Pacific Dredge & Construction LLC
Docket: ASBCA 63234
Decision date: 2022-08-16

ARMED SERVICES BOARD OF CONTRACT APPEALS 
 
OPINION BY ADMINISTRATIVE JUDGE EYESTER  
PURSUANT TO BOARD RULE 12.2 
 
Appellant Pacific Dredge & Construction LLC (Pacific Dredge) appeals a 
contracting officer’s denial of its claim and has elected to proceed under the Board’s 
Small Claims (Expedited) Procedures, Board Rule 12.2.  The Contract Disputes Act, 
41 U.S.C. § 7106(b)(4)-(5), as implemented by Board Rule 12.2, provides that this 
decision shall have no precedential value, and in the absence of fraud, shall be final 
and conclusive and may not be appealed or set aside.  For the reasons stated below, the 
appeal is denied. 
 
SUMMARY FINDINGS OF FACT 
 
On October 2, 2019, the U.S. Army Corps of Engineers issued invitation for 
bids No. W912PL20B0001 for the award of a fixed-priced contract for construction 
services consisting of maintenance dredging of the federal navigation channels at the 
Santa Barbra Harbor (R4, tab 4 at 20, 36).  Bidders were to submit fixed-prices for all 
contract line item numbers (CLINs), which included a CLIN for dredging for the first 
year, first cycle, and optional CLINs for additional cycles and years (id. at 23-24).  
The solicitation included a “Checklist for the CLIN Schedule,” which set forth the 
following checklist item for bidders:  “Do prices for each bid item include all costs, 
mark-ups and taxes (if any taxes are imposed)? Y_ NA_” (id. at 25).   
 
Appeal of - )  
 )  
Pacific Dredge & Construction LLC ) ASBCA No. 63234 
 )  
Under Contract No. W912PL-20-C-0003 )  
   
APPEARANCES FOR THE APPELLANT: W. Samuel Niece, Esq. 
Michael W. Squeri, Esq. 
    Ralls Gruber & Niece LLP 
    San Mateo, CA 
 
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. 
    Engineer Chief Trial Attorney 
 John F. Bazán, Esq. 
    Engineer Trial Attorney 
    U.S. Army Engineer District, Los Angeles 

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The solicitation included Federal Acquisition Regulation (FAR) clause 52.222-30, 
CONSTRUCTION WAGE RATE REQUIREMENTS – PRICE ADJUSTMENT 
(NONE OR SEPARATELY SPECIFIED METHOD) (AUG 2018), which explained 
the following to the bidders: 
 
(a) The wage determination issued under the Construction 
Wage Rate Requirements statute by the Administrator, 
Wage and Hour Division, U.S. Department of Labor 
[(DOL)], that is effective for an option to extend the term 
of the contract, will apply to that option period. 
 
(b) The Contracting Officer will make no adjustment in 
contract price, other than provided for elsewhere in this 
contract, to cover any increases or decreases in wages and 
benefits as a result of-- 
 
(1) Incorporation of the Department of Labor's wage 
determination applicable at the exercise of the option to 
extend the term of the contract; 
 
* * * * 
(End of clause) 
 
(R4, tab 4 at 115) (emphasis added).  We find that the solicitation did not provide 
“elsewhere” anything setting forth a specific pricing method that permitted a price 
adjustment to cover increases or decreases resulting from DOL construction wage 
determinations upon exercise of an option to extend the term of the contract.   
 
 The government awarded the contract to Pacific Dredge on December 27, 2019, 
and at the same time exercised the base bid CLINs and one option CLIN (R4, tab 6 
at 485, 487).  Pacific Dredge priced its option year unit amounts higher than the first-
year amounts (id. at 487).  The contract included FAR clause 52.222-30, set forth 
above, as well as FAR 52.243-4, CHANGES (JUNE 2007) (id. at 561-62, 625-26).  As 
with the solicitation, we find the contract did not provide “elsewhere” anything setting 
forth a specific pricing method that permitted a price adjustment to cover increases or 
decreases resulting from DOL construction wage determinations upon exercise of an 
option to extend the term of the contract.   
 
On February 26, 2021, the agency issued unilateral Mod. P00003, which 
exercised the CLINs for the second year, fourth cycle option, with a performance 
period beginning March 1, 2021 (R4, tab 9 at 776).  The modification stated that a new 
DOL construction wage determination issued on January 1, 2021, applied and 
superseded the prior one applicable to the contract (id. at 777-78).  The modification 

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did not increase the contract amount to account for any changes in the wage 
determination (compare R4, tab 6 at 487 to tab 9 at 808-09).   
 
On March 9, 2021, Pacific Dredge acknowledged Mod. P00003 and informed 
the contracting officer that the modification constituted a change pursuant to 
FAR 52.243-4, CHANGES, and asserted its right to an equitable adjustment (R4, 
tab 16).  On March 17, 2021, the contracting officer denied the request for an equitable 
adjustment (REA) because the contract included FAR 52.222-30, which stated that the 
contracting officer would make no adjustment in the contract price upon incorporation 
of a new or revised construction wage determination at the exercise of each option to 
extend the term of the contract (R4, tab 17).  Pacific Dredge responded with a formal 
REA seeking $42,752.81 for changes to the contract (i.e., the increased wage rates) 
and stated that its bid only included labor costs based on the wage rates required at that 
time and did not include any contingency amounts (R4, tab 18 at 994).  The 
government denied the REA (R4, tab 19).   
 
On September 13, 2021, Pacific Dredge filed a claim with the contracting officer 
seeking $44,606.39 and arguing, as it had before, that it did not price its bid using 
contingency pricing, and Mod. P00003 constituted a change order (R4, tab 20 at 1050-
53).  On December 13, 2021, the agency issued the contracting officer’s final decision 
which denied the claim for the same reasons discussed above and explained that the 
contract is unambiguous on this point. (R4, tab 3).  This appeal followed. 
 
DECISION 
 
The appellant has moved for summary judgment on entitlement and the 
government opposes the motion.  The appellant argues that the agency failed to 
interpret all of the terms of the contract because FAR 52.222-30, which reads in 
pertinent part that the “Contracting Officer will make no adjustment in contract price, 
other than provided for elsewhere in this contract, to cover any increases of decreases 
in wages and benefits as a result of” incorporation of a DOL construction wage 
determination, requires the contracting officer to look to the Changes clause (app. 
mem. at 3; app. reply at 1-3).  The appellant notes that the Changes clause, 
FAR 52.243-4, states that the contracting officer shall make an equitable adjustment to 
the contract when changing the specifications or method or manner of performance of 
the work set forth in the contract (app. mem. at 4-5; app. reply at 2-3).  The appellant 
asserts that the modification directed the appellant to pay its workers a higher wage 
rate and this constituted both a change in the contract’s written specifications and in 
the method or manner of appellant’s work and it is therefore owed an equitable 
adjustment (app. mem. at 5; app. reply at 2-3).  The appellant also asserts, inter alia, 
that if the Board does not agree with this argument, then the Board should find the 
contract contained a latent ambiguity as there is a strong policy against contingent 
bidding (app. mem. at 6-7).  

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We will grant summary judgment if there is no genuine issue of material fact 
and the moving party is entitled to judgment as a matter of law.  Celotex Corp. v. 
Catrett, 477 U.S. 317, 322 (1986).  The interpretation of a contract, particularly the 
issue of whether a contract is ambiguous, is a question of law that generally is 
amenable to summary judgment.  R.L. Persons Constr., Inc., ASBCA No. 60121, 
18- 1 BCA ¶ 37,007 at 180,236-37 (citation omitted).  The issue of whether any 
ambiguity is patent or latent is a question of law that is also appropriate for resolution 
on summary judgment.  Id. 
 
The Board has addressed this issue already in Gulf Pac. Cont., LLC, ASBCA 
No. 61434, 21-1 BCA ¶ 37,928, and consequently directed the parties here to discuss 
that decision in their briefs.  In Gulf Pac. Cont., LLC, the Board ruled that:  (1) FAR 
52.222-30(b) unambiguously informs offerors that there will be no adjustment to the 
prices in the awarded contract for DOL construction wage rate increases incorporated 
via a modification extending the term of the contract unless a specific method of 
adjustment is provided for elsewhere in the contract, and the contractor should 
therefore price its option years to take into account the risk of increased wages; and (2) 
an REA clause incorporated by reference in the contract--Defense Federal Acquisition 
Regulation Supplement 252.243-7002--did not create an ambiguity because the REA 
clause cannot be reasonably read to create an independent basis for the agency to pay 
for the wage increase.  Gulf Pac. Cont., LLC, 21-1 BCA ¶ 37,928 at 184,205-08.  
Although the appellant argues otherwise, we conclude that the Board’s majority 
holding in that appeal is directly on point.      
 
We provide a short background on the FAR clause at issue to shed more light 
on the subject but note that an enhanced discussion can be found in Gulf Pac. Cont., 
LLC.  As relevant here, the FAR instruction for contracting officers states that FAR 
52.222-30 is to be used in solicitations and contracts if the contract is expected to:  
(1) be fixed-price, (2) subject to the Construction Wage Rate Requirements statute, 
(3) contain option provisions by which the contracting officer may extend the term of 
the contract, and (4) utilize one of the two contract price adjustment methods set forth 
at FAR 22.404-12(c)(1) or (2).  FAR 22.407(e).   
 
FAR 22.404-12 sets forth several price adjustment methods for wage rate 
changes at the time an option to extend is exercised, and the contracting officer, after 
considering which method is suitable to the interest of the government, chooses one of 
those options.  As relevant here, FAR 22.404-12(c)(1) states the contracting officer 
may allow offerors to bid or propose separate prices for each option period and as a 
result, no further adjustment to the contract price will be made due to incorporation of 
a new or revised construction wage determination at the exercise of each option to 
extend the term of the contract.  FAR 22.404-12(c)(1); see also Federal Acquisition 
Regulation; Application of the Davis-Bacon Act to Construction Contracts With 
Options To Extend the Term of the Contract, 66 Fed. Reg. 53479-01 (Oct. 22, 2001) 

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(explaining for purposes of the Final Regulatory Flexibility Analysis that there is no 
adjustment in the contract price in this instance “because the option prices may include 
an amount to cover estimated increases”).  The contracting officer utilized that method 
here.   
 
If a contracting officer does not utilize the method at FAR 22.404-12(c)(1), he 
may then utilize the method at FAR 22.404-12(c)(2), which requires the contracting 
officer to include “a separately specified pricing method that permits an adjustment to 
the contractor price or contract labor unit price” at the exercise of the option.  
FAR 22.404-12(c)(2).  The rule explains that one “example of a contract pricing 
method the contracting officer might separately specify is incorporation in the 
solicitation and resulting contract” of pricing data that is multiplied by a factor 
proposed by the contractor.  Id.    
 
While this background on the FAR is helpful, contrary to arguments made by 
the appellant, Pacific Dredge did not need to read the prescription set forth in 
FAR 22.407 or the policy set forth in FAR 22.404-12 to understand that no adjustment 
would be made.  As in Gulf Pac. Cont., LLC, the solicitation and contract terms here 
are patently unambiguous.  Appellant was notified in the solicitation pursuant to the 
plain language of FAR 52.222-30, CONSTRUCTION WAGE RATE 
REQUIREMENTS – PRICE ADJUSTMENT (NONE OR SEPARATELY 
SPECIFIED METHOD) (AUG 2018), that the contracting officer would make no 
adjustment (i.e., the “NONE” method) in the contract price to cover any increases or 
decreases in wages and benefits due to a DOL wage determination applicable at the 
exercise of an option that extends the term of the contract (R4, tab 4 at 115).  In this 
regard, neither the solicitation nor contract contained “elsewhere” a separately 
specified pricing method.
1  Rather, the solicitation and contract allowed bidders to 
propose separate prices for option periods.2 Therefore, bidders were to have priced the 
wages for each option period based upon estimated increases.  In fact, the solicitation 
advised all bidders to expressly check and ensure prices for each bid item included all 
costs and mark-ups (R4, tab 4 at 25).     
 
Consequently, the CHANGES clause incorporated into the contract cannot be 
reasonably read to create an independent basis for the agency to pay Pacific Dredge for 
 
1 Appellant argues it cannot be charged with reading and understanding these terms, 
especially when Gulf Pac. Cont., LLC was issued years after appellant 
submitted its bid here and at least one Board judge interpreted FAR 52.222-30 
differently (app. reply at 4-5).  This clause, however, has been in the FAR since 
2001 and is plain on its face.    
2 FAR 22.404-12(c)(1) states that this method is generally used in construction-only 
contracts (with options to extend the term) that are not expected to exceed a 
total of 3 years, as we have here.   

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the wage increase.3  As the appellant itself states, the FAR 52.243-4, CHANGES 
clause is a mandatory clause.  See FAR 43.205(d)(the contracting officer “shall” insert 
the 52.243-4 clause in certain solicitations and contracts).  Therefore, if we agreed 
with appellant’s interpretation--that the mandatory CHANGES clause must be read to 
always require an equitable adjustment to a DOL construction wage rate increase 
inserted in an option to extend--it would render FAR 52.222-30 meaningless as there 
would never be an instance where no adjustment would be made.  Rather, as the title 
of FAR 52.222-30 explains, either the contract contains no method to adjust prices 
after award, or there is a separately specified method such as application of a 
coefficient to pricing obtained from pricing data; the CHANGES clause is not a 
separately specified pricing method.    
   
CONCLUSION 
 
For the foregoing reasons, the appeal is denied.  
 
 Dated:  August 16, 2022 
 
 
 
 
 
 
 
 
LAURA EYESTER 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
  
 
3 The appellant cites to a recent article stating the Gulf Pac. Contracting, LLC decision 
is harsh and the underlying policy of placing such risk on contractors is “unwise 
and somewhat unfair” (app. reply at 5, quoting 35 Nash & Cibinic Rep. NL 
¶ 70, Wage Rates for Option Years:  No Recovery?).  We note that these clauses 
and regulations were implemented pursuant to notice and comment rulemaking 
and the Board cannot read into a rule something that is just not there.           

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 I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 63234, Appeal of Pacific 
Dredge & Construction LLC, rendered in conformance with the Board’s Charter. 
 
 Dated:  August 17, 2022 
 
 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals