KOO Construction, Inc.
Docket: ASBCA 61389, ASBCA 61487
Decision date: 2018-07-26

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of --
KOO Construction, Inc. 
Under Contract No. N62473-09-D-I655 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 61389, 61487 
Herman M. Braude, Esq. 
Edward D. Manchester, Esq. 
Braude Law Group, P .C. 
Rockville, MD 
Craig D. Jensen, Esq. 
Navy Chief Trial Attorney 
Robyn L.. Hamady, Esq. 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE MCNULTY 
ON THE GOVERNMENT'S PARTIAL MOTION TO DISMISS, 
TO STRIKE AND FOR A MORE DEFINITE STATEMENT 
Before us is the government's motion requesting the Board to dismiss or strike 
appellant's defective specification cause of action for failure to state a claim. 
Alternatively, the government moves for a more definite statement regarding the legal 
and factual basis of the cause of action. We deny the motion. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 
1. Appellant was awarded Task Order 0004, under a multiple awardee, multi-year 
indefinite-delivery/indefinite-quantity contract, Contract No. N624 73-09-D-l655 (the 
Base Contract) 1 for the design and construction of a Child Development Center (CDC) at 
the Murphy Canyon Naval Base in San Diego, California (R4, tab 9 at 33652). 
2. Appellant submitted a certified claim dated 11 April 2017, seeking additional 
compensation for differing site conditions, defects in the specifications, additional work 
and delays resulting therefrom, all alleged to be the responsibility of the government. 
1 The Base Contract is not currently in the record despite the requirement set forth in 
Board Rule 4 that it include a copy of the contract. 
2 The Rule 4 file includes several pagination formats. To avoid possible confusion, for 
page number citation we cite to the consecutively-numbered pages that have 
been added to the lower right-hand comer of the documents. 

The claim narrative was 15 pages in length and was delineated into 5 separate claim 
items. The basis for each claim item was described in detail. (R4, tab 14) 
3. With regard to defective specifications, the claim in its entirety, stated: 
(I) Navy·s Defective HY AC Design 
The original RFP. with regard to the HV AC 
system, required "occupant comfort'' and "energy 
efficiency" along with reliable operation and ease of 
maintenance. The RFP also required that the HV AC 
syskm should meet or exceed the goal of a ·'30% 
energy reduction·· using ASHRAE 90.1 for energy 
performance and consumption calculations. Most 
important. Amendment 0006. dated September 20, 
2012, specifically also required the HV AC system to be 
provided based on ··lowest life cycle cost." as well as 
achieving a --LEED Silver certification." 
As noted above. Amendment 0006 (the last 
amendment to the RFP) issued before award, specifically 
amended the RFP to unequivocally state that the HV AC 
system to be provided on the CDC project \Vas to be based 
on the .. lowest life cycle cost:· This specific performance 
requirement left the contractor ,vith no discretion but to use 
the only system whose calculations produced the lmvest 
life cycle cost. This turned out to be a roof-top packaged 
DX VA V system. 
It is believed that the original RFP prohibited the 
use of DX VA V systems and originally discouraged the 
use of roof-top equipment. based on an apparent outdated 
NA VF AC Southwest boilerplate specification. which 
thought that this type of packaged roof-top unit \Vould be 
unsuitable for southwest California climate conditions. 
This outdated specification, however. failed to recognize 
the advances over the last decade. which has overcome the 
fundamental problem of capacity control. which can 
regulate a direct expansion (DX) variable volume system 
and is now recognized as substantially improving the 
energy efficiency of low-rise commercial buildings 
(including schools, child care centers. etc.)[.] 
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According to the Department of Energy, a DX 
packaged roof-top HY AC system now consumes merely 
one-third of the total heating and cooling energy as the 
previous units and arc regularly used for heating and 
cooling light commercial. low-rise buildings. such as 
schools. and arc recognized as high-energy efficient with 
significant energy-saving potential, even in relatively dry 
climate conditions 
Since January L 2012. ASH RE standard 90.1 has 
recognized that such packaged roof-top units save energy by 
automatically adjusting the indoor fan motor speed in 
sequence with the unif s heating. cooling. and ventilation, 
and now represents the largest segment of HY AC equipment 
for small commercial applications in North America. 
With the ne,v technology and optimized controls, 
these packaged DX roof-top units can deliver thirty percent 
more energy efficiency than a traditional chiller system. 
This new· technology, utilizing a DX variable air volume 
system. for the last decade. has a proven track record of 
reliable, efficient perfonnance and is the only HY AC 
system that produced the .. lowest life cycle cost:· pursuant 
to our A/E's computerized energy analysis. 
The original design concept submitted by the 
contractor's design team utilized a direct expansion (DX) 
VA V system, but the Nav)''s mechanical design reviewer 
disallowed this roof-top system as being prohibited by the 
RFP. The contractor's mechanical design team 
subsequently demonstrated that the packaged roof'-top DX 
VA V HY AC system produced the .. lowest life cycle cost." 
as well as meeting a 30% reduction in energy efficiency. as 
,veil as allowing the contractor to obtain additional points 
to obtain a LEED Silver certification. 
Unfortunately. it took over four-and-a-half months 
for the Navy design review team to finally agree that the 
originally submitted DX VA V packaged roof-top system 
,vould produce the .. lowest life cycle cost" and allmved its 
use in mid-May 2014. 
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KOO submits that this four-and-a-half month delay 
in the mechanical design was the responsibility of [the] 
Navy due to its breach of its implied warranty of the 
adequacy of the original RFP specifications as producing 
the desired result for the HY AC perfonnance criteria. 
(R4, tab 14 at 3445-47) 
4. The claim totaled $2,356,314. Appellant also sought the remission of liquidated 
damages, assessed by the government in the amount of$1,017,929. (R4, tab 14 at 3458) 
5. Appellant's claim was essentially denied in a contracting officer's decision 
dated 9 August 2017. The contracting officer found entitlement in the amount of 
$2,808. (R4, tab 17 at 4270) 
DECISION 
We begin by first addressing the alternative motion for a more definitive statement. 
Motions for a more definite statement are generally not favored. Pleadings are construed 
liberally to do substantial justice. See Honeywell, Inc., ASBCA No. 4 7103, 95-2 BCA 
,i 27,835 ("motion for more definite statement...is generally limited to such definiteness as 
will be sufficient for the moving party to prepare a responsive pleading"). When proper, 
but general, allegations are made by the complaint, the motion will be denied on the 
grounds that discovery should be used to obtain information the defending party feels is 
needed. See LGT Corporation, ASBCA No. 44066, 94-2 BCA ,i 26,607; Environmental 
Safety Consultants, Inc., ASBCA No. 53485, 02-2 BCA ,i 31,904 (allegations in answer 
were sufficient to fairly notify Board and appellant of the facts and issues). We note that 
the government has filed an answer without waiting for our decision on its motion. 
Generally, a party files a motion for a more definite statement, instead of its answer, when 
it asserts the complaint is too ambiguous to answer. St. Paul Fire and Marine Insurance 
Co., ASBCA No. 53228, 02-2 BCA ,J32,025; Laureano Bros. Co., ASBCA No. 8700, 65-2 
BCA ,i 4884. The government's answer includes multiple assertions that the complaint is 
too vague or ambiguous to answer with respect to various words and phrases in the 
complaint. The government repeatedly asserts in its answer that appellant's pleading is 
vague and ambiguous, rendering the allegation incapable of being answered accurately 
(e.g., answer ,i,i 9-10, 15 ("erroneously discouraged," "apparent outdated NA VFAC 
Southwest Division boilerplate specification" and "the advances over the last decade"), 
,i 18 ("present technology" and "optimized controls")). In every instance that the 
government asserts the pleading is vague and ambiguous the government has in fact 
answered the complaint by denying the allegation. 
We have reviewed the complaint and the claim and find that they include 
allegations that are sufficient to notify defendant of the nature of the defective 
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specification claim appellant makes. 3 Appellant generally alleges that the specifications 
were defective causing it to perform additional work, which in tum caused it to incur 
additional costs as well as delaying its performance. The nature of the defect is alleged to 
be a conflict between the requirement for the lowest life cycle cost heating and ventilation 
air conditioning system (HV AC), which appellant asserts was a rooftop direct expansion 
(DX) variable air volume (VA V) system, and the specification's express prohibition 
against DX VAV HVAC systems and the preference for other than roof-mounted systems. 
Appellant also asserts that the government is responsible for these additional costs and the 
delay to its performance. To the extent the government requires additional information to 
properly defend against appellant's assertions, it may obtain same through discovery. 
We also find that appellant has properly stated a claim of defective specifications. In 
Parsons Government Services, Inc., ASBCA No. 60663, 17-1 BCA ~ 36,743 at 179,099-100, 
we said the following with regard to the standards relating to motions to dismiss for failure to 
state a claim: 
Dismissal for failure to state a claim upon which 
relief can be granted is appropriate where the facts asserted 
in the complaint do not entitle the claimant to a legal 
remedy. Lindsay v. United States, 295 F.3d 1252, 1257 
(Fed. Cir. 2002). The Board will grant a motion to dismiss 
for failure to state a claim when the complaint fails to 
allege facts plausibly suggesting (not merely consistent 
3 Although a complaint was filed in these consolidated appeals, our rules contemplate 
the possibility that a complaint may not be necessary at all if the issues are 
sufficiently defined in the claim. In this regard Board Rule 6 states: 
(a) Appellant-Within 30 days after receipt of 
notice of docketing of the appeal, the appellant shall file 
with the Board a complaint setting forth simple, concise, 
and direct statements of each of its claims. The complaint 
shall also set forth the basis, with appropriate reference to 
contract provisions, of each claim and the dollar amount 
claimed, if any. This pleading shall fulfill the generally 
recognized requirements of a complaint, although no 
particular form is required. Should the complaint not be 
timely received, the appellant's claim and notice of appeal 
may be deemed to set forth its complaint if, in the opinion 
of the Board, the issues before the Board are sufficiently 
defined, and the parties will be notified. [Emphasis added] 
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with) a showing of entitlement to relief. Cary v. United 
States, 552 F.3d 1373, 1376 (Fed. Cir. 2009) (citing Bell 
Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)). In 
deciding a motion to dismiss for failure to state a claim, 
"the court must accept well-pleaded factual allegations as 
true and must draw all reasonable inferences in favor of the 
claimant." Kellogg Brown & Root Services, Inc. v. United 
States, 728 F.3d 1348, 1365 (Fed. Cir. 2013). In this 
review, "[ w ]e decide only whether the claimant is entitled 
to offer evidence in support of its claims, not whether the 
claimant will ultimately prevail." Matcon Diamond, Inc., 
ASBCA No. 59637. 15-1BCA136,144 at 176,407. The 
scope of our review is limited to considering the 
sufficiency of allegations set forth in the complaint, 
"matters incorporated by reference or integral to the claim, 
items subject to judicial notice, [ and] matters of public 
record." A&D Auto Sales, Inc. v. United States, 748 F.3d 
1142, 1147 (Fed. Cir. 2014) (citing SB CHARLES ALAN 
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND 
PROCEDURE§ 1357 (3d ed. 2004)). For purposes of 
assessing whether an appeal before us states a claim upon 
which relief can be granted, the primary document setting 
forth the claim is not the complaint, per se, but the 
contractor's claim submitted to the contracting officer. 
Lockheed Martin Integrated Systems, Inc., ASBCA 
Nos. 59508, 59509, 17-1 BCA ,J 36,597 at 178,281. 
[Footnote omitted] · 
The elements of proof for a defective specification claim are as follows: 
[W]here a contractor-claimant seeks to recover an 
equitable adjustment for additional work performed on 
account of a defective specification, the 
contractor-claimant must show that it was misled by the 
defect. To demonstrate that it was misled, the 
contractor-claimant must show both that it relied on the 
defect and that the defect was not an obvious omission, 
inconsistency or discrepancy of significance-in other 
words, a patent defect-that would have made such 
reliance unreasonable. 
E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1339 (Fed. Cir. 2004). The 
overall rationale for an equitable adjustment of this type is that the contractor experienced 
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additional costs in completing the project which were caused by its reasonable reliance 
on defective specifications or plans. See, e.g., Cable and Computer Technology, Inc., 
ASBCA No. 47420, 03-1 BCA, 32,237 (deficiencies in draft interim standards did not 
become apparent until after contract performance began, parties had assumed required 
systems could be designed based on the standards). 
Mindful that our goal at this stage is to determine if we should allow appellant to 
offer evidence in support of its claim and not whether appellant will ultimately prevail, 
and applying the above stated law to the facts of this case we find that appellant has set 
forth sufficient allegations in its complaint and claim to plausibly suggest a showing of 
entitlement to relief. Accordingly, the government's motion is denied. 
Dated: July 26, 2018 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
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CHRISit5PHER M. McNULrv 
Administrative Judge 1 
Armed Services Board 
of Contract Appeals 
I concur 
?.'J. ~REID PROUTY 
Administrative Judge 
Vice Chairman 
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 Nos. 61389, 61487, Appeals of 
KOO Construction, Inc., rendered in conformance with the Board's Charter. 
Dated: 
8 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals