BES Design/Build, LLC v. The United States

• Docket Number: 19-1892C
• Decision Date: 30 November 2021
• Parties: BES DESIGN/BUILD, LLC, Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

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BES DESIGN/BUILD, LLC, Plaintiff, v. THE UNITED STATES, Defendant.

No. 19-1892C

United States Court of Federal Claims

November 30, 2021

Todd A. Jones, Anderson Jones, PLLC, Raleigh, NC for plaintiff. With him was Edward P. Kendall, Strickland & Kendall LLC Montgomery, AL.

Ioana Cristei, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington D.C., for defendant. With her was Kelly A. Krystyniak, Trial Attorney, Commercial Litigation Branch, Steven J. Gillingham Assistant Director, Commercial Litigation Branch; Patricia M McCarthy, Director, Commercial Litigation Branch; Brian M. Boynton, Acting Assistant Attorney General, Civil Division. Major Nicole Kim, Judge Advocate, United States Army, of counsel.

OPINION

MARIAN BLANK HORN, JUDGE

In the above captioned case, plaintiff, BES Design/Build, LLC (BES Design/Build), filed a complaint in this court, albeit one labeled "Notice of Appeal," which stated it was a "Notice of Appeal to the United States Court of Federal Claims from the Contracting Officer's Final Decision ('COFD'), which was issued on BESDB's [BES Design/Build] claim on Contract Task Order W911S2-16-D-800-0001 on December 13, 2018." In this court, plaintiff subsequently filed an amended complaint, a second amended complaint, and, finally, its third amended complaint. The third amended complaint, filed on September 4, 2020, asserts two counts: Count One, "Breach of Contract - Failure to Pay," on the grounds that the government "breached its obligations under the Contract and failed to satisfy its obligations under FAR 52.232-10 by not compensating Plaintiff for the total value of work completed and accepted," and Count Two, "Changes," for "various changes to the Plaintiff's scope of work under the Contract" such as "Government directives to alter the design to include underground electrical utilities, an outside fiber optic cable and the inclusion of existing utility duct bank profiles." (capitalization in original). After an extended discovery process, the parties filed cross-motions for partial summary judgment, only on Count Two of the third amended complaint. The decision on Count Two has proven to be challenging in part due to the minimalistic approach of the parties' submissions in varying degrees on different issues. After extensive review of the record, the applicable statutes, regulations, contract provisions, and other referenced documents, the court issues the following decision.^[1]

FINDINGS OF FACT

On December 1, 2015, BES Design/Build and the United States Army entered into contract number W911S2-16-D-8000 (the contract) "an Indefinite Delivery Indefinite Quantity (IDIQ) contract for Architect & Engineering Services for use on federal projects located primarily at Fort Drum, [New York], but may be used on other federal projects as requested.. [sic]" The contract included a ceiling price of $4, 500, 000.00. The contract was scheduled to last "for a period of three years through November 30, 2018," and provided that "[t]here are no option periods." The contract stated that "[w]ork will be provided on a Task Order basis as the Government's needs arise." The contract also included a statement of work (SOW) that provided general requirements for the performance of the contract and any task orders, including requirements for the submission of required deliverables. According to defendant's motion for partial summary judgment, "[t]he contract included firm fixed-price fully burdened negotiated labor rates for each labor category BESDB would use in performing each task order." Further, according to defendant, task orders under the contract were "to be issued on a firm fixed-price bases, with the price to be negotiated based on the negotiated labor rates."

On December 2, 2015, the day after the contract was awarded to BES Design/Build, "the Army issued task order number W911S2-16-D-8000-0001 (task order)," which contained one item, the "Minimum Order Guarantee," priced at $10, 000.00. Subsequently, on December 18, 2015, then-Contracting Officer Cindy McAleese issued to plaintiff a "Request for Task Order Proposal for A&E [Architect & Engineering] Design & SWPPP [Stormwater Pollution Prevention Plan] for 400 Area Improvements," included in the record as an attachment to plaintiff's October 17, 2017 request for equitable adjustment (REA). (capitalization in original). The Request for Task Order Proposal (RTOP) provided:

The Contractor shall furnish all labor, management, facilities, supplies, equipment, and material necessary to perform an A&E Design & SWPPP for the 400 Area Improvements, with a 100% design completion date of 130 Calendar days after task order award. All work performed under this task order shall be in accordance with the attached Performance Work Statement.

(emphasis added). The RTOP further provided that "[t]he Task Order Proposal shall be due on 30 December 2015," and stated that the "[l]imit for construction cost for this task order is $4, 500, 000.00, and a 6% maximum design fee of $270, 000.00." Attached to the RTOP was the Fort Drum Performance Work Statement (PWS), ^[2] which would provide the specific requirements of the "400 Area Improvements" project task order.

According to a "Memorandum for Record" prepared by Ms. McAleese, dated February 2, 2016, and included in defendant's appendix to its motion for partial summary judgment, following the issuance of the RTOP,

BES Design/Build submitted an original cost proposal on 7 January 2016 in the amount of $421, 953.33. Negotiations were entered into on 13 January 2016, and the Government took exception to two main areas in their proposal. First, the profit percentages for BES Design, the prime firm, and KCI, one of their approved consultants, were incorrectly stated at 12%. The proposed rates for both firms were only 10% in the master contract, so they agreed to make the appropriate revisions. Second, they had estimated total construction cost to be $4, 500, 000.00 in their proposal, and it should've been only $4, 000, 000.00. They agree with the error and agreed to change it in their proposal, and revise their design fees accordingly.

The Memorandum for Record further stated that "[o]n 14 January 2016, BES Design/Build submitted a revised fee proposal in the amount of $370, 184.41. PWE reviewed the revised fee proposal and accepted it on 15 January 2016."

Modification W911S2-16-D-8000-0001-01 (modification)^[3] to the task order was issued on February 11, 2016, which placed an order for "all supervision, plant, labor, material and equipment necessary to perform all operations in connection with the A&E Design and SWPPP for the development of the 400 Area, Fort Drum NY, in accordance with the attached Performance Work Statement," and set the negotiated firm fixed price of the task order at $370, 184.74, based on the Estimated Cost of Construction (ECC) of $4, 000, 000.00.^[4] The task order proposal was negotiated by the government and contractor, and while the proposal itself is not in the record, the record does not indicate that utilities were part of the negotiation. The modification reflected the agreement reached by negotiation between the government and plaintiff regarding the task order proposal and accepted by the government on January 15, 2016. As with the RTOP, described above, attached to the modification was the PWS, the second attachment of the PWS to a contract document.

The modification set firm fixed prices for each design milestone, and "[t]he fees for the design requirements alone (the 35%, 65%, 95%, and 100% milestones) equaled to $239, 944.56, or approximately 6% of the $4 million estimated cost of construction." The firm fixed prices for the milestones were as follows:

SUMMARY Total Price

1. Field Investigation (Non-Design) $113, 881.66

2. Design - 35% $61, 285.31

3. Design - 65% $77, 717.05

4. Design - 95% $65, 181.55

5. Design - 100% $35, 760.65

6. RFI & Bidding $16, 358.18 6. [sic] Construction Services $ - ^[5]

Totals $370, 184.41^[6]

(capitalization and emphasis in original).

Two of the contract documents, specifically the SOW and the PWS reference an additional document, the Fort Drum Installation Design Guide (IDG). The SOW provided that "[a]rchitectural themes will be in accordance with Fort Drum's Installation Design Guide (IDG), latest edition."^[7] The PWS, attached to the December 18, 2015 RTOP and the February 11, 2016 modification, similarly provided that "[t]he contractor shall provide and develop site design and landscaping for 400 project area, which comply with the Ft drum installation design guidelines requirements . . . ." (capitalization in original). As discussed further below, although the terms "Ft drum installation design guidelines" and "Fort Drum's Installation Design Guide" are not identical they appear to refer to the same document, and these references raise the question of whether the IDG was incorporated into the contract. According to defendant's reply in support of its motion for partial summary judgment, the IDG "'provides design guidance' for all site planning, buildings, circulation, landscaping, site elements, and force protection at Fort Drum." Whether the IDG's requirements were incorporated into the contractual agreement between the plaintiff and the Army, and if so, whether the IDG or other documents which were incorporated into the contract between the parties for architectural and engineering services required that electrical utilities be placed underground is a main focus of the dispute addressed in this Opinion. Additionally, the parties have offered arguments regarding whether the government's actions during the course of performance of the contract constituted changes to the...