American West Construction, LLC
Docket: ASBCA 61094
Decision date: 2017-12-19

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
American West Construction, LLC 
Under Contract No. W912HY-10-D-0039 
APPEARANCE FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
) 
) 
) ASBCA No. 61094 
) 
) 
Ryan J. Klein, Esq. 
Sherman & Howard L.L.C. 
Colorado Springs, CO 
Thomas J. Warren, Esq. 
Acting Engineer Chief Trial Attorney 
Katharine S. Talbot, Esq. 
Alexandria P. Tramel, Esq. 
Engineer Trial Attorneys 
U.S. Army Engineer District, Fort Worth 
OPINION BY ADMINISTRATIVE JUDGE PROUTY 
This appeal is before us pursuant to the expedited proceedings provided for by 
Board Rule 12.31• In this appeal, the government seeks to recover, from a contractor, 
cost savings that the contractor realized by performing a construction contract using 
less expensive means than those specified by the contract. Here, we find in favor of 
appellant, American West Construction, LLC (American West), because even though 
the government did have the right to insist upon compliance with its specifications, it 
waived that right. 
SUMMARY FINDINGS OF FACT 
The above-captioned contract is a multiple award task order contract (or "MA TOC," 
as such vehicles are often known) for design-build construction services in the 
southwestern United States (R4, tab 1 at 3). It was awarded by the United States Army 
Corps of Engineers (the government or the Corps) to American West on 27 September 
2010 (id. at 2). Amongst the MATOC's provisions was the standard "Changes clause," 
Federal Acquisition Regulation (FAR) 52.243-4, CHANGES (JUN 2007) (id. at 198). 
On 13 August 2015, the Corps issued Delivery Order 02 (D02) on the MATOC, in the 
1 Appellant originally sought to proceed pursuant to Board Rule 12.2, but waived that 
request in order to proceed with a mediation that was ultimately cancelled. At the 
subsequent hearing on the merits, appellant requested to proceed via Rule 12.3, 
which we allowed. 

amount of $2,599,430, to American West (R4, tab 2 at 503). D02 is the central contractual 
document in this dispute. 
D02 was for the construction of bridges over irrigation canals in El Paso County, 
Texas, near the border with Mexico (R4, tab 2 at 502-07). To access the site of one of 
those bridges, "the Herring bridge," D02 provided for the construction of two temporary 
bridges over another canal and a drainage ditch (R4, tab 2 at 550, 763; tr. 1117-21). 
These temporary bridges were to be disassembled and removed after completion of the 
Herring bridge that was one of the objectives ofD02 (R4, tab 2 at 763). 
American West was concerned that it would not have enough time to complete 
the project in the time required by D02 if it built the temporary bridges, especially 
given seasonal constraints related to use of the irrigation ditches based upon 
agricultural needs. Instead, it sought access to the construction site via a levee on 
property held by the El Paso County Water Improvement District (the Water District, 
also known as "the Ditch Company"), which it and J.D. Abrams, the subcontractor that 
would perform much of the work for American West,2 believed would be quicker, 
safer, and more efficient. (Tr. 11176-77, 237-38) Because it could not be sure that it 
would obtain the easement until the negotiations were successful, J.D. Abrams made 
preparations to use temporary bridges ifthe easement was not approved (tr. 11250). 
J.D. Abrams incurred costs of approximately $20,000 to ensure the availability of 
temporary bridges (id. at 252). 
The first indication in the record that American West gave to the government 
that it intended to utilize the levee route, instead of the temporary bridges contemplated 
in the contract, was in the Construction Site/Traffic Control Plan that it submitted to the 
Corps on 23 September 2015 (see R4, tab 3). The government reviewer of this plan 
noted on the accompanying form that, "Haul roads provided in this submittal have not 
been approved by the government as provided in the contract documents. Provide 
required permits and approvals for using these roads." (Id. at 3293) In the agenda for a 
meeting between the parties held on 27 October 2015, American West noted, "Permits 
in hand except access road, but we can use USACE dictated routing till licensed by 
Ditch Co for Herring (forthcoming)" (ex. A-4 at 1). 
The necessary permit was, indeed, forthcoming. J.D. Abrams paid the Water 
District $1,000 on 13 October 2015 to consider its request for an easement and to price 
it, then paid the Water District the $13,200 it ultimately wanted for the easement on 
30 October 2015 (supp. R4, tab 18, tr. 11207-08, 242-43). The easement was executed 
by a representative from J.D. Abrams on 28 October 2015, and by the Water District 
2 J.D. Abrams's contract with American West was a firm-fixed-price contract and it 
passed neither its cost savings nor increased expenses to American West 
(tr. 11251). 
2 

