the work (Finding 185), but rather, simply represents ten percent of the variance between hours budgeted and actually expended for this work. Transcript at 1944-45, 1948-49; Appellant's Trial Exhibits 28, 29. These 304 man hours, when added to the estimated productivity loss of 19,335 man hours for non-vibration isolation work (Finding 188) and 5441 man hours for the impact of vibration isolation work (Finding 189), result in a total estimated labor productivity loss of 25,080 man hours.

Additional Damages Relating to Loss of Productivity

192. In addition to the labor productivity loss of 25,080 man hours, which Mr. Huyghe concluded T&S's plumbing and piping crews experienced, T&S also seeks compensation for additional labor costs. These costs are also said to have been incurred as a result of the Government's disruption of planned contract performance. They include:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement). We make the following findings regarding each of these items.

193. With regard to additional material handling of shop-fabricated materials, T&S's vice president and operations manager testified that during the months of July and August 1997, T&S produced the shop-fabricated materials required for the NOAA project. Owing to the uncertainty regarding the plumbing and HVAC system designs, however, much of the material prepared was not delivered immediately to the site but rather was stocked temporarily at T&S's off-site shop pending resolution of drawing issues and confirmation of pipe sizes. After consulting with those involved in this work, the operations manager concluded that at least twenty percent of the material handling of shop-fabricated material at the shop itself involved moving materials out to the shop yard and subsequently bringing them back from temporary storage once the decision was made to proceed with delivery to the site. Based upon company labor records, T&S determined that during this two-month period 73 8 hours were expended in material handling at its off-site shop. Twenty percent of this figure amounts to the 147 hours claimed. Transcript at 1609-13; Appellant's Supplemental Appeal File, Vol. 1, Exhibit 114; Vol. 4, Exhibit 208.

194. With regard to material handling between T&S's fabrication shop and the project site, T&S's operations manager testified the company experienced a significant overrun on this activity. T&S's labor cost report shows that 782 hours were originally budgeted for this work but that a total of 2616 were expended. Appellant's Supplemental Appeal File, Vol. 2, Exhibit 184 at 1. Even after subtracting 814 hours included in negotiated change orders for this activity, there remains an overrun of 1020 hours. T&S's operations manager contends that the overrun was attributable to the number of changes “over and above what you'd normally have.” Transcript at 1621. He further explained that T&S's project manager frequently disagreed with GSA on the amount that should be allowed for this activity when change orders were negotiated. He admitted, however, that the sum total of 814 was what was “ultimately agreed to.” Id. at 1620.

195. T&S's operations manager explained that the company's claim for the cost of additional supervision stemmed from the fact that T&S had originally intended to utilize “working foremen, ” i.e., foremen who would direct the plumbing and piping crews and, at the same time, actually help them install materials. This, however, proved to be impossible. Owing to the extensive disruption of contract performance, the foremen became full-time managers taken up in planning and coordinating installation rather than actively working side by side with their crews. Transcript at 1625-28. When asked how this development increased T&S's costs, the company's operations manager explained:

It's adding people. I mean, we had him as a productive installer and now he's non productive. I mean, he was needed to make the work happen, but he wasn't installing. So somebody else had to take his place.

Id. at 1626-27. For blocks D, C, B, and A, therefore, T&S claims a total of 7132 hours for supervisory time expended by its originally designated “working” foremen. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 110.

Calculation of Quantum in Terms of Dollars

196. In calculating the dollar amounts of its man hour losses, T&S used a composite rate of $30.43 per hour for all productive field labor - i.e., the workmen who were actually performing the installation of plumbing or HVAC piping at the project site - and its “non-working” foremen who were required to supervise the additional labor. This rate is comprised of the actual cost of labor of $28.03 as audited by the GSA Office of the Inspector General, plus an allowance of $2.40 per hour for future costs due to accidents or injuries that occurred during the course of the NOAA project, such as insurance premiums and surcharges and direct costs to T&S for medical bills. A GSA auditor testified at the hearing that, at audit, only the $2.40 component of the $30.43 claimed labor rate was not accepted and that was simply because T&S could not explain at the time how the $2.40 had been calculated. Transcript at 2597. During the course of the hearing, this deficiency was rectified by T&S's operations manager who testified in detail on how he calculated this component. Id. at 1613-18, 1628, 2597; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 197; Respondent's Supplemental Appeal File, Vol. 19, Exhibit G210. For material handling between shop and project site, T&S claims a slightly lower labor rate of $ 18.47. Transcript at 1624; Appellant's Supplemental Appeal File, Vol. 1, Exhibit 114.

197. Using these labor rates, T&S calculated the dollar amount of its man hour losses to be $1,003,523.77. This figure is broken down as follows:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement).

Other Labor-Related Costs

198. In addition to the afore-described labor costs of $1,003,523.77, T&S also claims costs incurred for small tools necessitated or consumed by the additional labor, additional project engineering costs, and additional equipment costs, as follows:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement). We make the following findings regarding each of these items.

199. With regard to small tool costs, T&S calculated these costs at a rate of $ 1.40 per hour (or 4.6% of its composite hourly rate of $30.43), an amount which is less than the actual ratio of small tool costs to labor costs incurred by T&S on the NOAA project (7.57%) and less than the rate used by the Office of the Inspector General in its audit of T&S's claim (6%). Transcript at 1629-30, 2604; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 197; Respondent's Supplemental Appeal File, Vol. 19, Exhibit G210. The claim of $35,112 is based upon an application of the $1.40 per hour rate to the 25,080 man hours of lost production calculated by Mr. Huyghe.

200. T&S's operations manager explained that the claimed project engineering costs consist of the additional time spent by T&S's project engineer and its assistant project manager performing tasks related to the resolution of the various design deficiencies in the contract drawings, such as answering questions posed by workers in the field, preparing RFIs, and generally resolving issues created by the absence of a complete and coordinated design. Transcript at 1633. To the extent that the project engineer or his assistant coded work on their time cards as relating to changes, that work has not been included in this claim. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 107 at 2 (unnumbered). T&S's operations manager also explained that the responsibilities of the project engineer, as originally intended, were to work with the project manager and field superintendent, going through drawings, posting drawings, expediting materials, following up on RFIs, keeping logs up, and the like. This work of the project engineer at the NOAA project, however, was to be completed by the close of 1997. It was not. Transcript at 1637-40. T&S seeks a total of $69,682.41 for project engineering services rendered at the NOAA project site during 1997, 1998, and a brief period in 1999. Of this amount, $8401.29 is for services rendered by the project engineer during 1997. The remainder is for services rendered by the project engineer during 1998 and early 1999, and by an assistant project engineer primarily during the vibration isolation disruption in late 1997 and early 1998.²³ Appellant's Supplemental Appeal File, Vol. 1, Exhibit 107.

201. T&S's operations manager explained that the company's claim of $298,364 for equipment costs covers the cost of rented construction equipment such as heavy scaffolding, forklifts, trucks, trailers, and the like. The figure represents the balance remaining of the company's total documented equipment costs for the project after subtraction of the estimated costs of rental equipment in the initial bid and subsequent contract modifications, and other equipment provided for in the bid under some heading other than rental equipment but whose costs were nonetheless charged to the job and included in the total of equipment costs for the project. The remaining balance of rented construction equipment costs was also adjusted downward to reflect a similar claim for equipment costs made in conjunction with appellant's vibration isolation claim (GSBCA 14877). Transcript at 1643-51; Appellant's Supplemental Appeal File, Vol.1, Exhibit 115; Vol. 2, Exhibits 186, 188, 189; Vol. 3, Exhibit 206.

202. This T&S claim, like its vibration isolation claim (GSBCA 14877), also has been marked up for overhead (12%) and profit (10%), which are the same markups that the Government consistently allowed on change orders involving T&S's work throughout the NOAA project. Transcript at 1651-55. The markup for bond cost is .7%. Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement). This markup for bond cost, as already seen for the vibration isolation claim, is less than that claimed and allowed by the Government (1.2%) during the project. Finding 52.

203. T&S's total claim, therefore, is broken out as follows:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement).

HPCC's Own Claim

204. In addition to the costs incurred by T&S as a result of the lack of a coordinated piping design at the time of award, the Government's insistence on the installation of vibration isolation on plumbing piping and some additional HVAC piping, and the agreement to add manpower to mitigate schedule impact caused problems with piping designs, HPCC claims the following direct costs which, with markups, total $100,758.90:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement).

205. With regard to HPCC's claim of $11, 250 for additional quality control management, this figure appears in HPCC's original certified claim regarding labor productivity impacts. Appeal File, GSBCA 14744, Vol. 4, Exhibit 3 at 4 (unnumbered). HPCC concluded that 250 additional hours of quality control management were required as a result of the impact of changes upon base contract work over an estimated one-year period. The figure was arrived at by dividing the approximate value of the original claim ($3,000,000) by one-half the estimated value of a two-year contract ($25,000,000) and multiplying the resulting figure (.12) times the 2080 hours worked by its quality control manager annually. Transcript at 1387-90. The resulting figure of 249.6 is then rounded off to 250 hours. The cost of these hours ($11,250) was figured on the basis an hourly rate of $45, the same rate applied to a similar claim regarding vibration isolation. Finding 56.

206. HPCC also concluded that over a twenty-week period within the same twelve-month time frame, half the time of the quality control manager's assistant (namely 400 hours) was also spent coping with the labor productivity impacts. At an hourly rate of $35, this came to a total of $ 14,000. Much of the time of both the manager and his assistant was spent in becoming familiar with circumstances as they developed. As HPCC's project manager testified:

[T]hese changes didn't come in a well defined quantified document that these people could take and post their set of specs and drawings with. It was a number of issues over a long period of time that took some daily update of those changes.

And then once they understood what the change implemented - the change that was going to be implemented was, they saw to it in the field that it was taking place as directed through the RFIs and the CRs.

Transcript at 1392. HPCC estimated that the cost of QCM supplies and equipment in support of the quality control manager and his assistant amounted to $900. This represented 12% of the original amount budgeted by the general contractor for this item. Id. at 1394.

207. HPCC's certified claim also included a request for $34,275 for the services of a scheduler. This amounted to 457 hours at a rate of $75 an hour. Appeal File, GSBCA 14744, Vol. 4, Exhibit 3 at 4 (unnumbered). HPCC's project manager explained that, as information regarding the quantity and definition of the various changes became available and understood, HPCC attempted to assess their impact upon the schedule. Although HPCC had originally planned to do all scheduling in-house, it eventually became necessary to turn to outside consultants for help in developing a mitigation schedule (N11A) and various status schedules over an eight-month period. HPCC's project manager testified that, were it not for the impacts flowing from the mechanical and plumbing changes, this additional schedule work would not have been necessary. Transcript at 1395-99. He also stated that the $7 5 rate was the consultant's actual billing rate supported by invoices provided to GSA at the time the claim was audited. Id. at 1397.

208. With regard to the $5500 sought by HPCC for schedule equipment and supplies, HPCC's project manager testified that this involved such items as computer hardware and software, plotter time, plotter paper, and other consumable type costs. He further explained 14877 that the figure of $5500 represented an effort on the part of the general contractor to come up with a fair estimate of the additional costs incurred as a result of the impact of the mechanical changes. HPCC had originally budgeted $25,000 for schedule equipment and supplies. It estimated that these costs increased by 20% as a result of the impacts. Transcript at 1398-99.

209. The labor rates and markups used by HPCC in calculating its additional costs are the same as those consistently allowed by the Government on change orders during the course of the NOAA project. Transcript at 1385-401; Appeal File, GSBCA 14744, Vol. 4, Exhibit 3; Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement).

210. HPCC's total labor productivity claim, therefore, with the same markups as used in the vibration isolation claim (Finding 45) of a commission on subcontractor costs (10%), general liability and builder's risk insurance premiums (0.4%), performance and payment bond premiums (0.6%), and City of Boulder tax (3.11% of 50% of the total cost), amounts to a total of $2,072,061.09 and is broken out as follows:

Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205 (Summary of Entitlement). As noted with regard to appellant's claim regarding vibration isolation, these percentage markups have been allowed by the Government on change orders throughout the NOAA project and were audited and allowed by the GSA Office of the Inspector General in connection with its review of appellant's claim. Finding 57.

Discussion

Appellant's labor productivity claim seeks costs incurred as a result of labor inefficiencies caused by the disruption of its planned performance. The causes of this disruption are said to be as follows:

Appellant's losses arise out of three separate, but related, factors for which the Government is responsible: (1) the lack of a complete, coordinated design at the time the project was awarded which resulted in extensive changes to the various piping systems; (2) the Government's October 1997 directions to install vibration isolation on HVAC piping in Building B and on plumbing piping throughout the project; and (3) the Government's direction to add manpower to mitigate the potential schedule impact caused by the Government-directed changes.

Appellant's Posthearing Brief at 81.

GSA does not deny that there was a disruption of HPCC's and, in particular, T&S's planned performance. GSA, however, contends that, in the final analysis, the disruption was not the fault of the Government but rather is directly attributable to the actions of appellant and its subcontractor, T&S. As to the three principal causes of disruption enumerated by appellant, the Government is prepared to recognize that the problems encountered with the various piping systems did produce some local or direct impact. Nevertheless, it contends that appellant was compensated for this impact through the change orders which were negotiated to resolve these issues and now has no right to a claim for anything more. As to the disruption resulting from the order to install vibration isolation, as we have seen, the Government contends that this was required by the contract and, therefore, any responsibility for disruption must rest with the contractors themselves. Finally, with one exception concerning CR85, respondent denies that it ever directed appellant to add manpower to mitigate the potential schedule impact caused by the Government's various directed changes.

We examine first the Government's arguments regarding the three major sources of disruption which appellant contends precluded it from following its planned performance (Part I). Our discussion then turns to the causes of the labor inefficiencies for which appellant seeks relief (Part II). Finally, we examine the evidence appellant has presented in support of the quantum of its claim (Part III).

Part I

Can the Disruptions Identified by Appellant Serve as the Basis for Its Labor Inefficiency

Is Appellant Barred from Recovering Additional Compensation for the Impact of Piping System Changes Now That Bilateral Change Orders Covering Those Changes Have Been Executed?

It is beyond dispute in this case that the two major change orders dealing with piping systems, namely CR34 (plumbing piping) and CR85 (HVAC piping) did contain provision for local or direct impact. HPCC, however, contends that its claim is not for labor inefficiencies associated with local or direct impact but rather with the impact of changes upon unchanged work. In support of its claim, HPCC relies upon that provision of the contract Changes clause, which states that a contractor is entitled to recover not only those impact costs regarding the new work, but also the costs resulting from the impact of the change on unchanged or basic work. Finding 2.

GSA argues that appellant is not entitled to recover those costs associated with the impact of changes on the unchanged work (sometimes referred to as “cumulative” — as opposed to “direct”— impact costs) because these costs were readily foreseeable at the time the piping system changes were agreed to, but nonetheless were neither expressly nor implicitly excluded from the signed modification. Hence GSA contends that appellant should now be deemed barred from recovering additional impact costs resulting from those changes. Respondent's Posthearing Brief at 68-69.

Respondent correctly cites two of our decisions, namely William Passalacqua Builders. Inc.. GSBCA 4205, 77-1 BCA ¶ 12,406, and Dawson Construction Co.. GSBCA 3 998, 75-2 BCA ¶ 11,563, in support of the general proposition that priced-out change orders bar recovery of further costs associated with those changes. Respondent's Posthearing Brief at 68. Nevertheless, in a subsequent decision we wrote:

Examination of Dawson and Passalacqua reveals that the bar erected by those cases is not nearly as absolute as it appears. Dawson specifically recites that the Board “found no oral understanding between the parties which would serve to alter the written provisions of the change order, ” 75-2 BCA at 55, 203, thereby permitting the inference that proof of a contrary understanding could cause the Board to reach a different conclusion. In Passalacqua the decision seems to rest primarily on the factual inference that appellant was in fact not incurring any impact costs at the time the earlier changes were priced. ... Thus, these cases turn on their facts and are distinguishable from cases in which the parties expressly or tacitly agreed that certain categories of costs were not part of their agreement.

Pittman Construction Co.. GSBCA 4897, et al., 81-1 BCA ¶ 14, 847, at 73, 299.

GSA writes: “Except for a schedule extension with regard to CR85, Appellant did not agree to exclude any costs from the scope of the bilateral modifications.” Respondent's Posthearing Brief at 69. We disagree. The facts in this case indicate otherwise.

At a meeting on July 15, 1997, HPCC and T&S officials advised the contracting officer and GSA's and CRSS's project managers that T&S was experiencing major impacts as a result of the multiple revisions to the HVAC and plumbing piping. At that time the contracting officer recognized the difficulty in assessing these impacts and acknowledged that a proposal dealing with them would be presented at some future date once T&S was in a position to quantify them. Finding 135. In late November, the proposal was in fact submitted. Findings 58-59. Immediately after the meeting of July 15, T&S urged HPCC to provide formal notice of the impacts discussed at the meeting. T&S's letter distinguished between the impact of direct costs and the impacts to the overall mechanical work “resulting from the cumulative effect of multiple changes and revisions.” T&S wrote that the latter were not addressed in pending proposals. Finding 136. By letter dated July 31, HPCC provided formal notice of these cumulative impacts to CRSS. In doing so, HPCC provided CRSS with a copy T&S's letter explaining the nature of the impacts. Finding 140.

In short, we are convinced that, in this case, the parties clearly understood from the outset and, therefore, tacitly — if not expressly - agreed to deal separately with the impact of the piping changes on the unchanged or basic work. Evidence in the record regarding the proposals and negotiations leading to the subsequent issuance of the contract modifications covering CR85 (on October 14, 1997) and CR34 (on December 4, 1997) provides abundant confirmation of this fact. The proposals submitted and the negotiations of those proposals dealt only with direct costs, while it was the understanding of representatives of CRSS, HPCC, and T&S that the contractor's claim for impact of the piping system changes on unchanged work would be treated at a later date as a separate and single item. Findings 69, 116, 123, 129, 144, 148, 151-153, 155, 158. We also see confirmation of the tacit agreement to deal separately with the impact of piping system changes on unchanged work in the tortuous history of appellant's claim from the time of the proposal submission in November 1997 to the submission of the certified claim in July of the following year. See Findings 60-80. The proposal, when submitted in November 1997, did not come as a surprise to GSA, and throughout the many months that it was under consideration, it was never rejected on the ground that it was barred as a result of the finalization of CRs 34 and 85. Indeed, the affirmative argument of accord and satisfaction was not raised by GSA until shortly before the hearing for this appeal was convened in late November 1999. We, therefore, do not view the actual issuance of contract modifications covering CR34 and CR85 as a bar to appellant's recovery of losses resulting from the impact of the piping system changes upon basic or unchanged work.

Is Appellant Entitled to Compensation for Labor Inefficiencies Suffered as a Result of GSA's Insistence on the Installation of Vibration Isolation?

In our discussion of GSBCA 14877, we have already dealt in considerable detail with the various arguments raised by GSA in opposition to HPCC's contention that the contract did not require vibration isolation on the project's plumbing system or on certain HVAC piping in block B. Given the conclusion we reached in reviewing that claim, it necessarily follows that appellant is entitled to compensation for labor inefficiencies suffered as a result of GSA's insistence on the installation of vibration isolation.

Before leaving this issue, however, we should perhaps underscore the fact that in the labor inefficiency claim we are examining here in GSBCA 14744appellant does not seek compensation for inefficiencies encountered in the actual installation of vibration isolation. 

That relief is part of the direct labor costs sought under GSBCA 14877. As we have already pointed out in the preceding section, appellant's inefficiency claim does not seek compensation for labor inefficiencies for changed work. Rather, what is sought here is compensation for the inefficiencies produced in the performance of base contract work. In this case it is the inefficiencies experienced in the performing of base contract work as a result of the Government's insistence that vibration isolation be installed. Because we agree with appellant that the contract did not require the isolation, we conclude that the contractor is entitled to compensation for any inefficiencies experienced in the performance of base work as a result of the GSA's insistence on its installation — provided, of course, that appellant can prove that such inefficiencies occurred.

Did the Parties Actually Agree to the Addition of Manpower to the Project at the Government's Expense in @Order to Mitigate the Impact of Changes in the Project's Piping Designs?

By the time appellant submitted its certified claim for impact and acceleration costs on July 1, 1998, the positions of the parties regarding the issue of acceleration costs were fairly well defined. HPCC and T&S remained convinced that there was an agreement reached in June of the previous year to add manpower to the project to mitigate the effects of the changes in mechanical design and that the cost of this additional manpower would be borne by the Government. Although this alleged agreement on the part of the Government was not immediately memorialized in writing, HPCC and T&S considered it eventually confirmed in October when T&S was formally authorized “to accelerate the schedule to mitigate the impact caused by the HVAC conflicts detailed in Change Request No. 85.” HPCC and T&S obviously did not consider the “good faith” payment of $50,000 authorized in February 1998 as adequate compensation for the costs being sought. Finding 70. They likewise were of the opinion that the documentation submitted in support of their claim was adequate. Finding 75. Finally, following the rejection of their claim for acceleration and impact, HPCC and T&S insisted that GSA should consider their earlier request for an extension of the contract completion date as an alternative to acceleration. Finding 81.

The Government, for its part, denied that it had authorized acceleration except for a unilateral modification issued in June 1997 to avoid an anticipated twenty-two day delay as a result of a revised underground plumbing design for block B and the call for acceleration in mid-October 1997 regarding the HVAC changes covered by CR85. Findings 65, 119, 154. As for the payment of $50,000 authorized in February 1998, this was said to cover the schedule impact on the approved baseline schedule resulting from the direct costs of CR85 — the only item on which GSA allegedly ever acknowledged entitlement concerning the impact of CR85. Finding 77. On the issue of documentation, GSA had, from the initial submission of appellant's claim in September 1997, continually decried the lack of adequate documentation. Findings 60-61, 63, 74-75, 77, 80. As to HPCC's requests for time extensions, the contracting officer denied the existence of such requests since nothing had been filed within the fourteen-day period established under the contract for submission of these requests. Finding 81.

We turn first to the issue of whether the parties did in fact agree to add manpower to the project in order to mitigate the impact of delays owing to changes in the plumbing and HVAC piping design. Given the evidence before us, we are convinced that, at the meeting of representatives of the parties on June 24, 1997, agreement was reached that the impact of changes in the plumbing and HVAC piping designs would be mitigated by the addition of manpower rather than by authorization of overtime, that this would be at the Government's expense, that this plan was made known to the contracting officer shortly thereafter, that the contracting officer posed no objection to it, and that, as the project progressed, it was well known to the Government that T&S was in fact adding manpower to the project. Findings 127-28, 139, 146. We find it indeed puzzling that, even after the October 17 letter expressly authorizing acceleration, the GSA project manager advised the contracting officer that T&S was incorrect in asserting that it had been directed to accelerate. Finding 65. We find it equally puzzling that the contracting officer, after being advised of the agreement in June to add manpower and expressly authorizing it in October, would ignore these facts in his letter of January 9, 1998, to HPCC. Finding 66.

As to the adequacy of the $50,000 payment authorized in February 1998, disagreement between the parties on this issue as well as over the adequacy of supporting documentation appears to stem from how the parties understand “acceleration, ” as the term is used to describe appellant's claim. The contracting officer's explanation of how the figure of $50,000 was determined, his subsequent letter of March 10, 1998, and CRSS's earlier letter of December 11, 1997, all indicate that “acceleration” has been understood in its strict sense and that any compensable acceleration would, of necessity, have to be tied closely to critical path items on the contract baseline schedule. See Findings 60-61, 70-72, 74. HPCC and T&S, on the other hand, appear to have used the term “acceleration” in a less technical sense. Given this divergent approach to the concept, it does not surprise us that the parties remained at loggerheads over the adequacy of the $50,000 payment and the adequacy of the documentation provided in support of the “acceleration” claim. In short, while we are convinced that the parties agreed to add manpower to the project at the Government's expense, we do not believe that this was based on any implied understanding of how appellant would be eventually compensated for this expense. Herein lie the seeds for much of this dispute.

Given the unique circumstances of this case, the contracting officer's refusal to consider appellant's request for time extensions after denying the acceleration claim is also difficult to understand. Following the issuance of CR22 on July 1, 1997, and the consequent extension of the contract completion date from November 4 to December 11, the parties appear to have remained intent on preserving that date as the contract completion date despite not only the changes in plumbing and HVAC design but also other changes. Findings 141, 145-46. Time extensions were hardly the order of the day. Understandably, the contracting officer's letter of January 9 suggesting that the costs associated with meeting the December 11 completion date were to be borne by the contractor came as a genuine surprise to HPCC and T&S. This, however, prompted the contractors to remind the Government that, in view of the impacts which had occurred, the only realistic alternative to acceleration was time extension. T&S promptly broached the issue in writing and in clear terms, submitting at the same time a detailed analysis together with schedule fragnets. All of this was forwarded to the Government by the general contractor. Findings 67-69.

The contracting officer's next move was as perplexing as his letter of January 9 suggesting that appellant was perhaps not entitled to any payment for acceleration. In early February 1998, he authorized payment of $50,000 to appellant for “costs associated with directed acceleration and impacts.” Finding 70. For the next three months the parties were engaged in renewed discussion of appellant's acceleration and impact claims. Findings 74-78, 80. The prospect of time extensions once again receded to the background and the mechanical work remained subject to acceleration. Once, however, the contracting officer in his letter of May 7 finally rejected definitively appellant's acceleration and impact claims, he was confronted again with the alternative claim for a time extension. Findings 80-81.

We find no evidence here that appellant slept on its rights under the contract to seek time extensions. The clear message sent by the Government to the contractor from July 1997 to January 1998 was that the contract completion date of December 11, 1998, was to be maintained. When, however, in January 1998 GSA suggested that the costs of maintaining this date, despite numerous adverse impacts, was to be borne by appellant, the alternative of time extensions was raised in what we would consider, under these circumstances, to be a timely fashion. The issue, however, was understandably put aside once more when the contracting officer approved payment of $50, 000 and resumed discussions regarding the acceleration and impact claims. It should have come as no great surprise to the contracting officer, therefore, that appellant promptly resurrected the issue once its claims for acceleration and impact were finally rejected. Accordingly, the contracting officer's refusal to discuss appellant's time extension requests on the technical ground that they were non-existent because they were not timely filed is, to say the least, disturbing.

Shortly after the meeting of the parties on March 11, 1998, T&S proposed use of the MCAA inefficiency factors to resolve the pending impact andacceleration claims. This suggestion of T&S was put forward by HPCC for the Government's consideration. Finding 76. The idea was promptly rejected by the contracting officer with the brusque observation that the claimant's time would be better spent attempting to prove entitlement rather than proposing methods for calculating quantum. Finding 77.

We find the proposal to use the MCAA factors particularly significant and far from limited merely to a calculation of quantum. It represented a return on appellant's part to the approach it had used in the initial presentation of its claim in November 1997. At that time, T&S noted that, because the acceleration took place while the work was being impacted by various delays and disruptions, it was extremely difficult to separate acceleration costs from impact costs. Finding 58. In a letter dated December 11, 1997, however, CRSS's project manager wrote that as long as the acceleration costs were combined with the request for impact or inefficiency costs, it would be impossible to resolve the claims. He insisted, therefore, that any claim for acceleration costs must be broken out and supported by a schedule showing the additional resources allocated to specific activities in quantities sufficient to remove the negative float and maintain the current completion date. Finding 60. Almost three months later, the contracting officer, in his letter of March 10, made a similar demand. Finding 74.

The subsequent proposal by T&S that the MCAA inefficiency factors be used to address the acceleration issue once more linked the two claims rather than dealing with them separately. By using this theory of recovery, appellant reintegrated the acceleration claim into the labor inefficiency claim and, in effect, stripped the former of those features which would otherwise characterize it as an acceleration claim in the strict sense of the word. What T&S was then proposing to the contracting officer was no longer that it be reimbursed directly for the manpower it found necessary to add to the project, but rather for the impact of this additional manpower on the base work. This addition of resources, to which we have found the parties agreed, thus, through me application of MCAA inefficiency factors, is seen rather as a source of disruption leading to labor inefficiencies rather than as the basis for an acceleration claim in the strict sense of the word.

Although the contracting officer rejected appellant's proposal to use the MCAA inefficiency factors, HPCC did in fact make use of them in formulating the certified claim it submitted on July 1, 1998. Finding 84. In briefing this claim, appellant continues to present the facts regarding the alleged “acceleration” as the source of additional disruption leading to labor inefficiencies. Appellant's Posthearing Brief at 81, 93; Respondent's Posthearing Brief at 87.

There is considerable merit in the approach ultimately hit upon by appellant for dealing with increased costs associated with the addition of manpower to the project. It circumvents the special requirements which must be met before a claimant can be reimbursed for acceleration costs — with which the Government understandably was concerned once it insisted on the claim for acceleration costs being broken out from HPCC's original impact claim. In particular it obviates the need to ensure that the additional manpower was no more than that required to overcome negative float and keep the contract on schedule. It likewise permits the claimant with the aid of its expert to assess the impact of the labor increase on base activities as opposed to critical path activities.²⁴ In addition, with this approach, appellant lays aside its claim for time extensions as an alternative to acceleration. Above all, by viewing the facts related to T&S's increase in manpower as the basis for a labor productivity claim rather than an acceleration claim, the Government is thus able to honor in an acceptable fashion the commitment previously made to assist with the costs attendant to the addition of manpower to mitigate the impacts resulting from design changes and keep the project on schedule.

In summary, we are most definitely convinced that GSA did in fact reach agreement with HPCC and T&S that the adverse impact of changes in the project's piping design would be mitigated by the addition of manpower to the project rather than by an extension of the contract completion date or the authorization of overtime. We likewise are convinced that, under this agreement, the Government was in some manner expected to bear the cost of these additional resources. We therefore conclude that appellant's request that it be reimbursed for the labor inefficiencies resulting from the disruption caused by the subsequent addition of manpower is entirely reasonable and should be honored by the Government in view of the agreement previously reached by the parties - provided claimant can demonstrate that the addition of manpower to the project did in fact adversely impact the unchanged work in the manner and to the degree alleged.

Part II

The Causes of the Labor Inefficiencies for Which Appellant Seeks Relief

A second line of argument pursued by GSA is that even if appellant is not barred from seeking further relief for disruptions, it must prove that the labor overruns said to be associated with the alleged inefficiencies were in fact attributable to these disruptions rather than to causes within appellant's control. This was an issue initially raised by CRSS when HPCC presented its original impact claim in November 1997 and again referred to by the contracting officer when he ultimately rejected the claim in May of the following year. Findings 60, 80. Among the possible causes suggested by GSA are failure to coordinate work properly, failure to read vibration isolation requirements correctly, underbidding the job, substantial difference between T&S's original performance plan and that ultimately incorporated into the baseline schedule, labor shortages, and time lost on unacceptable work. Finding 60; Respondent's Posthearing Brief at 76. We consider them in turn.

Was the Disruption of Appellant's Planned Performance in the Spring and Summer of 1997 Attributable to Causes Within the Control of HPCC andT&S?

GSA contends that the disruption of HPCC's planned performance was attributable not to changes in the project's piping systems, but rather to the general contractor's failure to coordinate the project work and, in particular, in the contractor's failure to take advantage of the thirty-eight day delay of the project in the spring of 1997. In their posthearing brief, counsel for GSA write:

[T]he original baseline schedule called for T&S to begin plumbing in Building D, garden level, on May 6, 1997.... Schedule update #1, which incorporated the 38-day extension, called for T&S to start plumbing on June 2, 1997. Instead, T&S resumed plumbing work on April 14, 1997, about seven weeks early. This early start significantly disrupted the work in Building D because T&S was “stacked” among other subcontractors, who were also working ahead of schedule. . . . Any disruption caused by T&S's early start and the consequent mingling of the trades is not GSA's fault.

Respondent's Posthearing Brief at 72.

It is correct that when HPCC prepared update number one of the approved baseline schedule in early April, it incorporated into the schedule the thirty-eight day calendar impact which T&S estimated to be associated with the change dealing with the perimeter drain system. Findings 115, 160. It is likewise true that this had the effect of delay ing all of T&S's scheduled work not yet done by a period of similar duration. Accordingly, T&S's above-ground construction in block D, which was scheduled to begin in May, would thus have been scheduled to begin instead in early June. Finding 160.

The Government faults HPCC for continuing to work during April and May 1997 rather than follow the updated schedule with its thirty-eight day delay. We do not. We consider HPCC's decision to be a prudent one under the circumstances. The situation confronting the general contractor during this time was far from encouraging. Serious problems had emerged already with regard to the contract drawings for the plumbing piping systems and, by May, similar problems were found to exist with the drawings covering the HVAC system. These problems gave rise to a myriad of issues requiring resolution through multiple RFIs and resulted in a delay in the preparation of critical coordination drawings. Findings 107-14, 116-18. The proposed thirty-eight day delay had indeed been incorporated into the updated baseline schedule, thus showing a project completion date of December 11. The contractual completion date, i.e., the date to which HPCC remained committed under the contract, however, remained November 4, and the schedule, as updated, showed twenty-six working days of negative float. Finding 101. The prospects of the proposed delay actually being approved by GSA were still uncertain. HPCC's project manager testified that GSA remained undecided over delay versus acceleration until the close of June. Finding 165. Contemporaneous documentation in the record confirms the fact that, until mid-June, GSA remained undecided both as to whether delay should be authorized and as to how long it should be even if authorized. Findings 120, 124-25.

HPCC, therefore, elected to continue work following as best it could its original planned sequence and requiring T&S, when necessary, to work around the other trades. Findings 165-68. Certainly delay of the project during April and May based solely on the hope that an extension of the contract completion date might eventually be approved would most certainly have been fraught with unacceptable risks. In addition, there was the very real possibility that the resumption of work after such a delay would have brought its own set of problems, given the chronic labor shortage in the area at that time. Findings 162-63. We, therefore, most certainly do not look upon HPCC's decision to press on during April and May as the cause of the disruption of appellant's planned performance. The evidence contained in the record convinces us instead that this decision was well advised and represented a genuine effort on the part of the general contractor to contend with and mitigate, if possible, the unexpected disruption of its planned performance during the first half of 1997 owing to the deficiencies in piping designs.

GSA's expert in contract scheduling expressed the opinion that HPCC's problems with coordination of trades was not attributable to disruptions caused by changes in piping designs, but rather to the general contractor's decision to “over accelerate the job.” He explained that once HPCC was aware of the prospect of a thirty-eight day delay and the increase in contract price by $24, 000 a day to cover general conditions for that period of time, there was ample motive to beat the delay and thus apply that compensation to pure profit rather than to overhead and profit. Transcript at 2659. HPCC's project manager has denied the accusation, pointing out that during the months of April, May, and June 1997, Government officials were very much aware of the problems facing the contractor and that the GSA project manager himself actually complemented T&S on its ongoing efforts to mitigate the impacts and delays encountered. Id. at 3106-07. We find the expert's argument unconvincing. Certainly every contractor is aware of the benefits of beating its schedule. Nevertheless, in this case, the facts indicate that the contractor's efforts were undoubtedly directed to catching-up with and, if possible, maintaining its schedule, rather than accelerating the schedule for the sake of pure profit.

What, however, was the ultimate cause of the disruption confronting appellant in the first half of 1997? Upon review of all the facts before us, we find nothing to convince us that the disruption was due to causes within the control of HPCC or T&S. Throughout this period these contractors were intent on moving the project forward notwithstanding the problems encountered. They submitted numerous RFIs, sought frequent meetings with CRSS and its engineering consultants to resolve the issues presented in these RFIs, and prepared change estimates covering the system changes ultimately deemed necessary.

Instead, it is our conclusion that responsibility for the disruption which ultimately made it impossible for T&S to follow its intended sequence of work rested with the Government. T&S states that its plan for the NOAA project was based in part on the assumption that the plans provided by the Government were complete and reasonably coordinated. Finding 106. They were not. Unrebutted evidence in the record indicates that even before award CRSS determined that there were deficiencies in the mechanical bid drawings. Finding 108. Following award, the magnitude of these deficiencies became increasingly apparent.

From January to late July 1997, the parties strove to resolve the problems posed by the deficiencies in the contract drawings. During this period, and afterwards as well, HPCC and T&S were critical of the RFI process. Evidence provided indicates that this criticism was justified and cannot simply be dismissed as typical contractor impatience. GSA has attempted to defend the adequacy of the RFI process with the report and testimony of an expert in schedule analysis. Finding 170. Nevertheless, we find his testimony unconvincing. His failure to differentiate between initial and follow-on RFIs and to make any qualitative evaluation of the answers provided to RFIs renders his analysis virtually useless for our purposes here. Further, his reliance on the representation allegedly made by GSA's and CRSS's project managers, that once an answer was provided the contractor could proceed without delay, was clearly misplaced. Again, such an assumption ignores the possibility of follow-on RFIs — of which there were many. Finding 171. As late as May 6, when T&S forwarded its change estimate on plumbing design changes, it identified twenty-eight specific drawings which had already been revised and noted that there were still items in these drawings which would require further clarification or direction through the RFI process. Finding 116. Indeed, changes were still being made in plumbing drawings at an RFI meeting on May 20. Finding 118. One critical part of the RFI process involved the participation of the original engineering firm of record, RDA. This further complicated the process and inevitably led to further delays. Findings 110-11, 118, 126, 134, 137.

Without amplifying the record further, we cannot tell with precision how much of the disruption of appellant's planned performance was attributable to the deficiencies in the contract drawings and how much instead was attributable to possible deficiencies in the RFI process — including the need to coordinate often between the two consulting engineering firms. In the final analysis, however, for this case, it makes no difference. What we do know here is that these delays and disruptions are readily and ultimately traceable to the deficiencies in contract drawings provided to the contractor by the Government.

GSA would have us believe that the problems HPCC and T&S encountered with the contract drawings have been grossly exaggerated by appellant. We are told that the changes ultimately agreed to for the plumbing system were neither complex nor of great magnitude, that the labor hours negotiated for the HVAC changes represented only 9.1% of the labor hours expended by T&S on HVAC work, that the total cost of materials for the HVAC work was only $13, 000, and that the impact of these various changes occurred at the beginning of the project and thus was for only a short period before being incorporated into the contract schedule. Respondent's Posthearing Brief at 72-74. Further, the Government's expert on schedule analysis who testified regarding the RFI process expressed the opinion that the problems encountered with the drawings were typical of a project of this size and readily resolved through the RFI process. Transcript at 2363, 2375.

It is in fact true that in the past we have sometimes denied cumulative impact claims on the ground that the number of changes involved and their dollar magnitude have not seemed to us sufficient to produce a significant impact upon the unchanged work. E.g., Freeman-Darling Inc.. GSBCA7112, 89-2 BCA ¶ 21, 882. Such determinations, however, are not made in a vacuum without consideration of the attendant circumstances in each case. In this case, the record amply supports the conclusion of T&S's project manager that it was not so much the magnitude of the piping system changes as it was their timing which produced such a significant impact. See Finding 164. By “timing” we understand this witness to be referring not only to when the disruption occurred in the course of the project but to its duration as well.

As early as January 1997, when T&S began work on coordination drawings, it encountered what it described as major discrepancies in the contract's plumbing drawings. Finding 108. The time and intense effort required to resolve the issues presented first with the plumbing system design and later with the HVAC design convince us that from the outset this was far more than a typical problem readily resolved through the RFI process. CRSS promptly sought the assistance of its engineering consultant, BCER, and at the same time advised GSA that BCER's services would have to be deemed as “extra” since they exceeded the scope of the contract with that company given the “massive” coordination issues involved. Finding 109. Once BCER became privy to the nature of the problems, it quickly advised CRSS that there were limits to the assistance it could provide. BCER recommended instead to CRSS that the engineering firm responsible for the original design be called in to assist in the revision of the piping designs and in a general review of these systems once revised. Findings 110-11. The problems presented by the contract drawing deficiencies were not readily resolved and eventually caused HPCC to modify the sequence it had originally planned to follow for T&S vis-a-vis other subcontractors. Findings 166-67.

Clearly in this case, it is not to the material or labor costs of the piping changes ultimately agreed to that we look in order to assess the magnitude of the disruption which occurred. Given the facts here, it is to the timing of the disruption, its duration, and to its resulting consequence that we look. And there we see the general contractor significantly thwarted, through no fault of its own, in its effort to coordinate the project as originally planned.

Were Appellant's Alleged Inefficiencies the Result of Appellant's Failure to Read Vibration Isolation Requirements Correctly?

This argument of course carries no weight in view of our conclusion reached earlier that HPCC and T&S did in fact read these specifications correctly.

Were Appellant's Alleged Inefficiencies the Result of Appellant's Underbidding the Job?

GSA would have us conclude that T&S significantly underbid its portion of the NOAA project and for that reason encountered labor costs significantly in excess of its original estimate. We find the argument unconvincing. The bid was developed using an estimating system which relies on labor units developed by MCAA. Finding 85. The offer actually submitted represented a discount of fifty-six percent from the figure initially derived using the MCAA bid estimating system. Finding 88. T&S's president testified that such discounting is typical. Findings 86-87. It is apparently based upon special considerations not necessarily incorporated into the MCAA standards, such as the special relation between the prime and the subcontractor and the anticipated plan of performance. Findings 89-90. A mechanical estimator employed by CRSS at the time of construction and called by the Government as a witness confirmed that it is customary for mechanical contractors to discount a bid based upon MCAA units. Finding 87. T&S's bid, as discounted with its labor component of 50, 159 man hours and contract price of $7,840,014, compared favorably with pre-award estimates prepared by CRSS and FBA. Findings 91-92.²⁵

Were the Alleged Inefficiencies Caused by HPCC's Changes in T&S's Original Planned Schedule?

Another cause alleged by GSA as a possible explanation for T&S's labor overruns is the fact that the performance schedule originally prepared by T&S for HPCC's consideration (the NOAT Schedule) and presumably used by T&S in preparing its bid, differed significantly from the baseline schedule (NOA1) ultimately approved by the Government. As a result, T&S was unable to realize the efficiencies anticipated in its discounted bid. Respondent's Posthearing Brief at 77. The record, however, confirms that the NOAT and NOA1 schedules were consistent with the basic assumptions on which T&S's bid was based. The total number of man hours and time required to be on the project were not significantly different. Finding 99. We, therefore, fail to see why, under the NOA1 Schedule, T&S would be expected to incur an extensive labor overrun not otherwise anticipated under NOAT.

Were the Alleged Inefficiencies Attributable to Local Labor Shortages or Time Lost on Unacceptable Work?

Undoubtedly a labor shortage existed at the time the NOAA project was underway. Findings 162-63. T&S, however, appears to have coped well with it. Indeed, there is convincing evidence that, by August 1997, T&S had roughly doubled its anticipated manpower. Finding 139.

The Government's expert in schedule analysis, who was recognized as having some experience in assessing labor inefficiencies, found that there was an unusually high labor turnover on the project for T&S. The company originally anticipated that thirty workers would be required at peak utilization. The expert, however, found that there were 150 T&S trade workers cycled through the project, excluding field officer personnel, general foremen, and non-working foremen. He opined that a turnover of this magnitude would result in inefficiencies due to the need to orient new laborers. He estimated that this inefficiency amounted to approximately 1100 man hours. Transcript at 2453-56, 2460. He likewise estimated that approximately 1748 man hours were lost on punchlist items and rework. Id. at 2461. The labor turnover addressed by GSA's expert may or may not have been attributable to the existing labor shortage. We cannot tell based upon the information available. As for the degree of punchlist items and rework, we cannot say whether some or any of this was attributable to coordination problems occasioned by the disruptions which appellant contends were the fault of GSA.

Ultimately, however, these and other alleged alternative causes cited by this expert hold no real significance for us. The expert testified that, so far as T&S's claim was concerned, it was his task to perform an analysis of the NOAA project to determine whether there were any labor productivity losses on the project and, if so, to identify causes of the productivity losses not attributable to GSA. Transcript at 2394-95. He ultimately concluded that T&S had suffered a total of 15, 917 man hours in labor overruns the cause of which could not be considered within the control of GSA. Id. at 2459-60; Respondent's Supplemental Appeal File, Vol. 23, Exhibit G234 (Exhibit 24 “Reasons for Labor Differences”). We see no need to weigh the validity of this conclusion given the nature of HPCC's claim. We do not view it as a total cost claim. T&S's total labor overrun for the project was 54, 416 man hours. Finding 172. The labor inefficiency claim, however, seeks compensation for only 33, 379 man hours. Finding 197. No claim has been made for the balance of 21, 037 man hours. See supra note 22. Since the total of 15, 917 man hours calculated by GSA's expert fits well within the total number of unclaimed hours, we must recognize that, even if the expert's calculation is correct, the Government has failed to demonstrate that the labor overrun for which appellant seeks relief is attributable to the causes identified by its expert. These causes could just as likely account for the labor overrun for which appellant seeks no relief.

Part III

 Appellant's Demonstration of Quantum

The Method Used

Loss of productivity is not an easy matter to prove. The aid of an expert is frequently required. Luria Brothers & Co. v. United States. 369 F.2d 701 (Ct Cl. 1966) (“It is a rare case where loss of productivity can be proven by books and records; almost always it has to be proven by the opinions of expert witnesses.”). In this particular case, appellant's expert elected to use the MCAA inefficiency factors to assess the impact of various unanticipated conditions encountered by T&S in performing the above-ground plumbing and HVAC piping. Findings 180-82. We have previously accepted the use of these factors for this purpose, dark Concrete. 99-1 BCA at 149, 760; Stroh Corp. v. General Services Administration. GSBCA 11029, 96-1 BCA ¶ 28, 165, at 141, 132.²⁶

Application of the MCAA inefficiency factors is not the only technique available for purposes of assessing impact. The “measured mile” analysis permits a comparison of the labor costs of performing work during different periods of time, so as to show the extent to which costs increased from a standard during periods impacted by certain actions. See dark Concrete. 99-1 BCA at 149, 746. Unfortunately, given the facts in this case, this technique simply does not readily lend itself for use here.

The Government's expert in schedule analysis spoke disparagingly of the use of the MCAA inefficiency factors. In his opinion, they have lost credibility over the twenty years they have been in use. Instead, he suggested that a CPM schedule, properly maintained and updated, has made far greater advances as a tool in identifying the potential for lost labor productivity than the MCAA factors have. Transcript at 23 87-89. This witness's preference for use of the CPM schedule does not surprise us, given his very limited experience in mechanical construction and in the use of the MCAA factors and his recognized expertise instead in the area of construction scheduling. See Transcript at 2347-57, 2466-69, 2483. The data available in a properly maintained and updated CPM schedule may in theory hold great promise as a tool for assessing labor inefficiencies. In this particular case, however, the multitude of schedules and schedule revisions reflected in the record does nothing to instill confidence in this regard. See Findings 73, 79, 82-83, 141-43, 149, 157. Instead, we have considerably more confidence, at least in this case, in the use of the MCAA inefficiency factors by appellant's expert — particularly in view of his extensive personal experience in the mechanical construction field. See Finding 175.

Citing to the Court of Claims decision in Luria Brothers, 369 F.2d 713, respondent reminds us that, although an expert is often required to prove loss of productivity, the mere expression of an estimate as to the amount of productivity loss by that expert with nothing to support it will not establish the fundamental basis for making a reasonably correct approximation of damages. Respondent's Posthearing Brief at 84. The Government is apparently convinced that the estimates provided in this case by appellant's expert are totally lacking in support. Counsel write:

[The expert] presented no proof. He made no attempt to show the nexus between the changes and the alleged cumulative impact. Contrary to Mr. Huyghe's view, the number of RFIs and changes alone is insufficient to establish the Government's liability for a contractor's inefficiency.

Id. at 81. In a similar vein, the Government's expert in schedule analysis criticized Mr. Huyghe's report on the ground that the allegations of disruption were overly broad and the claim still lacked linkage between those broad allegations of disruption and their effects on T&S's labor force. Transcript at 2380. He admitted that the concept of the cadence and rhythm of the work is a recognized one but one which it is difficult, if not impossible, to use for determination of a specific percentage of productivity loss. Id. at 2384.

We disagree with respondent's assessment of Mr. Huyghe's report and testimony. We found them highly credible and reliable for a variety of reasons. First is the expertise and experience of this witness. He has worked his way up through the ranks in the field of mechanical construction, working at different times as a laborer, apprentice, project engineer, assistant superintendent, scheduler, and project manager. He is a licensed contractor with academic training in construction management and an abundance of hands-on project management experience in mechanical construction. Difficult as the task may be, we believe that an expert with this experience and background should be able to comment competently even on such subtle realities of the workplace as cadence and rhythm of work or worker morale. See Finding 175.

Mr. Huyghe's assessment of T&S's labor productivity losses is far from a “guestimate” devoid of support. It stems from a thorough knowledge of the contract requirements and the actual history of contract performance. Findings 177-79. Based upon what he learned in this regard, he developed a methodology for assessing productivity losses which would do justice to the actual situations he found to exist at different times during the life of the project. Findings 183-84. Aware mat appellant's claim relates only to unchanged work, he based his calculations solely on as-planned or budgeted man hours and distributed those man hours over the entire period of the contract in what we consider to be a reasonable manner. Findings 185-86.

Once Mr. Huyghe had determined the number of as-planned or budgeted hours for each building and for each period, he then proceeded to make his own assessment of the impact of Government actions on T&S's productivity for each building and each time period. For this purpose he made use of the MCAA inefficiency factors but calculated his own percentages rather than rely on those recommended for the MCAA factors. Finding 190. He testified that his assessment was based upon his knowledge and understanding of the project which, in turn, was derived from his numerous interviews with project personnel, his own extensive review of the project documents, his construction and analysis of an as-built schedule, his experience in the construction industry, and his expertise in assessing labor productivity losses. Finding 187. Clearly this type of analysis is founded upon and involves the continual application of the principles of cause and effect. In terms of principal causes, Mr. Huyghe undoubtedly looked to the mechanical design deficiencies which restricted T&S's ability to follow its performance plan, the addition of manpower to the project to mitigate the potential delays arising out of the design deficiencies, the need to reassign manpower to complete the directed installation of vibration isolation on plumbing and some HVAC piping, and the addition of change order work to the contract scope as T&S was strugglin g to complete its work in blocks D and C. Indeed these causes serve as the basis for the division of the project into distinct periods in order to enhance the accuracy of his assessments. See Findings 183-84, 189. All of this becomes apparent when one examines the textual support provided with his assessment of each factor for each of the three buildings during the various periods of construction. Finding 188.

Mr. Huyghe's principal task was to assess the impact of unanticipated changes and disruptions on the productivity of T&S's plumbing and HVAC piping crews in performing base contract work — and then only as to the crews' performance of rough-in work. Finding 185. We find the conclusions he reached in this regard to be reasonable and well supported. See Findings 187-90. We find his estimate of the impact on base finishing work and equipment setting of fitters and plumbers (304 hours) to be reasonable and well supported as well. Finding 191.

Quantum (T&S's Claim)

Mr. Huyghe concluded that the base rough-in work of T&S's plumbing and piping crews suffered a total productivity loss, for which the Government was responsible, of 19, 335 man hours. A separate calculation for the impact of the Government's directive to install vibration isolation on plumbing piping concluded that the plumbing and piping crews suffered an additional productivity loss, for which the Government was responsible, of 5441 man hours. To these figures he has further added 304 hours as the impact on the base finishing work and equipment setting of T&S's fitters and plumbers. Findings 187-91. This comes to a total of 25, 080 man hours.

In addition to the labor productivity loss of 25, 080 man hours, which appellant's expert concluded T&S piping crews experienced, T&S also claims compensation for other labor costs incurred as a result of the Government's disruption of planned contract performance. These include additional material handling of shop-fabricated material at the shop itself, additional material handling between the shop and project site, and additional supervision. We find the explanation offered in support of the 147 hours spent for additional material handling of shop fabricated material highly convincing. See Finding 193. We cannot say the same, however, for the claim of 1020 hours for additional material handling between shop and project site or for the 7132 hours for additional supervision.

With regard to the additional material handling between the shop and project site, T&S's operations manager explained that the overrun on the estimated hours for this item was the result of the number of changes over and above what one normally would have expected. He explained that through negotiated change orders the parties had agreed to the addition of a total of 814 hours to the contract but that during negotiations T&S had frequently disagreed with GSA on the number of hours that should be allowed for this work. Finding 194. Given the fact that the number of hours for this work has already been the subject of negotiation on various change orders, we have no intention of reopening the matter. In addition, to the extent that this has been a matter of negotiation, we suspect that we may well be dealing here, at least in part, with direct rather than indirect or cumulative impact. We decline, therefore, to grant this portion of appellant's claim.

With regard to the hours of additional supervision, T&S's operations manager explained that these are supervisory hours which were worked by foremen who were originally expected to work side-by-side with piping crews as “working foremen” but, owing to the various disruptions of performance, were required to work as full-time supervisors. This, he explained, resulted in a need to make up in some way for the labor deficit created by the foreman not being able to make his own physical contribution to the installment effort. As the operations manager put it: “[S]omebody else had to take his place.” Finding 195. We understand this to mean that either the original piping crew had to be augmented or the remaining members of the crew had to do additional work. In either event, any resulting increase in costs would not be in connection with the now full-time supervisory foremen (presumably their salary remained unchanged) but rather with the need to add man hours to the existing piping crews. We would, however, view this as the result of a labor production loss resulting from various disruptions. Mr. Huyghe was of course aware that T&S was not able to use its working foremen for the piping crews but instead was required to rely on them for full-time supervision. Transcript at 1862-63. We would, therefore, expect him to bear this fact in mind in making his calculations of production loss. Consequently, we decline to credit T&S with these hours as a separate element. These hours should already be accounted for in Mr. Huyghe's calculations.

The figure of $30.43 per hour which appellant has utilized to convert man hours to dollars is acceptable. Only the $2.40 component covering future costs due to accidents or injuries was questioned by GSA auditors, and then only because T&S could not explain at the time of audit how the figure was calculated. We find the explanation offered by T&S's operations manager at the hearing to be satisfactory. See Finding 196.

In light of the considerations set out above, we revise T&S's claim for man hour losses as follows:

T&S also seeks certain labor-driven costs related to the labor losses which serve as the basis of its claim, namely small tools, project engineering, and equipment. As noted in our discussion of quantum in appellant's claim in GSBCA 14877, while it is the custom of GSA normally to view tool and equipment costs as time-related, the testimony of T&S's operations manager and a GSA auditor persuades us that T&S's treatment of these costs as labor-driven represents an acceptable approach in this case. See Finding 50. We are, therefore, with one exception explained below, prepared to allow these costs. We consider the claim for small tools to be reasonable and allowable - assessed as it is against the number of hours determined by Mr. Huyghe to be the responsibility of GSA. See Finding 199.

As to the claim for equipment costs, we disagree with the amount claimed, namely, $298,364. Finding 198. This figure is said to represent the adjusted balance of the overrun for this category of costs. Finding 201. Without any explanation, the entire amount is assessed against the labor production loss said to be attributable to the Government. Because this category of costs is deemed to be labor-driven, we see no reason why the $298,364 should not be spread over the entire labor overrun experienced by T&S for the project rather than be limited to that portion of the labor overrun for which we have found the Government liable. T&S has calculated the entire overrun to be 54,416 man hours. Finding 172. We have found that the Government is liable for 25, 227, or 46.4% of this total labor overrun. We, therefore, award 46.4% or $138,441, of the equipment costs sought here by T&S.

In contrast to the equipment cost, the $69,682 sought for project engineering costs are closely tied to the labor production loss associated with the disruptions for which we conclude the Government is liable. Finding 200. We find them reasonable and sufficiently supported by documentation and testimony in the record.

As with the vibration isolation claim, we find the markups for overhead, profit, and bond to be acceptable. Finding 202. We, therefore, conclude that T&S is entitled to the following:

Quantum CHPCC Claim)

HPCC's portion of direct costs associated with T&S's claim and the markups of the same appear to us to be fair and reasonable. The methods used to calculate or estimate the various quality control and scheduling costs are both sensible and credible given the facts in this case. See Findings 205-08. As we have already seen, in connection with the vibration isolation claim, the markups are consistent with those used by the parties during the life of the NOAA project. See Finding 209.

Substituting the revised figure for the T&S portion of appellant's claim, we conclude that appellant is entitled to an award of $1,518,382 for its total labor productivity claim, which we break down as follows:

Is Respondent Entitled to a Credit for the Earlier Payment of $50.000?

The details surrounding the contracting officer's authorization in February 1997 of payment of $50,000 to HPCC are far from clear. Finding 72. The CRSS project manager referred to it simply as a “good faith progress payment in relation to CR85.” Finding 70. The contracting officer, on the other hand, appears to have looked upon it as payment of an acceleration claim, distinct from a claim for impact on base contract work. He acknowledged that there was a schedule impact associated with the direct costs of CR85 and was apparently prepared to pay for the acceleration required to overcome this impact. Findings 71, 74, 77.

Can it be argued that since HPCC's certified claim seeks no direct relief for acceleration or schedule impact, but rather only for the impact of disruptions on base contract work, that the earlier payment of $50,000 should not be viewed as a partial payment of this claim? We think not. As we have already noted elsewhere, the cost associated with acceleration has, from the start, been inextricably enmeshed with HPCC's impact claim. Only at the insistence of CRSS, and later the contracting officer, was acceleration looked upon as a separate element of the original claim filed in November 1997. See Findings 60, 74. The claim, as ultimately certified and submitted in July 1998 using the MCAA inefficiency factors as a tool for assessing impact, clearly looks upon acceleration as an additional source of disruption and not as the basis for a separate claim. In this regard, the certified claim, like the original claim submitted in November 1997, does not assert a separate claim for acceleration as such. It is obvious to us, from the facts of this case, that the authorization in February 1998 to pay appellant $50,000 represented an effort on the Government's part, possibly using its own theory of relief, to make at least a good faith partial payment of HPCC's claim submitted in November of the previous year. Since that claim, as subsequently certified, remained essentially the same, we consider it only fair that respondent be afforded a credit of $50,000 on the amount we conclude here to be due appellant.

Decision

The appeals which are the subject of this decision are both GRANTED IN PART. We find that appellant is entitled to payment of $577,777 for its claim regarding the installation of vibration isolation (GSBCA 14877) and to payment of $1,518,382 for its labor productivity claim (GSBCA 14744). With regard to the latter claim, respondent is of course entitled to a credit of $50,000 already paid to HPCC. Appellant is likewise entitled to payment of interest on each of these amounts, in accordance with the Contract Disputes Act, from the date of submission of its certified claims until the date of payment-41 U.S.C. § 611 (1994).

EDWIN B. NEILL
Board Judge

We concur:

ANTHONY S. BORWICK
Board Judge

MARTHA H. DeGRAFF
Board Judge

FOOTNOTES

1 In accordance with Board Rule 104(a) and (b) the parties have made several appeal file submissions — some in connection with the individual appeals and some consolidated submissions covering both GSBCA 14744 and GSBCA 14877. The Government's submissions are as follows:

   1. Appeal File, GSBCA 14744 (four volumes)

   2. Appeal File, GSBCA 14877 (one volume)

   3. Respondent's Supplemental Appeal File (Consolidated) (twenty-seven volumes)

The Appellant's submissions are as follows:

   1. Appellant's Supplemental Appeal File, GSBCA 14744 (two volumes)

   2. Appellant's Supplemental Appeal File, GSBCA 14877 (one volume)

   3. Appellant's Supplemental Appeal File (Consolidated) (five volumes)

2 We note here that the terminology used by fact and expert witnesses in speaking of these blocks is not altogether consistent. Some use the term “block” while others refer to an individual block as a “building.” Our practice here is to use the term which actually appears on the page of the transcript or the document being cited.

3 The term “hydronic” is defined as: “Of relating to, or being a system of heating or cooling that involves transfer of heat by circulating fluid (as water or vapor) in a closed system of pipes.” Webster's Ninth New Collegiate Dictionary 590 (1990). For purposes of this case, therefore, we consider “hydronic piping” as equivalent to or the same as “HVAC piping.” See Transcript at 104-05, 455.

4 The witness pointed out that the actual total shown in the project cost analysis for material costs under this code is $95,417. It was reduced to $90,027 to correct for a miscoding error found before submission of the claim. Transcript at 313-15.

5 At the hearing, the Government called a consultant with considerable experience in the construction contract field. Counsel offered this individual as an expert “in contract interpretation.” Although the Board permitted this witness to testify, the presiding judge made clear from the outset that, to the extent that the ultimate application of the facts to the plain language of the contract is within the province of the trier of fact, the Board would not accord to this witness's testimony the deference normally given under the rules of evidence to an expert witness. Transcript at 575-85. It is interesting to note, however, that even this witness conceded under cross-examination that the lack of any direct reference to Section 15241 in the plumbing piping section of Division 15, as opposed to such a reference in the hydronic piping section, was indeed “an important consideration.” Id. at 614.

6 The Government notes that there is in Section 15410 (Plumbing Piping) a provision that basic piping installation requirements for plumbing piping are as specified in Section 15 510 (Hydronic Piping). This, according to the Government, renders Section 15241 applicable to. plumbing piping as well, since Section 15510 has a specific provision rendering hydronic piping subject to the requirements of Section 15241. Respondent's Posthearing Brief at 96. A close examination of the sections in question shows that Section 15510 (Hydronic Piping) does, in fact, contain a lengthy provision regarding piping installation, namely paragraph 3.11. However, no reference to Section 15241 is contained in this paragraph or any of the many subsequent subparagraphs of that same provision. Rather, the sole reference to Section 15241 in Section 15510 is found in a separate provision dealing with pipe hangers and supports. The corresponding provision on pipe hangers and supports in Section 15410 on plumbing piping contains no reference to Section 15241. Hence, this bootstrap argument of GSA regarding the applicability of Section 15241 to plumbing piping is tenuous at best. Compare Finding 31 with Finding 33.

7 Both appellant and the Government argue in the alternative that even if the provisions of Section 15241 are adjudged by the Board to be ambiguous, they would still prevail. Appellant contends that if its interpretation is within the zone of reasonableness it should prevail since the provision was drawn by the Government. The Government instead argues that any ambiguity, if it does exist, is patent and, therefore, should have been the subject of an inquiry on the part of the contractor. Alternatively, if the alleged ambiguity was latent, then there is insufficient evidence that appellant did, in fact, rely on the interpretation it now espouses. Appellant's Posthearing Brief at 75-76; Respondent's Posthearing Brief at 92-93. Given the conclusion we reach here, we see no need to discuss these issues.

8 In his testimony the contracting officer suggested that perhaps the forty-seven-day impact was reduced to nineteen based upon a completion date of December 11. Transcript at 2148. Unfortunately, these matters remain unresolved. Although Government counsel was of the opinion that the consultant's written report on the schedule impact of CR85 was in the record and the contracting officer believed that the record also contained a copy of an e-mail message on the subject from the consultant, no further documentation was ever identified or produced. Id at 2099, 3091-92.

9 These MCAA labor units used as a tool in preparing a bid for a new project should not be confused with the labor inefficiency factors also developed by the MCAA. The latter are used to gauge the effect of changes on a contractor's productivity. It was these inefficiency factors which T&S proposed using in mid-March 1998 as a medium to assess impact costs of contract changes on unchanged contract work. See Finding 76.

10 The contract reference to “Section 3.9” is an obvious error. That section deals with weekly schedule meetings. Presumably the intended reference is to Section 3.11, which deals with construction schedule revisions.

11 This too is an incorrect reference. Section 3.13 concerns the coordination of contract work. The proper reference is most probably to Section 3.12, which concerns time impact analyses.

12 “Float” is defined elsewhere in the contract as “the amount of time between the early start date and the late start date, or the early finish date and the late finish date of any activity in the project schedule.” “Total float” is defined as “the amount of time any given activity or path of activities may be delayed before it will affect the contract completion date”. Appeal File, GSBCA 14744, Vol. 1, Exhibit 1 at 01311-10, 01311-11.

13 The Government's expert in construction scheduling testified regarding the differences between T&S's proposed schedule and the approved NOA1 baseline schedule. On direct examination he testified that the duration of time T&S planned to work on the four blocks was smaller than that shown on HPCC's approved baseline schedule. This, in the opinion of this witness, would make it more difficult for T&S to accomplish its work at the bid rates. Transcript at 2712-13. On cross-examination, however, this same witness readily agreed that the total amount of time T&S was to remain on the job remained substantially the same under T&S's proposed baseline schedule and the ultimate NOA1 schedule. Id at 3027.

14 The contract was subsequently amended by mutual agreement to add an additional $1304 to the cost of rectifying this plumbing design deficiency without any consequent delay. Respondent's Supplemental Appeal File, Vol. 2, Exhibit CR51 at 3, 16.

15 GSA's expert in construction scheduling testified that RDA had attended meetings on site to discuss design problems on three separate occasions. The first meeting was said to have taken place on May 20, 1997. See Finding 118. The second design resolution meeting with RDA was said to have taken place on July 2, shortly before this July 15 meeting. The third design resolution meeting with RDA was said to have taken place shortly after the July 15 meeting, namely, on July 17. Transcript at 2948; Respondent's Supplemental Appeal File, Vol. 24, Exhibit G235 (Exhibit 5R).

16 The precise date of this meeting is unclear from the record. Counsel for appellant speaks of it as having taken place on or about July 21. Transcript at 2500. However, several RFIs submitted toward the close of July refer to “discussion with RDA on July 15, 1997.” Respondent's Supplemental Appeal File, Vol. 6, Exhibit G2 at 300-04, 306. Given the matters discussed at the meeting and the presence of an RDA consultant, however, this may well be the meeting which respondent's construction scheduling expert spoke of as having taken place on July 17. See supra note 15.

17 T&S's project manager also testified that, at this point in time, even with agreement on changes made to date, he still had some lingering concern regarding the sufficiency of the balance of the piping design. He testified that, from discussions with the RDA representative, he learned at that time that the representative himself had a similar concern with regard to the domestic water system. Transcript at 959-60. This tends to confirm the witness's earlier testimony that the changes in mechanical design were never subject to general review. See Finding 111.

18 By letter dated August 3, the contracting officer, as previously agreed (Finding 134), wrote HPCC regarding responsibility for these mechanical design changes which were to be incorporated into the contract documents by T&S. He assured the general contractor that T&S would not be considered the engineer of record for these revisions and that liability regarding them would not extend to T&S. Appellant's Supplemental Appeal File, Vol. 1, Exhibit 141.

19 HPCC's letter identifies the enclosed T&S letter as dated “July 18, 1997.” We assume this to be a typographical error since the letter in question was obviously that which was dated July 16, 1997, and which discussed the need to advise the Government of the existence of a separate impact claim (Finding 136).

20 Mr. Huyghe excluded from his analysis all man hours budgeted for below-grade or underground contract work based upon his opinion that such work simply would not have been impacted by the disruptions and changes in question. Transcript at 1832, 1850.

21 Of course, not all of the six factors were applied in every case or to every period. For example, his assessment of impact on base contract work done in buildings B and A during the first period is zero since during this period only underground work was being done in those buildings. See Finding 185. As for his assessment of conditions in buildings D and C during that same period, he used the factors “learning curve, ” “reassignment of manpower, ” “dilution of supervision, ” and “morale and attitude, ” but did not utilize the factors “stacking of trades” and “concurrent operations, ” since he apparently did not believe that the factual situation warranted application of those factors to base contract work being done in those buildings during that period. For apparently the same reason, he did not utilize the factor “stacking of trades” in his assessment of conditions in buildings D and C during the third period. Appellant's Supplemental Appeal File, Vol. 3, Exhibit 205, Tab D at 5-6, Tab C at 18-19, Tab B at 25-30, Tab A at 34-39; Appellant's Trial Exhibits 21-25.

22 This figure, when compared to the total labor overrun of 54,416 man hours (Finding 172), shows that appellant is not seeking relief for 21,037 man hours or 31.6% of this labor overrun. GSA contends that T&S is inconsistent in stating the amount of the total labor overrun for which it is not seeking compensation. It points out that, based upon Appellant's Trial Exhibits 21-25, the total number of man hours overrun for which relief is not claimed adds up to 24,090 man hours while Appellant's Trial Exhibit 28 puts this figure at 21,037 man hours. Respondent's Posthearing Brief at 83. Appellant's expert witness, who prepared these exhibits, testified that the correct figure is 21,037 man hours shown in Appellant's Trial Exhibit 28. He explained, to our satisfaction, that the higher figure of 24,090 is an interim calculation not yet adjusted for the productivity, shown on Appellant's Trial Exhibits 26-27, to have been lost as a result of the Government's directive to install vibration isolation on plumbing piping. Transcript at 3134-36.

23 We note a slight discrepancy between the total claim for project engineering ($69,682.41) when drawn from the individual entries shown on pages 3 and 4 of Exhibit 107 of Volume 1 of Appellant's Supplemental Appeal File and the sum total ($69,670) shown on page two of the same exhibit as well as on the entitlement sheet in Volume 3, Exhibit 205 of the same file. Assuming in this instance that the angels rather than the devil are in the details, we will assume that the figure $69,682.41, based as it is upon the individual entries, is more accurate than the unsupported summary entry of $69,670. Consequently we use the former for purposes of this decision.

24 We note that both GSA expert witnesses freely acknowledged that labor inefficiency claims could be based upon the adverse impact of disruption upon non-critical path activities. Transcript at 2521-22, 3080-81.

25 The man hour figures in the T&S and CRSS estimates may perhaps compare unfavorably with an estimate prepared by a colleague of GSA's expert on schedule analysis and included in the expert's report. This estimate puts man hours at 108,092. We know little about the estimate, however, and consequently attach little weight to it. The witness did not himself prepare it, was not recognized as an expert in construction estimates, and does not practice estimating. Indeed, on cross-examination he conceded that he had no prior experience with the MCAA system of estimating. Transcript at 2350-51.

26 GSA contends that reliance on Stroh and dark is misplaced since those cases involve use of the MCAA inefficiency factors to assess direct as opposed to indirect or cumulative impact. Respondent's Posthearing Brief at 85-86. We see no reason why, in a case such as this where the parties agreed to deal separately with the impact of piping changes on the unchanged or basic work, the MCAA inefficiency factors cannot be used to assess this impact. Stroh and dark do not stand for the proposition that MCAA inefficiency factors cannot be used to assess indirect or cumulative impact. Rather, they confirm the legitimacy of these factors for use in assessing impact. As already noted, the changes clause calls for adjustment of the contract price to reflect increases in the contractor's cost of performing work “whether or not that work is changed” by the contracting officer's change order. Finding 2. Accordingly, where the parties are committed to assessing the impact of change or disruption on unchanged work, we have no objection to a qualified expert using these factors for that purpose.

United States Court of Federal Claims.

No. 97-744C.

MORGANTI NATIONAL, INC., Plaintiff, v. The UNITED STATES, Defendant.

April 4, 2001.

Robert G. Watt, McLean, VA, for plaintiff. Carter B. Reid, Bennett J. Lee, and Scott W. Kowalski, of counsel.

Steven J. Gillingham, U.S. Department of Justice, Washington, DC, with whom were Assistant Attorney General David W. Ogden, and Director David M. Cohen, for defendant. Thomas D. Dinackus and Gerald M. Alexan­der, U.S. Department of Justice, and Michael A. Lewis, Federal Bureau of Prisons, of counsel.

OPINION

FIRESTONE, Judge.

I. INTRODUCTION

The present action was brought pursuant to the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-603 (2000). Plaintiff-contrac­tor Morganti National, Inc. (“Morganti”) was default terminated for failure to make prog­ress in constructing the 1,000 Bed Federal Detention Center in Brooklyn, New York. In this action, Morganti seeks to convert the termination for default into a termination for the convenience of the government on the grounds that the defendant excusably de­layed its performance and materially breach­ed the contract. Defendant Federal Bureau of Prisons (“FBOP”) argues that the termi­nation for default was justified and therefore should be upheld. The court held a three- and-a-half-week trial from August 7 through August 31, 2000. The court heard testimony from more than 25 witnesses. In addition, the parties presented in excess of 400 exhib­its to the court. Based on the evidence presented, for the reasons that follow, the court concludes that the FBOP’s termination for default is justified and therefore must be upheld.

II. BACKGROUND FACTS

A. Contract and Modifications

On or about June 21, 1993, the FBOP solicited bids for the construction of the 1,000 Bed Federal Detention Center in Brooklyn, New York (“project”). Plaintiff Morganti of Danbury, Connecticut and Trataros Con­struction, Inc. of Brooklyn, New York (jointly “MTJV”) submitted a bid and offer to con­struct the project for a fixed price of $103,444,00o.1 On September 28, 1993, the FBOP accepted the MTJV bid as the lowest responsible and responsive bid of the nine bids that were submitted, and awarded MTJV Contract No. JXOOc-140 in the amount of $103,444,000.

In general, the project called for the con­struction of a 14-story building that houses the new 1,000 Bed Federal Detention Center. The nine-floor superstructure of the building is constructed of cast-in-place concrete. In addition, portions of the exterior of the 4th through 8th floors have precast concrete pan­els. Each of floors 4 through 8 has a mezza­nine level (hereinafter “M”), giving the build­ing its 14-story height. Floors 1 through 3 serve as prison administrative areas, while floors 4 through 9 house the 1,006 inmate detention cells. The detention cells utilize a metal partition design that incorporates the use of prefabricated metal cell panels and security windows in each cell. The detention areas on floors 4 through 8M are divided into three cell blocks, designated “A” for North, “B” for South, and “C” for East. In addi­tion, each cell in a cell block is also designat­ed with a number and the letter “N” for North, “S” for South, or “E” for East. The 9th floor is different from floors 4 through 8M in that it has only two wings, North and South. In addition, the detention cells on the 9th floor are designated as higher-security segregation units, with a shower in each cell. There are also an indoor recreation room, an outdoor recreation area, and a food alcove in each of the two wings on the 9th floor.2

In addition to the specific contract terms relating to the project, the contract contained a number of standard contract provisions contained in the Federal Acquisition Regula­tion (“F.A.R.”), including the following: 52.234-4 “Changes”; 52.233-1 “Disputes”; 52.232-5 “Payments Under Fixed-Price Con­tracts”; 52.236-15 “Schedules of Construc­tion Contracts”; and 52.249-10 “Default (Fixed Price Construction).”

Separate from its contract with Morganti, the FBOP also contracted with Urbahn Asso­ciates, Inc. (“Urbahn”) to be the architect for the project. Urbahn prepared the design, plans, and specifications for the project, in­cluding the designs and specifications for all contract modifications. In addition, the FBOP contracted with CRSS Constructors, Inc. (“CRSS”) as the construction manage­ment firm for the project. CRSS furnished management services, including scheduling analysis and estimating services for the FBOP, throughout Morganti’s performance on the project.

On December 1, 1993, the FBOP issued the Notice to Proceed to Morganti. The original contract schedule provided a con­tract performance period of 730 days, with a substantial completion date of November 30, 1995, and a final completion date of February 1, 1996. Pursuant to the contract, Morganti was required to prepare a schedule and sub­mit updates using critical path method or “CPM” scheduling.

The FBOP accepted Morganti’s baseline schedule on June 24, 1994, and Morganti issued its final detailed baseline schedule on or about August 1, 1994. This schedule and its updates became known as “Schedule A.” As required under the contract, Schedule A was fairly complex and required the schedul­ing and tracking of more than 7,000 activi­ties. In addition, Morganti was required to submit a schedule of values that correlated to the various activities listed in the contract schedule. Under the contract, Morganti’s progress would be tracked against the con­tract schedule in monthly schedule updates submitted to the FBOP, and Morganti would be paid in accordance with the schedule of values upon its submission of proper pay­ment requisitions.

As initially contemplated under Schedule A, Morganti was to complete the concrete exterior by December 1994. By March 31, 1995, Morganti was to have completed the exterior precast panels, the windows, and the interior cell panels. By late October 1995, Morganti was to have completed the follow­ing interior work: interior partitions and ceilings; hollow-metal frames and doors; me­chanical, electrical, and plumbing equipment, piping, conduits, wiring, start-up, and testing (known collectively as “mechanical, electrical, and plumbing” or “MEP” work); elevators; building security, inmate duress, fireflife safety, power, lighting, water supply, and wastewater systems; and building site work. In order to meet the requirements of Sched­ule A, Morganti anticipated that a peak workforce of up to 350 workers would be needed.

Under the contract Morganti was primari­ly responsible for project administration, pro­ject scheduling, coordination of subcontrac­tors, quality control, and field engineering. The FBOP waived the requirement that 20 percent of the work be done by Morganti as prime contractor. Morganti’s subcontractors included Julius A. Nasso Concrete (“Nasso”) for the cast-in-place concrete, Applegarth In­dustries for the precast panels, Maris Equip­ment Co., Inc. (“Maris”) for fabrication and installation of metal cell panels and related work, Levinson & Santoro Electrical Co. for electrical work, Petri Mechanical Co. for plumbing, Navillus Tile Corp. for masonry, and Dart Mechanical Co. for heating, ventila­tion and air conditioning. The work of these seven subcontractors plus Morganti’s general conditions work accounted for approximately 80 percent of the original contract value.

During the course of Morganti’s perfor­mance, the FBOP was forced to make nu­merous contract changes. Prior to termi­nation, the FBOP issued 359 contract modifications, or “mods,” some of which affected the contract price and the perfor­mance period. Ultimately, through these modifications the contract price was in­creased from $103 million to $110 million. The FBOP also granted Morganti 176 cal­endar days (167 compensable calendar days) in time extensions through Modifica­tion Nos. 056, 057, 103, 104, and 108, for events experienced in the first eleven months of the project, including winter weather delays, test-pile program delays, differing site conditions, and design changes to the piles and the pile caps. As a result of a differing site condition and subsequent winter weather delays, the concrete superstructure was not substan­tially completed or “topped out” until April 1995.

Later in the project, in August 1996, the FBOP granted Morganti a 190-calendar-day non-compensable time extension to Decem­ber 31, 1996, for additional problems. This extension was granted in Modification Nos. 319, 326, 328, and 331. The bulk of the extension came under Mod 331, which was executed by the parties on August 6, 1996. In addition to the non-compensable time ex­tension, Mod 331 granted Morganti an equi­table adjustment in the amount of $625,000.

Although Mod 331 extended the contract completion date to December 31, 1996, the parties recognized that Morganti might still be entitled to additional time for events that the parties could not resolve. In particular, Mod 331 left unsettled several contractor proposed changes (“CPC’s”) and unilateral modifications. In this connection, Mod 331 provides:

this modification covers all issues, known and unknown, that occurred between April 1, 1995 and December 31, 1995 for time and money with the following exceptions:

1) ... CPC’s previously submitted [by Morganti] for impacts during the period April 1, 1995 through December 31, 1995.

2) Undefinitized Unilateral Modifications issued [by the FBOP to Morganti] dur­ing the period April 1, 1995 through December 31, 1995 [including Modifica­tion No. 192, issued July 27,1995].

3) Action Files Numbers (taken from Mor­ganti’s letters dated July 23,1996 “Defi­nitization of Direet/Indirect Cost” and “Action File Listing April 1, 1995 through December 31, 1995”): [relating to Morganti Action Files Nos. 208, 222, 303, 330, 334, 367, 402, 487, 538, 552, and 568]....

4) Maris costs incurred during April 1, 1995 through December 31, 1995; Both parties agree that Maris is also bound by Morganti/FBOP agreement reached of 190 noncompensable days. Morganti and the FBOP agreed during negotia­tions August 1, 1996 that Action File No. 496, Storage Cost of Fuel Oil Tanks — Dart, identified in Morganti’s letter dated July 23,1996 is not a Maris issue and shall be included with the agreement reached August 1,1996.3

Among the reasons Morganti and the FBOP were unable to compute possible de­lays for the items identified in Mod 331 was that Schedule A had become hopelessly out of date. By virtue of the numerous modifica­tions and time extensions to the project, Morganti was unable to keep up with the required schedule updates. The contract did not allow Morganti to add time to the con­tract schedule until the time was approved by the FBOP via bilateral modification. As a result, neither Morganti nor the FBOP was able to keep up with all of the changes. Phyllis McBride and Elizabeth Moore, suc­cessive contracting officers on the project, as well as Asraf Basta, from CRSS, testified to the problems with Morganti’s schedules at trial. Eventually, in an effort to address these scheduling issues, Morganti brought in a scheduling expert, Wagner, Hohns, Inglis, Inc. (“WHI”), to produce a new project schedule. Starting in July 1995, Morganti and WHI began preparing a new “Work to Complete Schedule,” which eventually be­came known as “Schedule B.”

Schedule B was not complete at the time the parties negotiated Mod 331. As a result, the parties were not equipped to make re­quests or evaluate time extensions for the events left unresolved by the exceptions to Mod 331. Of critical importance to this case, Mod 331 left open the possibility that Mor­ganti would be entitled to a further extension of time due to the impact of unilateral Modi­fication No. 192 on the project. Mod 192 made design changes to 31 corner cells in order to bring the original contract specifica­tions into conformance with FBOP guidance implementing the Americans with Disabilities Act (“ADA”). At trial, Morganti presented testimony to support its claim for a 511-­calendar-day contract extension because of the additional work arising from Mod 192.

B. The Schedule B Agreement

Between December 1995 and July 1996, the FBOP and Morganti had several meet­ings regarding the FBOP’s acceptance of Morganti’s “Work to Complete — Schedule B.” Based on these discussions, on August 9, 1996, the FBOP and Morganti executed a bilateral agreement entitled “Conditions of Recognition of [Morganti] Work to Com­plete — Schedule B” (“Schedule B Agree­ment”).

According to the terms of the Schedule B Agreement, the parties recognized February 22, 1996, as “the cut-off date for evaluating any events, impacts, planned dates, and prog­ress for work to complete under the accepted Contract Schedule (Schedule A).” As stated in the agreement, the parties agreed that “[Morganti] Work to Complete Schedule B shall be used for assessing the Contractor’s progress, as well as any impacts after Febru­ary 22,1996, in accordance with the Contract Completion Date (Schedule A).”

In this connection, the parties further agreed that the activity durations and sched­ule logic in Morganti’s WC04 Schedule B update (“WC04”), which set September 22, 1997 as the substantial completion date for the project, would serve as the baseline schedule for measuring any impacts to the schedule. Thus, the agreement provides as follows:

Actualized dates and activities defined within [Morganti] Work to Complete Schedule B, Update WC04, Data Date May 31, 1996 shall be the actualized dates for all respective activities in any preceding [Morganti] Work to Complete Schedule B updates. Any new activities/logic re­flected in WCOk shall apply to all previous Work to Complete Schedule updates.

(Emphasis added).

Finally, the Schedule B Agreement set forth how future time extensions, if any, would be evaluated and inputted into the contract:

All future impacts, from February 22,1996 until project completion, shall be evaluated on the basis of the Work to Complete Schedule WC01. Any future extensions of time, shall be inputted into the accepted Contract Schedule (Schedule A).

Under Morganti’s original Schedule B— WC01, Morganti had projected a substantial completion date of January 15, 1997, which was essentially the same as the December 31, 1996 contract completion date in Schedule A. Thus, the parties agreed that Morganti’s Schedule B — WC01 was theoretically equal to Schedule A, even though the completion dates were not exactly the same.

Various witnesses testified about the in­tended effect of the Schedule B Agreement. Phyllis McBride, the FBOP’s contracting of­ficer on the project who negotiated Mod 331 and the Schedule B Agreement, testified that she agreed to recognize Schedule B because she realized that Morganti was likely entitled to some additional time for Mod 192, but was unable to determine then just how much time it was due. Ms. McBride explained her un­derstanding of the agreement as follows:

THE COURT: ... And those open CPC’s and undefinitized mods [identified in Mod 331], how did that play into your view of the September ’97 date? THE WITNESS: Well, [I’ll go] back again to whether or not Morganti would be able to substantiate that there was any time due for that. That’s why we recognized Schedule B. If there was an actual time for a particular mod. or for a particular CPC, then they were to take that particular ele­ment and incorporate it within the Sched­ule B or the time frame. And we, in turn, would then take that and apply it on Schedule A. So it would still match if you look at the overall picture. It would still match together. But you had to take whatever favorite playing hand for those particular mods and CPC’s and apply it back on Schedule A itself. And that would give them the time extension that they would need. So, maybe, eventually the payment on how much they could substan­tiate, it would eventually pay out to that September 1997 date. ■ .

In Ms. McBride’s view, any extension of time based on impacts would be added to the December 31, 1996 contract completion date, not to the September 22, 1997 date set in WC04.

Steven Chin, the FBOP’s project manager, was also present at the Schedule B Agree­ment negotiations. Mr. Chin testified that the purpose of the agreement was to allow Morganti to continue working past the De­cember 31, 1996 contract completion date if Morganti could give the FBOP a date certain by which it would complete the project. Mr. Chin testified that “[f]rom my standpoint, all the bureau was looking for was for the con­tractor to give us a date that they — that obligated them.” Mr. Chin further explained how the parties agreed to evaluate future time extensions under the agreement as fol­lows:

THE COURT:... And did you negotiate any time for those excluded items? If they were excluded [from Mod 331], that meant that they weren’t on the table?

THE WITNESS: I believe it was incorpo­rated into Schedule B. It was mostly cost issues that could have possibly had time and it was excluded, yes, it could possibly have an impact on Schedule B in terms of the duration. But if they were due any more time, it would have been a sign the see [sic] the December date — I mean, the contract date....

THE COURT: And your thought was if more time would be due and owing on the open mods, you’d add it to when?

THE WITNESS: More time, if they were due a compensable delay on any of the open mods, it would be added. That delta would have been added to the contract completion date under Schedule A.

On November 20, 1996, after the Schedule B Agreement was negotiated, the FBOP changed contracting officers and named Eliz­abeth Moore as the new contracting officer. It was Ms. Moore who ultimately terminated Morganti for default. Ms. Moore also testi­fied as to her understanding of the Schedule B agreement. Ms. Moore explained that she understood that under the Schedule B Agreement, the FBOP had agreed to forbear from enforcing the contractual substantial completion date of December 31, 1996 for as long as Morganti was making acceptable progress toward substantial completion by the September 22, 1997 date identified in WC04. According to her understanding, in executing the Schedule B Agreement the FBOP would allow Morganti to continue working toward completion of the project “in lieu of termination” under F.A.R. 49.402-4, as long as Morganti maintained progress that would ensure a September 22, 1997 substan­tial completion date. Ms. Moore further tes­tified that with respect to events after the Schedule B cut-off date, February 22, 1996, “if the government caused the delay, I would have changed — by modification, I would have changed the contract completion date of De­cember 31 for an additional 30 days. I also would have recognized and not held Morganti to September 22. I would say, you know, okay and tell everybody they’re not going to be finished now until October 22.”

Morganti presented the testimony of Theo­dore Catino, Morganti’s vice president in charge of the project, who negotiated the agreement with Ms. McBride. Mr. Catino testified that he understood that extensions of time would be added to the September 22, 1997 date in WC04. However, he did not dispute that in a series of subsequent bilater­al modifications signed by Morganti, it was clear that the parties intended that any time extensions would be added to the December 31,1996 contract completion date — not to the September 22, 1997 date that Morganti had projected for substantial completion in WC04. In fact, in its November 6, 1996 time request for Mod 192, Morganti sought an extension1 of time from the December 31, 1996 contract completion date. In none of the contemporaneous documents did the par­ties suggest that time extensions would be added to WC04’s September 22, 1997 sub­stantial completion date.

C. The Termination Decision

Starting in the fall of 1996, it became apparent that the substantial completion date of September 22,1997 that Morganti project­ed in WC04 was slipping. Ms. Moore testi­fied that after she became the contracting officer in the fall of 1996, she became con­cerned that Morganti was not making suffi­cient progress toward the December 31,1996 contract completion date or the September 22, 1997 Schedule B substantial completion date. Specifically, Ms. Moore felt that Mor­ganti was failing to properly supervise and coordinate the project work, had insufficient manpower on the project, and was not pro­gressing the project work. As a result of these concerns, Ms. Moore issued a cure notice to Morganti on January 10,1997. The cure notice stated in relevant part:

[T]he Government considers your failure to complete the above-referenced project by the scheduled contract completion date of December 31,1996, or to comply with your revised Schedule to Complete (Schedule B), a condition endangering performance of the contract____

The scheduled contract completion date was December 31, 1996. As of November 30, 1996 Data Date, only 73.39% of the work was completed.

... during the period from August 1,1996, through November 30, 1996, [Morganti] has continued to demonstrate a lack of diligence by completing only a monthly average of .83% of the work remaining.... At [Morganti’s] current pace of work, it is anticipated that the project will not be completed for another 32 months. Not­withstanding this projection, [Morganti] continues to fall behind on their own schedule for work (Schedule B), as its lat­est schedule update shows a completion date for November 1997.

Our observations of [Morganti’s] past and current manpower, [Morganti’s] failure to correct deficient contract work in a timely fashion to mitigate impacts to the Schedule (e.g. concrete, hollow metal/cell doors/cell panels, Div. 16 impacts on Div. 17 work, installation of permanent power, chillers, etc.), and [Morganti’s] unwillingness to ac­curately assess and mitigate the impacts on the Schedule leaves the Government justifiably insecure that substantial com­pletion will be attained by any certain time frame.

Morganti submitted two interim responses and a final response to Ms. Moore’s January 10, 1997 cure notice. In his January 24, 1997 interim response on behalf of Morganti, Mr. Catino disputed the FBOP’s charges re­garding Morganti’s lack of progress. He argued that FBOP-caused delay was to blame for Morganti’s lack of progress. Ac­cording to Mr. Catino: “Measurement of progress against a construction schedule that is not being followed will necessarily yield a false — and, in this case, erroneously low— rate of progress.... [T]he delays through December 31, 1996 have been excused (on either a compensable or non-compensable basis), and the progress before and since that date is not accurately reflected in your letter.... [B]arring any other [FBOP]­caused delays, [Morganti] can and will achieve substantial completion in accordance with Schedule B [September 22, 1997 com­pletion date].... ”

However, Mr. Catino’s contention that Morganti could meet the September 1997 substantial completion date was contradicted by the actual events occurring on the project site. A November 13, 1997 internal memo­randum from Morganti’s project manager, John Rhodes, indicated that in order to meet a late October 1997 substantial completion date, Morganti needed to erect all of the cell panels for floors 4 through 8M, including both Mod 192 and “typical” cell panels,4 by February 19, 1997, and all of the 9th floor cell panels by March 12, 1997. In fact, as discussed below, the fabrication and delivery of both the Mod 192 and typical cell panels were delayed throughout the remainder of the project, which in turn caused Morganti to fall behind Mr. Rhodes’s schedule for cell-­panel installation.

Again, in his February 7, 1997 final re­sponse to the cure notice, Mr. Catino reiter­ated his belief that “the FBOP must bear substantial responsibility for the delays en­countered thus far,” yet emphasized that “Schedule B projects a substantial comple­tion date of September 1997, and Morganti is committed to take every action and devote all necessary resources to meet that date.” Among the actions Morganti identified that it was taking in response to the cure notice were: a projected increase of manpower by March 7, 1997; an increase in manage­ment/administrative staffing; completion of cell-panel installation by June 9, 1997; and contracting with a third subcontractor, Maxi­mum Security Products, to expedite assem­bly of Mod 192 cell panels. Finally, Mr. Catino requested “prompt processing and payments of the pending CPC’s, modifica­tions, and requisitions for stored material and equipment, the total unpaid value of which is now in excess of $30 million.”

Ms. Moore testified that she fully consid­ered Morganti’s responses to the cure notice, (but found them lacking. Ms. Moore did not agree with Morganti’s calculation of its rate of progress and was unimpressed with Mor­ganti’s progress in correcting work identified in outstanding deficiency and omission re­ports. In addition, Ms. Moore was dissatis­fied with Morganti’s progress in procuring and installing security windows and cell pan­els, and found that Morganti’s representa­tions in this regard were incomplete or mis­leading. In sum, despite Morganti’s claims, Ms. Moore stated that she did not believe that Morganti was putting forth its best ef­forts to cure the deficiencies she described in the cure notice.

Shortly after receiving Morganti’s final re­sponse to the cure notice, Ms.’ Moore advised Morganti in writing that she continued to be concerned about its progress with respect to, among other things, the cell panels and the security windows. Ms. Moore requested de­tailed scheduling information that would pro­vide the FBOP with a fuller understanding of Morganti’s plan to achieve timely completion. However, Morganti was unable to timely pro­vide the requested information, further exac­erbating Ms. Moore’s concerns about Mor­ganti’s commitment to the project and its ability to complete by September 1997. Eventually, Morganti supplied revised sched­uling information to the FBOP, but Ms. Moore testified that the logic and duration of the activities in the revised schedule caused the FBOP to have serious reservations about the feasibility of those schedules.

Although Morganti’s schedule updates dur­ing the winter of 1996 showed continued slippage, on January 31, 1997, Morganti pro­vided the FBOP with a recovery schedule, WR10, in which Morganti attempted to show how it would achieve the September 22,1997 substantial completion date. As with Mor­ganti’s previous schedule submissions, Ms. Moore concluded that WR10 was unrealistic and did not provide her with sufficient proof of Morganti’s ability to meet the September 22, 1997 substantial completion date. This conclusion was confirmed when Morganti’s subsequent schedules indicated a later sub­stantial completion date.

Against this backdrop, Ms. Moore issued Morganti a show cause notice on March 25, 1997. Ms. Moore testified that she continued to be particularly concerned that the sched­ules Morganti submitted after it received the cure notice were neither reasonable nor at­tainable, and that as a result, the FBOP was uncertain as to whether Morganti could achieve timely completion. Ms. Moore also testified that Morganti’s manpower subse­quent to the cure notice failed to meet Mor­ganti’s projections, and that Morganti again had failed to make adequate progress on cell panels, security windows, hollow metal, and security electronics. Finally, Ms. Moore not­ed that Morganti’s January and February 1997 schedule updates were already indicat­ing that Morganti’s progress had slipped 35 days from its recovery schedule.

Mr. Catino responded to the show cause notice on April 11, 1997, setting forth his explanation for why Morganti’s progress failures were beyond the control and without the fault or negligence of Morganti. Mr. Catino admitted that the Schedule B com­pletion date had slipped from September 22 to December 1997, but contended that the slippage was due to the fact that Schedule B did not reflect the impact of many mods issued by the FBOP, and that the FBOP had not yet accepted and approved Morgan-­ti’s time request submitted for those changes. Mr. Catino further maintained that Ms. Moore’s assessment of Morganti’s progress, based on payment requisitions rather than the updated Schedule B, was inaccurate. Mr. Catino stated that contrary to Ms. Moore’s assertions, Morganti was making sufficient progress in the areas of security windows, security electronics, chiller equipment, hollow metal, and cell-panel in­stallation. In response to Ms. Moore’s con­cerns regarding manpower, Mr. Catino stat­ed that manpower levels were being affected by unresolved construction issues and non­payment of additional monies sought by Morganti’s subcontractors. In this connec­tion, Mr. Catino complained that Morganti’s progress was being impeded by the FBOP’s failure to resolve several CPC’s in which Morganti sought additional payment, includ­ing CPC 58 and CPC 53, and by the FBOP’s practice of retaining and withholding monies from Morganti’s progress payments.

Ms. Moore testified that she fully consid­ered those responses. Again, Ms. Moore was unpersuaded by Morganti’s explanation of its failure to make progress. Specifically, Ms. Moore testified that she was concerned that the substantial completion date in Mor­ganti’s recovery schedule updates had slipped to January 1998. In addition, Ms. Moore noted that Morganti still had failed to provide the FBOP with consistent and reli­able scheduling information, despite the fact that Ms. Moore had repeatedly requested that information. Ms. Moore further con­cluded that Morganti had failed to make progress in the procurement and installation of security windows. Finally, Ms. Moore testified that she was concerned that Mor­ganti was having difficulty financing its sub­contractors, when she felt that the FBOP had paid Morganti all it was due at the time. At the time she was only holding 2 to 3 percent in retainage on what was, in her view, a failing project.

Based on these concerns, Ms. Moore next considered termination. Before deciding to terminate Morganti, however, Ms. Moore consulted extensively with FBOP and CRSS employees more familiar with Morganti’s performance history. Ms. Moore testified that she considered separate analyses of Morganti’s manpower performed by CRSS and Capital Project Management, Inc. (“CPMI”), an additional scheduling expert-­hired by the FBOP. Ms. Moore explained that CPMI and CRSS’s findings that Mor­ganti was providing insufficient manpower supported her own belief that Morganti’s manpower was not adequate to ensure timely completion of the project. She also consid­ered charts demonstrating Morganti’s rate of progress prepared by Scott Higgins of the FBOP, which showed that at Morganti’s then-current rate of progress of approxi­mately 1 percent per month, Morganti would not complete the project until January 1999. Mr. Higgins’s charts also depicted his analy­sis of the time it would take to complete the project in the event Morganti was terminated and the FBOP reprocured the work. Based on his analysis, Mr. Higgins concluded that a reprocurement contractor could complete the work by December 30, 1998 — earlier than Morganti could complete the work.

Ms. Moore also considered Morganti’s No­vember 6, 1996 request for a time extension due to Mod 192. Morganti had submitted a request for a 213-work-day time extension that would extend the contract completion date until October 30, 1997. Ms. Moore hired CPMI, which later became the FBOP’s trial expert, to perform an independent anal­ysis of the time request. CPMI determined that Morganti was not entitled to any time extension for Mod 192. CPMI found that the time request failed to take into account Morganti’s own delays, such as its slow prog­ress in procuring and installing the typical cell panels and other problems relating to alignment of concrete, cell panels, and securi­ty windows. Although Ms. Moore initially testified that she had reviewed the CPMI report or an earlier draft before terminating Morganti, she later clarified that she was only verbally briefed on CPMI’s findings be­fore making her decision. Ms. Moore testi­fied that she relied on this verbal briefing of CPMI’s findings, in addition to the advice from her technical support staff and CRSS, to deny Morganti’s request for the time ex­tension requested for Mod 192.

On April 30, 1997, having concluded that Morganti could not meet the September 22, 1997 substantial completion date recognized in WC04, Ms. Moore sent Morganti a notice terminating the contract for default. In her termination for default notice, Ms. Moore set forth the reasons for her decision. The ter­mination notice explained that Morganti had completed only approximately 75-76 percent of the contract work, while approximately 110 percent of the contract period had lapsed. The termination notice stated as follows:

[Morganti’s] February 7, 1997 response to the Cure Notice states, “Schedule B pro­jects a substantial completion date of Sep­tember 1997, and Morganti is committed to take every action and devote all necessary resources to meet that date and is confi­dent it can and will do precisely that ...” Yet, just two months later, in its April 11, 1997 response to a Show Cause Notice issued on March 25, 1997, [Morganti] readily admits in its projections it cannot substantially complete the project until at least December of 1997. That date is one year after the contractually approved com­pletion date, and [Morganti] has failed to' justify, in accordance with the Federal Ac­quisition Regulation, any alleged delays by the Government attributing to [Morganti’s] December 1997 projected completion date. Accordingly, Ms. Moore concluded that the FBOP was “justifiably insecure that the pro­ject will be completed in a timely manner, and in accordance with the contract specifica­tions.”

D. Work Remaining After Termination

There is no dispute that as of the termi­nation in April 1997, Morganti could not meet the September 22, 1997 substantial comple­tion date identified in WC04. As noted above, Ms. Moore’s evaluation of Mr. Higgins’s anal­ysis of Morganti’s as-built progress at the time of termination revealed that Morganti had completed only 75-76 percent of the contract work and that at Morganti’s then-­current pace of work — approximately 1 per­cent per month — it would not complete the projéct until January 1999.

At trial, the FBOP also presented testimo­ny by its scheduling expert, Frank Brennan, Executive Vice President of CPMI. Mr. Brennan testified that he evaluated three different work-to-complete scenarios. In this connection, Mr. Brennan testified that based on its WR14 April 1, 1997 schedule update, Morganti predicted a November 17, 1997 completion date. However, Mr. Brennan noted that he did not believe this to be a realistic completion date, given that Morganti was behind schedule in procuring the remain­ing cell panels, security window deliveries were delayed due to fabrication errors, and manpower levels were below those needed to complete the scheduled work. Mr. Brennan also testified that CRSS prepared a schedule to complete that estimated that 12.5 mqnths of work remained to project completion, or until May 1998. Finally, Mi’. Brennan sum­marized the projected completion schedule prepared by Lehrer McGovern Boris (“LMB”), the completion contractor hired by Morganti’s surety. Upon taking over the contract, LMB’s schedule projected that 16.75 months of work remained to be com­pleted. Mr. Brennan testified that he relied on the LMB schedule durations for his analy­sis. Based on LMB’s schedule, Mr. Brennan estimated that had Morganti continued work­ing at its pre-termination rate of progress, it would not have completed the remaining work on the project until September 23, 1998.

Morganti presented the testimony of its scheduling expert, Frank McDonough, Chief Executive Officer of the construction engi­neering firm McDonough, Boylard & Peck (“MBP”). Mr. McDonough testified that Morganti would have been able to achieve substantial completion by May 1998, or per­haps a few months earlier. As discussed later, Mr. McDonough further testified that Morganti was entitled to a time extension from the FBOP for all of that time. Morgan-­ti’s financial expert, Jeffrey Fuchs, also testi­fied that Morganti would have needed about a year from April 1997 to complete the work remaining, and thus would not have achieved substantial completion until approximately April 1998.

III. FACTS RELATING TO MODIFICA­TION 192

A. Introduction — The Scope of the Im­pact

The impact of Mod 192 on Morganti’s abili­ty to complete the project is at the heart of this case. The FBOP issued Mod 192 on July 27, 1995, just as Morganti was prepar­ing to commence cell-panel installation. Pur­suant to Mod 192, Morganti was required to change 31 corner cells to conform to the FBOP’s guidance implementing the ADA. As a result of Mod 192, Morganti had to rede­sign 387 cell panels of the 5,800 cell panels required for the project. Due to the result­ing impact that these changes had on Mor­ganti’s cell-panel production, Mod 192 also required that Morganti resequence installa­tion of cell panels and MEP follow-on work.

At the time Mod 192 was issued, the par­ties had varying views as to the resulting impact to the project schedule. When first presented with Mod 192, Maris, Morganti’s detention subcontractor, told various FBOP employees that Mod 192 changes should not result in time impacts to the schedule. The FBOP’s own scheduling contractor, CRSS, gave a “preliminary estimate ... of four to six weeks impact on the schedule.” Howev­er, Steven Chin, the FBOP’s project manag­er maintained that Morganti would suffer no time impact as a result of Mod 192. Shortly after Mod 192 was issued, Morganti asserted that Mod 192 would require significant rese­quencing of work and that this resequencing would result in a loss of productivity and comeback work. As noted, Morganti’s trial expert, Mr. McDonough, testified that Mod 192 caused a 511-calendar-day excusable de­lay.

While the primary effects of Mod 192 itself related to the design, fabrication, and instal­lation of the prefabricated metal cell panels that formed the walls of the 31 corner ADA-­designated cells, the full impact extended beyond those cells to other cells. More spe­cifically, in order to load the Mod 192 cell panels into the building, Morganti was un­able to install a number of cell panels and exterior precast concrete panels on each floor until after all of the cell panels for that floor, including Mod 192 cell panels, were delivered onto the floor. These cells are referred to as “leave-out” cells or areas. Without all of the cell panels in place, Morganti could not com­plete the mechanical, electrical, and plumbing work for any floor or cell block.

At trial, the FBOP challenged Morganti’s election to use “leave-out” areas to load cell panels into the building. Mr. Brennan testi­fied that other Morganti-caused problems led to the decision to use leave-out areas. In particular, Mr. Brennan testified that Mor­ganti had changed its “loading approach” to accommodate its concrete and masonry sub­contractors, and not because of Mod 192. Morganti countered with the testimony of several witnesses who stated that the only feasible way to load the cell panels into the building was via the “leave-out” areas.

B. Mod 192 Cell-panel Coordination and Fabrication

It is undisputed that before Morganti could proceed with fabrication of Mod 192 cell panels, Morganti had to coordinate the various affected trades and prepare “shop drawings” that showed the sizes and loca­tions of the penetrations in the cell panels that were necessary to accommodate me­chanical, electrical, and plumbing services. For example, the Mod 192 changes altered the utility openings in the chase walls and the height and location of grab bars, chair carriers, and mirrors.

Bill Sabino, Morganti’s project engineer, was responsible for overseeing the coordina­tion of Mod 192. Mr. Sabino testified that in addition to relocating MEP penetrations, the project superintendents also had to deter­mine the sequence in which the MEP work would be installed. The evidence adduced at trial shows that Morganti forwarded coordi­nation drawings to Mails, Morganti’s deten­tion subcontractor, on February 23, 1996. Maris had subcontracted with Industrial Acoustics Company (“IAC”) to fabricate the metal cell panels required for the project. Once IAC had the coordination drawings, it was to begin preparing shop drawings that would be used to fabricate the Mod 192 cell panels.

As the coordination and preparation of shop drawings progressed, Morganti and the FBOP engaged in a series of exchanges in­volving a number of requests for information or “RFI’s.” In these RFI’s, Morganti sought additional clarification and information from the FBOP necessary to complete the coordi­nation required for the shop drawings. Sev­eral of the RFI’s resulted in further modifi­cations, issued as Unilateral Modification Nos. 243 (dated December 11, 1995) and 287 (dated April 26, 1996). It is undisputed that Morganti could not complete Mod 192 shop drawings or begin fabrication of Mod 192 cell panels until the FBOP responded to the RFI’s and issued modifications. The FBOP responded to the last RFI relating to Mod 192 on May 7,1996.

In fact, the coordination and shop drawing process took much longer than Morganti’s contemporaneous schedules anticipated. Not only did Morganti start the coordination pro­cess in late July 1995, but Morganti took from February 23 through August 13,1996— 24 weeks — to complete the shop drawings. During that period, several events occurred. Most significantly, on May 3, 1996, while Morganti was still awaiting shop drawings from Maris’s cell-panel fabricator, IAC, Mar­is withdrew from the project. Prior to its departure from the project, Maris’s own in­ternal schedules showed that it expected IAC to deliver all Mod 192 cell panels by July 10, 1996.

Maris’s departure led Morganti to take several actions. First, Morganti contracted with the Doug Dailey Company (“DDC”) for the shop drawings and fabrication of Mod 192 cell panels. Morganti did not contract with DDC until June 1996. As part of its contract with Morganti, DDC was also given responsibility for another Maris project, the security windows. DDC, in turn, contracted with Georgia Detention Windows (“GDW”) to fabricate the cell panels and security win­dows, and with Industrial Drafting to pre­pare the shop drawings. Mr. Sabino testified that he finished the coordination process by June 10, 1996, and immediately traveled to Alabama to work with DDC and its subcon­tractor to prepare final shop drawings. An early schedule prepared by Steve Rivers of DDC anticipated that DDC would complete shop drawings for the Mod 192 cell panels for FBOP approval by July 29, 1996, and begin fabrication of the cell panels by Sep­tember 2,1996. However, DDC did not sub­mit the shop drawings for FBOP approval until August 13,1996.

Sometime in August 1996, Morganti elect­ed not to use GDW to fabricate the Mod 192 cell panels. Instead, on September 11, 1996, Morganti contracted with Pioneer Industries to fabricate the 387 Mod 192 panels. Pio­neer contended that the shop drawings pre­pared by DDC/GDW were not accurate and required re-engineering. This briefly de­layed Pioneer’s ability to begin fabrication of the Mod 192 cell panels.

Although Pioneer would not agree to be bound by a fabrication schedule, Morganti outlined its anticipated fabrication schedule in the purchase order as follows5:

1. Cell Block A, floors 4 through 6 mezza­nine on or before September 20, 1996;

2. Cell Block B, floors 4 through 6 mezza­nine on or before September 27, 1996;

3. Cell Block C, floors 4 through 6 mezza­nine on or before October 11, 1996; and

4. remaining panels on or before Novem­ber 20,1996.

Pioneer commenced fabrication of the Mod 192 cell panels on September 16,1996, within one week after the FBOP returned the shop drawing comments on September 10, 1996. Pioneer did not deliver the first priority Mod 192 cell panels to the site until October 1996. Subsequently, Genetech, Morganti’s panel in­staller, commenced installation of Mod 192 cell panels on November 4,1996.

It was at this time that Morganti’s project manager, John Rhodes, reported in a No­vember 13, 1996 memorandum that Morganti could meet a late October 1997 substantial completion date if panel fabrication remained on schedule. As indicated above, Mr. Rhodes’s schedule required that all of the cell panels for floors 4 through 6M, including Mod 192 and typical cell panels, be installed in cell block A by December 24, 1996, cell block B by January 8, 1997, and cell block C by January 17, 1997. In addition, the sched­ule required installation of all cell panels for floors 7 through 8M, including Mod 192 and typical cell panels, in all three cell blocks by February 19, 1997, and for the entire 9th floor by March 12,1997.

As it turned out, Pioneer was never able to meet Morganti’s schedules. By January 9, 1997, one day before the FBOP issued the cure notice, Pioneer had delivered only 137 panels out of the 387 panels it was required to fabricate, and even then there were still critical utility panels for cell block C on floors 4 and 4M that had not been delivered. Pio­neer’s continued poor performance caused Morganti to write on February 10, 1997, complaining that “Pioneer Industries appar­ently still cannot produce panels on the eight day cycle which you committed to initial­ly----Any further delays in the delivery of the remaining panels will have a disastrous effect on our construction schedule.” Pio­neer finally delivered the last of the Mod 192 cell panels (for floors other than the 9th floor) in April 1997.

In order to address Pioneer’s schedule de­lays, in February 1997, Morganti contracted with Maximum Security Products (“MSP”) to assemble 36 panels, composed of parts that had been fabricated by Pioneer. MSP as­sembled 40 panels between February 6 and 13,1997.

C. Problems with Pioneer’s Mod 192 Pan­els

In addition to the problems Morganti ex­perienced in securing the timely manufacture of Mod 192 cell panels from Pioneer, Mor­ganti was delayed by the poor quality of Pioneer’s work. The court heard testimony from Nigel Taylor, a CRSS inspector on the project, regarding problems discovered in the Mod 192 utility panels.6 Mr. Taylor tes­tified that on December 4, 1996, Chris Burke, another CRSS inspector, discovered that Pioneer had improperly manufactured almost all of the Mod 192 utility panels for cell blocks A and B. Apparently, the length of the panel connector piece was not deduct­ed from the length of the panel and therefore these panels were too long, which caused certain penetrations to be misaligned. This manufacturing defect required the installa­tion contractor, Genetech, to perform reme­dial work in the field. Mr. Taylor testified that these repairs were ongoing between March 3 and April 14, 1997. This remedial work delayed installation of the cell panels, which in turn delayed installation of follow-­on MEP work.

D. Other Cell Panels

In addition to falling behind schedule on fabrication of the 387 Mod 192 cell panels, Morganti also fell behind schedule in its fa­brication and installation of all the remaining typical cell panels. After Maris left the pro­ject, Morganti needed an additional 1317 typ­ical cell panels to complete the project. IAC, the original cell-panel fabricator under Mar­is, ceased cell-panel fabrication after Maris left the project in May 1996. Although there was a backlog of typical panels on site when Maris left, Morganti did not contract with IAC until September 23, 1996, and IAC did not begin fabricating the remaining 1317 cell panels until sometime after October 2, 1996.

In addition to the typical cell panels, IAC was also required to manufacture a number of “custom panels.” Apparently, 36 custom panels were required after Nasso, Morganti’s concrete subcontractor, improperly con­structed 36 punched window openings located at the northwest and southwest corners of cell blocks A and B. The exterior concrete openings did not match the openings in the back cell panels, and IAC had to redesign each affected back panel as a custom panel. Although it is unclear when these custom panels were fabricated, the evidence estab­lished that they were released for fabrication in the winter of 1995 and loaded into the building before the Mod 192 cell panels.

In order to meet the September 1997 schedule, Morganti sought to have IAC fabri­cate all of the remaining 1317 typical cell panels by November 8,1996, in the following order of priority: (1) cell block A; (2) cell block B; (3) cell block C; and (4) floors 8M and 9. As with Pioneer, IAC was not able to meet this schedule. Mark Boe, who assisted in the preparation of the CPMI expert re­port, testified that Morganti’s WC04 sched­ule required that IAC achieve a production rate of 40 panels per day. In fact, IAC produced just seven panels per day.

Another internal Morganti memorandum from Mr. Rhodes to Mr. Catino revealed that by November 12, 1996, Morganti had deter­mined that the slow delivery of the 4th floor typical panels was causing schedule slippage. On November 11,1996, Mr. Rhodes had writ­ten to IAC that delivery of priority 3 cell panels for cell block C “on December 2 is absolutely critical ... to maintain an installa­tion schedule 21 working days behind.” De­spite Mr. Rhodes’s “pushing,” by late No­vember Morganti was still receiving priority 1 cell panels for cell block A. Then, on De­cember 11, 1996, Mi’. Catino wrote to IAC, explaining that the scheduled delivery of pri­ority 3 cell panels for cell block C on Decem­ber 9,1996, had “slipped,” and that the “new target date” was December 23, 1996. Yet as of January 30, 1997, priority 3 cell panels for cell block C on the 4th floor still had not been delivered. At the time of termination in April 1997, IAC had just delivered the cell panels for 8M, but had not yet delivered any of the 9th floor cell panels.

E. Contemporaneous Time Requests

On November 6, 1996, following the par­ties’ Schedule B Agreement and contempora­neous with the first Mod 192 panels arriving on site, Morganti submitted a Time Impact Analysis (“TIA”) prepared by its scheduling expert, WHI.7 Importantly, Morganti submit­ted the WHI TIA sometime after Maris’s departure, and just as the Mod 192 cell pan­els were being delivered. Therefore, WHI was able to incorporate these events into its schedule analysis. Based on its evaluation of the delay to the schedule through Morganti’s WC07 schedule update, dated September 30, 1996, WHI concluded that Morganti was en­titled to a time extension of 213 work days, which would extend the Schedule A Decem­ber 31, 1996 contract completion date to Oc­tober 30, 1997.

In the TIA report, WHI stated that there were two significant reasons why the Janu­ary 1997 substantial completion date in Mor­ganti’s original Schedule B-WC01 had been revised to a September 1997 substantial com­pletion date in WC04. First, WHI noted that Maris’s departure from the project had an impact of 64 work days of delay. Second, WHI explained that the impacts to the MEP follow-on work that were caused by the rese­quencing required by Mod 192 were not rec­ognized in WC01. Thus, WHI stated that the substantial completion date in WC04 had been revised to reflect the impact of these events. Morganti abandoned the WHI anal­ysis at trial.

F. Expert Delay Analyses

Mr. McDonough provided expert schedul­ing analysis on behalf of Morganti at trial. Mr. McDonough’s opinion as to the extent of excusable delay that Morganti experienced was based on his as-built analysis of Morgan-­ti’s performance as compared with Morgan-­ti’s Schedule A and WC01 schedule. Mr. McDonough’s as-built analysis reflected Mor­ganti’s progress on the project from its first day through the April 30, 1997 termination and included Mr. McDonough’s projections as to how Morganti would have completed the project from May 1, 1997, through May 26,1998, had it not been terminated.8 Based on this detailed as-built schedule, Mr. Mc-­Donough testified that the as-built critical path of the project ran through Mod 192. Mr. McDonough then explained that the “to­tal time” from January 1996 until project completion that Morganti spent to address Mod 192 and its surrounding impacts repre­sented the duration of the FBOP-caused de­lay to the critical path, which entitled Mor­ganti to a time extension to May 26, 1998.

In particular, Mr. McDonough testified that Mod 192 delayed the critical path of the project a total of 511 calendar days and that the FBOP was the sole cause of this delay. Under Mr. McDonough’s analysis, Morganti was entitled to a time extension due to excus­able delay for every day that it took for the coordination, fabrication, and installation of the Mod 192 and associated cell panels, from January 1996, until the follow-on MEP work was completed. Mr. McDonough began counting the 511 days of delay from January 1,1996, and not the date Mod 192 was issued, because Morganti had already been given a time extension until December 31, 1995, in earlier contract modifications.

In this connection, Mr. McDonough testi­fied that Morganti was entitled to 293 calen­dar days of delay for coordination and fabri­cation of Mod 192 cell panels. In addition, Mr. McDonough’s partner and President of MBP, Charles Boylard, testified regarding the complexity of the follow-on MEP work and the loss of productivity that resulted from the resequencing of work caused by Mod 192. Mr. McDonough relied on Mr. Boylard’s expertise to justify his conclusion that Morganti was entitled to an additional 218 calendar days for the follow-on MEP work.

Mr. McDonough further testified that to the extent Morganti caused any delay in connection with the project, that delay was “concurrent delay.” In addition, Mr. Mc-­Donough testified that the problems that Morganti encountered with the fabrication and installation of Pioneer’s Mod 192 cell panels were “reasonable,” and therefore should not limit the number of days of excus­able delay due to Mod 192. Finally, Mr. McDonough testified that Maris’s departure did not delay the project. Rather, he testi­fied that Morganti mitigated any delay caused by Maris’s departure by securing Pio­neer, a second cell-panel manufacturer, to fabricate Mod 192 cell panels while IAC fa­bricated the remaining typical cell panels.

Mr. Brennan, the FBOP’s expert, present­ed a very different assessment of the impacts of Mod 192. Using a TIA method of evaluat­ing delays, Mr. Brennan compared Morgan-­ti’s WC01 schedule with Morganti’s schedule updates and the as-built schedule, to deter­mine the cause and effect of any critical path delays. Mr. Brennan concluded, based on his TIA analysis, that Morganti was not enti­tled to any extension of the December 31, 1996 contract completion date because of the changes caused by Mod 192. In his expert opinion, the coordination, fabrication, and in­stallation of Mod 192 cell panels were never on the critical path of the project, and thus did not cause delay to the project as a whole. Contrary to Mr. McDonough’s testimony, Mr. Brennan testified that all of the critical path delays to the project’s completion date were caused solely by Morganti.

In particular, Mr. Brennan testified that his view of Morganti’s contemporaneous schedules showed that at the time Mod 192 was issued in July 1995, Morganti was plagued by critical path delays associated with repairing deficient concrete work and fabrication of the typical cell panels. Mr. Brennan maintained that these delays pro­vided more than enough “float” in the sched­ule for Morganti to design, fabricate, and install the limited number of Mod 192 cell panels without delaying the critical path. In addition, Mr. Brennan challenged Mr. Mc-­Donough’s contention that Mod 192 caused Morganti’s resequencing delays. Mr. Bren­nan testified that Morganti was forced to change the sequencing of work, and hence leave out many more cell panels than just those affected by Mod 192, because of a series of choices that were dictated by the concrete and masonry subcontractors, and not by Mod 192. In sum, Mr. Brennan con­cluded that the activities associated with Mod 192 were never on the critical path, and thus Morganti was not entitled to any additional time.

G. Liquidated Damages

Beginning in March 1997, the FBOP as­sessed liquidated damages against Morganti at a rate of $7,000 per day, from January 1, 1997, through termination, for a total of $840,000. Steven Paul, another contracting officer assigned to assist Ms. Moore on the project, testified that upon review of the Schedule B Agreement, he came to believe that the assessment of liquidated damages against Morganti was improper.

IV. FACTS RELATING TO BREACH OF CONTRACT CLAIM

As an alternative defense to the FBOP’s default termination, Morganti also presented testimony regarding its claim that the FBOP materially breached its contract with Mor­ganti, thereby precluding the FBOP from terminating Morganti for default. In this connection, Morganti presented evidence to establish that the FBOP: (1) failed to make timely progress payments; (2) made exces­sive withholdings and baseless retainage; (3) failed to remit timely and complete payments on modifications and CPC’s; and (4) failed to maintain sufficient project funding. The facts with respect to each breach claim are discussed below.

A. Progress Payments

The parties do not dispute that during the course of the project, the FBOP made $82 million in progress payments in accordance with the terms of the contract. Under the prompt payment clause of the contract, F.A.R. 52.232-27, the FBOP was obligated to make progress payments within 14 days of receiving a proper requisition for payment. However, based on the mistaken belief that the contract requirements established a 30-­day payment period, as provided under a different F.A.R. provision, the FBOP consis­tently paid Morganti on a 30-day schedule.

At trial, Morganti presented the testimony of Patrick Menefee, one of Morganti’s con­tract administrators, who testified that he objected as early as 1994 to the 30-day pay­ment period, but was told by Ms. McBride that the contract provided for a 30-day pay­ment period. Ms. McBride testified that she did not recall Morganti ever complaining about her using the wrong payment period. Specifically, she recalled that Morganti’s only complaints concerned rejected payment req­uisitions, withholdings, and retainages. Ms. McBride testified that Morganti “[njever brought it to my attention about the 14 days, or that would have been corrected.” Mor­ganti presented no evidence to show that Mr. Menefee or any other Morganti employee pursued the matter further until April 1997, just before termination.

B. Retainage and Withholding

In addition to objecting to late progress payments, Morganti also objected to the FBOP’s decision to “retain” monies from progress payments for lack of progress, and then to “withhold” additional monies for defi­cient work. It is undisputed that in May 1995 the FBOP began retaining a maximum of 10 percent from every progress payment to Morganti under F.A.R. 52.232-5(e) for lack of adequate progress. According to Morganti’s financial expert, Mr. Fuchs, the FBOP’s retainages totaled more than $4 mil­lion over the course of the project. It is also undisputed that over and above these retain-­ages, the FBOP “withheld” portions of prog­ress payments at various times throughout the course of the project, starting with Prog­ress Payment 9 in October 1994. The FBOP withheld money from progress payments for defective work identified through specific de­fíciency and omission reports, or “D & O’s,” under F.A.R. 52,232-5(b).9

Ms. McBride testified that the most signifi­cant withholding came from Progress Pay­ment 17, dated June 23, 1995, against which the FBOP withheld $3.2 million for concrete repair work. Ms. McBride explained that she withheld the entire amount due for con­crete work because, at the time, it was diffi­cult to ascertain the true extent of the value of the necessary repairs. Realizing that she could not withhold the entire amount due for concrete work, on July 14,1995, Ms. McBride released $3.2 million to Morganti in Progress Payment 18A, which represented the amount that she had withheld from Progress Pay­ment 17 (minus the 10 percent retainage the FBOP was contractually authorized to retain because Morganti was then behind schedule). Subsequently, the parties reached an agree­ment on a concrete repair plan that provided itemized values for various repairs. Pursu­ant to the concrete repair plan, the FBOP withheld $1.9 million from Progress Payment 18 for the defective concrete work that Mor­ganti had performed during May and June 1995. Morganti and the FBOP agreed that this was a fair valuation of the cost to repair these defects. Thus, for a period of 20 days, the FBOP was withholding more than $1 million in excess of the actual value of the concrete repairs.

Later in the project, when Ms. Moore be­came the contracting officer, she released $2 million of the money that was being held as retainage to Morganti. Ms. Moore testified that she released these funds because she knew Morganti needed the money and felt that Morganti might be owed some money for outstanding CPC’s yet to be definitized. Ms. Moore testified that she and Morganti agreed that once the CPC’s were negotiated and paid, a portion of that money would go back into the FBOP’s retainage fund for the project.

C. Processing CPC’s and Modifications

At trial, the court also heard extensive testimony concerning the FBOP’s failure to timely negotiate and make payment on CPC’s and modifications. In particular, Morganti focused on the FBOP’s conduct with regard to CPC 53 and CPC 58.

On or about March 28, 1996, Morganti submitted CPC 53 to the FBOP seeking pay­ment of $3,893,261 in direct and indirect costs incurred for out-of-sequence work, win­ter concrete placement, and acceleration costs caused by excusable winter weather delays during the winter of 1994-1995. Mor­ganti and the FBOP began negotiations on CPC 53 in August 1996, and in February 1997, they agreed to settle CPC 53 for $2.73 million. Ms. Moore explained at trial that the FBOP’s payment in connection with CPC 53 was conditioned on Morganti’s concrete subcontractor withdrawing a Freedom of In­formation Act request relating to project funding. Morganti provided its consent to the condition on April 29, 1997, one day before Morganti was terminated for default. As a consequence, CPC 53 was not defini­tized and Morganti was not paid for the CPC.

Morganti submitted its original proposal for CPC 58 on May 1, 1996, in the amount of $307,282, for costs claimed by approximately 20 subcontractors, incurred as a result of cold weather delays experienced during the winter of 1994-1995. On May 31, 1996, the FBOP requested that Morganti submit a re­vised CPC 58.

Subsequently, on August 19, 1996, Mor­ganti submitted its revised CPC 58 in the amount of $8,174,485. Ms. Moore testified that the increase from Morganti’s original CPC 58 was due to money claimed for indi­rect costs, including extended overhead, asso­ciated with the time extension of 176 calen­dar days (167 compensable calendar days) granted in Mods 056, 057, 103, 104, and 108. In early November 1996, Ms. Moore conclud­ed that the indirect costs requested in CPC 58 necessitated an audit. The audit was not completed as of the time of termination, and as such CPC 58 was not definitized.

D. Project Funding

Morganti also presented evidence regard­ing the overall status of funding for the project. Apparently in April 1994, Mr. Chin, the FBOP architect and project manager, requested an additional $15.3 million in pro­ject funding based on his projections of the project’s funding needs, including contingen­cies, but the FBOP denied the request. Then in 1995, Mr. Chin made additional fund­ing requests ranging from $9.3 million to $12 million, and the FBOP also denied these requests.

Ms. McBride and Ms. Moore both ex­plained that despite the denial of Mr. Chin’s funding requests, at no time did a lack of funds delay negotiation of CPC’s and unilat­eral modifications. Ms. Moore and Ms. McBride both testified that they were always free to negotiate payment for modifications or CPC’s without regard to funding availabil­ity. In addition, Scott Cohen, the FBOP’s project cost manager, testified that funding was always made available once negotiations on a CPC were completed. Mr. Cohen ex­plained that pursuant to standard FBOP practice, the FBOP never keeps a project fully funded, but instead transfers funds into a specific project budget as the funds are needed.

The evidence also established that several unilateral modifications and CPC’s were defi­nitized during the period of alleged FBOP funding shortfalls. However, Ms. McBride testified that there was a brief delay in defi­nitizing CPC 8B. Ms. McBride testified that she and Morganti had concluded negotiations regarding the amount due to Morganti for CPC 8B in December 1995, but that she could not immediately definitize the CPC because funding had not yet been transferred into the project budget. Mr. Cohen then testified that in January and February 1996, approximately $10 million was transferred into the project budget. Subsequently, by March 1, 1996, the FBOP and Morganti had definitized CPC 8B for $800,220 with Modifi­cation No. 260.

V. DISCUSSION

A. The Termination for Default

1. Standard of Review

It is well settled that “default-ter­mination is a drastic sanction, which should be imposed (or sustained) only for good grounds and on solid evidence.” Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed.Cir.1987) (citations omitted). The government bears the initial burden of proof to show that the contractor was in default at the time of termination. Id. at 763-64. Here, the FBOP exercised its power to terminate Morganti’s contract for default under FAR 52.249-10(a), which permits the contracting officer to terminate for default if the contractor “refuses or fails to prosecute the work or any separable pari, with the diligence that will insure its completion with­in the time specified in this contract includ­ing any extension....”

A termination for default for failure to prosecute the work requires “a reasonable belief on the pari of the contracting officer that there was ‘no reasonable likelihood that the [contractor] could perform the entire con­tract effort within the time remaining for contract performance.’ ” Lisbon Contrac­tors, 828 F.2d at 765 (alteration in original) (quoting RFI Shield-Rooms, ASBCA Nos. 17374, 17991, 77-2 BCA ¶ 12,714, at 61,735, 1977 WL 2320 (1977)). A termination for failure to make progress usually occurs where the contractor has fallen so far behind schedule that timely completion has become unlikely. Hannon Elec. Co. v. United States, 31 Fed.Cl. 135, 143 (1994), aff'd, 52 F.3d 343 (Fed.Cir.1995) (table). In this connection, the government is not required to prove that it was impossible for the contractor to com­plete performance on time. Lisbon Contrac­tors, 828 F.2d at 765. Rather a termination for default will be upheld where “a demon­strated lack of diligence indicates that [the government] could not be assured of timely completion.” Id. (alteration in original) (cit­ing Discount Co. v. United States, 213 Ct.Cl. 567, 575, 554 F.2d 435, 441 (1977); Universal Fiberglass Corp. v. United States, 210 Ct.Cl. 206, 537 F.2d 393, 398 (1976)).

F.A.R. 49.402-3(f), “Procedure for De­fault,” provides a list of factors that the contracting officer should consider when ex­ercising her discretion to terminate a con­tractor for default. These factors include, but are not limited to: the contractor’s ex­cuses for the failure; the availability of the contract work from other sources; the ur­gency of the need for the contract work; and the period of time required to obtain the contract work as compared with the period of time in which the current contractor could perform. Id. at 49.402-3(f).

In addition, courts and contract boards of appeal have held that in determin­ing whether to terminate a contractor for default, the contracting officer may consider, among other things: the contractor’s failure to meet its own representations concerning the progress of the work (e.g., Guenther Sys­tems, ASBCA No. 14032, 72-1 BCA ¶ 9443, at 43,869, 1972 WL 1392 (1972)); the per­centage of work completed and the percent­age of time expended (e.g., Olympic Painting Contractors, ASBCA No. 15773, 72-2 BCA ¶ 9549, at 44,474 (1972)); monthly progress reports indicating that delivery will be late and an additional time extension is sought (e.g., Fitzgerald Labs., Inc., ASBCA Nos. 15205, 15594, 71-2 BCA ¶ 9029, at 41,937, 1971 WL 1683 (1971)); as well as a contrac­tor’s performance history (e.g., Decker & Co. v. West, 76 F.3d 1573, 1581 (Fed.Cir.1996)). Against this backdrop, the court will examine Ms. Moore’s decision to terminate Morganti for default.

2. Schedule B Substantial Completion Date

In order to evaluate whether Morganti was in default, the court must first determine the appropriate contract completion date. The court finds that the official contract comple­tion date was set in Mod 331 as December 31, 1996, and that contrary to Morganti’s contentions, the Schedule B Agreement did not formally extend the contract completion date. Morganti failed to present any reliable evidence to support its contention that the Schedule B Agreement formally extended the contract completion date to September 22, 1997, or that the parties agreed that any future time extensions would be added to the September 22, 1997 substantial completion date identified in WC04. To the contrary, the parties executed several bilateral contract modifications following the Schedule B Agreement, in which they expressly recog­nized December 31, 1996 as the contract completion date, including Mods 340, 341, 342, 343, 344, 345, 350, 353, 354, and 356. Indeed, Morganti recognized that December 31, 1996 was the contract completion date in its November 6, 1996 TIA for Mod 192, in which Morganti sought a time extension of 213 work days from December 31, 1996, until October 30,1997.

Nonetheless, the court further finds that under the terms of the Schedule B Agree­ment, the parties recognized Morganti’s WC04 schedule update as the controlling schedule, and under WC04 the substantial completion date was September 22, 1997. It is undisputed that the FBOP agreed not to terminate Morganti so long as Morganti was making progress toward achieving the sub­stantial completion date of September 22, 1997 that it represented in WC04. As noted above, Ms. McBride, Mr. Chin, and Ms. Moore, as well as Mr. Catino, all understood that the purpose of the Schedule B Agree­ment was to allow Morganti to continue working beyond the contract completion date of December 31,1996, as set by the parties in Mod 331, while the FBOP evaluated whether Morganti was owed additional time due to Mod 192.

Finally, the court finds that the parties provided in the Schedule B Agreement that if Morganti was due any extension of time, that time would be added to the December 31, 1996 contract completion date, and not to the September 22, 1997 substantial completion date in WC04. As discussed further with respect to Morganti’s claim for an additional 511 calendar days of excusable delay, the court finds that by the plain terms of the agreement, the parties agreed that any ex­tensions of time would be evaluated under WC01, which projected a substantial comple­tion date of January 5, 1997, and was intend­ed to “match up” with Schedule A’s substan­tial completion date of December 31, 1996. The parties further agreed that the Septem­ber 22, 1997 date in WC04 would only be extended if Morganti could show that it was owed a time extension that extended the December 31, 1996 official substantial com­pletion date beyond the September 22, 1997 substantial completion date set in WC04.10 The parties’ understanding in this regard is reflected in Morganti’s November 6, 1996 request for an extension of time from Decem­ber 31,1996, until October 30,1997.

In view of the foregoing, the FBOP’s case turns on whether Ms. Moore had a “reason­able belief’ that there was “no reasonable likelihood” that Morganti could complete the project by the September 22, 1997 substan­tial completion date.

3. Ms. Moore Was Justified in Terminat­ing Morganti for Default

The court finds that at trial the FBOP established that Ms. Moore’s decision to terminate Morganti for default was rea­sonable and supported. There is simply no serious dispute that at the time Morganti was terminated in April 1997, Morganti was not going to meet the September 22, 1997 substantial completion date set in WC04. In­deed, Morganti concedes as much. In its April 11, 1997 response to the show cause notice issued by Ms. Moore on March 25, 1997, Morganti stated that there had been slippage in the schedule since the January 1997 cure notice and that it could not sub­stantially complete the project until at least December 1997 — three months after the WC04 completion date. According to later Schedule B updates, Morganti was projecting that it would not achieve substantial comple­tion until January or March 1998.

In addition, Mr. McDonough, Morganti’s own scheduling expert, estimated that Mor­ganti would not have achieved substantial completion until May 26, 1998 — eight months after the substantial completion date in WC04. Mr. McDonough testified that Mor­ganti could probably have shortened that date by four months if the FBOP had been willing to pay for acceleration. However, even using Mr. McDonough’s accelerated es­timate for substantial completion by January 1998, Morganti would still have exceeded the agreed-upon September 22, 1997 substantial completion date. Thus, the court finds that Ms. Moore was reasonable in her belief that Morganti would not complete the project in time. ,

Finally, the court finds that contrary to Morganti’s contentions, Ms. Moore gave adequate consideration to the requirements in F.A.R. 49.402-3(f) in making her termi­nation decision. In particular, the court finds that Ms. Moore properly considered the amount of work remaining for Morganti to complete the project, the amount of time it would take Morganti to complete the remain­ing work, whether Morganti or another con­tractor could perform the work more expedi­ently, and whether Morganti was entitled to an extension of time that would have given Morganti sufficient time to complete the pro­ject.

The court notes that a contractor must satisfy a significant burden of proof when arguing that a termination for default should be invalidated as an abuse of discre­tion. Mega Constr. Co. v. United States, 29 Fed.Cl. 396, 422 (citing Continental Bus. En­terprises, Inc. v. United States, 196 Ct.Cl. 627, 637-38, 452 F.2d 1016, 1021 (1971)). As detailed in the statement of facts, Ms. Moore went through each phase of the termination process with care. Morganti was given sev­eral opportunities to show whether it could come close to the September 22, 1997 sub­stantial completion date. The evidence proves that Morganti was never able to do so. Indeed, Morganti’s own schedules showed a substantial completion date that had slipped beyond January 1998. More­over, Morganti’s only outstanding request for a time extension at termination, WHI’s No­vember 1996 TIA, sought an extension until only October 30, 1997. In such circum­stances, Ms. Moore’s termination decision was justified.

Accordingly, Morganti’s contention that the termination for default was improp­er because Ms. Moore neglected to consider all the factors set forth in the F.A.R. is without merit. It is well settled that “[f]ail­ure to consider one or more of the [F.A.R.] factors should not invalidate a termination for default where the totality of the circum­stances demonstrates a reasonable exercise of discretion.” Lafayette Coal Co., ASBCA No. 32174, 89-3 BCA ¶ 21,963, at 110,482, 1989 WL 74885 (1989). As stated by the Federal Circuit in DCX, Inc. v. Perry, 79 F.3d 132, 135 (Fed.Cir.1996), “[a] contracting officer’s failure to consider one or more of the section 49.402 — 3(f) factors therefore does not require that a default termination be converted into a termination for the conve­nience of the government.”

In this connection, the court notes that Morganti made much of Ms. Moore’s memo­ry lapses and her decision not to keep her personal notes regarding her decision to ter­minate Morganti for default. Ultimately, however, the court found Ms. Moore to be a credible witness. It was evident that based on the information presented to her and after giving Morganti the benefit of the doubt, Ms. Moore reached the reasonable conclusion that Morganti would not be able to get the job done within the time frame to which the parties had agreed. While Ms. Moore may not have had perfect knowledge, she had sufficient knowledge to make a sound and reasonable judgment.

Given the court’s finding that Morganti could not meet the Schedule B substantial completion date, or even the October 30,1997 date sought by Morganti in its November 1996 request for a time extension, the case turns on whether Morganti can establish that its admitted delay beyond September 1997 was excusable under the excusable delay clause of the default provision, F.A.R. 52.249-10(b).

B. Excusable Delay

1. The Contractor’s Burden

Under the excusable delay clause, the contractor has the burden of proving that the delay was excusable under the terms of the default provision of the contract. F.A.R. 52.249 — 10(b); Sauer Inc. v. Danzig, 224 F.3d 1340, 1345 (Fed.Cir.2000) (citing International Electronics Corp. v. United States, 227 Ct.Cl. 208, 231, 646 F.2d 496, 510 (1981)). A termination for default may be converted to a termination for conve­nience of the government only where the contractor can establish that “[t]he delay in completing the work arises from unforesee­able causes beyond the control and without the fault or negligence of the Contractor.” F.A.R. 52.249-10(b); Sauer Inc., 224 F.3d at 1345.

In addition, it is well settled that: When a contractor is seeking extensions of contract time, for changes and excusable delay, which will relieve it from the conse­quences of having failed to complete the work within the time allowed for perfor­mance, it has the burden of establishing by a preponderance of the evidence not only the existence of an excusable cause of de­lay but also the extent to which completion of- the contract work as a whole was de­layed thereby.

Santa Fe, Inc., VABCA No. 1943, 84-2 BCA ¶ 17,341, at 86,410, 1984 WL 13360 (1984) (quoting Wilner Constr. Co., VABCA No. 1421, 80-2 BCA ¶ 14,529, at 71,628, 1980 WL 3020 (1980)). Thus, the contractor must demonstrate that the excusable event caused a delay to the overall completion of the con­tract, i.e., that the delay affected activities on the critical path. Sauer Inc., 224 F.3d at 1345 (citing Mel Williamson, Inc. v. United States, 229 Ct.Cl. 846, 850-51 (1982)). In this connection, the contractor must also establish the extent to which completion of the work was delayed. A contractor “is entitled to only so much time extension as the excusable cause actually delayed performance.” Robert P. Jones Co., AGBCA No. 391, 76-1 BCA ¶ 11,824, at 56,457, 1976 WL 24288 (1976) (citations omitted). However, the fact that the contractor may also have caused concur­rent delay is not fatal to the contractor’s claim for additional time due to excusable delay. “If a period of delay can be attrib­uted simultaneously to the actions of both the Government and the contractor, there are said to be concurrent delays, and the result is an excusable but not a compensable delay.” Weaver-Bailey Contractors, Inc. v. United States, 19 Cl.Ct. 474, 476 (1990); Utley­James, Inc., GSBCA No. 5370, 85-1 BCA ¶ 17,816, at 89,109, 1984 WL 13874 (1984) (citing Dawson Constr. Co., GSBCA No. 3998, 75-2 BCA ¶ 11,563, at 55,204, 1975 WL 1808 (1975)).

2. The Impact of Schedule B on Delay Analysis

As an initial matter, the court must ad­dress the impact of the Schedule B Agree­ment on the delay analysis. As discussed above, the court finds that in entering the Schedule B Agreement, the parties estab­lished how to evaluate and calculate time impacts caused by Mod 192. In particular, the parties apparently recognized that Schedule A was no longer workable and that Morganti’s WC01 update was also unrealistic. The plain terms of the Schedule B Agree­ment provide:

Actualized dates and activities defined within [Morganti] Work to Complete Schedule B, Update WC04, Data Date May 31, 1996 shall be the actualized dates for all respective activities in any preceding [Morganti] Work to Complete Schedule B updates. Any new activities/logic re­flected in WC04. shall apply to all previous Work to Complete Schedule updates.

All future impacts, from February 22,1996 until project completion, shall be evaluated on the basis of the Work to Complete Schedule WC01. Any future extensions of time, shall be inputted into the accepted Contract Schedule (Schedule A).

(Emphasis added).

Based on the plain language in the Sched­ule B Agreement, the court finds that the parties intended to be guided by the dura­tions and logic contained in the WC04 update for measuring progress and assessing any delays after February 22, 1996. In addition, as explained above, to the extent such delays were identified, the parties provided that any time extensions would then be added to the December 31, 1996 official substantial com­pletion date set in Mod 331. Accordingly, the court concludes pursuant to the Schedule B Agreement that in order to evaluate whether any FBOP-caused delays required a contract extension, the parties must look to WC04 to determine the time impact, if any, and add that time to December 31, 1996.

Significantly, at trial neither of the parties fully addressed the complexity added to the delay analysis by the Schedule B Agreement. Although Morganti’s trial expert, Mr. Mc-­Donough, recognized that the parties agreed in the Schedule B Agreement that Morgan-­ti’s WC04 schedule update would serve as a baseline schedule after February 22, 1996, his delay analysis never referenced the dura­tions or logic in Morganti’s WC04 schedule update. Rather, Mr. McDonough deter­mined the number of days of excusable delay by comparing the as-built schedule with Mor­ganti’s Schedule A and WC01 schedule. Mr. Brennan, the FBOP’s trial expert, also relied on WC01 as the baseline as-planned sched­ule, as compared with WC04 and other Mor­ganti schedule updates, and Morganti’s as-­built progress to determine whether the FBOP caused any excusable delay. Howev­er, Mr. Brennan’s analysis rejected the possi­bility that the Schedule B Agreement repre­sented some acknowledgment on the part of the FBOP that Mod 192 may have caused some excusable delay beyond December 31, 1996.

Ultimately, however, the court must be guided by what the parties agreed to and bargained for in the Schedule B Agreement, despite the expert testimony. The court’s “paramount focus is the intention of the par­ties at the time of contracting; that intention controls in any subsequent dispute.” King v. Dep’t of the Navy, 130 F.3d 1031, 1033 (Fed. Cir.1997) (citing Greco v. Dep’t of the Army, 852 F.2d 558, 560 (Fed.Cir.1988)). It is in view of the parties’ understanding in the Schedule B Agreement that the court now turns to Morganti’s excusable delay claim.

3. Critical Path

Based on the parties’ understanding in the Schedule B Agreement, the court finds that Mod 192 caused some delay to the critical path by interfering with the sequencing of cell-panel installation as well as follow-on MEP work, and thus Mod 192 caused delay to the project as a whole. The full extent of that delay will be analyzed below. At the outset, however, the court rejects Mr. Bren­nan’s contention that the Mod 192-related work was never on the critical path. Mor­ganti’s WC04 schedule indicates that the crit­ical path of the'project ran through fabrica­tion and installation of cell panels, and then would eventually move on to the follow-on MEP work. The court notes that Morganti’s WC04 schedule reflects that both Mod 192 and typical cell panels were on the critical path, and thus the delay caused by Mod 192 is apparently characterized by Morganti as concurrent delay. Notwithstanding, for the reasons that follow, the court concludes that Morganti failed to establish a right to the 511 calendar days of excusable delay that it claims.

4. Delay Attributable to Mod 192

Morganti claims that the Mod 192 changes caused 511 calendar days of excusable delay to the project, which would extend the con­tract completion date to May 26, 1998. Mor­ganti’s scheduling expert, Mr. McDonough, attributes 293 days of critical path delay for coordination and fabrication of Mod 192 pan­els and 218 days of critical path delay for installation of Mod 192 cell panels and follow-­on MEP work.

Although Mr. McDonough purported to compare Morganti’s as-built performance against Morganti’s as-planned Schedule A and WC01 schedule, his analysis is in essence a “total time” approach, which is of virtually no value. Mr. McDonough “simply takes the original and extended completion dates, com­putes therefrom the intervening time or overrun, points to a host of individual delay incidents for which defendant was allegedly responsible and which ‘contributed’ to the overall extended time, and then leaps to the conclusion that the entire overrun time was attributable to defendant.” Law v. United States, 195 Ct.Cl. 370, 382 (1971). It is well settled that this “total time” theory of prov­ing delay is insufficient to meet the contrac­tor’s burden to prove that government-­caused delay actually delayed the overall completion of the project. Mel Williamson, Inc., 229 Ct.Cl. at 852 (citing Law, 195 Ct.Cl. at 382). The “total time” approach to prov­ing delay is “as unsatisfactory as the ‘total cost’ method of proving damages,” because it assumes that the government is responsible for all of the delay. Law, 195 Ct.Cl. at 382.

The court also has serious problems with the FBOP’s expert analysis. The FBOP’s expert, Mr. Brennan, testified that Morganti is not entitled to any excusable delay for delay caused by Mod 192. Mr. Brennan explained that Morganti’s WC01 schedule was a reasonable estimate of the time re­quired for implementation of Mod 192 and completion of the project by January 1997. Mr. Brennan further testified that based on his examination of the project as compared with Morganti’s as-planned WC01 schedule and as-built progress from February 22, 1996, through termination, it was his opinion that any delays that occurred beyond WC01 were caused by Morganti and not the actions of the FBOP. As noted above, Mr. Brennan did not consider the parties’ Schedule B Agreement regarding the use of Morganti’s WC04 schedule as a baseline for measuring progress and delays, and thus his analysis disregards the parties’ stated intent.

In such circumstances, the court’s role is to comb through the evidence and determine whether, based on the record, Morganti was entitled to any time beyond December 31, 1996, for critical path delays caused by Mod 192. Law, 195 Ct.Cl. at 386-­87 (holding court may rely on other evidence in the record where plaintiffs total time the­ory has been rejected). Although the court’s analysis “takes into account the experts’ con­trary opinions, ... we give most weight to the other evidence in the record, and draw the logical conclusions flowing therefrom.” Cogefar-Impresit USA, Inc., DOTCAB No. 2721, 97-2 BCA ¶ 29,188, at 145,199, 1997 WL 484585 (1997). Based on its review of the expert analyses, Morganti’s contempora­neous schedules, its November 6, 1996 TIA, and the terms of the Schedule B Agreement, the court concludes that Morganti was enti­tled to a total time extension of 246 calender days from the December 31, 1996 contract completion date, or until September 3, 1997. Because Morganti was not entitled to an extension of time beyond the September 22, 1997 substantial completion date recognized by the parties in the Schedule B Agreement, the termination for default is affirmed.

a. Coordination/Fabrication Delays

At trial, Morganti’s expert claimed that Morganti was entitled to 293 calendar days— starting from January 1, 1996 through No­vember 3, 1996 — to complete coordination, shop drawings, and fabrication of Mod 192 panels. For the reasons that follow, the court concludes that the government was not responsible for this entire period of delay, but rather that Morganti was entitled to 145 calendar days for coordination and fabrica­tion of Mod 192 cell panels.

As explained above, the court has looked to Morganti’s WC04 schedule update to gauge the parties’ contemporaneous understanding of the time that would be necessary to com­plete the Mod 192 coordination and fabrica­tion activities. By the time Morganti’s WC04 update was issued, Morganti anticipat­ed that it would need 49 calendar days to complete shop drawings before it could begin fabricating the first shipment of Mod 192 panels. Because this was 49 calendar days of critical path delay occurring after the Feb­ruary 22, 1996 cut-off date in the Schedule B Agreement, it must be added to the Decem­ber 31,1996 substantial completion date.

In addition to the 49 calendar days Mor­ganti scheduled for shop drawings, the court finds that Morganti was entitled to some, but not all of the time Morganti claimed for the earlier engineering process. The evidence demonstrated that after an exchange of RFI’s and several rounds of coordination with trade subcontractors, Morganti forward­ed coordination drawings to Maris and IAC on February 23, 1996, so that they could begin to prepare shop drawings. At that time, Morganti estimated that it would take two weeks for Maris to complete the shop drawings. In fact, IAC did not begin prepar­ing shop drawings until April 1996. The FBOP is clearly not responsible for this de­lay.

Nonetheless, in early April 1996, Maris and IAC requested additional information that Morganti submitted to the FBOP in another series of five RFI’s. Morganti estab­lished at trial that it could not proceed with completion of the Mod 192 shop drawings until it had received a response from the FBOP, which in the case of RFI No. 1232 required an additional modification to the original Mod 192 design. The FBOP issued Mod 287 in response to RFI No. 1232 on April 26, 1996, and responded to all of Mor­ganti’s additional RFI’s by May 7, 1996. Based on this delay, the court finds that Morganti is entitled to a time extension of 34 calendar days for FBOP-caused delays occur­ring during the coordination process.

Although by July 15, 1996, the date Mor­ganti submitted WC04 to the FBOP, Mor­ganti had all the information it needed from the FBOP and estimated that it could com­plete the shop drawings in 49 days, in fact Morganti took much longer to complete the shop drawings. While Morganti claimed en­titlement to this additional time, it failed to prove that any of the delays in completing the shop drawings were caused by the FBOP. Rather, the evidence proved that the delays were Morganti’s responsibility.

As noted in the facts, just as the shop drawings were ready to be finalized, Maris, Morganti’s principal subcontractor for cell-­panel production, left the project. As a con­sequence, Morganti was required to repro­cure contracts for the work of Maris and its subcontractors, including the cell-panel man­ufacturer, IAC. Contrary to Mr. McDon­ough’s testimony, the court finds that Maris’s departure had a significant time impact on Morganti’s ability to perform in a timely manner. Morganti admitted as much in its April 11, 1997 response to the FBOP’s show cause notice where Mr. Catino stated: “Giv­en the very significant scope and critical path nature of the work covered by Maris’ con­tract (e.g., cell panels, security windows, se­curity electronics), a severe impact to our progress as a result of that abandonment was unavoidable. Morganti has recovered as well or better than could be reasonably expect­ed....”

After Maris’s departure, Morganti con­tracted with DDC and GDW to fabricate Mod 192 cell panels. Mr. Sabino testified that it was not until June 1996, one month after the FBOP had responded to Morganti’s last RFI’s relating to Mod 192, that he trav­eled to GDW’s offices in Alabama to assist in the preparation of a second set of shop draw­ings. GDW did not complete the shop draw­ings until August 13, 1996, when Morganti submitted them to the FBOP for approval. Clearly, none of this time was FBOP-caused delay.

In addition to the time necessary for prep­aration of the shop drawings, WC04 provided 21 calendar days for the FBOP to approve the shop drawings. The court concludes that Morganti is entitled to this reasonable period of time due to Mod 192. In fact, Morganti submitted the shop drawings to the FBOP on August 13, 1996, and the FBOP returned them on September 10, 1996. Thus, it took the FBOP 6 calendar days longer than antici­pated in WC04 to return the shop drawings. Because the FBOP is responsible for this delay, the court finds that Morganti is enti­tled to this additional 6 calendar days, plus the 21 calendar days Morganti provided in WC04.

Having determined the time that Morganti is owed for coordinating and preparing the shop drawings for the Mod 192 cell panels, the court now turns to fabrication. WC04 provided 35 calendar days for fabrication of the first delivery of critical Mod 192 cell panels. While the court finds that Morganti was entitled to this 35 days, Morganti in fact took much longer to get a critical number of Mod 192 cell panels delivered to the site, such that it was delayed in progressing the critical path onto MEP follow-on activities. The evidence established that Morganti was responsible for all of the delays beyond the 35 calendar days provided in WC04.

Pioneer, Morganti’s cell-panel fabricator, took from September 11 to November 13, 1996, to .fabricate and deliver the first priori­ty group of Mod 192 cell panels. Under the initial purchase order with Pioneer, Morganti anticipated that Pioneer would deliver the first priority group of cell panels by Septem­ber 20,1996. However, later correspondence between Morganti and Pioneer indicates that this shipment was delayed until October 1 and 2, 1996, and was not delivered in full until November 13, 1996. Moreover, Mor­ganti was unable to use all but four of the panels that arrived by October 2,1996. Mor­ganti, and not the FBOP, is solely responsi­ble for this delay caused by Pioneer.

Following this first delivery, Pioneer was never able to maintain Morganti’s fabrication schedule. Indeed, the clear evidence estab­lished that delays caused by Pioneer contin­ued to plague the critical path of the project through installation of the Mod 192 cell pan­els and follow-on MEP work up to the time of the default termination. The court will address this additional delay below in the context of cell-panel and MEP installation delays. In sum, with respect to coordination and fabrication of the Mod 192 cell panels, the court concludes that Morganti was enti­tled to a 145-calendar-day time extension from December 31,1996.

b. Cell-panel Installation and MEP De­lays

As contemplated in WC04, once Morganti had a critical number of Mod 192 cell panels delivered to the project site, the critical path of the project would shift from installation of cell panels to follow-on MEP work. Mr. McDonough, Morganti’s scheduling expert, testified that Morganti was entitled to 218 calendar days of delay as a result of installa­tion resequencing and additional comeback MEP work required by Mod 192.11 Again, Mr. McDonough based his conclusion solely on Morganti’s as-built schedule. For the reasons that follow, the court concludes that Morganti was entitled to only a 101-calen-­dar-day contract extension for these Mod 192-related activities.

While it is true that Morganti was required to install cell panels and follow-on MEP work under the original contract, the court finds that the changes imposed as a result of Mod 192 caused a definite time impact to these activities. Based on the expert testimony and the November 6, 1996 TIA prepared by WHI on Morganti’s behalf, the court is per­suaded that the Mod 192 changes required resequencing of work that created an addi­tional amount of comeback MEP work in the Mod 192 and other Mod 192-affected cells. This additional MEP work could not be com­pleted until the Mod 192 cell panels were fabricated, delivered, and installed into the building. The court further concludes, based on the testimony and contemporaneous evi­dence, that the 101 calendar days Morganti provided in WC04 to accommodate this comeback MEP follow-on work was a reason­able estimate of the time necessary to ac­count for the delay due to Mod 192 and that Morganti was responsible for any delays be­yond the time provided in WC04.

Contrary to Morganti’s contentions, Mor­ganti’s WC04 schedule update took into ac­count the additional delay caused by the disruption to the sequencing of cell-panel and MEP installation activities arising from Mod 192. As WHI explained in its November 6, 1996 TIA, WC04 reflected substantial revi­sions that accounted for delays due to Mod 192, which resulted in the September 22, 1997 substantial completion date:

the impact of the ADA partitions on work in other areas had not been fully under­stood when the Schedule B was devel­oped____After further analysis it was re­alized that all chase rough-in on floors with ADA cells was in fact dependent upon having the Modification No. 192 partitions in place. Specifically, the electrical sub­contractor can not begin pulling the securi­ty wiring “home runs” unless the corner cells, where the ADA cells are located, are completed.

In fact, there is evidence that Morganti antic­ipated that Mod 192 would result in a loss of productivity and comeback work as early as September 8,1995.

In this connection, the court notes that when Morganti revised the original Schedule B-WC01 in the WC04 schedule update, it combined cell-panel installation and MEP fol­low-on work for Mod 192 cells with installa­tion and MEP follow-on work relating to the remaining typical cells for each floor. Thus, the discrete number of days of delay to the critical path attributable to Mod 192 is not readily apparent by looking at WC04 alone. This delay was analyzed, however, in the TIA prepared for Morganti by WHI. In the Mod 192 TIA, WHI explains that the impact to follow-on MEP work is in large part why WC04 results in a September 22, 1997 sub­stantial completion date. According to WHI, the 185-work-day delay in WC04 is attribut­able to 49 work days of delay carried over from WC03 and two new events that nega­tively affected the schedule: (1) Maris’s de­parture; and (2) the impact of Mod 192 on MEP follow-on work in all cell chases. WHI attributed 64 work days of delay to Maris’s departure. Simple arithmetic reveals that WHI attributed the remaining 72 work days or 101 calendar days to the impact of Mod 192 on the MEP follow-on work.

While the court heard extensive testimony from Morganti’s MEP expert, Mr. Boylard, regarding the complexity of the MEP work within the cell utility chases, Mr. Boylard failed to explain why Morganti’s WC04 schedule did not reflect a reasonable esti­mate of time for comeback work by the MEP trades that was caused by Mod 192. Mr. McDonough likewise could not identify any­thing that the FBOP did after the November 6, 1996 TIA that would have caused addition­al delay beyond that which WHI already had attributed to Mod 192 activities in the TIA. To the contrary, the evidence established that Morganti was delayed beyond the 101 calendar days identified in the TIA because of the delays it suffered in getting cell panels fabricated and delivered to the job site in a timely fashion.

Contemporaneous evidence reveals that Morganti conceded that timely cell-panel fa­brication and installation were critical to keeping the project on schedule. In an in­ternal memorandum, dated August 23, 1996, Mr. Rhodes, the project manager, wrote:

Cell panel delivery and erection through the 6th floor is this project’s critical path. This is key to completion of the project. It is attainable if we would all pull in one direction. It involves a minimal number of panels. The “trick” is to deliver and in­stall the 4, 4M, 5, 5M & 6 remaining panels ASAP as once they are erected cell block finish activities will never catch panel erec­tion.

In addition, Mr. Sabino confirmed at trial that the fall 1996 delivery dates Morganti established for Pioneer for Mod 192 cell pan­els had to be achieved in order complete the project by September 22, 1997. However, Pioneer was unable to fabricate and deliver cell panels in accordance with the schedule set by Morganti.

The record is replete with documents showing that the critical work of installing cell panels was delayed because Pioneer was late with every delivery of Mod 192 cell panels. As discussed above, Pioneer was late with its first delivery of the critical panels for floors 4 through 6M for cell block A. By January 9, 1997, one day before the FBOP issued the cure notice, Pioneer had delivered only 137 panels, and even then, there were still critical 4th floor panels for cell block C that had not been delivered. On February 10, 1997, Morganti concluded that “Pioneer Industries apparently still cannot produce panels on the eight day cycle which you committed to initially.... Any further delays in the delivery of the remaining panels will have a disastrous effect on our construction schedule.” At the time of termination, April 1997, the last Mod 192 cell panels had just arrived on site, although they were expected in December 1996. There is also evidence that the panels delivered by Pioneer con­tained defects, delaying installation of cell panels and follow-on MEP work even fur­ther.

At the same time, Morganti was suffering concurrent delays with respect to typical-cell-­panel production. The evidence showed that IAC, which was responsible for manufactur­ing the remaining non-ADA typical cell pan­els, was far behind schedule. As Morganti explained at trial, it could not complete the follow-on MEP work on any floor until all the cell panels were installed, including both Mod 192 and typical cell panels. In order to meet the September 22, 1997 substantial comple­tion date, Morganti required IAC to fabricate 1317 typical cell panels between September and November 1996. To this end, Morganti put IAC on a similar fabrication schedule to Pioneer’s schedule for Mod 192 cell panels. However, according to Mr. Rhodes, by Octo­ber 2, 1996, IAC had yet to begin fabricating panels, which meant that they would be de­layed in turning over floors 4 through 6M for follow-on MEP work. By November 12, 1996, Morganti projected that delivery of the 4th floor typical panels for cell block C was “absolutely critical” and was causing sched­ule slippage. It is significant that at the time of termination, none of the 8M or 9th floor cell panels had been installed. In fact, none of the 9th floor cell panels had been fabricat­ed.

The above-noted delays in fabricating typi­cal and Mod 192 cell panels, in turn, nega­tively affected the follow-on MEP work that was the next activity on the critical path, and ultimately prevented Morganti from meeting its WC04 schedule. Morganti’s expert could not explain these fabrication delays other than to say that the Mod 192 changes caused additional delay to installation activities be­cause Mod 192 required resequencing and comeback MEP work. According to Mr. McDonough, Morganti was proceeding at a reasonable pace throughout the installation and MEP period and therefore was entitled to however long it took to accomplish these activities. However, Mr. McDonough’s “to­tal time” analysis was wholly lacking in the face of contemporaneous schedule updates showing that the principal thing preventing Morganti from meeting its schedule was the delay caused by Morganti’s fabrication sub­contractors.

In sum, based on the evidence presented at trial, the court concludes that Morganti was entitled to a 145-calendar-day time ex­tension for coordination and fabrication of Mod 192 cell panels and a 101-calendar-day time extension for installation and MEP fol­low-on work, for a total time extension of 246 calendar days. If these days are added to the December 31, 1996 contract completion date, Morganti would have been entitled to a contract extension until September 3, 1997. Because the FBOP based its termination de­cision on Morganti’s failure to make suffi­cient progress to achieve the September 22, 1997 substantial completion date in WC04, the decision must be affirmed.

5. Other Grounds for Delay

Finally, there are no other grounds for delay that would entitle Morganti to any additional time beyond the September 22, 1997 date. In his expert report, Mr. McDon­ough identifies six major items of work as additional causes of “excusable” delay, in­cluding: security windows; chiller equip­ment; kitchen equipment; hollow-metal frames; electronic security and wiring; and expansion joints. Mr. McDonough testified that Morganti is entitled to excusable delay for each of these items. For the reasons that follow, the court finds that none of these issues caused delay to the critical path of the project, such that the September 22, 1997 substantial completion date should be extend­ed.

First, with respect to security windows, Mr. McDonough testified that because Mor­ganti decided to install temporary window coverings sometime in late 1995, procure­ment and installation of security windows would not move onto the critical path until sometime following cell-panel installation. Mr. McDonough further testified that at the time of termination, installation of the securi­ty "windows was 60 days off the critical path.12 Because none of the delay associated with the security windows delayed ultimate completion of the project, any delays associ­ated with security windows do not provide a reason for extending the September 22, 1997 substantial completion date.

Second, Mr. McDonough’s report and testi­mony regarding the chillers does not support any additional delay claim. The FBOP ap­proved Morganti’s chiller manufacturer on May 24, 1995. Although Mr. McDonough claims that the testing for each chiller re­quired by the contract specifications “was more time-consuming than originally planned,” there is no specific evidence that shows that the FBOP was responsible for any specific period of delay.

Third, Mr. McDonough claims that Mor­ganti experienced significant delays due to issues relating to design and coordination of the kitchen equipment. However, Mr. Mc-­Donough admits that these issues were re­solved in August 1996 and that Morganti still projected a completion date of September 1997. Thus, Morganti failed to demonstrate how any of the delays regarding the kitchen equipment caused critical path delay.

Fourth, Morganti’s delay claim regarding FBOP-caused delay relating to the hollow-­metal-fi'ame design does not withstand scru­tiny. The FBOP granted a time extension for this delay in Mod 331. Although Mr. McDonough claims additional delays during 1996 and 1997, the evidence adduced at trial established that cell-panel procurement and then installation and MEP work were on the critical path, not hollow-metal frames. No evidence was presented to show that these alleged delays caused delay to the overall completion date.

Fifth, with respect to Morganti’s claims relating to electrical and security wiring, there was no evidence presented that Mor­ganti ever made enough progress with secu­rity wiring for any of these alleged delays to have resulted in any critical path delay. The evidence established that throughout 1997 until termination cell-panel installation and MEP work were still on the critical path.

Finally, with respect to any delay attend­ant to the FBOP’s expansion joint design, it appears these issues were resolved through a series of RFI’s exchanged in August 1995 and Modification 275, issued on April 5,1996. Although Mr. McDonough asserts that there were additional RFI’s regarding the expan­sion joint design in January 1997, Mr. Mc-­Donough failed to present any evidence to show that these RFI’s affected the critical-­path work relating to cell-panel and MEP installation. The court therefore finds that the expansion joint design problems do not provide grounds for any extension of time beyond September 22,1997.

In sum, because Morganti failed to estab­lish that any of these alleged delays resulted in a delay to the critical path of the project, Morganti is not entitled to any additional time for these issues.

6. Morganti’s Ability to Complete the Work Within the Contract as Extend­ed

The undisputed evidence demonstrated that at the time of termination Morganti would have required approximately another year — or six months beyond the September 22,1997 substantial completion date — to com­plete the project. Because Morganti was not entitled to any time extension beyond Sep­tember 3, 1997, the contracting officer’s deci­sion to terminate Morganti for default based on a September 22, 1997 substantial comple­tion date was reasonable.

C. Liquidated Damages

Morganti seeks the return of the $840,000 in liquidated damages that the FBOP assessed and withheld from progress payments, plus interest. “As a general rule, a party asserting that liquidated damages were improperly assessed bears the burden of showing the extent of the excusable delay to which it is entitled.” Sauer Inc., 224 F.3d at 1347 (citations omitted); Youngdale & Sons Constr. Co., Inc. v. United States, 27 Fed.Cl. 516, 564 (1993) (citation omitted). Because the court concludes that Morganti was entitled to a time extension based on excusable delay extending the contract to September 3, 1997, the FBOP’s imposition of liquidated damages beginning on January 1, 1997, on the grounds that December 31, 1996 was the official contract completion date, was improper. Youngdale & Sons, 27 Fed.Cl. at 564-65 (citations omitted). Accordingly, Morganti is entitled to a return of the $840,000 withheld from progress payments as liquidated damages. However, return of these liquidated damages, together with any appropriate interest, is presently premature. The court finds that final resolution of Mor­ganti’s entitlement to liquidated damages should await resolution of all of Morganti’s payment claims.

D. Morganti’s Breach of Contract Claims

The court now turns to Morganti’s breach of contract claims. A contractor’s failure to perform may be excused and a termination for default converted to a termi­nation for the convenience of the government if the contractor can establish that the gov­ernment materially breached the contract. Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1276 (Fed.Cir.1999); Malone v. United States, 849 F.2d 1441, 1445 (Fed. Cir.1988). Not every departure from the literal terms of a contract is sufficient to be “material.” Stone Forest Indus., Inc. v. United States, 973 F.2d 1548, 1550 (Fed.Cir. 1992); Consumers Oil Co., ASBCA No. 24172, 86-1 BCA ¶ 18,647, at 93,713, 1985 WL 17314 (1985) (holding only a “material” breach discharges contractor’s duty to per­form). The Federal Circuit has held that whether a particular breach is material “de­pends on the nature and effect of the viola­tion in light of how the particular contract was viewed, bargained for, entered into, and performed by the parties.” Stone Forest, 973 F.2d at 1551 (citing RESTATEMENT (SECOND) OF CONTRACTS § 241 cmts. a & b (1981)).

Morganti argues that the FBOP’s conduct in administering the contract amounted to a material breach, such that Morganti’s failure to perform should be excused and the termi­nation for default should be converted to one for the convenience of the government. At trial, the court heard extensive testimony regarding the FBOP’s administration of Mor­ganti’s contract. Through its witnesses, Morganti sought to establish that the FBOP had materially breached the contract by: (1) making late progress payments; (2) making baseless retainages and excessive withhold­ings; (3) failing to negotiate and make pay­ment of CPC’s and unilateral modifications; and (4) failing to maintain sufficient project funding. The court will examine each of these claims in turn.

1. Late Progress Payments

Morganti’s first breach of contract claim relates to the FBOP’s delayed payment of progress payments. The prompt payment clause included in the contract, F.A.R. 52.237-27, required that the FBOP make payment to Morganti within 14 days of re­ceiving a requisition. The FBOP concedes that it paid all but one of the progress pay­ments made during the contract beyond the 14 days required under the contract.13 Ms. McBride testified that at the time she was administering the contract, she believed the contract included a different payment clause under the F.A.R., which provided that pay­ments were due within 30 days of requisition. The FBOP does not now dispute that it was required to remit properly-requisitioned pay­ment requests within 14 days.

Although the FBOP admittedly violated the contract with regard to the time­liness of progress payments, the court con­cludes that it did not materially breach the contract. “[F]ailure to pay progress pay­ments when due is not a material breach per se. Materiality must be shown by the totali­ty of the facts and circumstances.” D.W. Sandau Dredging, ENGBCA No. 5812, 96-1 BCA ¶ 28,064, at 140,161, 1995 WL 739023 (1995). In this connection, “the amount of money involved, the length of time of the non-payment, and the payment procedure agreed to by the parties are significant fac­tors to consider” in determining whether a breach due to non-payment is material. Jones Plumbing & Heating, Inc., VABCA Nos. 1845, 1869, 86-1 BCA ¶ 18,659, at 93,­857, 1985 WL 17668 (1985) (quoting General Dynamics Corp., DOTCAB No. 1232, 83-1 BCA ¶ 16,386,1983 WL 7499 (1983)).

Where, as here, the contract con­tains a specific remedy-granting clause that pertains to progress payment disputes, that clause governs. Pursuant to the prompt payment clause, F.A.R. 52.232-27, Morganti is entitled to interest for late payments, which would remedy any damages sustained as a result of FBOP’s late payments. In such circumstances, the contract clause miti­gates the materiality of the breach. D.W. Sandau Dredging, 96-1 BCA ¶ 28,064, at 140,161,1995 WL 739023 (holding that under the totality of the circumstances, “the late­ness of the 2 undisputed payments which were made is not significant and the Prompt Payment and/or Disputes provisions of the contract and applicable law and regulations provide an adequate remedy”).

The court recognizes that a “prolonged failure to pay large amounts” could constitute a material breach. Northern Helex Co. v. United States, 197 Ct.Cl. 118, 125, 455 F.2d 546, 550 (1972). However, here, the evidence established that the FBOP never refused to pay Morganti; the FBOP merely delayed payment. While the FBOP’s payment histo­ry was not perfect, it is not disputed that Morganti received $82 million in progress payments on a $110 million project that it ultimately failed to complete. In such cir­cumstances, the FBOP’s conduct does not constitute a material breach. Id. at 124, 455 F.2d 546 (holding that “mere delay in pay­ment, for a while, would not be a material breach”); Jones Plumbing & Heating, Inc., 86-1 BCA ¶ 18,659, at 93,857, 1985 WL 17668.

In concluding that the FBOP’s failure to make progress payments within 14 days does not amount to a material breach, the court also finds it significant that Morganti apparently acquiesced to the FBOP’s 30-day payment period. Morganti presented the testimony of Patrick.Menefee, a contract ad­ministrator for Morganti, who stated that he told Ms. McBride in 1994 that she was using the wrong payment period. Mr. Menefee testified that he told Ms. McBride that he believed the contractual payment period was 14 days, but that she advised him that the contract provided a 30-day payment period. Ms. McBride testified that her recollection was that Morganti had complained about the FBOP’s rejecting certain payment requisi­tions, and retaining and withholding money from progress payments, but that Morganti had not complained about the 30-day pay­ment period that the FBOP was using. In any event, Morganti did not present any evidence to suggest that it pursued the mat­ter further with the FBOP. To the contrary, Morganti did not raise the issue again until April 1997, just before the termination. In such circumstances, Morganti failed to prove its contention that the late payments consti­tuted a material breach that would have jus­tified Morganti’s nonperformance. D.W. Sandau Dredging, 96-1 BCA ¶ 28,064, at 140,161, 1995 WL 739023 (holding that “con­tractor complaints that late or no payments are affecting performance” is a significant factor in determining materiality); Jones Plumbing & Heating, Inc., 86-1 BCA ¶ 18,­659, at 93,858, 1985 WL 17668 (finding breach was not material where contractor did not pursue payment or assert any urgen­cy).

2. Retainages and Withholdings

a. Retainages for Lack of Progress

The court also finds that the FBOP’s prac­tice of retaining money from progress pay­ments did not amount to a material breach. The parties agree that beginning in May 1995, the FBOP began to retain “portions of Morganti’s progress payments under F.A.R. 52.232-5(e), based on Morganti’s failure to make progress. Under F.A.R. 52.232-5(e), the contracting officer “may retain a maxi­mum of 10 percent of the amount of the [progress] payment until satisfactory prog­ress is achieved.” Nexus Constr. Co., ASBCA No. 31070, 91-3 BCA ¶ 24,303, at 121,461, 1991 WL 179322(1991) (recognizing that the government “may suspend or with­hold progress payments under certain cir­cumstances depending on the contract’s pro­visions”). The evidence presented at trial established that the total amount that the FBOP held as retainage peaked at approxi­mately $4 million. However, at various times, the FBOP released portions of this money to Morganti as Morganti achieved adequate progress. At the time of termi­nation, the FBOP was holding less than $1 million in retainages and withholdings (ex­cluding liquidated damages).

Morganti contends that the FBOP’s retainage was excessive because the FBOP retained money from progress pay­ments without regard to FBOP-caused delay. It is well established that the government possesses broad discretion with regard to retainage and its actions in this regard are to be evaluated under an abuse of discretion standard. Technocratica, ASBCA Nos. 44347, et al., 94-1 BCA ¶ 26,584, at 132,288, 1993 WL 557156 (1993); JOHN CIBINIC, JR. & RALPH C. NASH, JR., ADMINIS­TRATION OF GOVERNMENT CON­TRACTS, 1171 (3d ed.1995). Here, the court finds that the FBOP did not breach the contract by retaining money from progress payments. While there was delay on the part of both Morganti and the FBOP in submitting and evaluating TIA’s in support of time extension requests, Morganti pre­sented no evidence to show that the FBOP’s delay in analyzing such requests was the result of an abuse of discretion or bad faith on the part of the FBOP. Ms. McBride’s testimony established that she exercised her discretion with regard to retainage in a rea­sonable manner and that Morganti did not seriously challenge her decisions at the time. Moreover, once the contract schedule was extended through a bilateral modification, the FBOP released to Morganti any retain-­age relating to the time period covered by the extension.

b. Withholdings for Deficient Work

With respect to the FBOP’s withholding for deficient work, the court also concludes that Morganti failed to prove a material breach. Under the terms of the contract, in addition to its right to retain money for lack of progress, the FBOP was entitled to with­hold money for deficiencies in work from progress payments. F.A.R. 52.232-5(b). The FBOP admits that throughout the course of the project, it withheld portions of the progress payments due Morganti for al­leged deficiencies in Morganti’s work that it had identified in D & O’s.

In particular, Morganti challenges the FBOP’s withholding for concrete deficiencies. Morganti relied on the testimony of Ms. McBride and Mr. Menefee to establish that the FBOP withheld the entire Progress Pay­ment 17 without first obtaining a cost esti­mate for the repairs. In addition, Morganti presented Mr. Menefee and a financial ex­pert, Jeffrey Fuchs, who testified that the FBOP withheld cumulative amounts for the same concrete deficiencies.

Ms. McBride admitted that she withheld $3.2 million from Progress Payment 17, dat­ed June 23, 1995, for deficient concrete work without knowing the actual amount needed to repair the deficient work. Ms. McBride ex­plained that this money was released on July 14, 1995, however, in interim Progress Pay­ment 18A, after a meeting between the FBOP and Morganti, and pending the par­ties’ agreement regarding a concrete repair plan detailing the actual repairs required. Subsequently, Morganti consented to a con­crete repaii' plan that included an itemized valuation of the required concrete repairs and a schedule by which Morganti would perform those repairs. The FBOP then withheld $1.9 million from Progress Payment 18, dated July 21, 1995, for the concrete deficiencies described in the concrete repair plan.

The court assumes that govern­ment officials act in good faith and requires a specific showing of intent to injure the con­tractor in order to establish bad faith on the part of the government. Caldwell & Sant­myer, Inc. v. Glickman, 55 F.3d 1578, 1581 (Fed.Cir.1995) (citations omitted). The court finds, based on the evidence presented re­garding Progress Payments 17, 18A, and 18, that while the FBOP may have initially acted too quickly in withholding money for con­crete repairs, Ms. McBride did not intend to harm Morganti and thus her actions do not amount to a material breach. While Ms. McBride’s conduct in withholding the entire amount due in Progress Payment 17 without sufficient information about the cost of the repairs may have been excessive, Ms. McBride did not act in bad faith. Ms. McBride testified that she withheld the en­tire Progress Payment 17 because there was so much deficient concrete work that neither the FBOP nor Morganti could really deter­mine the cost of each repair until a repair plan was submitted.

Moreover, the FBOP released the money it had improperly withheld from Progress Payment 17 after a period of only 20 days. The subsequent withholding for deficient concrete in Progress Payment 18 was made in accordance with the concrete plan to which Morganti had agreed. The fact that Ms. McBride worked with Morganti to resolve these issues regarding deficient work demon­strates that she was operating in good faith. The fact that Morganti agreed that the re­pairs were necessary and agreed to the amounts in the concrete repair plan also supports the court’s conclusion that Ms. McBride was not acting in bad faith.

Further, Morganti failed to present any evidence to demonstrate that the FBOP’s additional withholdings were improper or ex­cessive. Although Mr. Fuchs testified that the FBOP withheld a total of $6.7 million for defective work throughout the project, this amount clearly fluctuated depending on the quality of the work performed and the speed at which Morganti corrected deficient work. Morganti did not show that the work for which the various withholdings were made was not deficient. Moreover, the money withheld for deficient concrete work, as well as money withheld for other deficiencies in Morganti’s work, was released to Morganti as the defective work was corrected.

Morganti’s additional complaint, that the FBOP “double-” and “triple-dipped” by first withholding money for concrete repairs, and then retaining money for lack of progress on those repairs, also fails to give rise to a material breach claim that would excuse Morganti’s failure to perform. The FBOP was merely exercising separate rights under the contract. When viewed in light of the totality of the circumstances, the FBOP’s conduct with regard to withholding for defi­cient work and retaining money for lack of progress was not in bad faith, but was within its rights under the contract. Therefore, the FBOP’s actions with regard to withholding and retaining do not constitute a material breach.

3. Negotiation and Payment of CPC’s and Unilateral Modifications

In addition to progress payments, Morgan-­ti presented testimony to show that the FBOP’s conduct related to CPC’s and unilat­eral modifications amounted to a material breach. Mr. Catino and Mr. Menefee testi­fied that Morganti was owed approximately $30 million at the time of termination for CPC’s and unilateral modifications, and that the FBOP’s failure to negotiate and make payment violated the implied duties of good faith, fair dealing, and cooperation.

Notably, under the terms of the con­tract, Morganti had the burden of establish­ing entitlement to payment for CPC’s and unilateral modifications. Morganti submitted CPC’s for changes in the work, including unilateral modifications, that it believed re­quired an equitable adjustment to the con­tract price. Morganti has the burden of establishing that it is entitled to an equitable adjustment under the Changes Clause of the contract. F.A.R. 52.243-4. In addition, F.A.R. 43.201(b), governing change orders, and F.A.R. 52.233-1, governing disputes, re­quire the contractor to proceed with perfor­mance until the contractor’s claims of entitle­ment can be resolved under the Changes Clause. “A contractor may not abandon a contract solely because it claims there is money due.” In re Boston Shipyard Corp., 886 F.2d 451, 457 n. 4 (1st Cir.1989).

At trial, the court heard testimony from Ms. McBride, Ms. Moore, Mr. Catino and Mr. Menefee regarding the FBOP’s con­duct with regard to CPC 53 and CPC 58 in particular. There is no dispute that Morgan-­ti submitted CPC 53 to the FBOP on March 28, 1996, seeking $3.9 million in direct and indirect costs incurred as a result of winter weather delays associated with concrete placement in the winter of 1994-1995. Ms. McBride testified that due to more pressing issues relating to the non-compensable time extension granted in Mod 331 and the Sched­ule B Agreement, the negotiation of CPC 53 was delayed until late 1996. After Ms. Moore became the contracting officer in No­vember 1996, she evaluated Morganti’s claims in CPC 53, and in December 1996 she made an initial offer of $2.3 million to Mor­ganti. In February 1997, after further eval­uation and negotiation, Ms. Moore ultimately increased her offer to $2.73 million.

• Because of a condition of acceptance added by Ms. Moore during the final round of ne­gotiations that would require Morganti to terminate a Freedom of Information Act re­quest brought by one of Morganti’s subcon­tractors, Morganti required additional time for attorney review of the FBOP’s offer. Morganti communicated its acceptance of the FBOP’s offer of $2.73 million for CPC 53 on April 29, 1997. However, on April 30, 1997, Ms. Moore terminated Morganti’s contract for default and therefore CPC 53 was never definitized as a bilateral modification, nor was it paid to Morganti.

Morganti contends that this evidence proves that the FBOP delayed negotiating CPC 53 in bad faith. The court disagrees. The Federal Circuit has stated that “ ‘[sub­terfuges and evasions violate the obligation of good faith,’ as does lack of diligence and interference with or failure to cooperate in the other party’s performance.” Malone, 849 F.2d at 1445 (quoting RESTATEMENT (SECOND) OF CONTRACTS § 205 cmt. d). Here, the court finds nothing intentionally deceitful or dilatory in Ms. McBride’s or Ms. Moore’s conduct as they attempted to ad­dress CPC 53. Ms. McBride testified that Morganti had not complained about delays in negotiating CPC 53 at any time before she left the project in November 1996. Subse­quently, in November 1996, Ms. Moore be­came the contracting officer and asked Mor­ganti for a prioritized list of pending CPC’s and unilateral modifications for which it sought payment. Ms. Moore took personal responsibility for resolving the highest priori­ty CPC’s and unilateral modifications, includ­ing CPC 53. In addition, between August 1996 and December 1996, the FBOP assigned two additional contracting officers to the pro­ject to assist Ms. McBride and Ms. Moore with processing CPC’s and unilateral modifi­cations. It is clear that both Morganti and the FBOP were attempting to deal with a multitude of contract administration issues at the time, and there is no evidence that Ms. Moore acted unreasonably or in bad faith with respect to the time she devoted to nego­tiating CPC 53.

Similarly, the court finds no merit to Mor­ganti’s contention that the FBOP unjustifi­ably delayed resolution of CPC 58 in order to avoid payment. Morganti submitted CPC 58 to the FBOP in May 1996, seeking $302,000 for subcontractor costs incurred as a result of the compensable delay caused by winter concrete placement that occurred in the win­ter of 1994-1995. On May 31, 1996, the FBOP wrote Morganti requesting a revised CPC 58 with additional supporting documen­tation. Subsequently, on August 19, 1996, Morganti resubmitted CPC 58, seeking $8.1 million for subcontractor costs incurred dur­ing a compensable time extension granted for winter concrete placement in the winter of 1994-1995.

Ms. McBride testified that she did not immediately address CPC 58 as a result of the same issues that precluded her immedi­ate review of CPC 53, namely Mod 331 and the Schedule B Agreement. However, Ms. Moore explained that she took personal re­sponsibility for resolving CPC 58 when she became the contracting officer in November 1996, because it had been identified by Mor­ganti as one of its top priority CPC’s. Be­cause CPC 58 sought $8.1 million, primarily in indirect costs, Ms. Moore determined that an audit was necessary. Ms. Moore began to take steps to obtain an audit of CPC 58 in early November 1996. The audit was not completed as of the April 30, 1997 termi­nation and therefore CPC 58 was unresolved at the time of termination.

In view of these facts, the court finds that Morganti failed to establish that the FBOP unreasonably delayed resolution of CPC 58. Although Ms. McBride did not devote her immediate attention to CPC 58, it is clear from the record that the parties were both occupied by a number of other matters at the time, including negotiation of a non-compen­sable time extension granted in Mod 331 and the Schedule B Agreement. Indeed, the court finds Ms. McBride’s willingness to ne­gotiate the Schedule B Agreement and to forbear from terminating Morganti if it showed progress toward meeting the Sep­tember 22, 1997 substantial completion date as significant evidence of the FBOP’s good faith.

Moreover, the record reflects that the par­ties were able to definitize several CPC’s and unilateral modifications during this period. During 1996 and up until Morganti’s termi­nation in April 1997, the FBOP and Morganti executed nearly 50 bilateral modifications, which definitized more than 60 unilateral modifications, 11 CPC’s and 5 TIA’s, which resulted in increases of $3.7 million to the contract price and added 221 calendar days to the contract schedule. Given the fact that Morganti did not submit CPC 58 until more than a year after the events that it ad­dressed, the court finds that Morganti did not view CPC 58 as a high priority until November 1996. The government responded accordingly. Thus, the court concludes that Morganti failed to establish that the FBOP materially breached the contract by its han­dling of CPC’s.

4. Maintaining Adequate Project Fund­ing

Morganti also claims that the evi­dence established that the FBOP materially breached the contract by failing to maintain sufficient project funding. Morganti claims that the FBOP failed to negotiate CPC’s and unilateral modifications because it lacked ad­equate project funding. In particular, Mor­ganti alleges that the FBOP deliberately de­layed resolution of CPC 8B, CPC 53, and CPC 58 because the project lacked the fund­ing to make payment on those CPC’s. Ms. McBride and Ms. Moore, the contracting offi­cers, both testified that at no time did period­ic funding shortfalls in the project budget delay resolution of CPC’s or unilateral modi­fications.

At trial, Mr. Cohen, the FBOP’s project cost manager, explained how the FBOP funds specific projects. Mr. Cohen testified that the FBOP does not maintain full funding for a project in the project’s budget at any given time. Rather, as money is needed, the FBOP transfers money into the specific pro­ject budget. The transfer of funds into a specific project budget is not triggered until the parties reach a meeting of the minds with regard to the amount for a particular CPC.

With respect to CPC 8B, the evidence showed that after it was negotiated in De­cember 1995, approximately $10 million was infused into the project budget in January and February 1996. By March 1, 1996, Ms. McBride and Morganti executed Mod 260, which definitized CPC 8B for $800,220. Thus, between the time CPC 8B was negoti­ated and the bilateral contract modification necessary for its payment was executed, the funds were transferred into the project bud­get. The court finds that this two-month period in which the money was transferred was not an unreasonable delay. Moreover, no evidence was presented that established that the FBOP intentionally delayed negotia­tion or payment of CPC 8B due to a lack of funding.

Similarly, the court finds that Morganti failed to establish a breach of good faith with respect to project funding for CPC 53. As discussed above, CPC 53 was negotiated in late 1996 through early 1997. However, be­fore the parties could execute a bilateral contract modification definitizing the parties’ agreement, Ms'. Moore insisted that a re­quest under the Freedom of Information Act, allegedly relevant to the dispute resolved by CPC 53, be withdrawn. Morganti explained that its attorneys had to approve this last-­minute condition added by Ms. Moore. Mor­ganti informed Ms. Moore on April 29, 1997, that it would accept the condition of pay­ment, and Ms. Moore responded to Morganti that she would send out the necessary paper­work to definitize the corresponding bilateral contract modification. However, on April 30, 1997, the FBOP terminated Morganti for default and the CPC was never definitized.

At closing argument, counsel for Morganti argued that Ms. Moore terminated Morgan-­ti’s contract for default rather than pay Mor­ganti for CPC 53. Morganti presented no evidence to show that the FBOP intentionally terminated Morganti for default because there was a lack of funding to carry out the project. As discussed above, Ms. Moore’s decision to terminate Morganti for default was based on her reasonable belief that Mor­ganti was not progressing the work with the diligence that would ensure completion of the project by the agreed-upon substantial com­pletion date of September 22, 1997. The evidence presented at trial demonstrated that this decision was in no way influenced by Ms. Moore’s alleged perception that there was a lack of funding. Rather, Ms. Moore based her decision on her observation that Morganti had consistently achieved a slow rate of progress from the time she arrived on the project, juxtaposed against the amount of work remaining to be done at the time of termination.

Moreover, the fact that the FBOP negoti­ated and paid Morganti for a number of unilateral modifications and CPC’s through­out 1996 belies the notion that either Ms. Moore or Ms. McBride believed there were insufficient funds to carry out the project. As noted above, during 1996 and up through the time of termination in April 1997, the FBOP and Morganti executed nearly 50 bi­lateral modifications, which added $3.7 mil­lion to the contract price and 221 calendar days to the contract schedule.

Finally, Morganti failed to establish that Ms. Moore’s decision to request an audit of CPC 58 had anything to do with project funding. Ms. Moore explained that she re­quested an audit of CPC 58 in November 1996 because the indirect costs sought by Morganti’s request necessitated an indepen­dent audit. In CPC 58, Morganti was seek­ing extended overhead costs for several sub­contractors. Negotiations for CPC 58 could not begin until after the audit was complete. Therefore, the court concludes that insuffi­cient project funding did not preclude the resolution of CPC 58, rather the CPC re­mained outstanding because the audit was not complete.

5. Cumulative Financial Impact on Mor­ganti

Finally, Morganti contends that when viewed cumulatively, the FBOP’s ac­tions throughout Morganti’s performance of the project amounted to a material breach of its implied duties of good faith, fair dealing, and cooperation. As evidence of the materi­ality of the FBOP’s alleged breach, Mr. Fuchs testified that Morganti self-financed $17.7 million and its subcontractors self-fi­nanced $11.7 million for completion of the project. Mr. Fuchs asserted that these amounts translate into the $30 million in unilateral modifications and CPC’s sought by Morganti throughout 1996 and 1997 that re­mained unpaid at termination. Mr. Fuchs further explained that Morganti incurred $2 million in interest expenses in order to bor­row the money necessary to finance the pro­ject as a result of these unpaid claims.

The court finds that the fact that Morganti had to borrow money to pay subcontractors and may have incurred $2 million in interest expenses on a $110 million contract does not establish a material breach. Morganti may recover the $2 million it incurred in interest costs as an equitable adjustment if it can establish that the loans were borrowed spe­cifically to finance changed work. Wickham Contracting Co., Inc. v. Fischer, 12 F.3d 1574, 1582-83 (Fed.Cir.1994); Gevyn Constr. Corp. v. United States, 827 F.2d 752, 754 (Fed. Cir.1987) (citations omitted).

While it is true that the FBOP’s contract administration was not perfect, when viewed in its totality, Morganti failed to prove that the FBOP acted in bad faith. The evidence demonstrated that both Ms. McBride and Ms. Moore devoted significant amounts of time and resources toward resolving each of the issues raised above. As a result of their efforts, the FBOP resolved a number of CPC’s and unilateral modifications in 1996 that provided Morganti with additional mone­tary compensation and time extensions. In addition, both Ms. McBride and Ms. Moore took steps throughout the project to assist Morganti. Ms. McBride testified that in an effort to assist Morganti with its financial difficulties, she made some partial payments to Morganti for work performed in response to unilateral modifications, even though the contract required that the amount for such work first be definitized in a bilateral modifi­cation. Ms. Moore also took steps to try to get Morganti paid for unilateral modifications prior to the execution of bilateral modifica­tions with respect to CPC 53 and CPC 58. Ms. Moore testified that she believed Mor­ganti was entitled to some money for these CPC’s, even though she disagreed with the total amount Morganti was requesting in each of the CPC’s. Thus, Ms. Moore released $2 million that was being retained for lack of progress until she and Morganti could defini­tize bilateral modifications based on CPC 53 and CPC 58.

In sum, the court finds that neither Ms. McBride nor Ms. Moore did anything to in­tentionally undermine Morganti’s perfor­mance. Importantly, Morganti presented no evidence that the FBOP’s conduct interfered with its ability to perform. D.W. Sandau Dredging, 96-1 BCA ¶ 28,064, at 140,160, 1995 WL 739023 (holding that whether fail­ure to make progress or other payments is material depends upon the seriousness of the breach and its impact on the contractor’s ability to perform) (citing Northern Helex, 197 Ct.Cl. at 124-25, 455 F.2d at 550; RE­STATEMENT (SECOND) OF CON­TRACTS § 237). To the contrary, Morganti readily conceded that it always maintained sufficient funding for critical path work and that there was never a time when it lacked sufficient funding to proceed. Mr. Menefee, Morganti’s contract administrator, testified that Morganti never allowed its difficulties with getting money for CPC’s and modifica­tions to affect critical path work, and that Morganti always provided funding necessary to pay the subcontractors. In fact, Morganti conceded on summary judgment that the FBOP’s payment errors never delayed Morg­anti.14 Thus, money was not the source of its inability to complete the contract work on time. D.W. Sandau Dredging, 96-1 BCA ¶ 28,064, at 140,161-62, 1995 WL 739023 (holding that continued performance is rele­vant to materiality where contractor’s perfor­mance failures were not caused by financial situation).

Morganti argues that its ability to perform despite the FBOP’s alleged payment failures should not be considered in a material breach analysis because that would put cash-rich contractors at the mercy of the government. This argument does not apply in cases such as the present, where the government in fact made progress payments throughout the con­tract. “While we do not find that serious adverse financial impact [on the contractor] must be present in all instances for establish­ing a material breach due to withholding money, it is an element that will be consid­ered in arriving at the overall judgment.” Jones Plumbing & Heating, Inc., 86-1 BCA ¶ 18,659, at 93,858,1985 WL 17668.

The court’s findings that the FBOP’s pay­ment errors were not intentional or substan­tial and that the FBOP did not act unreason­ably or in bad faith in resolving CPC’s and unilateral modifications, taken in combination with Morganti’s admission that the alleged financial burden imposed by the FBOP did not affect its ability to perform, lead the court to conclude that Morganti failed to establish that the FBOP materially breached the contract. In such circumstances, the FBOP’s actions do not provide a basis for invalidating the default termination.

VI. CONCLUSION

For the foregoing reasons, the court finds that the FBOP’s termination for default of Morganti’s contract must be upheld. Ac­cordingly, the court directs the Clerk of the Court to enter judgment in favor of the defendant consistent with this opinion. No costs.

1

. Morganti and Trataros Construction, Inc. in­tended to perform the contract as a joint ven­ture — the Morganti/Trataros Joint Venture. Ultimately, Trataros left the joint venture in November 1995, and Morganti assumed the contract by a novation agreement. The FBOP approved the dissolution of the joint venture on April 2, 1996, in Modification No. 261.

2

. The court conducted a site visit of the 1,000 Bed Federal Detention Center on January 5, 2000.

3

. On May 3, 1996, Maris, Morganti’s primary subcontractor responsible for detention work, left the project. The impact of Maris’s departure is discussed below.

4

. As discussed in more detail below, in addition to fabrication and installation of Mod 192 cell panels, Morganti was also responsible for fabri­cation and installation of cell panels for the non-­ADA-designated cells. The cell panels for these non-ADA-designated cells shall hereinafter be re­ferred to as “typical” cell panels.

5

. The agreement between the parties provided that Pioneer would not be held contractually liable to Morganti’s schedule.

6

. For security reasons, the MEP work for each cell is housed in a vertical triangular utility chase, which allows utility services to be deliv­ered to inmates while preventing the inmates from having access to the interior MEP work. The utility chase consists of a "Y” shaped panel, two "utility” panels, and a chase panel. The utility services are provided to inmates in the two cells adjacent to each chase via penetrations in the utility panels.

7

. The time impact analysis or "TIA” is a method of assessing and proving contractor claims of delay using critical path method or "CPM” scheduling. The contract between Morganti and the FBOP required that Morganti submit a TIA in support of any requests for time extensions.

8

. Mr. McDonough arrived at his post-termination projections of excusable delay based on the activ­ity durations and schedule logic in Morganti’s WCIO December 31, 1996 schedule, updated for actual progress and delays through termination.

9

. During trial, the court heard substantial testi­mony regarding the D & O’s issued to Morganti. Through this testimony, the FBOP established that Morganti’s work was less than perfect and that the FBOP was not unreasonable in holding Morganti responsible for correcting the defects.

10

. The court finds that Ms. Moore's statements regarding the possibility of extending both the December 31, 1996 and the September 22, 1997 substantial completion dates must be discounted, as they are inconsistent with the FBOP’s contem­poraneous understanding and Morganti’s con­temporaneous conduct. Moreover, Ms. Moore was not present for the negotiation or drafting of the Schedule B Agreement.

11

. Mr. McDonough explained at trial and in his expert report that 84 of the 218 calendar days of delay that he attributed to installation of Mod 192 cell panels and MEP follow-on work were, in fact, delays Mr. McDonough projected would continue if Morganti had not been terminated. Mr. McDonough stated that he based this time on Morganti's WC10 schedule update, revised to reflect Morganti’s actual rate of progress at the time of termination. See infra note 7.

12

. In fact, Morganti did not install any security windows prior to termination. The first delivery of security windows arrived on January 24, 1997. However, these windows could not be installed due to defects in their construction, and there­fore Morganti returned them to the manufactur­er. Subsequently, on February 27, 1997, the FBOP issued a suspension of work on the win­dows, preventing Morganti from installing any windows until the defects were repaired. The suspension of work was not lifted prior to Mor­ganti’s termination.

13

. The court notes that the delay associated with the final progress payment occurred after the termination for default, and therefore it is not relevant to determining whether the FBOP mate­rially breached the contract prior to the termi­nation.

14

. Contemporaneous with their pretrial submis­sions, the parties filed cross motions for partial summary judgment with respect to the interpre­tation of the Schedule B Agreement and the material breach issues. The court denied the parties’ cross motions in a bench ruling issued on June 29, 2000.