on 10 November 2015 (R4, tab 9 at 3501; tr. 1 /209-11 ). The agenda for the parties' 
weekly construction meeting, held on 3 November 2015, noted that American West 
had obtained the easement from the Water District (app. supp. R4, tab 23 at 4). 
Although the Corps never explicitly approved a plan using the Water District 
levee in lieu of the bridges (see tr. 1161-63 ), this lack of approval did not ultimately 
prevent American West from proceeding with and completing the construction without 
using, or ever constructing, the temporary bridges (tr. 1198, 102). 
Mr. Ramon Macias was the resident engineer and administrative contracting 
officer assigned to the project for the Corps (tr. 1153). He had oversight responsibilities 
for all Corps construction in the geographically extensive El Paso office area of 
responsibility (tr. at 52). Mr. Macias testified that he was aware of the proposal to use 
the levee instead of the temporary bridges in the Fall of 2015 and that he did not object 
so long as it was ''equitable to the government" (tr. 1161), by which he meant the costs 
would be about the same (tr. 1164 ). He further testified that he had a brief, in-person, 
discussion with the American West project manager, Mr. Jude Kolb, to that effect in late 
October 2015 (tr. 1162-63). Mr. Kolb testified that he did not recall such a conversation 
(tr. 11215). 
Mr. Macias also testified that he raised the issue of a government credit for 
waiver of the temporary bridge requirement with American West (primarily, Mr. Kolb) 
monthly, starting in the mid-December 2015 timeframe (tr. 1/79-80). Mr. Macias did 
not contemporaneously document these discussions, but testified that he directed the 
project's quality assurance representative (QAR), Mr. Arturo Aranda, to make notes of 
important discussions in the daily reports that he kept (tr. 1199-100). There are no notes 
in these daily reports touching upon the temporary bridges issue until 2 March 2016 
(tr. 11112-13; see supp. R4 at 3825). Mr. Kolb testified that, to his recollection, this was 
the first time that the subject of a credit for the temporary bridges was raised with him 
(tr. 11215). 
The hearing judge closely observed the demeanor of both Mr. Kolb and 
Mr. Macias during their testimony at the hearing and found both to appear credible: 
more likely than not, both testified truthfully regarding their recollections. We 
reconcile the disparity in testimony by consideration of the daily reports, which did not 
reflect the discussions recalled by Mr. Macias until 2 March 2016. The most likely 
cause of this is that, even if Mr. Macias did raise the credit issue on occasion before 
2 March 2016, it was done in an off-hand manner that neither registered with Mr. Kolb, 
nor Mr. Aranda, who did not find it noteworthy. 
The construction schedule submitted to the Corps by American West was never 
amended to remove the installation of the temporary bridges (which it originally 
included), but, in the 23 December 2015 submission of the revised schedule, the 
3 

bridges entry was altered to add the annotation "(Paid Permit)" to the line that 
previously only read, "Install Temporary Crossings Chicken Ranch Road" (R4, 
tab 5A at 3371; tr. 1/75). This change was not identified as such in the portion of the 
submission where such changes were usually to be brought to the government's 
attention (R4, tab 5A at 3361; tr. 1/75). Because this schedule formed the basis for 
American West's progress payment requests to the government (see tr. 1/76-77), 
American West, on 23 December 2015, submitted a request for progress payments that 
included construction of the temporary bridges, though they were not, in fact, built 
(R4, tab 6 at 3457; tr. 11149-50).3 Mr. Aranda (the Corps QAR), who was on site 
many days of construction (tr. 1/154) (and thus, was aware that the temporary bridges 
had not been built), approved and directed payment of this request (tr. 11150). Later 
in January 2016, Mr. Aranda would consider this payment to have been an error, 
but he did not seek to recover the money (tr. 11150-53). Mr. Aranda brought the 
payment to the attention of Mr. Macias sometime that month (tr. 1/150). Nothing 
appears to have occurred thereafter, but things began to come to a head at the end of 
February/beginning of March 2016. · 
American West re-submitted its revised Construction Site Plan/Traffic Control 
Plan to the Corps on 23 February 2016 (see R4, tab 9). Two days later, the government 
reviewer wrote: 
Code C, APPROVED, EXCEPT AS NOTED. 
RESUBMISSION REQUIRED 
Herring - Haul road provided in this submittal has not been 
approved by the government as provided in the contract 
documents. Provide required permits and approvals for 
using these road [sic]. · 
(Id. at 3478) The license from the Water District had, in fact, been provided with this 
submittal by American West (id. at 3494-501). On 2 March 2016, as noted above, 
Mr. Aranda asked Mr. Kolb for the contractor's budgeted temporary bridge costs so 
that the government could receive a possible credit for permitting American West to 
avoid building the temporary bridges (supp. R4, tab 15 at 3825). The next notation 
regarding this matter was the 4 April 2016 daily report, in which Mr. Aranda noted 
that he had not received a reply to his previous request to Mr. Kolb (id. at 3879). On 
5 May 2016, Mr. Aranda made a remark in the daily report about negotiations 
regarding the temporary bridge being "in progress" (id. at 3931), which was repeated 
3 We do not believe the progress payment request was meant to be misleading since 
the Corps plainly knew that the bridges were not built. The most reasonable 
understanding of the submission is that the "bridges" task was seen as being 
subsumed by obtaining of the easement for the same purpose. 
4 

verbatim in subsequent daily reports until 10 May 2016 (id. at 3933, 3937, 3939). The 
project was substantially complete on 12 May 2016 (id. at 3943). 
On 1 June 2016, the Corps, through Mr. Macias, sent a letter to American West 
demanding that it submit a proposal to the Corps for proceeding without the temporary 
bridges, setting forth the savings to which the government would be entitled (R4, tab 10). 
Not surprisingly, on 7 June 2016, American West responded to this letter by denying any 
obligation to give the government such a credit (R4, tab 11 ). The Corps sent a rebuttal 
letter on 18 July 2016 to American West (R4, tab 12) and on 2 August 2016, American 
West wrote a letter (R4, tab 13) to the Corps, again disputing its obligation to provide the 
government a credit. On 19 December 2016, the Corps issued a contracting officer's 
final decision, asserting that the Corps was owed $40,239.89 as a credit for the estimated 
difference in price between performing the project with the temporary bridges and 
performing it without them 4 (R4, tab 14). The record does not detail whether the 
government has, in fact, collected this credit. 
American West submitted a timely appeal to the Board on 14 March 2017, 
which we duly docketed as this appeal. 
DECISION 
The evidence before us supports a finding in favor of American West; although 
the government was entitled to strict compliance with D02' s specifications, including 
the installation and removal of the temporary bridges, it lost its entitlement to any 
credit under the Changes clause by waiving its right to such work prior to insisting on 
such compensation. 
I. The Government was Contractually Entitled to Construction of the 
Temporary Bridges and to a Credit for Work not Performed 
First, it is clear that the government was entitled to require American West to 
build the temporary bridges. The terms of D02 required American West to build the 
bridges and American West has presented no serious argument otherwise. To be sure, 
there was no need for such bridges after the contract was completed, and it appears that 
all concerned were better off because they were never built, but it has long been held that 
the government "can engage a contractor to make snowmen in August, if [it spells] it out 
clearly." Rixon Electronics, Inc. v. United States, 536 F.2d 1345, 1351 (Ct. Cl. 1976); 
see also The Wagner Awning & Mfg. Co., ASBCA No. 19986, 77-2 BCA ~ 12,720 
4 This calculation did not take into account the costs incurred by J.D. Abrams to secure 
temporary bridges for the contingency in which the easement was not approved 
by the Water District (R4, tab 14). 
5 

at 61,827 (government entitled to strict compliance with contract terms even if alternative 
techniques might be suitable). 
The law also provides that, when a contractor fails to perform required work 
required by a contract, the Changes clause permits the contracting officer to make an 
equitable adjustment to deduct from the payment owed the contractor the cost that the 
contractor would have incurred if it had complied with the contract. Fox Construction, 
Inc., ASBCA No. 55265 et al., 08-1 BCA ii33,810 at 167,370-71, (citing Celesco 
Industries, Inc., ASBCA No. 22251, 79-1BCAii13,604 at 66,683). This statement of 
law is unchallenged by American West. 
II. The Government Waived Its Right to Construction of the Temporary 
Bridges and thus Its Right to a Credit 
We now turn to the prime argument raised by American West; whether the 
government waived its right to compliance with the contract terms regarding the 
temporary bridges (see app. br. at 1-6). We find that, in the facts presented here, it did 
so waive that right. 
The law provides that the government may waive strict compliance with 
contractual requirements and be estopped from later re-imposing those requirements 
upon the contractor. See, e.g., Gresham & Co. v. United States, 470 F.2d 542, 554 
(Ct. Cl. 1972) ("There can be no doubt that a contract requirement for the benefit of a 
party becomes dead if that party knowingly fails to exact its performance, over such an 
extended period, that the other side reasonably believes the requirement to be dead"); 
Worldwide Parts, Inc., ASBCA No. 38896, 91-2 BCA ii 23,717 at 118,712; Watsky 
Constr. Co., ASBCA No. 36940, 90-2 BCA ii 22,934 at 115,125; see also Miller 
Elevator Co. v. United States, 30 Fed. Cl. 662, 687-88 (1994). That is what happened 
here. 
There is no dispute that the government (in the guise of Mr. Aranda and 
Mr. Macias) was well aware of American West's decision to use the Water District's 
levee, rather than the temporary bridges, as a means to build the permanent bridges. 
American West told the government of these plans on multiple occasions in the Fall of 
2015 and, of course, the government was on site and able to observe that American 
West had not installed temporary bridges as construction progressed. Though the 
government technically rejected the 23 September 2015 traffic control plan that 
included the use of the Water District levee, that rejection appears to have been 
predicated upon the uncertainty of obtaining a permit from the Water District. The 
subsequent preconstruction meeting held in October 2015, in which American West 
informed the Corps that its agreement with the Water District was imminent and in 
which the government made no signal discouraging American West from proceeding 
with the levee plan, gave American West good cause to believe that the government 
6 

was satisfied with its plans to forego the temporary bridges. Indeed, the government 
made progress payments to American West in late December 2015, without objection, 
for the line item regarding the levee license agreement. The government's February 
2016 rejection of the revised traffic plan for supposedly not including evidence of the 
Water District permit, in addition to being demonstrably incorrect (a copy of the 
permit having been provided), evinced no real objection of the plan to proceed without 
the temporary bridges. A reasonable contractor reviewing it and considering all of the 
other facts and circumstances surrounding its use of the levee would find no reason to 
be concerned that the Corps, in fact, wished it to build the temporary bridges. 
American West not only believed that it had the government's consent, but it 
also relied upon the government's acquiescence to the levee plan. It proceeded 
without building the temporary bridges, and it also incurred $14,200 in fees to the 
Water District to obtain the right to use the levee. Thus, we find here, as the Court of 
Claims held in Gresham, that the contract requirement for the temporary bridges was 
"dead." See 4 70 F .2d at 554. 
The government argues that, while it may have permitted deviation from the 
contract, that allowance was essentially conditional upon an equitable adjustment from 
American West (see gov't br. at 2). Relying upon Norcoast-Beck Aleutian, ASBCA 
No. 25469, 81-1BCA,15,072, the government asserts that it may permit a deviation 
from the contract requirements while still availing itself of the opportunity to obtain a 
credit (gov't br. at 4-5). These arguments are unavailing. 
First, the evidence before us leads us to conclude that the conditional nature of 
the government's waiver only became evident after the contractual requirement was 
effectively eliminated. Thus, the Changes clause cannot be considered applicable 
because the terms of the contract no longer required American West to build the 
superfluous temporary bridges at the time it was invoked. 5 
With respect to Norcoast-Beck Aleutian, that appeal is easily distinguished. In 
Norcoast-Beck Aleutian, the government never agreed to accept lesser contract 
performance than required; it merely took occupancy of a building after it became 
clear that the contractor would not fully comply with contractual requirements. The 
deductive change came a "reasonable time later." 81-1 BCA at 74,550-51. Because 
there was actual waiver of the original contract requirements in the present appeal, 
Norcoast-Beck Aleutian is simply inapplicable. 
5 The outcome of this appeal may well have been different ifthe Corps had clearly and 
explicitly conditioned its waiver of the contractual requirements at an earlier 
date, but that circumstance is not before us. 
7 

CONCLUSION 
For the reasons stated herein, we hold that the Corps waived the contractual 
requirement to build temporary bridges and, with that waiver, surrendered its right to 
obtain a deductive change. The appeal is sustained. 
Dated: 19 December 2017 
I concur 
, 
j · .. 1·'/J/I 
y.._)~ VJ'Wl·' ,, 
DAVID D' ALESSANDRIS 
Administrative Judge 
Acting Vice Chairman 
Armed Services Board 
of Contract Appeals 
J. REID PROUTY 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
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. 61094, Appeal of 
American West Construction, L.L.C., rendered in conformance with the Board's 
Charter. 
Dated: 
8 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals