DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
ARMED SERVICES BOARD OF CONTRACT APPEALS 
OPINION BY ADMINISTRATIVE JUDGE D’ALESSANDRIS 
 
 In 2011, the Naval Facilities Engineering Systems Command (NAVFAC, Navy, 
or government) issued a solicitation for the West Sound base services operating 
contract.  The solicitation was for a firm-fixed-priced, performance based, Indefinite 
Delivery Indefinite Quantity contract to provide base operations support, such as fire 
and emergency services, garbage collection and building maintenance, at Naval 
Facilities in the Puget Sound, Washington area.  The solicitation was intended to be a 
follow-on contract to the existing base operations support contract.  However, the 
solicitation differed from the existing contract in at least one key detail:  the existing 
contract procured a set number of “trouble calls,” basically unscheduled building 
maintenance issues, while the solicitation provided that the contractor would be 
responsible for an unlimited number of trouble calls. 
 
 As part of the solicitation process, the government prepared an independent 
government estimate (IGE) of the cost of performing the contract.  The IGE was 
generated by government employees based on data from the incumbent contractor, and 
the government estimators’ subjective, and typically conservative, projections of the 
cost of performing a contract with unlimited trouble calls.  The solicitation provided 
most, but not all, of the incumbent contractor’s relevant data to the offerors.  Chugach 
Federal Solutions, Inc. (Chugach or CFSI) was one of nine offerors responding to the 
Appeal of - )  
 )  
Chugach Federal Solutions, Inc. ) ASBCA No. 61320 
 )  
Under Contract No. N44255-14-D-9000 )  
   
APPEARANCES FOR THE APPELLANT: Richard B. O’Keeffe, Jr., Esq. 
William A. Roberts III, Esq. 
Gary S. Ward, Esq. 
Cara L. Lasley, Esq. 
    Wiley Rein LLP 
    Washington, DC 
 
APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. 
    Navy Chief Trial Attorney 
 David M. Marquez, Esq. 
Robyn L. Hamady, Esq. 
Anthony Hicks, Esq. 
    Trial Attorneys 
  
 

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solicitation.  Despite being a firm-fixed-price level of effort contract, the solicitation 
requested that offerors provide staffing levels in their proposals.  The government 
evaluated the proposals through a technical team and a price team, which in turn 
reported to a source selection committee.  The technical team concluded that eight of 
the nine offerors, including Chugach, had a major weakness in their proposed staffing 
levels.  The government determined that the offerors should be prompted to review the 
performance work statement to ensure that they were including sufficient staffing to 
deal with the change to unlimited trouble calls.  In addition, the government 
determined that it should review the accuracy of its own IGE. 
 
 The government entered into negotiations with the offerors and asked Chugach 
to review its proposal to ensure that it accounted for the change to unlimited service 
calls.  At the same time, the government noted that specific portions of Chugach’s 
proposal had prices that were either too high or too low, relative to the remaining 
offerors.  Following proposal revisions, the government awarded the contract to 
Chugach in March of 2014.  During the transition period, Chugach recognized that it 
had proposed inadequate staffing, and significantly increased its number of full time 
equivalent employees before beginning full performance of the contact in October 
2014.  Even with the increased staffing, Chugach experienced problems meeting the 
contract’s performance standards.  The government noted deficiencies in Chugach’s 
performance ratings and began withholding contract funds.  In response, Chugach 
increased its staffing, causing financial losses on the contract. 
 
 In August 2016, Chugach submitted a certified claim seeking in excess of 
$12 million in increased costs pursuant to a variety of theories.  According to 
Chugach, the government engaged in negligent negotiations because the government 
failed to inform Chugach that the government had determined that Chugach was not 
proposing enough staff to perform the contract.  Alternatively, Chugach contends that 
the government had superior knowledge regarding the staffing necessary to perform 
the contract that it did not share with Chugach.  Chugach also contends that the parties 
were mutually mistaken regarding the staffing required to perform the contract, that 
there was a constructive change to the contract, and that the government improperly 
withheld payments. 
 
 The matter is before the Board pursuant to Board Rule 11, “Submission 
Without a Hearing,” permitting the Board to make findings of fact based on the 
evidentiary record.  Based on the record before us, we find that Chugach has not 
produced evidence sufficient to support its theories of negligent negotiation, superior 
knowledge, mutual mistake, or constructive change.  With regard to the improper 
withholding count, we find that the government did not support its decision to 
withhold contract funds.  We grant Chugach’s appeal only with regard to its challenge 
to the Navy’s fixed percentage withholding. 
 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
3 
 
 
FINDINGS OF FACT 
 
I.  The Parties 
 
 At the time of the relevant events, appellant, Chugach Federal Solutions, Inc. 
was a subsidiary of Chugach Government Solutions, Inc. (CGS), which was, in turn, a 
subsidiary of Chugach Alaska Corporation (CAC) (gov’t proposed finding of fact ¶ 
2; compl. ¶ 1).  CAC was an Alaska Native Corporation created under the Alaska 
Native Claims Settlement Act of 1971 (gov’t proposed finding of fact ¶ 2; compl. ¶ 1).  
Chugach specializes in base operations support, logistics, public works, construction, 
and IT services (R4, tab 4-1 at CFSI21902_7). 
 
II.  The Solicitation 
 
A.  Background 
 
 On November 21, 2011, NAVFAC issued Solicitation N44255-10 -R-5016 
(WSBOS solicitation) for the West Sound Base Operations Support Contract (WSBOS 
contract), a firm-fixed-priced, performance based, Indefinite Delivery Indefinite 
Quantity (IDIQ) contract to provide base operations services at NAVFAC facilities in 
the Puget Sound, Washington area, including Naval Base Kitsap (Bremerton, Bangor, 
and Keyport) and Naval Magazine Indian Island (R4, tab 1-1.1 at GOV1-2; R4, tab 1-
1.4 at GOV363-65; compl. ¶10).  The WSBOS contract was intended to follow 
Contract No. N44255-05-D-5103 (EJB Contract), the expiring base operations services 
contract then being performed by EJB Facilities Services (EJB) (app. supp. R4, 
tab 60).  The WSBOS solicitation anticipated an award based on competitive 
acquisition, incorporating by reference Federal Acquisition Regulation (FAR) 52.215-
1 (R4, tab 1-18 at GOV18373). 
 
B.  Evaluation Criteria 
 
 The WSBOS solicitation provided for a price evaluation factor with no 
subfactors and a non-price evaluation factor with six subfactors (R4, tab 1-18 
at GOV18378-91).  The solicitation provided that the non-price subfactors are 
approximately equal to each other and the six non-price factors combined are 
approximately equal to the total price for evaluation (id. at GOV18379).  In addition, 
Section M, Evaluation Factors for Award, Paragraph 3.a., Price, states in relevant part: 
 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
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(2) Basis of Evaluation: 
 
(a) . . . Analysis will be performed by one or more of the 
following techniques to ensure a fair and reasonable price: 
 
(i) Comparison of proposed prices received in response to 
the RFP. 
(ii) Comparison of proposed prices with the IGE. 
(iii) Comparison of proposed prices with available 
historical information. 
(iv) Comparison of market survey results. 
(v) Comparison with any other data source which assists in 
validating the price as fair and reasonable. 
 
(Id. at GOV18381) 
 
 The solicitation also includes Section M, Evaluation Factors for Award, 
Paragraph 3.b.(2), Factor 2, Technical Approach/Method, which states in relevant part: 
 
2) Provide a completed Attachment J.M-5, Full Time 
Equivalent (FTE) Worksheet.  Provide the annual hours, 
and FTEs proposed for performing each element of the 
contract as specified in the FTE worksheet. 
. . .  
(b) Basis of Evaluation: Factor 2 will be evaluated as an 
overall factor with no subfactors.  The Government will 
evaluate the offeror’s technical approach for adequate 
staffing levels and that the staffing plan offers a reasonable 
understanding of the requirements, labor quantities, and 
skills needed to successfully perform and meet the contract 
performance standards and objectives. 
 
(Id. at GOV18384) 
 
C.  The Performance Work Statement (PWS) 
 
 The Solicitation’s Performance Work Statement (PWS) provides that: 
 
All terms and conditions of the contract award, 
performance work statement, and all attachments are 
applicable.  The proposal presented by the offeror to whom 
the award is made will be incorporated, in whole or in part, 
into the contract at time of award.  If the Contractor’s 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
5 
 
proposal contains terms or conditions more favorable to 
the Government, these more favorable terms and 
conditions shall be performed.  However, the minimum 
requirements of the performance work statement must be 
met. 
 
(Id. at GOV18303)  The PWS similarly states that “[t]he Contractor warrants that its 
proposal incorporated herein by reference will meet or exceed the performance 
objectives set forth in this contract” (R4, tab 1-14.2 at GOV17269). 
 
 The PWS is organized into annexes.  Section J of the PWS includes multiple 
attachments providing more than 9,000 pages of historical data reflecting EJB’s 
performance of the EJB Contract, inventory and equipment lists, and other information 
relevant to the WSBOS contract (R4, tab 1-12.5 at GOV14595 et seq.; R4, tabs 4-4 
through 4-8).  In addition to the information in Section J, there was a NAVFAC 
technical library, which was made available to all the prospective offerors (R4, tab 1-
18 at GOV18369).  There is no evidence, however, that CFSI ever used the resources 
available through the technical library (R4, tab 5-1 at 80; R4, tab 5-8 at 77-79). 
 
1.  Trouble Calls 
 
 Annex 0100000, General Information, Specification Item 1.5, Verification of 
Workload and Conditions, states in relevant part, in relation to the information 
contained in Section J: 
 
Any historical workload data provided is from the most 
recent contract which differs significantly in both 
specification and liability limit from this contract.  These 
workload quantities are for illustration purposes only and 
represent the types and mix of the various tasks required 
for the performance of the previous contract.  This data is 
not intended to be all inclusive of the requirements for this 
contract or as limit for future workload.  The Contractor 
shall be responsible to determine the required workload to 
meet the specifications of this contract.  The Contractor 
shall perform all required repairs below the stated liability 
limits, regardless of the volume of work, with no additional 
cost to the Government. 
 
(R4, tab 1-14.2 at GOV17267 (emphasis added)) 
 
 Annex 0100000, General Information, Specification Item 1.11, Technical 
Proposal Certification, states:  “The Contractor warrants that its proposal incorporated 

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6 
 
herein by reference will meet or exceed the performance objectives set forth in this 
contract” (id. at  GOV17269). 
 
 Also relevant to this appeal is Annex 1502000 (and a similar Annex 1502010 
applicable to the Bureau of Medicine and Surgery (BUMED) Naval Hospital 
Bremerton) Facility Investment.  The scope of work in the annex generally includes 
“infrastructure sustainment,” the maintenance and repair necessary to keep facilities in 
“good working order.” (Id. at GOV17350, GOV17411)  The Recurring Work for 
Facility Investment is generally broken down into four categories: Spec Item 3.1 
Trouble Calls, Spec Item 3.2 Maintenance, Spec Item 3.3 Inspection, Testing and 
Certification, and Spec Item 3.4 Other Recurring Services (id. at GOV17347-49).  
Annex 1502000, Facility Investment, Spec Item 3.1, Trouble Calls, requires the 
Contractor to perform “work identified at a point in time that is necessary to return a 
facility, structure, or piece of equipment to its intended use” (R4, tab 1-14.2 
at GOV17357-59; R4, tab 1-12.7 at GOV14824).  Examples of service calls would 
include repairing a non-functioning HVAC unit, replacing lamps in light fixtures, and 
unclogging drains (R4, tab 1-12.7 at GOV14824).  The WSBOS Contract describes 
“trouble calls” as follows: 
 
Trouble Calls are classified as emergency or service work 
requests.  Trouble calls are called into the work reception 
center by building occupants or generated by designated 
Government or Contractor representatives; are brief in 
scope; and do not reasonably require detailed job planning.  
Multiple maintenance, repair, and minor construction 
requirements received for the same trade in the same 
building or structure at the same time will be combined 
into one trouble call as long as the trouble call threshold is 
not exceeded. 
 
(R4, tab 1-12.5 at GOV14599) 
 
 Under the EJB Contract, EJB would perform what were referred to as “service 
calls” (app. supp. R4, tab 61 at CSUP2245) that were roughly equivalent to trouble 
calls in the new contract.  Under the EJB Contract, service calls were classified as 
routine, urgent, or emergency calls (app. supp. R4, tab 61 at CSUP2247-49).  Routine 
calls were required to be completed within 60 calendar days, urgent calls within 15 
calendar days, and emergency calls within 1 hour with work continuing until the 
emergency has been arrested (id. at CSUP2247-48).  Under the EJB Contract, service 
calls had a maximum financial liability for the contractor of either $2,000 or $5,000 
for the direct cost of labor and materials (id. at CSUP2245, CSUP2247-49).  In the 
solicitation, the dollar limit per call was $5,000 of direct labor and direct material per 
occurrence (R4, tab 1-14.2 at GOV17358).  The government highlighted this change 

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during the solicitation process  (R4, tab 1-19 at GOV18405, GOV18436; R4, tab 6-120 
at CFSI 256231_43-44).  In addition, the new contract required all non-emergency 
trouble calls to be resolved within 30 calendar days (R4, tab 1-14.2 at GOV17359). 
 
 Historical trouble call data was provided in an attachment.  This information 
provided offerors with guidance regarding the type and mix of work to expect under 
this requirement.  Specifically, J-1502000-06 contained 1,972 pages of historical data 
regarding service calls performed by EJB from FY09 through FY11, representing 
years 4 through 6 of EJB’s performance (R4, tab 4-6 at CFSI8949_2-1973).  Chugach 
calls attention to two specific service calls where it contends that the government 
withheld material information:  No. 3453054, where EJB incurred $2,126.30 in 
material costs, plus 12 labor hours, on a call with a $2,000 limit; and No. 3221559 
where EJB incurred $3,242.74 in subcontractor costs, again in excess of the $2,000 
limit (app. br. at 23 (citing app. supp. R4, tab 103.02 [native])).  Chugach additionally 
notes that of the 24,027 service calls and bullets in the November 2009 report, 22.67% 
were performed late (id. at 23-24); and that the records show that EJB repaired 
equipment that did not have an equipment number, meaning that EJB was not 
responsible for maintaining the equipment (id. at 24).  Dale Hrenko, a NAVFAC 
engineering technician, compiled the historical data based on reports from EJB; the 
data originated from EJB’s computerized maintenance management system, known as 
“Maximo” (gov’t ex. 2 ¶¶ 5, 11-13).  The data provided to offerors included the 
description, work type (routine, urgent, or emergency), the dollar threshold, location of 
the work, and the labor hours expended (R4, tab 4-6 at CFSI18949_2-1973).  
However, the government did not provide other information to offerors, such as the 
date of the service request, the target and actual completion dates, and who requested 
the work (app. supp. R4, tab 103.02 [native]).  The service call historical data 
indicated there was variability year-over year in the quantity of trouble calls, ranging 
from approximately 21,000 to 25,000 trouble calls, on which EJB expended between 
approximately 70,000 and 88,000 labor hours (gov’t ex. 4 ¶ 36). 
 
 During EJB’s performance of the contract, the Navy’s demand for service calls 
in some years exceeded the contractual number of calls.  In these instances, the Navy 
attempted to purchase additional service calls at a contractually pre-priced rate.  (Gov’t 
ex. 3 ¶ 4)  However, some users “metered” or restricted their use of service calls to 
avoid incurring additional costs (app. ex. 1 at 108-09; gov’t ex. 1 ¶ 21).  Chugach 
further contends that the Navy directed EJB not to “self-generate” service calls, 
implying that EBJ was not to identify items needing to be repaired (app. supp. R4, 
tab 143.01 at CSUP5028; tab 126 at CSUP4982); however, it is unclear whether the 
dispute was regarding self-generated repairs, or if the Navy was concerned that EJB 
was attempting to classify maintenance work as repair work (app. supp. R4, tab 143.01 
at CSUP5027). 
 

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2.  Maintenance 
 
 In addition to trouble calls, the WSBOS Solicitation required the contractor to 
perform maintenance on identified systems and equipment.  Specifically, the 
contractor was required to “develop and implement a maintenance program . . . to 
ensure proper operation, to minimize breakdowns, and to maximize useful life” (R4, 
tab 1-14.2 at GOV17363).  The performance standard required that “[m]aintenance is 
accomplished in accordance with the Contractor’s maintenance program plan and 
work schedule” (id.; gov’t ex. 1 ¶ 18).  Thus, the contractor had flexibility to develop a 
work plan that would minimize its costs.  Equipment lists were provided for all of the 
categories of equipment that the contractor was required to include in the maintenance 
program (see, e.g., R4, tab 1-14.2 at GOV17365 (referring to the galley equipment list 
at R4, tab 1-12.7 at GOV14880)).  While performing the scheduled maintenance per 
the contractor’s own maintenance plan, the contractor was also required to perform 
any “incidental repairs, including replacement, discovered during schedule 
maintenance up to $500 per occurrence . . . . Incidental repairs performed under 
maintenance are not considered a Trouble Call, but part of the scheduled maintenance 
service” (R4, tab 1-14.2 at GOV17362).  This liability limit was also a change from 
the lower $250 liability limit for the EJB contract (app. supp. R4, tab 1 at CSUP317).  
The solicitation also required the contractor to add up to an additional 250 pieces of 
equipment to the maintenance program each year, at a liability limit of $1,500 of direct 
labor and direct material per piece of equipment (R4, tab 1-14.2 at GOV17362). 
 
 In addition to the maintenance program where the contractor was to propose an 
“economical approach” for maintenance, the contractor was also required to maintain 
other categories of equipment according to “prescriptive maintenance,” where the 
maintenance frequencies and tasks are dictated by regulation from federal, state, or 
local governing agencies (R4, tab 1-14.2 at GOV17371; R4, tab 1-12.7 at GOV14822). 
 
 An additional task not contained in the EJB contract, was to develop an 
integrated maintenance plan encompassing both maintenance and repair for specific 
categories of equipment (R4, tab 1-14.2 at GOV17378; R4, tab 5-6 at 142-43) rather 
than a set schedule of maintenance tasks, as was the case under the EJB contract (R4, 
tab 6-73 at CFSI115660_1; R4, tab 5-6 at 142-43).  The RFP also provided that for 
equipment and systems subject to an IMP “the Contractor has full responsibility for 
any individual occurrence of repair, including replacement, up to and including 
$10,000 in direct material and/or direct labor cost for each piece of equipment per 
incident unless stated otherwise for specific equipment or systems” (R4, tab 1-14.2 
at GOV17435). 
 

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D.  Maximo Data 
 
 Annex 0200000, Management and Administration, Specification Item 2.6.7, 
Computerized Maintenance Management Systems (CMMS), requires the contractor to 
maintain a CMMS to manage all service operations and performance data (R4, tab 1-
14.2 at GOV17287-88).  Maximo is a commercial software application that is known 
as a “Computerized Maintenance Management System” or “CMMS” (see R4, tab 5-10 
at 111).  Although both the government and EJB used Maximo during EJB’s 
performance of the EJB Contract, the government’s Maximo database and the EJB 
Maximo database were separate databases (app. supp. R4, tab 61 at CSUP2149; R4, 
tab 10-1 ¶ 133).  EJB was contractually required to enter certain types of information 
into the government’s Maximo database, however, it maintained even more detailed 
information in its own database.  See EJB Facilities Servs., ASBCA No. 57112, 15-1 
BCA ¶ 35,867, at 175,358; R4, tab 10-1 ¶ 133. 
 
 Prior to award of the WSBOS contract, CFSI reviewed the solicitations for both 
the EJB contract and the WSBOS contract, both of which described the types of 
information entered into the government’s Maximo database (R4, tab 5-10 at 113-14).  
In addition, the government made the EJB contract available for review by prospective 
offerors (R4, tab 1-19 at GOV18392).  Chugach itself previously used Maximo on 
at least two base operation services contracts with the Navy—the Whidbey Island (also 
called North Sound) and Fallon contracts (R4, tab 5-10 at 111-12).  Chugach 
understood that Maximo includes functions for scheduling, inventory management, 
property management, material management and contains work plans and performance 
data, including the hours craftsmen spend on a work order (id. at 113). 
 
E.  The Pre-Proposal Conference and Site Visit 
 
 On December 12-13, 2011, the government held a pre-proposal conference and 
site visit, which Mr. Hammock and Mr. Watts, members of Chugach’s proposal team, 
as well as Matt Hayes (one of Chugach’s subsidiary presidents) attended (R4, tab 6-
119; R4, tab 6-120; R4, tab 5-3 at 59-60, 71-72).  At the Pre-Proposal Conference and 
Site Visit, the government described some of the differences between the EJB contract 
and the WSBOS contract, including the new IMP requirement and the changes in 
trouble call liability limits and completion times (R4, tab 6-120 at CFSI1256231_29-
35; gov’t ex. 5 at GOV1059689, GOV1059696-98).  During a presentation at the Pre-
Proposal Conference and Site Visit, David Williams, NAVFAC’s Facility Support 
Contract Program Manager, informed prospective offerors that, compared with the 
EJB Contract, “[t]he service call approach, or trouble calls is different in [the WSBOS 
contract]” (R4, tab 6-120 at CFSI256231_30).  Mr. Williams informed offerors that “a 
key difference” between the EJB contract and the WSBOS contract is that the 
government changed “all our various size trouble calls to one size, with a maximum 
$5,000 liability limit per trouble call.”  He notified offerors that the “old data is based 

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on two different [trouble call] sizes, $2,000 limit trouble call, and a $5,000 size.” (Id. 
at CFSI256231_44)  Mr. Williams also informed the prospective offerors that another 
major change from the EJB contract was that “[t]his solicitation includes something 
that we haven’t utilized here in the Northwest, and it’s [an] integrated maintenance 
program, or an integrated maintenance program approach” (id. at CFSI256231_30). 
 
F.  The Independent Government Estimate 
 
 As part of the source selection process, the government developed an IGE that 
was used to facilitate its planning and budgeting for the WSBOS contract, and was 
intended to be available as a tool to evaluate proposals (gov’t ex. 2 ¶ 15; gov’t ex. 1 
¶ 10; app. ex. 1 at 143; R4, tab 1-18 at GOV18381). 
 
 At issue in this appeal is the IGE pertaining to trouble calls under the facility 
investment annex.  Mr. Hrenko, was primarily responsible for developing the IGE for 
Annex 1502000, the “Facility Investment” work which includes maintenance and 
repair of facilities (gov’t ex. 2 ¶ 14).  For some lines of the IGE for 1502000, including 
the trouble call lines, Mr. Hrenko used information from EJB’s historical performance, 
and, based on his own judgment, adjusted for the projected impacts of the differences 
between the EJB Contract and the WSBOS solicitation (id.; app. ex. 3 at 117-18).  As 
discussed in more detail below, Mr. Hrenko used certain of EJB’s historical 
performance data that was not provided to offerors in the solicitation.  In his 
preparation of the IGE for Annex 1502000 trouble calls, Mr. Hrenko utilized a total 
quantity of 19,395 trouble calls under ELIN 15AF and 3,153 IMP repairs under ELIN 
15AG, for a total quantity of 22,548 trouble calls and IMP repairs (gov’t ex. 2 ¶ 16).  
The data he provided for WSBOS solicitation attachment J-1502000-06 lists FY09–
FY11 trouble calls from the EJB contract (id.).  For his estimate of trouble calls (TC) 
in the IGE, Mr. Hrenko used the following factors: Emergency non-BEQ (Bachelor 
Enlisted Quarters or bachelor housing) at 4.8 hrs/TC, Emergency BEQ at 3.8 hrs/TC, 
Service non-BEQ at 6.6 hrs/TC, and Service BEQ at 5.0 hrs/TC (id. ¶ 17). 
 
 In preparing his estimate, Mr. Hrenko estimated how the changes to the 
requirements could impact the contractor’s effort related to trouble calls and IMP 
repairs (id.).  Mr. Hrenko estimated that all types of trouble calls would require a 
higher number of hours than historical values based on this assumed impact (id.).  As 
noted above, in developing the Annex 1502000 IGE for trouble calls, Mr. Hrenko 
estimated that each nonemergency, non-BEQ trouble call would require an average of 
6.6 labor hours (i.e., approximately double the average under the incumbent EJB 
Contract) because he assumed that the increase in liability limits (from a mix of $2,000 
and $5,000 to only $5,000) from the EJB contract to the new WSBOS contract would 
mean that the contractor would spend an increased amount of time performing trouble 
calls (because the contractor would be responsible for a greater amount of cost before 

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liability shifted to the government) (gov’t ex. 2 ¶ 18).1  The 6.6-hour factor was 
Mr. Hrenko’s projection as to what would, on average, be required to perform these 
non-emergency calls given the increase in liability limit (id.).  This estimation of 6.6 
hours per trouble call was higher than EJB’s weighted average hours per trouble call 
and higher than the average hours per trouble call that Mr. Hrenko had used in 
negotiating changes with EJB on its contract (id.).  In fact, Chugach’s experience in 
performing the contract was substantially below 6.6 labor hours per service call (R4, 
tab 10-1 ¶ 117). 
 
 Mr. Hrenko estimated the future quantity of trouble calls under the WSBOS 
contract by adjusting the historical quantities of service calls based on his personal 
judgment (id. ¶ 21).  For estimating the cost of materials associated with Annex 
1502000, Mr. Hrenko used his personal judgment to estimate that materials would 
generally be 30% of the direct labor cost (id. ¶ 23).  He applied the 30% to trouble call 
repairs, IMP repairs, and the facilities manager and data entry clerk (id.).  Mr. Hrenko 
also applied the material cost factor to labor elements that have limited to no 
associated material costs, causing the IGE to be higher than it otherwise would have 
been (id.).  The IGE for Annex 1502000 materials (approximately $4.5 million/year 
after sales tax) was conservative in comparison to Chugach’s actual recorded material 
costs during performance of the WSBOS contract of approximately $2.37 million in 
FY15 and $3.05 million in FY16 (app. supp. R4, tab 656 [native], Sheet: “ELIN-
BASE PERIOD FFP,” Cell N777 ($4,133,863.43 in Total Material Costs) and Cell 
O777 ($355,512.26 in Materials Sales Tax); app. supp. R4, tab 1657 at CSUP65940, 
CSUP65944).  On a percentage basis, Mr. Hrenko’s 30% estimate for 1502000 
materials (equates to an average of 27% due to not being applied to every labor dollar) 
was conservative compared to the approximately 18.5% that CFSI actually incurred 
for Annex 1502000 materials in FY15 and FY16, respectively.
2 
 
 
1 In his deposition, the government’s expert witness Mr. Schaeb testified that 
Mr. Hrenko could not explain how he came up with the 6.6 hour figure.  
Mr. Schaeb was of the opinion that the 6.6 hour figure was a mistake.  (App. ex. 
13 at 175-77) 
2  The estimate is supported by calculations performed on spreadsheets in the record 
(app. supp. R4, tab 656, Sheet:  “ELIN-BASE PERIOD FFP”, Cell N777 
($4,133,863.43 in Total Material Costs) and Cell O777 ($355,512.26 in 
Materials Sales Tax) divided by the Sum of Cells M18 to M730 ($16,587,842 
in Direct Labor Costs); app. supp. R4, tab 1657 at CSUP65940 (FY15 Annex 
1502000: $2.37M in Direct Materials divided by $12.8M in combined Direct 
Labor, Direct Burden and Direct Fringe is approximately 18.5%), CSUP65944 
(FY16 Annex 1502000: $3.05M in Direct Materials divided by $16.5M in 
combined Direct Labor, Direct Burden and Direct Fringe is approximately 
18.5%)). 

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12 
 
III.  CFSI’S PROPOSAL 
 
A.  General Background 
 
 At the time of the competition, Chugach had never previously been awarded a 
competitively bid base operations service (BOS) contract, but had performed BOS 
contracts awarded as small business set-aside/sole source awards (R4, tab 5-3 at 176-
77).  To develop CFSI’s proposal, Chugach assembled a proposal development team 
consisting primarily of employees in its business development group and assisted by 
employees of other Chugach corporate entities and third-party consultants (R4, tab 6-
47 at CFSI101373_4-7; R4, tab 5-3 at 9, 66).  Chugach’s Mr. Hammock authored a 
document known as the Capture Plan Worksheet, that included Mr. Hammock’s initial 
“price-to-win-target price,” which Mr. Hammock initially believed to be $300 million, 
with a “Recurring price” of $45 million per year (R4, tab 6-123 at CFSI98525_1; 
tab 5-3 at 107-09).  The term “price to win” refers to an overall bid price that has 
“reached a level that we [Chugach] feel[s] is competitive.”  To the extent Chugach’s 
“solution price” is not at a competitive level, Chugach “look[s] for ways [to] achieve 
reductions” (R4, tab 5-10 at 245). 
 
 One of the proposal strategies within Chugach’s concept of operations (also 
known as a “CONOPS”) was the “hub and spoke” concept, which Mr. Hammock 
described as Chugach “center[ing] most of our resources at Bangor and then have 
right-sized locations and then support them with push-out teams that would perform 
maybe periodic type of maintenance” (R4, tab 5-3 at 79-80; R4, tab 6-123 
at CFSI98525_4).  Chugach held a kick-off meeting with its proposal team to discuss 
the development of its proposal.  In a kick-off meeting PowerPoint presentation dated 
January 18, 2012, Chugach identified on a slide entitled “Capture Strategy/Win Plan 
Overview” a “Price to Win target” of $300 million, comprised of $40 million for 
recurring work and $20 million for non-recurring work.  The slide also provided: 
“Focus on reducing Recurring cost below $40M” noting that “FTE/Vehicles/IMP [are] 
heavy cost drivers.”  (R4, tab 6-124 at CFSI101373_38)  Ultimately, CFSI bid roughly 
$30 million per year for recurring work, or $10 million less than its initial price to win 
target (R4, tab 2-39.1 at GOV468687_39; tab 6-123 at CFSI98525_1; Tab 5-3 at 107-
09). 
 
 The kick-off meeting presentation also noted scope changes from the EJB 
contract including increases because “trouble calls [are] now only $5K liability (vs 
$2K and $5K)” and “New Integrated Maintenance Program (IMP) with $10K limit of 
liability for all prescribed items (vs $500 threshold for other general PM)” (R4, tab 6-
124 at CFSI10373_19). 
 
 During the development of CFSI’s proposal, Chugach’s business development 
personnel generally did not involve Chugach’s/CFSI’s operations and management 

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personnel (who would actually perform the work if awarded the contract) in 
discussions of cost, out of concern that they “can’t take the tough cuts” and are “scared 
to take a risk” (R4, tab 12-144.1 at CFSI104803_1). 
 
B.  Chugach’s Use of Historical Workload Data Provided in the WSBOS 
Solicitation 
 
 Chugach prepared estimates for the labor hours necessary to complete the 
various contract requirements based upon industry guides such as RS Means, subject 
matter experts within Chugach, and Chugach’s own experience with other BOS 
contracts (R4, tab 5-10 at 96-97).  For Annex 1502000 and 1502010 maintenance, 
Chugach attempted to create an RS Means-based estimate for all of the assets and 
facilities identified in the Annex 15 Attachments in Section J (R4, tab 6-54 
at CFSI7359_1).  Ultimately, a spreadsheet largely based on RS Means titled “West 
Sound WBS Pricing (4)” formed the “numerical starting point[]” for Chugach’s effort 
to develop its proposal for Annex 15 (R4, tab 12-247.1 (“West Sound WBS Pricing 
(4)” spreadsheet); R4, tab 7-37 at 7; R4, tab 10-1 at 26-31; gov’t ex. 4 ¶¶ 47-54).  
Upon developing labor hour estimates for the various specification items detailed in 
the solicitation, whether by himself or in conjunction with other members of the 
proposal development team, Mr. Watts recorded the estimates in a spreadsheet known 
as the “Work Breakdown Structure” (WBS) or workload model (R4, tab 6-49; R4, 
tab 5-10 at 141-42; R4, tab 5-3 at 36-37, 60, 231, 245-46; R4, tab 5-1 at 14-15).  The 
labor hour estimates in the WBS model were “a summary of CFSI’s estimated work 
hours by labor craft” for various PWS spec items (R4, tab 7-37 at 2).  Because staffing 
represents about 85 percent of CFSI’s cost of performing base operations services, 
Mr. Crosta relied on the labor hour estimates in the WBS to develop CFSI’s cost 
model (R4, tab 5-3 at 36-37, 152).  Mr. Crosta testified that the staffing estimated in 
the WBS, including “labor category, labor type and the full-time equivalent(s)” flowed 
directly into the cost model (R4, tab 5-1 at 12-13; R4, tab 7-37 at 5).  The cost model 
was then used to calculate the values (dollars, labor hours, and FTEs) presented in 
Chugach’s final revised price (R4, tab 7-37 at 1). 
 
C.  The “Option Year Modifier” 
 
 One of the elements that Mr. Watts included in the WBS was titled an “option 
year modifier” that modified the number of labor hours input into the WBS (R4, tab 6-
49 at Column Q).  The specific option year modifier used in the WBS varies by 
specification item, ranging from a modifier of 0% to a modifier of 112% (R4, tab 6-1 
at Column Q; tab 6-49 at Column Q).  The option year modifier applied to the total 
labor hours assumed for the base year in addition to the option years (R4, tab 5-7 
at 47).  Mr. Hammock testified that the option year modifier is synonymous with an 
“efficiency factor” (R4, tab 5-3 at 22-24; R4, tab 5-10 at 195-97).  He testified that 
Chugach typically applies an efficiency factor to staffing estimates developed for base 

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14 
 
operations services proposals (R4, tab 5-3 at 137).  According to Mr. Hammock, the 
efficiency factor represents Chugach’s business judgment about how much more 
efficiently it can perform the contract requirements compared to the “standard 
approach” assumed by common estimating resources such as RS Means (id.; R4, 
tab 5-10 at 89-90).  Mr. Hammock also testified, however, that, with respect to the 
WBS for the WSBOS contract, the option year modifier was applied not only against 
RS Means-based labor hour estimates but also against labor hour estimates based on 
Chugach’s past performance and labor hour estimates based on the judgment of 
Chugach’s in-house subject matter experts (R4, tab 5-3 at 138-39; R4, tab 5-10 at 96-
97).  Mr. Hammock, as Chugach’s corporate designee, testified that Chugach has no 
data, documentation, or other files that show how Mr. Watts (or anyone else) 
determined the specific option year modifier values in the WBS (R4, tab 5-10 at 92-
93).  Mr. Hammock also testified that Chugach expected to be able to perform the 
WSBOS contract relatively more efficiently because it would implement “[b]etter 
scheduling techniques, better management oversight, [and] better supervision and 
training” (id. at 146; 197). 
 
 Mr. Williamson, who was tasked with assisting Chugach’s internal review of 
Chugach’s losses in 2016, testified that he “just couldn’t make sense” of the WBS and 
that Mr. Watts “would talk in circles” (R4, tab 5-9 at 102-04).  Mr. Viramontes, the 
former transition manager who was hired back as a consultant to assist the review, 
testified that he “relentlessly chased [Mr. Watts], trying to just get some answers best 
that he had.  You know, he didn’t have a lot . . . .[W]e couldn’t get definitive answers 
about how he came up with the numbers” (R4, tab 5-6 at 75-77).  Mr. Hargis testified 
that, when he met with Mr. Watts to get an understanding of the WBS, Mr. Watts 
“provided some guidance as to his thought process [but it] really didn’t help us much, 
because the numbers are what the numbers are” (R4, tab 5-4 at 65-67).  Mr. Watts 
testified at his deposition that he had no knowledge about the purpose of an option 
year modifier, or how the option year modifier was derived (R4, tab 5-8 at 119-20). 
 
 Regardless of how the option year modifier values were determined, their 
overall effect on the WBS was to reduce the total recurring work labor hours from 
682,501.91 to 414,101.18 labor hours and full time equivalents (FTEs), for Chugach’s 
self-performed recurring work, from 363.10 FTEs to 220.37 FTEs (R4, tab 6-1 at Cells 
S7 and T7; tab 10-1 ¶ 54). Chugach’s FTE count prior to application of the option year 
modifier (363.10) is approximately the same number of FTEs that EJB performed with 
in FY 2010.  This figure was known to Chugach before it submitted its final proposal 
revision for the WSBOS contract in November 2013 (R4, tab 6-52 (email dated 
February 2, 2012 from Mr. Hammock, informing the proposal team that “as the WBS 
starts to flesh out we need to be well below the current staffing level . . . in FY 10, we 
saw that EJB had 364 employees plus 156 subcontract employees.”) R4, tab 6-124 
at CFSI101373_38 (noting for FY10 “EJB FTE count 364 + 156 Subs.”)). 
 

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D.  The Learning Curve 
 
 Chugach’s proposal also provided that it would reduce its total workforce by 
3% each year for each of the option years (R4, tab 2-39.7 at GOV212643_4).  If 
implemented as proposed, this “learning curve workforce reduction” would result in a 
staffing reduction of approximately 10.5% from the base year to the final option year.  
This is a reduction of an additional 23.15 (220.85 - 197.70) FTEs of Chugach’s labor, 
excluding subcontractors.  (Id.)  The 3% learning curve reduction was solely based on 
Chugach’s business judgment (R4, tab 5-10 at 25-26; 65-66).  Mr. Hargis testified 
at his deposition that the learning curve was “not realistic,” “very aggressive,” and “a 
flawed plan to begin with” (R4, tab 5-4 at 30-31, 76-77, 99-100, 288).  In June 2014, 
after Chugach was awarded the WSBOS contract but before it started performing, 
Mr. Hargis wrote in an internal Chugach email that the learning curve was “a great 
selling point but is BS from an Ops standpoint” (R4, tab 6-134 at CFSI132904_1; R4, 
tab 5-4 at 77). 
 
E.  Chugach’s Response to the Integrated Maintenance Program Requirement 
 
 With respect to the integrated maintenance program (IMP) requirement, 
Mr. Hammock testified that the requirement’s only impact to Chugach’s proposal was 
that it comprised one of the underlying assumptions of the learning curve—the IMP 
requirement did not otherwise impact Chugach’s staffing assumptions or proposal 
price, despite being a completely different approach to maintenance from the 
predecessor contract (R4, tab 5-10 at 13-19).  However, in Chugach’s Kick-Off 
Meeting the IMP was described as a “heavy cost driver[]” (R4, tab 6-124 
at CFSI101373_38).  Chugach recognized that failing to implement reliability centered 
maintenance (RCM) was resulting in performance of “very labor-intensive” and 
inefficient maintenance (R4, tab 5-7 at 89-91; R4, tab 6-73 at CFSI115660_1).  
Mr. Hammock himself described the transition from time-based PMs to RCM as one 
of the largest reductions to the WBS and implementing RCM would be one of the 
“most impactful” ways for Chugach to reduce its costs (R4, tab 6-128 
at CFSI110675_1). 
 
F.  Chugach’s Treatment of Trouble Calls 
 
 Chugach used the quantity of trouble calls for FY11 from the WSBOS 
solicitation to determine the expected volume or number of trouble calls (R4, tab 7-37 
at 6; R4, tab 10-1 ¶ 76).  Chugach additionally used its own historical data from 
Whidbey Island and Fallon to estimate the number of hours per trouble call (R4, tab 6-
13 at CFSI97123_1; R4, tab 5-10 at 96-99, 144, 151; R4, tab 10-1 ¶ 76).  Chugach did 
not specifically estimate the material costs for trouble calls, but instead relied upon a 
contract-wide global estimate of material costs as 13.2% of “unwrapped costs” (labor, 
vehicles/equip., and ODCs) (gov’t ex. 4 ¶ 13).  However, because Chugach applied an 

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option year modifier of 55% to its original estimated level of effort to perform trouble 
calls, the result was that Chugach assumed that it could perform more efficiently (i.e., 
using fewer hours per trouble call) than its own performance at Whidbey and Fallon 
(R4, tab 5-10 at 151-53, 197; gov’t ex. 4 ¶¶ 39-40). 
 
 Chugach’s employees recognized that the unlimited trouble calls in the WBOS 
solicitation would result in increased numbers of trouble calls compared to historical 
data.  Mr. Hargis testified that the change to unlimited trouble calls “incentivized” 
Navy customers to call in more trouble calls “because there’s no limit,” in contrast to 
the EJB contract, under which those customers “were disincentivized because they had 
to pay for” extra trouble calls (R4, tab 5-4 at 140-46).  Mr. Viramontes testified that an 
unlimited number of trouble calls makes the WSBOS contract more risky than the EJB 
contract (R4, tab 5-7 at 75-76).  With respect to the “unlimited” trouble calls 
contemplated by the WSBOS solicitation, Mr. Hammock testified that Chugach 
specifically identified the risk of an increase in workload “much greater than 
historical” as a result of the change.  Rather than model that risk as an increased 
estimate for trouble call hours, Chugach opted to account for that risk in the profit 
markup it would seek under its fee.  (R4, tab 5-10 at 31-33; R4, tab 12-232.1 
at CFSI107046_1; R4, tab 12-232.2 [native] at Sheet: Summary, Cells A22, C22 
(determining after the Government provided clarification that trouble calls were 
unlimited that there was no cost impact))  With respect to the shorter response times to 
respond to trouble calls, Mr. Viramontes testified that shorter response times will 
generally increase the number of FTEs needed to handle a given number of trouble 
calls (R4, tab 5-6 at 190-91; R4, tab 5-7 at 40-41).  With respect to the $5,000 
limitation of liability for trouble calls, which was different from the EJB Contract’s 
two-tier $2,000 and $5,000 limitations of liability, (R4, tab 6-124 at CFSI101373_19), 
Chugach’s 30(b)(6) witness testified that the $5,000 limitation of liability on trouble 
calls had no impact on Chugach’s proposal (R4, tab 5-10 at 55-56).  However, 
Mr. Haunton testified that the increase in liability limits from the EJB contract to the 
WSBOS contract was significant: “Well, any time you double the cost . . . it’s 
significant going from . . . a liability limit of $5,000 per work order and, for a utility 
piece of equipment, to 10,000, that’s significant” (R4, tab 5-5 at 95).  Mr. Haunton 
testified that higher liability limits would, at least “in theory,” cause the FTEs for 
recurring work to be higher (id. at 96-97; R4, tab 6-112 at CFSI239913_23 (May 16, 
2016, Chugach presentation stating that the change in liability limits has “major cost 
implications.”)).  Mr. Crosta testified that the higher the liability limit the higher the 
risk to a contractor (R4, tab 5-1 at 78-79; see also R4, tab 6-12 at CFSI98065_1). 
 

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IV.  THE SOURCE SELECTION 
 
A.  Initial Proposals 
 
 On or before the February 28, 2012 proposal deadline, CFSI and eight other 
offerors submitted proposals in response to the RFP (compl. ¶ 36).  One of the other 
offerors was West Sound Services Group (WSSG), which was a Limited Liability 
Company formed between J&J Worldwide Services and EMCOR Government 
Services, which had been two of the three entities that formed EJB, the incumbent 
contractor performing the EJB contract (R4, tab 2-35.16 at GOV549288_1; EJB 
Facilities Servs., 15-1 BCA ¶ 35,867 at 175,350 n.1).  WSSG represented that, through 
its experience with EJB it possessed the “institutional knowledge that constitutes the 
baseline for our technical approach” (R4, tab 2-35.16 at GOV549288_1).  One of the 
other offerors was LINC Government Services LLC (LGS), which was the successor 
entity to BMAR & Associates, the third entity that comprised EJB (R4, tab 2-7.4  
at GOV544202_4; EJB Facilities Servs., 15-1 BCA ¶ 35,867 at 175,350 n.1).  One of 
the other offerors was IAP-HILL, LLC (IAP), a joint venture managed by IAP 
Worldwide Services, Inc (R4, tab 2-3.15 at GOV543992_1). Through its subsidiary 
IAP World Services, Inc., IAP Worldwide Services had performed the base operating 
services contract that preceded the EJB contract (id. at GOV543992_6-10).  Moreover, 
IAP Worldwide Services’ contract was the result of a successful rebid, meaning that 
IAP Worldwide Services had actually performed base operations services at West 
Sound for nearly 15 years prior to the EJB contract (see id. at GOV543992_9). 
 
 Chugach’s proposal dated February 28, 2012, states that its bid is based on 
achieving significant efficiencies and cost savings throughout the scope of the 
contract. Under “Factor 2 – Technical Approach/Method,” the proposal states that 
Chugach would perform the WSBOS contract with a “lean workforce” by using a 
“‘hub and spoke’ concept of operations” and, of Chugach’s plan to further reduce its 
workforce by 3% each year, asserted that Chugach had “achieved similar efficiencies” 
on similar contracts (R4, tab 2-4.7 at GOV209039_30)  Under “Factor 3, Management 
Approach/Capability of Key Personnel,” Chugach’s proposal asserts that it expects to 
achieve efficiencies from its “hub and spoke” concept of operations, and its adoption 
of its RCM program in conjunction with Nelson Engineering (id. at GOV209039_75). 
 
 Chugach’s proposal also asserts that “Chugach will enhance our workforce 
flexibility through cross-utilization” and that cross-training and cross-utilization of 
employees are “key components for gaining maximum efficiency from a lean 
workforce . . .” (id. at GOV209039_81). 
 
 Chugach’s proposal assumed a staffing level of 322.85 FTEs (id. 
at GOV209039_45).  Chugach’s estimate of approximately 323 FTEs was not an 
outlier from the other offerors.  Three offerors estimated fewer FTEs and five offerors 

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estimated more FTEs (R4, tab 2-5.16 at GOV544729_4 (WSSG, proposing 293 FTEs); 
R4, tab 2-3.16 at GOV544015_21 (IAP-HILL, proposing 303 FTEs); R4, tab 2-6.11 
at GOV1023145_16 (G4S, proposing 306 FTEs); R4, tab 2-4.7 at GOV209039_45 
(Chugach, proposing 323 FTEs); R4, tab 2-7.4 at GOV544202_47 (LGS, proposing 
324 FTEs); R4, tab 2-2.14 [native] (Exelis, proposing 324 FTEs); R4, tab 2-1.4 
at GOV1022936_38 (Fluor, proposing 352 FTEs); R4, tab 2-8.5 at GOV1023289_17 
(NWSS, proposing 396 FTEs); R4, tab 2-9.7 at GOV1023680_45 (Star3, proposing 
428 FTEs)).  Of the three offerors with prior experience at West Sound, WSSG (293 
FTE) and IAP (303 FTE) both estimated fewer FTEs than Chugach, and LGS (324) 
estimated 1 more FTE than Chugach (R4, tab 2-5.16 at GOV544729_4; R4, tab 2-3.16 
at GOV544015_21; R4, tab 2-7.4 at GOV544202_47). 
 
 NAVFAC did not evaluate the offerors’ original proposals because, on July 24, 
2012, it issued Amendment 0011 which, among other things, made various 
adjustments to the PWS (R4, tab 1-12.1 at GOV14201; R4, tab 6-62 at E1; R4, tab 4-
44 at GOV29294). 
 
B.  The First Proposal Revisions 
 
 On or before August 9, 2012, Chugach submitted a first proposal revision (R4, 
tab 4-44 at GOV29294).  Chugach’s first proposal revision estimated a staffing level 
of 329.04 FTEs, an increase of 6.19 FTEs over its original proposal (see compl. ¶ 40).  
Once again, Chugach’s staffing proposal was not an outlier, with five offerors 
estimating fewer FTEs and three offerors estimating more FTEs (R4, tab 2-14.9 
at GOV542646_4 (WSSG, proposing 290 FTEs); R4, tab 2-15.12 at GOV542048_16 
(G4S, proposing 307 FTEs); R4, tab 2-12.12, GOV1022477_21 (IAP-HILL, proposing 
308 FTEs); R4, tab 2-11.14, [native] (Exelis, proposing 323 FTEs); R4, tab 2-16.3 
at GOV936647_2 (LGS, proposing 322 FTEs); R4, tab 2-13.9 at GOV208762_45 
(Chugach, proposing 329 FTEs); R4, tab 2-10.4 at GOV541908_4 (Fluor, proposing 
359 FTEs); R4, tab 2-17.7 at GOV542492_10 (NWSS, proposing 398 FTEs); R4, 
tab 2-18.6 at GOV936713_46 (Star3, proposing 434 FTEs)).  Of the three offerors 
with prior experience at West Sound, all three estimated fewer FTEs than Chugach, 
with WSSG estimating 290 FTEs, IAP estimating 308 FTEs, and LGS estimating 322 
FTEs (R4, tab 2-14.9 at GOV542646_4 ; R4, tab 2-12.12, GOV1022477_21; R4, 
tab 2-16.3 at GOV936647_2). 
 
 In a memorandum dated August 15, 2012, NAVFAC’s Technical Team 
documented its review of the first proposal revisions (R4, tab 2-42.2 at GOV474771).  
Regarding the FTE’s estimated by Chugach’s First Proposal Revision, the Technical 
Team’s report states: 
 
The hours proposed appear to be underestimated in annex 
020000, 150000, 16000, and 180000.  This is also 

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represented in the number of FTE’s proposed in these 
annexes.  The estimated level of effort in hours is not 
consistent or comparable with that estimated by the 
Government when considering the Key Personnel and 
administrative functions in Annex 020000 and the differing 
service call response times and IMP requirements of 
Annex 150000.  Though little has changed with the 
requirements of Annex 180000, the man-hour estimate 
falls short of current Independent Government Estimate 
(IGE) figures based on the current workload. 
 
20000- FTE’s appear low in comparison to the IGE; the 
J.M-5 does not require that activities in annex 2 be 
separately listed so it cannot be determined what activity is 
understaffed. The proposal is 15 FTE’s less than the IGE. 
 
150000- FTE’s appear significantly low in trouble calls 
and maintenance. This demonstrates a misunderstanding of 
the staffing levels required to perform “no limit” trouble 
calls and meeting the requirements of IMP.  The proposal 
is 75 FTE’s below the IGE. 
 
160000- FTE’s appear low in electrical utility operation 
requirements.  The proposal appears to not consider the 
number of FTE’s required to perform these operations. 
 
180000- FTE’s appear low in hazardous waste 
management services.  The proposal is 6 FTE’s below the 
IGE. 
 
This is also concerning because one of Chugach’s 
proposed objectives is to realize a “learning curve” and 
reduce FTE’s 3% over the life of the contract through 
efficiency. 
 
Staffing in all other annexes was approximately equal to 
the IGE. 
 
(Id. at GOV474785-86) 
 
 The Technical Team report also states, of Chugach’s first proposal revision, 
that “[a]ll annexes demonstrate an understanding of the requirements and describe a 
method and approach to accomplish RFP requirements” (id. at GOV474786).  Of 

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Chugach’s representation that it would partner with a third-party engineering firm 
(Nelson Engineering) to develop and implement the required IMP program, the 
Technical Team report states that “[t]his was viewed as a strength by the board due to 
the importance of an IMP program that is continually monitored and adjusted to 
realize a balance of performance and reliability” (id. at GOV47487). 
 
 As a result of the Technical Team’s finding that Chugach’s estimated FTEs for 
Annexes 020000, 160000, and 180000 appeared “low,” and that Chugach’s estimated 
FTEs for Annex 150000 appeared “significantly low,” the Technical Team concluded 
that Chugach’s First Proposal Revision had a “significant weakness” related to staffing 
levels (id. at GOV474785-86, 88). 
 
 The Technical Team’s findings regarding whether an offeror’s estimated FTEs 
were “low,” “high,” “significantly low,” or “significantly high” were based on the 
difference between the offeror’s estimated FTEs and the FTEs estimated by the IGE 
(id. at GOV474785-86; app. ex. 3 at 132-33, 141, 143).  The technical team assigned a 
“significant weakness” related to staffing levels to eight of the nine offerors (R4, tab 2-
42.2 at GOV474788, GOV474813, GOV474839, GOV474863, GOV474888, 
GOV474915, GOV474940, GOV474989). 
 
 In a report dated September 11, 2012, the Source Selection Advisory Council 
(SSAC) documented its review of the reports prepared by the Technical Team and 
Price Team and provided its recommendations to the Source Selection Authority 
(SSA) (R4, tab 2-42.4 at GOV1722534).  With respect to the staffing estimated by the 
offerors, the SSAC report states: 
 
One of the areas of concern is the number of offerors 
whose proposed staffing for recurring work was 
significantly less than the 396.64 FTEs estimated by the 
Government.  WSSG, ICHS, and LGS proposed 246.84, 
283.21, and 291.63, respectively, and are approximately 
105 to 150 less than the GE.  G4S, ESC, CFSI, and FSS 
proposed 307.2, 324.74, 328.91, and 358.50 FTEs, 
respectively.  Although closer to the GE, the proposed 
FTEs ranged from approximately 38 to 89 less than the 
GE.  With 398.27 and 400.87 FTEs proposed, NWSS and 
Star 3, respectively, were comparable to the GE; they are 
also the highest priced. 
 
The variance between the FTE count between most of the 
offerors and the GE can be attributed [to] several things.  
The GE could be in error, or offerors are attempting to 
position themselves favorably for contract award.  It is also 

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21 
 
possible that a lower FTE count can be the result of 
improved, more efficient work practices or methodologies 
and an increased use of technology.  However, the primary 
focus of this contract is the provision of public works 
maintenance services which are traditionally labor 
intensive.  The wide range of FTEs is an indicator that 
offerors should be prompted to review the performance 
work statement to ensure their proposals include the level 
of effort required. 
 
Both the Technical and Price team reviewed proposed 
FTEs and developed proposed questions to support their 
concerns.  The Technical Team’s review was based on a 
comparison of the offerors’ proposed staffing compared to 
the GE.  The price report utilized a standard deviation 
analysis method that is more detailed and comprehensive 
than the Technical Team’s approach that included all 
offerors’ and the Government’s FTE estimates.  Both 
teams considered the proposed FTEs by annex for 
recurring work.  Despite the apparent duplication of effort, 
both teams focused on separate issues.  The Technical 
Team’s proposed questions are focused on specific areas 
within an annex that appear under- or over-staffed while 
the price report approaches FTEs from a price perspective.  
The FTE concerns expressed by both teams are valid, and 
it is recommended that the questions prepared by each 
team be presented to the offerors during discussions. 
 
(Id. at GOV1722546-47) 
 
 The SSAC report recommended that all nine offerors remain in the competitive 
range and be provided an opportunity to revise their proposals.  With respect to CFSI, 
the report states: 
 
Offering the lowest price and rated Acceptable overall, 
Chugach Federal Solutions appears to be a strong 
candidate for contract award.  Discussions will permit the 
offeror to potentially increase its technical weaknesses in 
Factors 2 and 3.  Discussions will also provide the offeror 
an opportunity to review its proposed 328.91 FTEs for 
recurring work to ensure its proposed workforce can 
comply with the RFP requirements. 
 

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(Id. at GOV1722547)  In a memorandum dated September 26, 2012, Steve Shapro, the 
designated Source Selection Authority (SSA), documented his agreement with SSAC’s 
recommendation to enter discussions with all nine offerors.  The SSA also documented 
his comments about the difference between the IGE and the majority of the First 
Proposal Revisions: 
 
As discussed in reference (a), the IGE price and FTEs are 
significantly higher than the price and FTEs on the 
majority of the proposals.  []  As discussed at FAR 15.404-
1, Proposal Analysis Techniques, the RFP states that price 
analysis will be performed by a number of techniques 
including the comparison of proposals to the IGE.  Given 
the significant variation between the IGE and proposed 
prices and FTEs, the IGE should be validated by the 
Government team that developed it.  If necessary, the IGE 
should be revised prior to completing the price evaluation 
of proposals received following discussions.  The 
validation of the IGE and the rationale for any revisions 
should be documented in the Price Evaluation Team’s final 
report. 
 
(App. supp. R4, tab 853 at CSUP29972-73) 
 
 David Williams, the NAVFAC employee with overall responsibility for 
compiling the IGE, subsequently undertook the requested “validation” of the IGE 
(app. supp. R4, tab 1062 at CSUP38470).  On November 7, 2012, NAVFAC issued an 
evaluation notice to Chugach regarding Chugach’s first proposal revision (R4, tab 2-
42.5 at GOV474578).  The evaluation notice sent to Chugach included eighteen 
discussion questions directed at its price proposal (id. at GOV474583-84) and five 
discussion questions directed at its nonprice proposal (id. at GOV474585).  Among the 
questions, regarding Factor 2, Technical Approach/Methods, the evaluation notice 
asked 
 
After reviewing the Performance Work Statement for 
Annexes 020000, 150000, and 180000, please ensure your 
hour estimates and FTE staffing for these annexes has 
adequately addressed no limitation to trouble call 
quantities, the increased requirements of the RFP (over 
historical) maintenance program including IMP, and 
environmental services specifically hazardous waste 
management. 
(Id.) 
 

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C.  Second Proposal Revisions 
 
 Chugach and the other eight offerors submitted second proposal revisions on or 
about November 20, 2012 (R4, tab 2-43.1 at GOV475007).  Chugach’s second 
proposal revision estimated a staffing level of approximately 318 FTEs (R4, tab 2-22.7 
at GOV1602610_16 (Chugach, proposing 318 FTEs)).  Once again, Chugach’s 
estimate of approximately 318 FTEs was not an outlier from the other offerors.  Three 
offerors estimated fewer FTEs and five offerors estimated more FTEs (R4, tab 2-21.12 
at GOV473763_4 (IAP-HILL, proposing 254 FTEs); R4, tab 2-23.11 
at GOV1598994_4 (WSSG, proposing 290 FTEs); R4, tab 2-24.15 at GOV936827_8 
(G4S, proposing 309 FTEs); R4, tab 2-20.17 [native] (Exelis, proposing 332 FTEs); 
R4, tab 2-25.4 at GOV936873_32 (LGS, proposing 359 FTEs); R4, tab 2-19.6 [native] 
(Fluor, proposing 371 FTEs); R4, tab 2-26.6 at GOV1723728_5 (NWSS, proposing 
385 FTEs); app. supp. R4, tab 936 at CSUP36316 (Star3, proposing 423 FTEs)).  Of 
the three offerors with prior experience at West Sound, IAP (254 FTEs) and WSSG 
(290 FTEs) estimated fewer FTEs and LGS (359 FTEs) estimated more FTEs (R4, 
tab 2-21.12 at GOV473763_4; R4, tab 2-23.11 at GOV1598994_4; R4, tab 2-25.4 
at GOV936873_32). 
 
 In a report dated December 5, 2012 (R4, tab 2-43.2), the Technical Team 
documented its review of Chugach’s second proposal revision, including its responses 
to NAVFAC’s November 7, 2012 evaluation notice (id. at GOV475164-89).  As part 
of its analysis, the price team performed a “statistical” analysis that attempted to 
identify bid prices for specific annexes as being high and low (R4, tab 2-42.1 
at GOV474675).  Chugach contends that the Navy’s analysis was flawed, because the 
government assumed a normal distribution and then eliminated any prices that it 
considered to be “outliers” and then recalculated the mean and standard deviation 
(id.).
3  To the extent that the government eliminated outliers that it considered to be 
“too high” the effect would be to reduce the mean and the standard deviation.  
However, the government contends, in essence, that it was simply using the analysis as 
a tool to identify prices that were high or low relative to the other offerors (that is, 
descriptive statistics rather than inferential statistics)4 (app. ex. 7 at 68-70; R4, tab 2-
42.1 at GOV474625).  Chugach additionally contends that the standard deviations, 
even after the elimination of outliers and recalculation, were too large to function as 
 
3 A standard deviation is measure of the variation or dispersion of a data set.  A data 
set with a low standard deviation would have data points tightly clustered 
around the mean (mathematical average), while a data set with a large standard 
deviation would have data points with a greater spread. 
4 As an example, house prices do not follow a normal distribution.  Descriptive 
statistics can tell whether the price of a particular house is high or low relative 
to other houses, but cannot estimate the probability that a house will be worth a 
certain price.   

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24 
 
reliable tools (R4, tab 6-171 ¶ 105).  However, to the extent the standard deviations 
were too large to function as reliable tools, this would discredit Chugach’s superior 
knowledge argument because the price team would not have known, from the standard 
deviation that Chugach’s proposal prices were too high, or too low. 
 
 Regarding CFSI’s response to the evaluation notice’s discussion question 
regarding Factor 2 – Technical Approach/Methods, the Technical Team report states: 
 
DISCUSSION QUESTION: After reviewing the 
Performance Work Statement for Annexes 020000, 
150000, and 180000, please ensure your hour estimates 
and FTE staffing for these annexes has adequately 
addressed no limitation to trouble call quantities, the 
increased requirements of the RFP (over historical) 
maintenance program including IMP, and environmental 
services specifically hazardous waste management. 
 
RESPONSE: Chugach clarified that a review of the PWS 
was conducted and a revised J.M-5 was provided.  The 
revised J.M-5 resulted in an overall loss of 12 FTE’s across 
all annexes with no changes to annex 020000 and 180000.  
Annex150000 and 160000 were reduced by approximately 
5 FTE’s and 6 FTE’s respectively. 
 
EVALUATION RESULTS OF RESPONSE: The board 
concluded that the contractor response and revised J.M-5 
did not adequately address the Government[’]s concern; 
however the revised proposal acknowledged that Chugach 
determined the staffing levels were sufficient to 
accomplish the requirements of the RFP.  The significant 
weakness remains. 
 
(R4, tab 2-43.2 at GOV475171-72) 
 
 In a report dated December 10, 2012, the Price Team documented its review of 
the offerors’ second proposal revisions (R4, tab 2-43.1 at GOV475007, GOV475156).  
In a memorandum dated December 19, 2012, David Williams documented his IGE 
“validation” (app. supp. R4, tab 1062 at CSUP38470; app. supp. R4, tab 1062.01 
at CSUP38472-75).
5  Mr. Williams concluded that the IGE was a “reasonable” 
estimate of the cost to fully and satisfactorily perform the requirements of the WSBOS 
contract; however, he observed that the IGE was “conservative” compared to what 
 
5 The IGE validation memorandum is dated 9 days after the price team report. 

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might be proposed by contractors in a competitive bidding environment (app. supp. 
R4, tab 1062.01 at CSUP38473-74).  In its report regarding the second proposal 
revisions, the SSAC noted that the Technical Team “relied heavily upon the IGE when 
evaluating proposed FTEs” (R4, tab 2-43.4 at GOV1202881).  Given Mr. Williams’ 
conclusion that the IGE represented a conservative estimate, the SSAC concluded that 
the IGE could be used as a benchmark for “a maximum staffing number that should 
not be exceeded; however, it cannot offer assistance in determining the minimum 
FTEs required” (id.).  Accordingly, the SSAC compared the offerors to each other 
rather than the IGE (id.).  Based on that comparison, the SSAC report stated that “the 
[SSAC] does not believe that the FTE significant weaknesses noted by the TT in 
Factor 2 for CFSI, G4SGS, LGS, and ESC are appropriate” (id. at GOV1202882).  
The SSAC report recommended removal of the significant weakness findings (id.).  In 
addition, the SSAC report recommended eliminating five of the offerors from the 
competitive range: LGS, WSSG, G4SGS, NWSS, and Star3 (id. at GOV1202883-85). 
 
 In a memorandum dated January 8, 2013, the Source Selection Authority 
(SSA), Steve Shapro, documented his decision to eliminate five of the nine offerors—
G4SGS, LGS, NWSS, Star3, and WSSG—from the competitive range (app. supp. R4, 
tab 1068 at CSUP38498-501).  Remaining in the competitive range were CFSI, ESC, 
FFS, and IAP (id. at CSUP38501-02). 
 
 Regarding the IGE, the SSA’s memorandum states: 
 
During evaluation of initial proposals, it was noted that the 
IGE price and Full Time Equivalent staff (FTE) were 
significantly higher than the price and FTEs on most of the 
proposals.  As a result, the Government team that 
developed the IGE was requested to validate it.  The 
Government team verified the calculations, reviewed the 
estimates for realism, and confirmed underlying 
assumptions of the IGE.   
 
The Government determined the IGE by calculating the 
efforts and resources required to perform each annex 
independently. The individual annex estimates were then 
aggregated to develop an overall IGE.  The Government 
took minimal risks in developing the IGE and did not 
attempt to incorporate resource leveling across the 
annexes.  Conversely, the contractors’ price and FTE 
estimates most certainly include the cross utilization of 
personnel based on business decisions that reflect tradeoffs 
between risks and costs.  This difference in approach is 
essential as it explains why there is such a difference 

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26 
 
between the “theory” used by the Government to develop 
its staffing estimate when compared to the offerors’ 
practical and realistic approach of reallocating staffing 
resources to meet performance needs.  As a result of the 
Government’s conservative methodology, the IGE is at the 
high end of the price and FTE spectrum.  A review of the 
Price Report and SSAC reports indicate that the source 
selection team was cognizant of this information and 
addressed appropriately it [sic] in their analysis of the 
proposals. 
 
(Id. at CSUP38498) 
 
 Regarding Chugach’s second proposal revision, the SSA’s memorandum states: 
CFSI: CFSI offers a strong technical proposal and is rated 
Good overall.  Technically, this firm is ranked fourth and 
offers the lowest price.  At this stage of the competition, 
considering the technical factors and price, CFSI’s 
proposal is the most competitive for award. 
 
(Id. at CSUP38501) 
 
 On January 23, 2013, the Navy informed WSSG that it had been eliminated 
from the competitive range (app. supp. R4, tab 1083.03 at CSUP38613; West Sound 
Services Group, LLC, B-406583.2, B-406583.3, 2013 CPD ¶ 276 (Comp. Gen. Jul. 3, 
2013)).  Following an agency-level protest (R4, tab 8-30 at GOV1708526_1-2), 
WSSG protested the Navy’s decision to the GAO on March 25, 2013 (id.).  On July 3, 
2013, GAO issued its decision sustaining the protest and recommending that WSSG be 
added back into the competitive range (R4, tab 8-32 at GOV1709748_1-22). 
 
D.  Third Proposal Revisions 
 
 On or about February 1, 2013, after WSSG had been excluded from 
competition but before the resulting protest had been resolved, Chugach, ESC, FFS, 
and IAP, the four offerors remaining in the competitive range, submitted third proposal 
revisions (R4, tab 2-27.2 at GOV548079_1; R4, tab 2-28.3 at GOV1599142_1; R4, tab 
2-29.1 at GOV548591_1; R4, tab 2-30.3 at GOV212713_1).  Chugach’s third proposal 
revision estimated a staffing level of 288 FTEs (R4, tab 2-30.6 [native], Cell U73).  
Chugach’s estimate of approximately 288 FTEs was not an outlier from the other 
offerors.  IAP, the remaining offeror with prior experience at West Sound, estimated 
272 FTEs (R4, tab 2-29.12 J.M-1 Additional Pricing Info [native], Cell U73).  FFS and 
ESC estimated 342 and 327 FTEs, respectively (R4, tab 2-27.4, J.M-1 Additional 

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Pricing Info [native], Cell U73; R4, tab 2-28.9, J.M-1 Additional Pricing Info, Cell 
T73). 
 
 On July 10, 2013, after reinstating WSSG and reopening discussions in 
response to GAO’s decision in B-406583, the government issued an evaluation notice 
to Chugach (R4, tab 2-44.4 at GOV474548).  The evaluation notice included four 
discussion questions, including the following: 
 
1. Summary of Recurring Work FTEs Findings. 
Applies to both the price and non-price proposals.  []  
While your overall recurring work FTEs are within an 
acceptable range, your recurring work FTEs for specific 
annexes 0401060, 1501000, 1502000, and 1502010 appear 
low, and your FTEs for 1503020, 1503030, 1600000, 
1602000, 1603000, 1605000, and 1607000 appear high.  
Please review and amend or confirm your FTEs for each 
listed annex as required. 
 
(Id. at GOV474553) 
 
E.  Fourth Proposal Revisions 
 
 Chugach’s fourth proposal revision, dated July 25, 2013, estimated 
approximately 292 FTEs (R4, tab 2-34.7 at GOV548623_7).  Chugach’s estimate of 
approximately 292 FTEs was not an outlier from the other offerors.  IAP, which had 
prior experience at West Sound, also estimated approximately 292 FTEs (app. supp. 
R4, tab 1201.02 at CSUP41460 (IAP-HILL, proposing 292 FTEs); R4, tab 2-34.7 
at GOV548623_7 (Chugach, proposing 292 FTEs); R4, tab 2-35.19 at GOV549313_4 
(WSSG, proposing 295 FTEs); R4, tab 2-31.6 at GOV1057084_16 (Fluor, proposing 
298 FTEs); R4, tab 2-32.14 [native] (Exelis, proposing 336 FTEs)).  WSSG, 
comprised of two of the three joint venturers that had performed the EJB Contract, 
estimated approximately 295 FTEs (R4, tab 2-35.19 at GOV549313_4).  Flour and 
Exelis estimated approximately 298 and 336 FTEs, respectively (R4, tab 2-31.6 
at GOV1057084_16; R4, tab 2-32.14 [native]).  In a memorandum dated July 31, 
2013, the Price Team documented its evaluation of the Fourth Proposal Revisions (R4, 
tab 2-45.1 at GOV475476, GOV475511).  In a memorandum dated August 8, 2013, 
the Technical Team documented its evaluation of the fourth proposal revisions and 
ranked Chugach’s fourth proposal revision second with a technical rating of “Good” 
(R4, tab 2-45.2 at GOV475512-13).  The Technical Team report summarizes the 
strengths and weaknesses of Chugach’s fourth proposal revision as pertains to Factor 
2, Technical Approach/Methods, as follows: 
 
Strengths: 

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• Contract Security Manager and HVAC/R Supervisor 
offers significant experience. 
• Third party engineering partner will be utilized to 
develop and continuously improve IMP program. 
• Technology based metric that defines activities 
performed to equipment under IMP. 
 
Weaknesses: None noted 
 
Significant Weaknesses: 
• Despite discussions, new electrical supervisor proposed 
lacks NERC Certification and does not meet RFP 
requirements. 
• [sic] 
Deficiencies: None noted 
 
(Id. at GOV475528)  In a memorandum dated September 12, 2013, the SSA 
documented his decision to end discussions and request final proposal revisions from 
the five offerors in the competitive range: Chugach, ESC, FFS, IAP, and WSSG (R4, 
tab 2-45.5 at GOV475443, GOV475446).  With respect to the IGE, the SSA 
memorandum states: 
 
During evaluation of initial proposals, it was noted that the 
IGE price was significantly higher than the price on most 
of the proposals.  As a result, the Government team that 
developed the IGE was requested to validate it.  The 
Government team verified the calculations, reviewed the 
estimates for realism, and confirmed underlying 
assumptions of the IGE. 
 
The Government determined the IGE by calculating the 
efforts and resources required to perform each annex 
independently.  The individual annex estimates were then 
aggregated to develop an overall IGE.  The Government 
took minimal risks in developing the IGE and did not 
attempt to incorporate resource leveling across the 
annexes.  Conversely, the contractors’ price most certainly 
includes the cross utilization of personnel based on 
business decisions that reflect tradeoffs between risks and 
costs.  This difference in approach is essential as it 
explains why there is such a difference between the 
“theory” used by the Government to develop its staffing 
estimate when compared to the offerors’ practical and 

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29 
 
realistic approach of reallocating costs and staffing 
resources to meet performance needs.  As a result of the 
Government’s conservative methodology, the IGE is at the 
high end of the price spectrum.  A review of the Price 
Report and SSAC reports indicate that the source selection 
team was cognizant of this information and addressed it 
appropriately in their analysis of the proposals. 
 
(Id. at GOV475445) 
 
 Regarding the SSA’s decision to end discussions and request final proposal 
revisions, the SSA memorandum states: 
 
4. COMPETITIVE RANGE DECISION, ENDING 
DISCUSSIONS AND REQUESTING FINAL 
PROPOSAL REVISIONS 
Based on the Navy’s evaluation of revised proposals 
following the last round of discussions, all five offerors 
should remain in the competitive range.  All firms are rated 
Good overall technically, and it is reasonable to assume the 
$36,892,887.52 or 13.03% variance between the lowest 
and highest priced offerors (CFSI and ESC, respectively) 
will decrease with the final proposals.   
 
As discussed at FAR 15.307, at the conclusion of 
discussions, each offeror remaining in the competitive 
range shall be given an opportunity to submit a final 
proposal revision. Accordingly, discussions should be 
ended and final proposal revisions should be requested 
from the five offerors in the competitive range: CFSI, ESC, 
FFS, ICHS and WSSG. 
 
A best value ranking of the firms will not be conducted 
until after receipt of final proposal revisions. 
 
(Id. at GOV475446) 
 
F.  Final Proposal Revisions 
 
 Chugach’s Final Proposal Revision JM-5 reflected an estimate of 
approximately 311 FTEs (R4, tab 2-39.7 at GOV00212643_13 (Chugach, proposing 
311 FTEs); gov’t ex. 11 at 6). Chugach’s final price proposal for FY15 Recurring was 
$31,613,147 (R4, tab 2-39.1 at GOV468687_39).  Chugach’s estimate of 

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approximately 311 FTEs was not an outlier from the other offerors.  Of the five 
offerors remaining, three estimated fewer FTEs than Chugach, including IAP (284 
FTEs), which had prior experience at West Sound, and WSSG (289 FTEs), which was 
comprised of 2 of the 3 joint venturers that had performed the EJB Contract (R4, tab 2-
38.14 at GOV547785_4 (IAP-Hill, proposing 284 FTEs); R4, tab 2-40.13 
at GOV547893_4 (WSSG, proposing 289 FTEs); R4, tab 2-36.5 [native] (Fluor, 
proposing 298 FTEs); R4, tab 2-37.10 [native] (Exelis, proposing 336 FTEs); gov’t ex. 
11 at 6). 
 
 In a report dated December 4, 2013, the Technical Team documented its review 
of final proposal revisions (R4, tab 2-46.2 at GOV475707).  Regarding Chugach’s 
final proposal revision, the Technical Team report states: 
 
Chugach was ranked second; their proposal had a technical 
rating of Good.  The factor ratings are as follows; Factors 
1, Corporate Experience, Factor 2, Technical 
Approach/Methods and 3, Management 
Approach/Capability of Key Personnel, Factor 6, Small 
Business Utilization were determined to be Good.  Factor 
5, Safety was rated Outstanding.  The TT felt that the 
Technical Approach/Methods was a strength over that of 
the remaining offerors due to the qualifications of a few 
key personnel in Factor 2 exceeding RFP requirements.  
Other noted strengths proposed were a third party partner 
to develop and continuously improve the IMP program as 
well as evaluate program effectiveness.  The FTE’s 
proposed by Chugach are second closest when compared 
to the IGE.  The remaining significant weakness in Factor 
2 was the Electrical Supervisor not being compliant with 
NERC certification. 
 
(Id. at GOV475710) 
 
 In a memorandum dated January 10, 2014, the SSAC Chairperson, Audrey 
Fitzgerald, documented the SSAC’s evaluation of the Technical Team’s, Price Team’s, 
and SSEB’s supplemental findings and recommendation of which proposal offered the 
best value to the government (R4, tab 2-46.4 at GOV1722627, GOV1722629).  The 
SSAC found that the Price Team “conducted a reasonable evaluation of the offerors’ 
final proposals in accordance with the RFP” and accepted the Price Team’s overall 
findings (id.).  The SSAC further noted that the IGE was not used in the price analysis 
because “the proposed prices reflect the current market conditions and therefore a 
more accurate expected value” (id. at GOV1722630).  The SSAC noted that the IGE 
had not been updated throughout the life of the procurement because “there was no 

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31 
 
expertise available to rectify erroneous assumptions made when the estimate was 
initially prepared” (id.).  The SSAC summarized several deficiencies in the IGE.  For 
example, the SSAC noted that NAVFAC had never previously used an Integrated 
Maintenance Plan (IMP) concept in a regional facility maintenance contract, and so 
the government had no relevant historical data or experience with which it could 
estimate the IMP-associated costs (id.).  Regarding the FTEs estimated by each 
offeror, the SSAC concluded that it was appropriate to compare the offerors to each 
other.  All of the offerors demonstrated an understanding of the requirements and were 
proposing similar methods to meet the performance objectives of the WSBOS 
Contract.  (Id. at GOV1722633) 
 
 In a memorandum dated January 14, 2014, the SSA, Steve Shapro, found that 
“[t]he proposal submitted by CFSI represents the best value to the Government” (R4, 
tab 2-46.5 at GOV475656, GOV475670).  Regarding the IGE, the SSA’s January 14, 
2014 memorandum states: 
 
During evaluation of initial proposals, it was noted that the 
IGE price was significantly higher than the price on most 
of the proposals.  As a result, the Government team that 
developed the IGE was requested to validate it.  The 
Government team verified the calculations, reviewed the 
estimates, and confirmed underlying assumptions of the 
IGE.  The Government determined the IGE by calculating 
the efforts and resources required to perform each annex 
independently.  The individual annex estimates were then 
aggregated to develop an overall IGE.  The Government 
took minimal risks in developing the IGE, and did not 
attempt to 
incorporate resource-leveling across the annexes, which 
would involve the cross-utilization of personnel to perform 
multiple functions.  Conversely, based on our observation 
of BOSC contractor practices on current and prior BOSCs 
at the four major Naval installations within our Area of 
Responsibility, contractor price likely included the cross-
utilization of personnel based on business decisions that 
reflect tradeoffs between risks and costs.  Since each 
offeror’s approach to the risk and cost tradeoff will differ 
in a competitive environment, the Government cannot 
assume one approach over another and so took the more 
conservative approach.  This difference in the approach to 
pricing explains why there is such a difference between the 
IGE price developed by the Government, and actual 
offered prices.  As a result of the Government’s 

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32 
 
conservative methodology, the IGE is at the high end of 
the price spectrum.  A review of the Price Report and 
SSAC reports indicate that the source selection team was 
cognizant of this information, and addressed it 
appropriately in their analysis of the proposals. 
 
(Id. at GOV475658-59) 
 
 Regarding CFSI’s non-price proposal, the SSA’s January 14, 2014 
memorandum states: 
 
CFSI offered the second strongest technical proposal.  For 
Factor 5, Safety, CFSI greatly exceeds solicitation 
requirements and was evaluated as Outstanding. 
 
 * * * 
For Factor 1, Experience, Factor 2, Technical 
Approach/Methods, Factor 3, Management 
Approach/Capability of Key Personnel, and Factor 6, 
Small Business Utilization, CFSI exceeded solicitation 
requirements and was assigned a rating of Good. 
 
(Id. at GOV475661) 
 
 Regarding CFSI’s price proposal, the SSA’s January 14, 2014 memorandum 
states: “CFSI offers the lowest price.  CFSI offers a total of 311.18 FTEs for recurring 
work, slightly higher than the mean of the five offers” (id. at GOV475667). The SSA 
ranked the five Final Proposal Revisions from lowest to highest price: 
 
Contractor Total Evaluated Price Total FTEs for Recurring Work 
CFSI $329,451,129.64 311.18 
FFS $330,703,955.16 298.06 
ICHS $348,946,841.89 284.4 
WSSG $364,007,190.94 288.70 
ESC $378,361,168.07 335.72 
Mean Total FTEs for Recurring Work 303.61 
Range of One Standard Deviation of Mean 282.93-324.29 
 
(Id. at GOV475667) 
 
 The SSA’s January 14, 2014 memorandum states: 
 

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CFSI offers the best value proposal and is ranked first. The 
firm offers the lowest evaluated price and is ranked second 
technically.  Overall, its technical rating is Good with an 
Outstanding safety record.  CFSI proposes innovative 
methods to convey safety awareness to their workforce and 
demonstrated an exceptionally strong approach to the 
evaluation and determination of subcontractor safety.  An 
evaluation of Past Performance demonstrates there is 
substantial confidence in the offeror’s ability to perform 
the contract.  For the price offered, CFSI offers good value 
in terms of recurring direct and total FTEs. 
 
(Id. at GOV475667-68) (emphasis in original) 
 
 On March 21, 2014, the government awarded the WSBOS contract to Chugach 
(R4, tab 3-1 at GOV18529).  The PWS in the WSBOS Contract contains the same 
requirements, performance objectives, and performance standards as the WSBOS 
solicitation.  Consistent with the WSBOS solicitation’s intent to incorporate the 
contractor’s proposal “in whole or in part,” the WSBOS contract incorporates parts of 
Chugach’s Final Proposal Revision.  Specifically, the WSBOS contract defines as 
Attachments the J.B-1, the J.C-1, and the J.F-1, but does not incorporate the J.M-5 or 
J.M-1 from Chugach’s proposal (id. at GOV18586). 
 
V.  THE POST-AWARD BID PROTEST 
 
 On or about March 31, 2014, WSSG filed a post-award protest with GAO, 
asserting that the award of the WSBOS contract to Chugach was improper because of 
various alleged source selection defects (R4, tab 8-2 at GOV1708553_1-2).  Among 
other things, WSSG’s protest asserted that the government failed to perform a realism 
analysis of the FTEs proposed by Chugach and the other offerors (id. at 
GOV1708553_6). 
 
 During the course of the post-award protest, and subject to a GAO protective 
order, the government provided Chugach with documentation including the existence 
and amount of the IGE (R4, tab 12-372.1 at MSJ Exhibit 08_88 and 08_0124).  On or 
about April 16, 2014, the government and Chugach jointly requested that GAO issue a 
partial summary dismissal of the protest, arguing in part that the WSBOS Solicitation 
does not require a price realism analysis (R4, tab 12-368.1 at MSJ Exhibit 37_1). 
 
 On April 23, 2014, GAO partially dismissed WSSG’s protest, finding “no legal 
or factual basis” for WSSG’s claim that NAVFAC “failed to perform a price realism 
analysis in accordance with the RFP” and that “the terms of the RFP did not require a 
price realism analysis” (R4, tab 12-370.1at MSJ Exhibit 6_1).  On or about May 5, 

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2014, the government filed its Agency Report in response to WSSG’s protest (R4, 
tab 12-394.1 at MSJ Exhibit 42_1).  Among other things, the Agency Report explained 
that NAVFAC’s source selection decision was based on a comparison of the offerors 
to each other rather than to the IGE “because it recognized that a collective statistical 
model of the offerors’ FTE counts better reflected current market conditions and the 
approaches employed by the offerors than the IGE did” (id. at MSJ Exhibit 42_9).  
Accordingly, NAVFAC used the IGE for “assessing the upper limits of price 
reasonableness” (id. at MSJ Exhibit 42_22).  On or about May 19, 2014, Chugach 
submitted to GAO its comments on the Agency Report and “endorse[d] without 
exception the Navy’s position” (R4, tab 12-405.1 at MSJ Exhibit 38_1).  On or about 
May 15, 2014, WSSG submitted a supplemental protest (R4, tab 12-403.1 at MSJ 
Exhibit 40_1).  On July 9, 2014, GAO denied WSSG’s original and supplemental 
protests (R4, tab 12-435.1 at MSJ Exhibit 33_1).  In its decision denying the protests, 
GAO stated, in part: 
 
The Navy reviewed the offerors’ technical approach 
proposals and found that “[w]hile offerors differed in their 
approaches or methods for meeting the RFP requirements . 
. . no firm provided an approach or method that was so 
unique that [it] would noticeably impact staffing due to 
increased or decreased efficiencies.”  AR, Tab G-1, SSAC 
Report, at G7. As a result, the technical team concluded 
that it was appropriate to compare offerors’ proposed FTEs 
to each other with a standard deviation analysis.  Id. 
* * * 
On this record, we find that the agency reasonably 
evaluated [WSSG’s] technical approach. 
 
(Id. at MSJ Exhibit 33_6-8) 
 
VI.  CFSI PERFORMS THE WSBOS CONTRACT 
 
A. The Transition Period 
 
 After CFSI was awarded the WSBOS contract, but before it began 
performance, Chugach stood up a transition team led by Robert (Chris) Viramontes, 
who was CGS’ Vice President of Base Operations Support Services (R4, tab 5-6 at 27; 
R4, tab 6-22 at 2).  As part of his transition team duties, Mr. Viramontes conducted a 
review of the WSBOS Contract and Chugach’s proposal (R4, tab 5-6 at 34).  
Mr. Viramontes tasked Kevin Hargis, CGS Operations Manager, to identify items that 
Chugach failed to price into its bid and estimate the financial impact of failing to 
include those items in its bid (R4, tab 6-133 at CFSI128617_1; R4, tab 6-28 at 
CFSI132774_1-2; R4, tab 5-4 at 41-51, 57-58).  As a result of his review, Mr. Hargis 

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projected that Chugach would lose between $4.7 to $5.4 million dollars per year (R4, 
tab 5-4 at 70-71).  Mr. Hargis believed the impact of the bid misses coupled with the 3 
percent learning curve reduction would result in Chugach paying the government to 
work for the government (id. at 77; R4, tab 6-134 at CFSI132904_1). 
 
 During his review, Mr. Viramontes also had discussions with Robert Haunton, 
the operations manager for the incumbent contractor, EJB (R4, tab 5-5 at 27, 52-53).  
Chugach had hired Mr. Haunton part-time to assist with the transition and would 
subsequently hire Mr. Haunton full-time in a management role (id. at 34, 52-53).  
Mr. Haunton directed Mr. Viramontes to areas of the WSBOS contract’s performance 
work statement that Mr. Haunton believed Chugach failed to adequately address in its 
proposal pricing (id. at 53-55; 65-66).  Mr. Haunton also stressed the “significant 
planning” Chugach was going to need to manage the conversion to an RCM-based 
maintenance program, emphasizing that, “[i]n order for us to be ready to support RCM 
on 01 October ’14 we have to have a concrete plan on what we’re going to keep from 
the old PM-centric plan and what we going to run-to-fail or engage in Total Predictive 
Maintenance strategies” (R4, tab 6-89 at CFSI240939_1).  Mr. Viramontes concluded 
that CFSI had failed to price certain aspects of the WSBOS contract and 
underestimated by approximately 80-90 FTEs the staffing level Chugach needed to 
perform the contract requirements (R4, tab 5-6 at 34, 122-25).  In an email exchange 
regarding the cost model associated with another Chugach contract in August 2014, 
Mr. Viramontes wrote: “We both know [Business Development] just arbitrarily cut 
position to come up with their winning price. I’m seeing the same here at West Sound” 
(R4, tab 6-63 at CFSI298501_1). 
 
 As a result of Mr. Viramontes’ review of Chugach’s proposal, he increased 
staffing from the 220 FTEs that Chugach bid for self-performed recurring work, to 
307 FTEs, because he “didn’t perceive having enough staff to start the job at 220.  So 
[he] took it to 307 just to get [Chugach] up and running.”  Mr. Viramontes attributed 
this staffing shortfall in part to the option year modifier and in part due to various bid 
misses.  (R4, tab 5-7 at 64-66)  Mr. Viramontes testified that the decision to increase 
staffing from 220 to 307 was a decision made by Chugach and was not due to any 
direction from the government (id. at 66-67).  In addition to the hiring of Mr. Haunton 
discussed above, during the transition period and early stages of performance, 
Chugach hired many of EJB’s productive work force as well as management and 
supervisory staff.  Chugach also purchased EJB’s vehicle fleet, Maximo data, 
operating procedures, and work plans. (R4, tab 12-458.1 at CFSI251320_1; R4, tab 5-
2 at 23; R4, tab 5-5 at 107-08; R4, tab 5-4 at 73-74, 105) 
 
 The transition team saved money by using EJB’s Maximo data and work plans 
to populate its own work plans, rather than having to develop their own work plans for 
things like preventive maintenance (see R4, tab 12-451.1 at CFSI18311_3; R4, tab 5-5 
at 107-08). 

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B.  CFSI Performance of the Contract 
 
 Chugach began full performance of the WSBOS Contract on October 1, 2014 
(R4, tab 5-2 at 43; R4, tab 5-6 at 132-33).  As of the start of performance, Chugach 
was staffing approximately 305 employees to perform the Recurring work (app. supp. 
R4, tab 1660 at CSUP66042).  After correcting for work that Chugach bid as 
subcontractor-performed work, but ultimately self-performed, this staff of 305 is an 
increase of approximately 80 FTEs above what Chugach proposed (R4, tab 12-338.1, 
Sheet: FFP Summary at Cell AG91 (indicating 214.79 FTEs excluding 
subcontractors); R4, tab 12-498.1 at CFSI299179_1; R4, tab 10-1 ¶ 106 (CFSI 
ultimately self-performed Annex 18, which was bid as 11 subcontractor FTEs); R4, 
tab 2-39.7 at GOV212643_13). 
 
 At the time of award, Chugach did not have Nelson Engineering under 
subcontract to write and produce the IMP, even though Chugach’s proposal stated 
“Nelson Engineering will develop our contract-specific IMP . . . .” (R4, tab 6-87 
at B365; R4, tab 6-72 at CFSI115665_1; R4, tab 5-7 at 62-63; R4, tab 6-96 
at CFSI181742_2).  In November 2015, after Chugach realized Nelson Engineering 
was not actually under contract to develop the IMP, Mr. Hargis informed Mr. Haunton 
that Chugach was reaching out to Nelson “with an official SOW and RFP for all IMP’s 
called out in [Chugach’s] contract” (R4, tab 6-96 at CFSI181742_1; R4, tab 12-726.1 
at CFSI16366_6 (admitting that “the development of the IMP’s at WSBOSC is an 
additional service above and beyond” Nelson Engineering’s existing contract.)).  In 
response to Mr. Hargis’ email, Mr. Haunton wrote: “All of this just sucks. I’m sure 
Scott is saying; ‘when will the blood-letting ever end at West Sound.’  Believe me 
when I say that we’re working very hard to find ways to not continue this money bath, 
but it’s very hard as [Business Development] screwed this up so bad” (R4, tab 6-96 
at CFSI181742_1). 
 
 In January 2016, Chugach discovered that not only was Nelson Engineering not 
under contract to develop the IMP, there was a dispute between Chugach and Nelson 
Engineering as to the full scope of Nelson’s RCM-related work.  Nelson asserted that 
its contract with Chugach only included RCM analysis, not RCM “implementation” 
which included not only the revision of “existing PM Job Plans and creat[ing] new PM 
Job Plans to implement the RCM maintenance program recommendations . . . .” but 
also “PT&I (predictive testing and inspection), RCM training, facility condition 
assessments, and capital asset planning” (R4, tab 12-726.1 at CFSI16366_1, 5).  In a 
PowerPoint presentation dated January 27, 2016, Chugach described the dispute 
pertaining to Nelson Engineering’s scope of work as it related to the “updating and/or 
creating of PM plans” and “IMP plan development” as “costly” to the tune of 
“$1.327M additional (unbudgeted) cost to West Sound” (R4, tab 12-728.2 
at CFSI24364_1-2, 9). 

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 In addition to not having Nelson Engineering under contract to write and 
produce the IMP, Chugach failed to include approximately $100,000 worth of costs 
associated with Nelson performing the RCM analysis in its bid (R4, tab 6-96 at 
CFSI181742_3).  As of March 7, 2016, 17 months into Chugach’s performance (the 
middle of the second claim year), not one IMP had been completed or implemented 
(R4, tab 6-161 at CFSI301675_1).  Chugach admits that it had not implemented an 
Integrated Maintenance Program as of the end of FY16 or 30 September 2016 (R4, 
tab 7-37 at 9-10).  Because it had not yet implemented any IMP or RCM efficiencies, 
Chugach was following work plans and procedures it had purchased from EJB, the 
incumbent contractor (R4, tab 6-81 at CFSI23535_20; R4, tab 5-4 at 105; R4, tab 5-2 
at 179-80).  Chugach continued to follow EJB’s work plans for at least approximately 
two years (R4, tab 6-81 at CFSI23535_20; R4, tab 5-4 at 99-100, 105-08) and 
continued performing time-based preventative maintenance which is “very labor 
intensive” (R4, tab 5-7 at 89-90; R4, tab 6-73 at CFSI115660_1; R4, tab 6-112 
at CFSI239913_12 (CFSI presentation to NAVFAC on or about May 16, 2016 stating 
that “[u]ntil IMP components are submitted and approved, CFSI has no choice but to 
accomplish all PMs based on the old, inefficient maintenance plans inherited from 
predecessor” resulting in CFSI being “unable to gain the intended efficiencies of 
RCM/IMP until halfway through the contract’s PoP . . . .”)). 
 
 Chugach experienced difficulties meeting the performance requirements of the 
WSBOS contract (R4, tab 6-90 at CFSI184604_1; R4, tab 5-4 at 81; R4, tab 5-9 at 89).  
Approximately five months after performance began, Mr. Hargis, in consultation with 
Mr. Haunton, recommended the hiring of approximately 60 more FTEs to improve 
Chugach’s performance (R4, tab 6-90 at CFSI184604_2; R4, tab 5-4 at 81-87).  By 
email dated May 15, 2015, Mr. Haunton noted the hours used by Chugach’s bid 
proposal team to calculate the number of FTEs required to perform the workload 
captured in the WBS “was based on 1,880 hours or a full productive year” (R4, tab 6-
92 at 211991_1).  Mr. Haunton believed using 1,880 productive hours per year “is not 
realistic when calculating actual FTE numbers, whereas an industry standard of 
between 1,400-1,500 hours would be expected based on myriad categories of non-
productive time that impact the [operations area of responsibility] of the West Sound” 
(id., R4, tab 12-612.1 at CFSI183001_1). 
 
 In May 2015, CFSI internally discussed that increasing staffing on WSBOS in 
order to improve “on time performance,” even to the point of operating at a loss, 
would still be beneficial and profitable to the company in the longer term: “Those 
highly rated CPAR ratings and the positive reputation that would come from 
successfully operating the WSBOSC (even at a loss), could lead Chugach to a strong 
future on future Navy BOS contracts” (R4, tab 12-577.1 at CFSI28518_30).  By 
sometime in 2016, Chugach, in an effort to meet the performance standards under the 
WSBOS contract, increased its recurring work staffing to approximately 425 FTEs 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
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(exclusive of subcontractors) (R4, tab 5-5 at 56).  The government did not direct 
Chugach to increase its staffing (id. at 77-78; R4, tab 5-2 at 76-82; R4, tab 5-4 at 83-
84, 171-72, 235). 
 
C.  March 2016 “Huntsville” Investigation 
 
 In March 2016, as part of Chugach’s effort to investigate its difficulties in 
performing the WSBOS Contract, Daniel Fenza, the President of Chugach, hired 
Mr. Viramontes, who was no longer a Chugach employee, as a consultant to assist 
Chugach with the investigation, to include determining what areas of the contract, if 
any, were underbid by Chugach (R4, tab 6-41 at CFSI24264_1; R4, tab 6-42 at 
CFSI25872_1, CFSI25874_1-13; R4, tab 5-6 at 13-14, 147-49; 161-64; R4, tab 5-2 
at 137-39). 
 
 Among other things, Mr. Fenza and Mr. Viramontes discovered that the labor 
hours assumed in Chugach’s proposal for the WSBOS Contract had been reduced by 
approximately 258,000 hours prior to submission of the proposal (R4, tab 6-83 
at CFSI115655_2-3).  The 258,000-labor hour reduction identified by Mr. Viramontes 
and Mr. Fenza approximates the overall 39% reduction attributable to the option year 
modifier (R4, tab 6-1 at Cells S7 and T7 (Option Year Modifier reduced the total 
recurring work Labor Hours from 682,501.91 to 414,101.18); tab 10-1 ¶ 54).  In an 
email dated March 7, 2016 from Mr. Fenza to Mr. Viramontes, Mr. Fenza states that 
the 258,000 hours of reductions that took place in the WBS “[are] unaccounted for” 
and Mr. Viramontes responds that “[g]iven the lack of knowing the basis for reducing 
the hours this drastically I’m led to believe the cuts were simply arbitrary as a means 
to get lean and competitive” (R4, tab 6-73 at CFSI115660_1).  In furtherance of the 
investigation, Mr. Fenza, Mr. Viramontes, Mr. Hargis, and Mr. Williamson gathered in 
Huntsville, Alabama to discuss Chugach’s financial losses on the WSBOS contract 
(R4, tab 5-9 at 162-64).  Mr. Williamson testified at his deposition that the Huntsville 
group did not determine the reason for the 40% reduction to Chugach’s labor hour 
assumptions.  He further testified that the speculation of the group was that the 
reduction was made to make Chugach’s bid price more competitive (R4, tab 5-9 
at 197, 202). 
 
 While in Huntsville, the team assembled by Mr. Fenza compared the IGE FTE 
and labor hour estimates with Chugach’s unmodified FTE and labor hour estimates.  
The team concluded that the difference between the IGE labor hour estimate and 
Chugach unmodified labor hour estimate was only 26,872 hours (or approximately 13 
FTEs at 2,080 hours per year) (R4, tab 6-139 at VIRA34_1; R4, tab 5-4 at 205-06). 
 
 Mr. Viramontes testified that the Huntsville team concluded that the historical 
data provided in the solicitation for number of trouble calls was not out of tolerance 
with the number of trouble calls that Chugach received while performing the WSBOS 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
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39 
 
contract (R4, tab 5-7 at 38; 72; R4, tab 6-67 at 1).  While the number of trouble calls 
experienced by Chugach was not out of tolerance with the historical data provided in 
the solicitation, Chugach experienced a difference between the hours it estimated for 
trouble calls and the hours it actually incurred for trouble calls (R4, tab 6-64 at 3-4; 
R4, tab 5-7 at 37-39).  Mr. Viramontes testified that during the Huntsville review, the 
team noticed that indirect costs for Annexes 15 and 17 seemed “extremely high,” 
which points to an issue with coding, resulting in costs not being charged “to the right 
category of costs” (R4, tab 5-7 at 81-83). 
 
 D.  The July 2016 “Tiger Team” and Related Investigations 
 
 In July and August 2016, Chugach assembled a “Tiger Team” to further 
evaluate the causes of its financial losses and performance issues (R4, tab 6-79 
at CFSI10224_2; R4, tab 12-1072.1 at CFSI117037_1-2; R4, tab 4-1 
at CFSI21902_33).  The Tiger Team consisted of “expert and experienced base 
operations business capture and operations professionals” who “devote[d] significant 
effort over a two-month period to analyze all aspects of the problem” (R4, tab 4-1 
at CFSI21902_33).  A “core element” of the Tiger Team’s mission was to “research 
why so many more hours were recorded than expected” (id.).  The Tiger Team’s 
efforts resulted in over 200 discrete findings (R4, tab 6-142 at CFSI158857_1, 1-17). 
 
 On July 26, 2016, Steve Hammock, who had served as a member of the Tiger 
Team, wrote in an email to James Williamson that one of the biggest issues with 
regard to WBS reductions was “really part of the overall cost strategy to incorporate 
more modern RCM-based PM program so not necessarily a ‘miss’” (R4, tab 12-1195.1 
at CFSI110695_1).  On or about August 4, 2016, less than one month before Chugach 
submitted its certified claim, Mr. Hammock wrote, among other things, that Chugach 
“lack[ed] an apparent financial control process that establishes budget levels for shops 
or activities, incorporates control measures, and quickly identifies and corrects 
budgetary overruns” (R4, tab 6-128 at CFSI110674_1, CFSI110675_1).  He also wrote 
that Chugach “ha[d] not implemented a modern, engineering-based PM program that 
eliminates legacy maintenance practices and optimizes maintenance actions.”  He 
continued, “[i]n my opinion, the most impactful actions are to implement a completely 
revamped modernized maintenance program.” (Id. at CFSI110675_1) 
 
 On August 12, 2016, James Williamson, another member of the Tiger Team, 
provided a summary of his individual conclusions to Daniel Fenza and Kevin Hargis, 
noting that there were “three major issues affecting financial performance at West 
Sound:” “Flaws in bid strategy,” “Government administration of the contract 
unfavorable to Chugach,” and “Poor management controls” (R4, tab 12-1447.1 
at CFSI118789_1; R4, tab 12-1447.2 at CFSI118790_1).  Mr. Williamson identified 
several flaws in Chugach’s bid strategy, including Chugach’s decision to 
underestimate trouble call hours.  He noted that the three-year average of trouble call 

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40 
 
hours in the RFP was 77,887 hours per year, but that Chugach’s proposal was based on 
52,769 hours per year.  (R4, tab 12-1447.2 at CFSI118790_1)  Mr. Williamson wrote 
that, in his view, poor management controls “is the area that could have the largest 
impact on financial performance” (id. at CFSI118790_3).  Among the issues he noted 
were a “[l]ack of budgets and budget review” and “[i]mproper coding” (id.).  
Mr. Williamson concluded his summary by writing, in part: 
 
At the heart of the issues that afflict the West Sound 
project is a lack of coordination between business 
functions at Chugach.  Business Development did not 
adequately involve Operations in the development of the 
bid and Operations did not adequately involve Business 
Development in the startup.  This resulted in executing a 
plan that was very different from the bid plan.  While there 
were legitimate concerns about the bid strategy this could 
have easily been alleviated before the bid by adequate 
review and input from operations.  Even after the bid much 
of the financial woes could have been mitigated by a 
cooperative relationship with business development in 
executing the project in a manner consistent with the bid 
strategy.  Unfortunately neither of these occurred and the 
financial damage has been virtually unmitigated for nearly 
two years. 
 
(Id. at CFSI118790_4) 
 
 On or about June 26, 2017, Daniel Fenza, CFSI’s President, memorialized in 
writing his “Lessons Learned from West Sound BOSC” (R4, tab 12-1985.2 
at CFSI116818_1).  While not directly tied to the Tiger Team’s effort, Mr. Fenza’s 
“lessons learned” drew from the Tiger Team’s effort as well as “a variety of research 
efforts and analyses conducted after the contract’s start date of October 2014” (id.).  
Mr. Fenza noted several lessons learned, including that: 
 
 CFSI had failed to heed the “danger signs” in the RFP 
regarding differences between the incumbent contract and 
the WSBOS Contract. 
 Regarding CFSI’s use of the incumbent contractor’s job 
plans, CFSI “failed to realize that as a performance based 
contract, corrective actions were within our control and 
should have been addressed during the contract start-up 
phase.” 

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41 
 
 “Ops failed to realize that NAVFAC wanted a change 
agent on this contract who would convert the PM program 
from OEM based to RCM based.” 
 “The initial cost coding structure established on this 
contract failed to allocate costs in a manner that would 
serve as an effective management tool or to allow for 
effective forensic accounting of job losses after the fact.” 
 
(Id. at CFSI116818_1-2)  However, Mr. Fenza testified that the Tiger Team’s findings 
could not explain the differences in labor hours being experienced by Chugach, and 
that the inefficiencies identified were “minimal” (R4, tab 5-5 at 183). 
 
 Beginning in October 2016, after the Tiger Team concluded its investigation 
and provided its findings and recommendations, Chugach began to reduce staffing, 
initially by 86 FTEs and then further with subsequent reductions in force (R4, tab 6-
142 at CFSI158857_1; R4, tab 6-143 at 3; R4, tab 5-4 at 267-70).  Eventually, 
Chugach reduced its staffing to 280 FTEs (R4, tab 6-108 at 6). 
 
 E.  NAVFAC Withholds Payment 
 
 The WSBOS Contract contained two clauses, 5252.246-9303, 
CONSEQUENCES OF CONTRACTOR’S FAILURE TO PERFORM REQUIRED 
SERVICES (OCT 2004) and 5252.246-9304, ESTIMATING THE PRICE OF 
NONPERFORMED OR UNSATISFACTORY WORK (OCT 2004), which authorized 
the government to withhold payment for non-performed or unsatisfactory work (R4, 
tab 3-1 at GOV18541-42).  Clause 5252.246-9303, CONSEQUENCES OF 
CONTRACTOR’S FAILURE TO PERFORM REQUIRED SERVICES stated in part: 
 
The Contractor shall perform all of the contract 
requirements. The Government will inspect and assess 
Contractor performance in accordance with FAR 52.246-4, 
INSPECTION OF SERVICES – FIXED PRICE and the 
Section E provision entitled GOVERNMENT 
PERFORMANCE ASSESSMENT.  The Government will 
require re-performance, withhold payment, or seek other 
suitable consideration for unsatisfactory or non-performed 
work.  When defects can’t be corrected by re-performance, 
the Government may reduce the price to reflect the reduced 
value of services performed. 
 

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(Id. at GOV18541)  Clause 5252.246-9304, ESTIMATING THE PRICE OF 
NONPERFORMED OR UNSATISFACTORY WORK stated in relevant part: 
 
In the event the price of non-performed or unsatisfactory 
work cannot be determined from the prices set out in the 
Schedule or on the basis of the actual cost to the 
Government, estimating methods may be used to 
determine an amount, which reflects the reduced value of 
services performed.  The Government may estimate the 
cost using wage rates and fringe benefits included in the 
wage determinations included in the contract, Government 
estimates of the Contractor’s overhead and profit rates, and 
Government estimates of material costs if applicable. 
 
(Id. at GOV18542) 
 
 On or about June 23, 2015, NAVFAC finalized a Contractor Performance 
Assessment Report (CPAR) for Chugach’s performance from October 1, 2014-
March 31, 2015 (R4, tab 11-2 at GOV1723310_1).  The CPAR assigned Chugach a 
“marginal rating for Schedule (id.). 
 
 On November 14, 2015, Jim Niles, Administrative Contracting Officer, sent a 
letter to Joan Mulholland, ACQ Director, Chugach Government Solutions, stating, in 
part: 
 
This letter serves as written notice that the Government 
intends to deduct a portion of the Firm Fixed Price (FFP) 
invoice payment under the WSBOSC.  This is to 
compensate the Government for non-performed 
Preventative Maintenance (PM) work in Annex 1502000, 
1602000, 1604000, 1607000, and not completed cross 
connect inspections, annual utility inventories, and unfilled 
key personnel identified in the basic contract.  In addition, 
the Government will begin 10% temporary monthly 
withholdings due to continued nonconformance of the 
contract. 
 
(R4, tab 12-632.3 at GOV421048_1) 
 
 On November 30, 2015, Thomas Heck, Chugach’s project manager, responded 
to the government’s November 14, 2015 withholding letter.  Mr. Heck wrote that 
“CFSI recognizes and acknowledges the FFP performance shortfalls indicated under 
[the November 14, 2015 letter].  CFSI concurs with the proposed deducts with the 

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exception of the following: [] Staffing Deduction for Key Personnel [and] Annual 
Utility Equipment Inventory” (R4, tab 12-637.1 at GOV54778_1).  Mr. Heck proposed 
that the amount of the deduct should be $311,733.47.  He also wrote: 
 
As discussed in weekly partnering meetings with the 
Government, CFSI continues to apply resources to remedy 
the performance trends that resulted in these deductions.  
As also discussed, we are having difficulties recruiting and 
hiring High Voltage, Low Voltage, and HVAC/R 
technicians as we are just not getting applicants.  Further, 
since May 2014, CFSI has expanded staff from 307 to 380 
personnel.  Accordingly, CFSI will continue to support the 
Government in a quality manner. 
 
(Id. at GOV54778_3) 
 
 On or about January 7, 2016, the government finalized a CPAR for Chugach’s 
performance from April 1, 2015-September 30, 2015, again assigning Chugach a 
marginal rating for Schedule (app. supp. R4, tab 1428 at CSUP49927-28, 31).  In its 
response to the CPAR, CFSI stated in relevant part: 
 
Although unfilled key positions were contract 
requirements, other members of the Management Team 
stepped up to cover those Areas of Responsibilities 
(AORs).  CFSI does not believe, in it’s entirety [sic], that 
untimely work completion and lower quality deliverables 
were a result of these vacancies, the real issue in our view 
is our inability to find qualified applicants for our critical 
hourly positions. 
 
(Id. at CSUP49930-31) 
 
 On November 14, 2015, the government notified Chugach that it intended to 
withhold a portion of the firm-fixed-price invoice due to non-performed work (R4, 
tab 12-632.1 at GOV421046_1).  In a response dated November 30, 2015, Chugach 
generally agreed with the specific deduction amounts (R4, tab 12-641.2 
at GOV389012_1-3).  On February 2, 2016, the government issued unilateral contract 
modification no. A00003 formalizing a deduction of $439,353 for additional 
nonperformance of FY15 work (R4, tab 3-26 at GOV18659-60).  The government 
prepared and Chugach commented on a CPAR for Chugach’s performance from 
February 1, 2016-September 30, 2016 (R4, tab 11-6 at GOV1723325_1).  The CPAR 
assigned an unsatisfactory rating to Chugach for schedule and also for management 
(id. at GOV1723325_2).  With respect to Chugach’s performance during the review 

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period, the CPAR (February 1, 2016-September 30, 2016) stated:  “CFSI failed to 
meet contract specified completion timeframes for Service Trouble Calls, Bullets 
(small scope repair/renovation projects), and their scheduled dates for Preventative 
Maintenance (PM) of equipment in the BUMED Facility Investment (1502010), 
Facility Investment (1502000), and Utilities (1600000) Annexes.”  “CFSI failed to 
submit 35% of the deliverable reports per Section F of the contract.”  “Vacant Key 
Positions this performance period included; Utility Manager vacant since 
October 2014 was filled February 2016.  Utility Supervisor vacant since 
February 2015 was filled September 2016.”  (Id. at GOV1723325_2-3)  NAVFAC 
reduced its FY16 withholdings for unsatisfactory (late) and nonperformed FY16 work 
from 10% to 5%:  “In June [2016] the amount of late work decreased.  As a result the 
Administrative Contracting Officer (ACO) released 40% of prior withholdings and 
decreased monthly withholding to 5% from 10% on CFSl’s monthly invoices.  The 
ACO continued withholding 5% due to the remaining incomplete work” (id. 
at GOV1723325_3). 
 
 Chugach admitted it was not fully performing the FY16 recurring work (gov’t 
ex. 8 at CFSI161578_1).  Mr. Hargis, in responding to a CPAR for period of 
October 2015 through January 2016, indicates, “CFSI recognizes the impact that late 
work has on the overall mission readiness of WSBOSC customers and has 
implemented strategies to improve our ‘On Time Performance’ metrics’” (R4, tab 11-4 
at GOV1723317_4).  During the entirety of FY16, NAVFAC withheld 5% of the 
recurring invoice amounts based upon the government’s determination that Chugach 
had not performed or not performed satisfactorily certain FY16 work (R4, tab 11-6 
at GOV1723325_3; R4, tab 12-2100.2 at CFSI292068_1).  The 5% withheld was 
NAVFAC’s estimate of the value of the non-performed and unsatisfactory work in 
FY16 (gov’t ex. 1 ⁋ 20).  As the government began withholding 5% in June 2016, it 
made the determination before FY2016 performance was complete. 
 
VII.  CFSI’S CERTIFIED CLAIM 
 
 On May 27, 2016, representatives of the government and Chugach met to 
discuss Chugach’s assertions that it had omitted costs in its bid, some elements of 
which it believed NAVFAC should have known during proposal evaluations, and that 
some terms of the contract as interpreted post award were causing CFSI to expend 
more costs in materials and labor than were included in its price proposal (app. supp. 
R4, tab 1446 at CSUP50017).  Chugach requested that NAVFAC consider an 
adjustment to the contract price (id.).  By letter dated June 7, 2016, Audrey Fitzgerald, 
Contracting Officer, responded to Chugach’s informal request for a contract price 
adjustment indicating that NAVFAC did not find any evidence that the Government 
should have known of any bid mistakes prior to award (id.).  She closed the letter by 
stating: “[t]he Government provided in the RFP a list of historical service calls to help 
offerors estimate the effort and scope of trouble calls that it may receive each year and 

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to use that data to build its proposal.  Should Chugach discover that there is 
significantly greater effort to perform trouble calls under its contract than the historical 
data would indicate, the Government would give proper consideration to a request for 
equitable adjustment to the price of the contract” (id. at CSUP50020). 
 
 Rather than submit a request for equitable adjustment, on September 2, 2016, 
Chugach submitted a certified claim for $12,174,903.61, representing losses it 
allegedly incurred in FY15 as a result of either NAVFAC’s alleged failure to disclose 
“vastly superior knowledge needed to project the level of effort and cost required to 
perform” or the parties’ mutual mistake that the WSBOS Contract could “be 
performed by a workforce of a similar size [as EJB]” (R4, tab 4-1 at CFSI21902_4-5, 
45).  Chugach developed its claim using its integrated accounting system, known as 
Lawson, to allocate its management and administration costs across the other annexes 
(app. supp. R4, tab 1657 at CSUP65931-61; R4, tab 7-11 at 3-4) and then calculating 
the difference between its proposed and incurred costs, and then backing-out its 
acknowledged bidding mistakes (R4, tab 12-1516.1 [native], app. ex. 12 at 4-5).  
Chugach asserted in its claim that its losses stemmed solely from these preaward acts 
or omissions: 
 
CFSI has several credible and compelling legal theories to 
establish that it is entitled to an adjustment in the Contract 
price, and they are all derived from the way that the Navy 
negotiated the WSBOSC.  But simply put, the parties did 
not achieve a valid meeting of the minds during contract 
formation. 
 
(R4, tab 4-1 at CFSI21902_6) 
 
 On February 6, 2017, CFSI revised its claim to include FY16 costs of 
$22,205,406.60 and withholdings of $1,663,634.80 for nonperformance of FY16 work 
(R4, tab 4-43 at GOV29286).  With this revision, Chugach’s total claim amount 
increased to $36,043,945.01 (see id.).  On July 28, 2017, Eileen Mitchell, Chief of the 
Contracting Office, issued a Contracting Officer’s Final Decision denying Chugach’s 
certified claim, as revised, in its entirety (R4, tab 4-44 at GOV29306). 
 
 Contracting Officer’s Representative, Keith Sandoval, performed an analysis of 
Chugach’s claim.  Mr. Sandoval noted that Chugach reported an increase in trouble 
calls and hours spent on those calls, as compared to the number of calls and hours 
reported by EJB  (App. supp. R4, tab 1523.01 at CSUP64641; app. ex. 4 at 198-99)  In 
a December 21, 2017 email, Mr. Sandoval shared his analysis of trouble calls with 
other Navy employees (app. supp. R4, tab 1557 at CSUP65565).  Chugach cites to this 
email for the proposition that Mr. Sandoval “believed that there were ‘grounds for an 
REA’” (app. proposed finding of fact ¶ 344 (quoting app. supp. R4, tab 1557 

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at CSUP65565)).  However, Mr. Sandoval’s comments, read in their entirety were 
obviously sarcastic: 
 
This is not true.  Trouble call details, including labor hours, 
were identified in attachment J-150200-06.  FY09-FY11 
historic average was 77,887 hours for trouble calls, 
including equipment repairs not under ICMR.  CFSI final 
proposal was 71,456 hours, not including ICMR (no 
breakout in the proposal).  Show me how significantly 
greater the effort to perform trouble calls was than 
historical average, CFSI.  Oh, wait, CFSI, do you want me 
to do that for you?  OK, that was 101,364 hours in FYl5 
and 102,103 hours in FY16.  Thank you for the trouble call 
report.  Seems like grounds for an REA to me!  You’re 
welcome, CFSI. 
 
(App. supp. R4, tab 1557 at CSUP65565)  However, Chugach cites to Mr. Sandoval’s 
deposition testimony that the increase in trouble calls from the historical average 
would form the basis of a claim, but that he could not provide a conclusion because 
Chugach had not provided supporting documentation as support for its claim (app. 
ex. 4 at 199-200).  Mr. Sandoval testified that Chugach had proposed less trouble calls 
than the historical average but actually performed more trouble calls than the historical 
average.  Mr. Sandoval noted the change to unlimited service calls, and indicated that 
Chugach “should take into consideration [that the solicitation included unlimited 
service calls] and price it – price and risk it accordingly or propose with some risk 
accordingly.” (Id. at 199)  Although Mr. Sandoval believed that Chugach should have 
proposed at least the number of service calls as the historical average, he also was of 
the opinion that the level of service calls was high enough to provide the basis for a 
claim (id. at 200).  In response, the government submitted an affidavit by 
Mr. Sandoval controverting Chugach’s proposed factual finding and stating that 
Mr. Sandoval’s determination was that Chugach “did not provide enough information 
for its claims to be analyzed, and that he was “unable to draw any substantive 
conclusions from the comparison” without additional supporting documentation (gov’t 
ex. 1 ¶¶ 22-23). 
 
VIII.  Chugach Appeals To The Board 
 
A.  Chugach’s Complaint 
 
 On September 11, 2017, Chugach filed a timely notice of appeal with the 
Board. On or about October 5, 2017, Chugach filed its complaint in ASBCA 
No. 61320.  In addition to repeating the certified claim’s allegations of superior 
knowledge (Count II) and mutual mistake (Count III), the Complaint alleged that the 

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government negligently negotiated (Count I) and constructively changed (Count IV) 
the WSBOS contract, breached the covenant of good faith and fair dealing (Count V), 
and improperly withheld payments from CFSI (Count VI). 
 
B.  Discovery Disputes Regarding Historical Information 
 
 Following a discovery dispute, the Navy filed a motion to compel Chugach to 
respond to the government’s Interrogatory No. 11 (Order dtd. Apr. 1, 2019, at 2).  The 
interrogatory provided: 
 
For each MAXIMO data field identified in CFSI’s 
Supplemental Response to Interrogatory No. 2 as 
“containing information that CFSI contends constitutes 
superior knowledge”, state for which specific contract 
annex and SLIN the information in the data field is vital 
knowledge of a fact affecting CFSI’s 
estimated/proposed/bid cost or duration of performance, 
and describe how, why, and the extent to which CFSI’s bid 
pricing for that annex and SLIN would have been different 
had CFSI possessed the information contained in the data 
field.” 
 
(R4, tab 7-17 at 3)  On April 1, 2019, the Board entered an order stating, in part: 
 
As the MAXIMO database apparently contains between 1 
and 2 million records, the Navy is entitled to identification 
of the specific records Chugach contends to be relevant.  
To the extent Chugach’s claim depends upon the database 
in general and is not limited to specific data records, it 
should supplement its response to indicate this. 
 
(Order dtd. Apr. 1, 2019, at 3) 
 
 On May 1, 2019, CFSI provided a supplemental response to Interrogatory 
No. 11, stating, in relevant part: 
 
In light of the Board’s April 1, 2019 order, we now 
interpret Interrogatory No. 11 as seeking an “identification 
of the specific records Chugach contends to be relevant” to 
its superior knowledge claim.  CFSI contends that the 
database as a whole is relevant.  The database provided the 
Navy with superior knowledge not necessarily because of 
the contents of any one row, but because it gave the Navy 

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the ability to query the aggregate of records, using the data 
fields identified in Response to Interrogatory No. 2, to 
identify historical metrics and trends that were relevant to 
estimating the level of effort. As the individual responsible 
for developing the IGE explained, “actual data” is 
preferable and “the bigger the database the better the data.”  
Williams Deposition Tr. 170:16-171:4. 
 
(Gov’t ex. 9 at 6) 
 
 In response to Chugach’s Supplemental Response to Navy Interrogatory 
Nos. 10 and 11, the Navy filed a supplemental motion to compel Chugach to comply 
with Board’s Apr. 1, 2019 Order and respond to Interrogatory No. 11 (Order dtd. 
May 24, 2019 at 1).  On May 24, 2019, the Board denied the Navy’s Supplemental 
Motion to Compel.  The Board also, however, clarified that Chugach is bound by its 
discovery response that it is not relying on specific individual records to support its 
claims in this appeal: 
 
Chugach is bound by its discovery responses, and we 
interpret its response to interrogatory No. 11 as providing 
that the entire MAXIMO database is relevant and that it is 
not relying upon specific individual records. 
[…] 
Depending on the evidence adduced at a hearing, 
Chugach’s demonstration that the Navy had access to the 
MAXIMO database and an “ability to query the aggregate 
of records” may not be sufficient to establish that there was 
a “conscious omission to share superior knowledge [the 
Navy] possesses.” Thus, without deciding here whether 
Chugach’s reliance upon its theory that the Navy’s access 
to the MAXIMO database as a whole is adequate to 
establish its superior knowledge claim, if Chugach fails to 
identify with specificity the superior knowledge contained 
therein, it will bear whatever consequences that its decision 
entails.  With this in mind, we find that Chugach has 
complied with the Board’s April 1, 2019 order and deny 
the government’s motion to compel. 
 
(Order dtd. May 24, 2019, at 2-3) 
 
 In addition to written discovery, the Navy attempted to obtain testimony 
regarding what specific information Chugach believed should have been disclosed by 
NAVFAC. Mr. Hammock, as Chugach’s corporate designee, testified that it wasn’t 

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“able to conduct a complete analysis of the history of maintenance activities” such that 
it prepared its bid “without the understanding of the actual condition or the history of 
what had been done to that plant [facility]” (R4, tab 5-10 at 133-34, 136 (testifying 
that CFSI was lacking knowledge of “the condition of the facilities and the historical 
maintenance”)).  Mr. Crosta, the lead cost estimator on the proposal team did not 
identify any specific information that he believed NAVFAC should have disclosed 
prior to award (R4, tab 5-1 at 94-95, 98).  Similarly, Mr. Watts, who had primary 
responsibility for estimating Chugach’s staffing requirements did not identify any 
specific information that he believed NAVFAC should have disclosed prior to award 
(R4, tab 5-8 at 140-42). 
 
C.  Dispositive Motions 
 
 On July 16, 2018, the Board granted the Navy’s opposed motion to amend its 
answer to plead the affirmative defenses of estoppel and waiver.  Chugach Federal 
Sols., Inc., ASBCA No. 61320, 18-1 BCA ¶ 37,111 at 180,620 (Chugach I).  On 
April 10, 2019, the Board denied the Navy’s motion for partial summary judgment and 
granted Chugach’s cross-motion for summary judgment, the latter of which resulted in 
dismissal of the Navy’s affirmative defenses of estoppel and waiver.  Chugach 
Federal Sols., Inc., ASBCA No. 61320, 19-1 BCA ¶ 37,314 at 181,496 (Chugach II).  
On May 16, 2019, the Board denied the Navy’s motion to dismiss Counts I, III, IV, V, 
and VI.  Chugach Federal Sols., Inc., ASBCA No. 61320, 19-1 BCA ¶ 37,380 
at 181,720 (Chugach III).  On May 27, 2020, the Board granted the Navy’s motion for 
summary judgment as to Count V, and denied the Navy’s motion for summary 
judgment as to Counts I, II, III, IV, and VI.  Chugach Federal Sols., Inc., ASBCA 
No. 61320, 20-1 BCA ¶ 37,617 at 182,597 (Chugach IV). 
 
DECISION 
 
 By request of the parties, this appeal is being decided pursuant to Board 
Rule 11, “Submission Without a Hearing.”  Unlike a motion for summary judgment, 
which must be adjudicated on the basis of a set of undisputed facts, pursuant to Board 
Rule 11, the Board “may make findings of fact on disputed facts.”  DG21, LLC, 
ASBCA No. 57980, 15-1 BCA ¶ 36,016 at 175,909 n.1; aff’d DG21, LLC v. Mabus, 
819 F.3d 1358 (Fed. Cir. 2016); Grumman Aerospace Corp., ASBCA No. 31585, 
92- 3 BCA ¶ 25,059 at 124,886 n.13 (Kienlen, J. dissenting). 
 
I.  Superior Knowledge 
 
 We begin with Chugach’s superior knowledge claim.  Chugach argues that the 
government should not be allowed to “withhold vital information and negotiate for low 
staffing levels to reap the benefit of lower prices, just to turn around and insist on far 
higher staffing levels at the contractor’s expense during performance” (app. br. at 1).  

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Chugach contends that the government failed to disclose three categories of superior 
knowledge:  historical workload data reflecting the costs required to perform the 
predecessor contract; past practices whereby the government suppressed demand for 
work under the predecessor contract; and, the technical team’s finding that Chugach 
did not propose enough personnel to meet the contractual demands (id. at 142).  The 
government asks that we strike certain of Chugach’s arguments regarding the 
historical workload data because Chugach failed to identify the arguments in response 
to multiple discovery requests (gov’t resp. at 7-9).  In addition, the government 
contends that it did not withhold any superior knowledge; that the Navy did not 
suppress demand for service calls; and that the evaluation team did not conclude that 
Chugach could not perform the contract with the proposed staffing (gov’t resp. at 12-
32).  Finally, the government contends that Chugach cannot establish that the alleged 
undisclosed information affected its cost of performance because of problems caused 
by its own business judgment (gov’t resp. at 32-41).  We consider Chugach’s alleged 
categories of superior knowledge sequentially. 
 
A.  The Legal Standard For Superior Knowledge 
 
As a general rule, a contractor performing a fixed-price contract assumes the 
risk of unexpected costs.  See, e.g., Helene Curtis Indus., Inc. v. United States, 
312 F.2d 774, 777-78 (Ct. Cl. 1963).  However, the government has an implied duty to 
“disclose to a contractor otherwise unavailable information regarding some novel 
matter affecting the contract that is vital to its performance.”  Scott Timber Co. v. 
United States, 692 F.3d 1365, 1373 (Fed. Cir. 2012) (quoting Giesler v. United States, 
232 F.3d 864, 876 (Fed. Cir. 2000).  Superior knowledge generally applies when: 
 
(1) a contractor undertakes to perform without vital 
knowledge of a fact that affects performance costs or 
duration, (2) the government was aware the contractor had 
no knowledge of and had no reason to obtain such 
information, (3) any contract specification supplied misled 
the contractor or did not put it on notice to inquire, and (4) 
the government failed to provide the relevant information.  
 
Hercules, Inc. v. United States, 24 F.3d 188, 196 (Fed. Cir. 1994) (quoting American 
Ship Bldg. Co. v. United States, 654 F.2d 75, 79 (Ct. Cl. 1981)). 
 
B.  Historical Workload Data 
 
 Chugach’s main argument is that the Navy failed to disclose superior 
knowledge in the form of historical workload data generated by the incumbent 
contractor, EJB (app. br. at 142).  Specifically, Chugach points to reports that EJB 
provided to the Navy during performance of predecessor contract (id.).  However, 

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Chugach fails to identify information possessed by the Navy that constitutes “vital 
knowledge of a fact that affects performance costs or duration.”  Hercules, Inc., 
24 F.3d at 196.  Instead, Chugach points to information possessed by the Navy and 
speculates that knowledge of this information was the reason for the differences 
between the government’s IGE and Chugach’s bid.  Chugach fails to identify specific 
information that would have affected its “performance costs or duration.”  Instead, 
Chugach simply points to the difference between its bid and the IGE.  This argument 
fails for two reasons.  First, the Navy established that the IGE was prepared based on 
projections made by Navy employees, and not solely historical data (although the 
Navy did use some data not provided to Chugach).  Second, other bidders that 
participated in predecessor contracts submitted bids similar to that of Chugach.  
Chugach fails to explain how the bidders possessing this “vital knowledge” did not 
submit different bids.  Third, Chugach did not perform the contract consistent with its 
proposal. 
 
 Chugach asserts that EJB provided to the Navy information pertaining to 
trouble calls, bullets, and preventative maintenance actions, but that the Navy did not 
provide all this information to bidders (app. br. at 142-47).  For trouble calls, the Navy 
provided what it considered to be the relevant information including the description of 
the call, the location, labor hours, cost threshold, and work type (app. supp. R4, 
tab 103.02 [native]).  However, the Navy omitted data such as the date the Navy 
requested the work, the date EJB completed the work, the piece of equipment being 
repaired, the cost of materials, and subcontractor costs (app. br. at 143).  For 
maintenance, Chugach contends that the government withheld all information other 
than the inventories of equipment to be maintained (id. at 145).  The Navy did not 
provide more information because of the change to the new IMP maintenance 
procedure.  Chugach additionally identifies four specific service calls as evidence of 
superior knowledge.  The first record (#3453054) shows that EJB incurred costs above 
the contractual liability limit of $2,000 on the predecessor contract (id. at 23, 146).  
From this single data point, Chugach speculates that the “undisclosed material costs 
would have revealed significant material costs, including some instances where the 
material costs exceeded the full liability limit under the previous EJB Contract” (id. 
at 146). 
 
 Chugach cites to a second record (#3221559) as evidence that subcontractor 
costs could exceed the liability limit (id. at 23, 146).  Chugach again speculates from 
this single record that bidders would need the missing information to understand the 
full volume of work, and that “[i]n some cases, that would significantly alter the 
offeror’s understanding of the work” (id. at 146). 
 
 Chugach additionally cites to EJB data demonstrating that EBJ took longer to 
complete service calls than permitted under the contact on more than 20% of the work 
(id. at 23-24).  Chugach speculates that the “ordering and completion dates would have 

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given additional context to . . . the difficulties of staffing these requirements to meet 
fluctuating demand” (id. at 146).  Chugach also points to the fact that EJB’s data are 
missing the equipment number for many of the repair calls, and, thus, much of the 
workload is to repair items for which the contractor does not have maintenance 
responsibility (id. at 24).  Chugach speculates that this information is essential to 
determine the contractor’s ability to decrease demand through more effective 
maintenance (id. at 147). 
 
 We find that the information identified by Chugach does not constitute superior 
knowledge with regard to the WBOS solicitation.  We hold that Chugach has not 
established by a preponderance of evidence that the information identified was “vital 
knowledge of a fact that affects performance costs or duration.”  While Chugach 
argues that the identified information would have affected its performance costs, we 
do not find that the limited information identified by Chugach was “vital” to 
determining its bid.  First, and most significantly, we find that the identified 
information is too limited to constitute “vital” facts.  Chugach has identified two 
individual records that it contends contain errors out of 1,972 pages of historical data 
that was provided to bidders.  In addition, Chugach identified two data fields that were 
not provided to bidders that it speculates would have influenced its bid.  However, 
Chugach fails to demonstrate how knowledge of this information would have 
influenced its bid.  In fact, Chugach seems to be unable to explain how its bid was 
formulated.  Because we determine that Chugach has not established the existence of 
vital factual information, we do not reach the government’s argument that Chugach 
has not established that the superior knowledge was responsible for its financial losses 
on the contract (gov’t resp. at 32-41).  However, we do note Chugach’s inability to 
explain how its bid was formulated in determining that Chugach has not established 
that the factual information was vital. 
 
 Second, even if knowledge of this information could have been vital in bidding 
for the existing WBOS contract, Chugach fails to address how this would be vital 
information for the new WBOS contract.  Specifically, Chugach points to information 
regarding bullets that exceeded the $2,000 limit in the existing EJB WBOS contract 
(app. br. at 23, 146).  However, the new WBOS contract had a $5,000 limit.  In 
addition, much of the information regarding maintenance on equipment without 
equipment numbers ignores that the new WBOS contract under bid had an entirely 
different maintenance requirement. 
 
 With regard to the second factor for superior knowledge, that the government 
was aware that Chugach had no knowledge of and had no reason to obtain such 
information, the government demonstrates that Chugach, as an established BOS 
contractor should have known the types of information that existed (gov’t resp. at 20-
22).  Moreover, the Navy notified bidders of the significant changes to the contract. 
 

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C.  The Navy’s Purported Suppression of Demand 
 
 Chugach additionally identified the Navy’s purported suppression of demand 
for services as an example of superior knowledge (app. br. at 150-53).  According to 
this argument, the Navy required more service calls during performance of the EJB 
base services contract, but was unable to agree to a price, and that the Navy therefore 
“metered” its service calls to avoid exceeding the number of calls required by the 
contract.  In addition, Chugach argues that the Navy prohibited EJB from identifying 
items that needed to be repaired through trouble calls (app. br. at 150-51). 
 
 As the government notes, the data are from the EJB contract.  However, the 
contract at issue differed from the EJB contract in that the number of service calls was 
unlimited (gov’t resp. at 24).  Despite repeated cautions in the solicitation, and in 
discussion questions, warning bidders to account for this significant change (R4, 
tab 1- 14.2 at GOV17267; R4, tab 6-120 at CFSI256231_30, 44; R4, tab 2-43.1 
at GOV475171-72) Chugach contends that it was unclear whether a change to 
unlimited service calls would result in an increase or decrease in the number of service 
calls (app. br. at 151-52).  Chugach’s argument is contrary to the most basic principles 
of economics—it is undisputed that demand will increase when the price of an 
additional unit is essentially set to zero.  See, e.g., Adam Smith, An Inquiry Into the 
Nature and Causes of The Wealth of Nations 62-63 (Modern Library ed., Random 
House 1937) (1776).  Chugach’s employees recognized this simple economic fact (R4, 
tab 5-4 at 141 (change to unlimited trouble calls “incentivized” Navy customers to call 
in more trouble calls “because there’s no limit,” in contrast to the EJB contract, under 
which those customers “were disincentivized because they had to pay for [extra 
trouble calls]”); (R4, tab 5-7 at 75-76) (unlimited number of trouble calls makes the 
WSBOS contract more risky than the EJB contract); R4, tab 5-10 at 31-33 
(“unlimited” trouble calls created risk of increase in workload “much greater than 
historical”)). 
 
 Given the change in the structure of the contract, we hold that the purported 
suppression of demand, even if proven, was not vital factual information that would 
increase Chugach’s costs or performance time.  Moreover, the solicitation clearly and 
specifically notified bidders that there were changes to the treatment of service calls, 
both in number and financial limit.  Chugach relies upon the holding in Tripod, Inc., 
ASBCA No. 25104, 89-1 BCA ¶ 21,305 for the proposition that the government’s 
knowledge that workload data provided was understated would constitute superior 
knowledge (app. br. at 151).  In Tripod, the government failed to notify bidders of a 
longstanding obligation to provide a special lunch (the Mexican meal) each week.  The 
Board found that the special lunch involved additional time and effort and was more 
heavily patronized, relative to other lunch services.  Tripod, 89-1 BCA ¶ 21,305 
at 107,438.  The Board ultimately held that Tripod was entitled to compensation for 
the additional costs of providing the special meal, because it would be unreasonable to 

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expect bidders to ask the government for the master menu or to inquire if there were 
any special meals that were not disclosed.  Id. at 107,444.  As an initial point, it is not 
even clear that Tripod is a superior knowledge case.  The opinion notes that the 
appellant argued superior knowledge, but the Board does not cite or apply the standard 
for a superior knowledge claim.  Id.  Rather, it appear that the Board considered this to 
be a contractual change.  Regardless, even if the Board did base its award in Tripod on 
the existence of superior knowledge, the case is factually distinct from this appeal.  In 
Tripod, the requirement for the special meal continued from the existing contract to the 
new contract.  Here, the contract substantially changed the requirements for service 
calls. 
 
D.  The Navy’s Purported Knowledge That Chugach Would Not Be Able to 
Perform the Contract With Its Proposed Staffing 
 
 Chugach’s final allegation of superior knowledge is its contention that the 
government knew that Chugach would not be able to perform the contract with its 
proposed staffing.  According to Chugach, the government prepared its IGE based, in 
part, on the EJB workload data that the Navy did not provide to bidders.  According to 
Chugach, the fact that its proposal provided for substantially fewer full-time-
equivalent employees, means that the government knew that Chugach could not 
perform the contract with its proposed staffing.  (App. br. at 153-55) 
 
 As the government notes, Chugach’s argument treats the IGE as the “known” 
minimum staffing requirements for the contract (gov’t resp. at 14-18).  In fact, the IGE 
is a projection made by the government, incorporating discretionary judgments by a 
number of government employees.  For example, one of the key drivers in generating 
the IGE was the estimate of the number of labor hours per service call.  Chugach 
contends that the government “knew” that the number of hours per service call would 
be higher in the new contract based upon undisclosed data from the incumbent 
contractor EJB.  However, the EJB data show no such thing.  Rather, the government 
estimator made a projection that the number of hours per service call would double 
from roughly 3.3 hours per service call experienced by EJB to 6.6 hours per service 
call (gov’t ex. 2 ¶ 18).  There was nothing in the EJB data to indicate such an increase.  
In addition, it appears that the government projection overestimated the impact of the 
contractual changes, because Chugach did not incur 6.6 labor hours per service call 
(R4, tab 10-1 ¶ 117).  The fact that the government’s staffing estimate was ultimately 
more accurate than Chugach’s projection does not make it superior knowledge.  As 
noted in Northrop Grumman v. United States, 47 Fed. Cl. 20, 90 (2000) a difference in 
technical judgment or prediction between the government and a contractor is not a 
“fact” that affected performance cost or duration and, therefore, does not support a 
superior knowledge claim.  We hold that the staffing levels assumed in the 
government’s IGE do not constitute “vital knowledge of a fact that affects 

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performance costs or duration.”  Rather the IGE is a projection, and not a “fact.”  The 
contract specifications pointed Chugach to the changes in the new contract. 
 
II.  Negligent Negotiation (Violation of FAR 15.306(d) 
 
 Count I of Chugach’s complaint alleges that the Navy engaged in “negligent 
negotiations” when it violated FAR 15.306(d) by failing to meaningfully discuss with 
Chugach its concerns that Chugach had underestimated the necessary staffing.  The 
government previously moved to dismiss the negligent negotiations claim for lack of 
subject matter jurisdiction.  Under the standard of review for a motion to dismiss, we 
denied the government’s motion, finding that Chugach had made jurisdictional 
allegations sufficient to survive the motion to dismiss.  Additionally, we noted that 
“Chugach’s negligent negotiations claim is actually, for all intents and purposes, really 
just an element of its superior knowledge claims . . . .”  Chugach III, 19-1 BCA ¶ 
37,380, at 181,719.  That is, that Chugach was alleging that the government had 
superior knowledge regarding necessary staffing levels that it did not disclose during 
contract negotiations.  We held above that Chugach had not demonstrated the 
existence of vital knowledge of a fact that affects performance costs or duration 
information, thus we deny Chugach’s negligent negotiations claim to the extent it 
asserts that the government possessed superior knowledge.
6 
 
 Chugach also contends that a violation of FAR 15.306(d) provides an 
independent basis for recovery, because the regulation exists for the benefit of 
contractors (app. br. at 125-26).  The government contends that FAR 15.306(d) 
provides contractors with the fair opportunity to compete for an award, and does not 
address the harm -- unprofitable performance -- alleged by Chugach (gov’t resp. at 44-
47). 
 
 We previously held that FAR 15.306(d) existed, at least in part, for the benefit 
of contractors.  Chugach III, 19-1 BCA ¶ 37,380 at 181,718-19 (citing LaBarge 
Products, Inc. v. West, 46 F.3d 1547, 1552 (Fed. Cir. 1995)).  However, as explained 
below, we hold that Chugach has not demonstrated a violation of the FAR provision. 
 
 Pursuant to Federal Acquisition Regulation (FAR) 15.306(d), “Exchanges with 
offerors after establishment of the competitive range:” 
 
Negotiations are exchanges, in either a competitive or sole 
source environment, between the Government and 
offerors, that are undertaken with the intent of allowing the 
 
6  Thus we need not reach the question of whether a cause of action based on negligent 
negotiations can provide a remedy when a contractor is unable to satisfy the 
four elements of a superior knowledge claim.   

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offeror to revise its proposal.  []  When negotiations are 
conducted in a competitive acquisition, they take place 
after establishment of the competitive range and are called 
discussions. 
. . . 
(2) The primary objective of discussions is to maximize the 
Government’s ability to obtain best value, based on the 
requirement and the evaluation factors set forth in the 
solicitation. 
 
(3) At a minimum, the contracting officer must, subject to 
paragraphs (d)(5) and (e) of this section and 15.307(a), 
indicate to, or discuss with, each offeror still being 
considered for award, deficiencies, significant weaknesses, 
and adverse past performance information to which the 
offeror has not yet had an opportunity to respond.  []  The 
scope and extent of discussions are a matter of contracting 
officer judgment. 
 
FAR 15.306(d) (emphasis added) 
 
 Chugach asserts that the Navy violated FAR 15.306(d) when it did not 
meaningfully discuss its concerns that Chugach had underrepresented the necessary 
staffing such that the Navy did not believe that Chugach could perform the contract 
(app. br. at 127-37).  However, the government contends that it fully complied with 
FAR 15.306 (gov’t reply at 47-62).  Chugach alleges that it is entitled to relief upon 
demonstrating that i) the FAR provision exists for the benefit of the contractor; ii) the 
government violated the FAR provision; and iii) the violation harmed the contractor 
(app. br. at 124, citing LaBarge Prods., 46 F.3d at 1552).
7  Here, we have already held 
that FAR 15.306 exists, at least in part, for the benefit of the contractor.  Turning to the 
second factor, the parties dispute whether the government violated FAR 15.306(d).  
Both Chugach and the government cite to decisions by the Government Accountability 
Office and the United States Court of Federal Claims applying FAR 15.306(d) in the 
context of bid protests (app. br. at 128; gov’t resp. at 48-49).  Chugach cites to 
decisions requiring that the government conduct discussions that are meaningful and 
not misleading (app. br. at 128 (citing ACS Gov’t Sols. Grp., Inc., B-282098, 99-1 
CPD ¶ 106 (Comp. Gen. June 2, 1999)).  Conversely, the government contends that it 
did comply with FAR 15.306 by directing Chugach to the areas of concern in its 
proposal (gov’t reply at 47-62). 
 
 
7 LaBarge does not explicitly state such a rule, but as a general proposition, any appeal 
must demonstrate a violation of a contact term, law, or regulation and harm.   

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 It is undisputed that in August 2012, the government technical evaluation team 
assigned Chugach a significant weakness regarding its proposed staffing levels for 
annexes 020000, 150000, 160000, and 180000 in its first proposal revision (R4, tab 2-
42.2 at GOV474788).  In fact, the same report assigned 8 of the 9 offerors the same 
significant weakness (id. at GOV474788, GOV474813, GOV474839, GOV474863, 
GOV474888, GOV474915, GOV474940, GOV474989).  The technical evaluation and 
price evaluation reports both went through the Source Selection Advisory Council to 
the source selection authority (the Contracting Officer).  The next month, in 
September 2012, the SSAC recognized the disparity between the IGE and the 
proposals of 8 offerors, and indicated that the IGE could be at fault, or the offerors 
might be attempting to position themselves for award, or that the offerors might be 
planning on improved and more efficient work practices.  (R4, tab 2-42.4 
at GOV1722546)  The SSAC concluded that the wide range of proposed FTEs “is an 
indicator that offerors should be prompted to review the performance work statement 
to ensure their proposals include the level of effort required” (id.).  Thus, while the 
technical team found a significant weakness, the SSAC, which reviews the technical 
and price team reports, found that there was a concern with the staffing levels, but fell 
short of identifying it as a weakness. 
 
 Following these evaluations, in November 2012, the Navy issued discussion 
questions to the offerors, including Chugach.  Here, the Navy brought attention to the 
issue by requesting that Chugach “ensure your work hour estimates and FTE staffing 
for these annexes has adequately addressed no limitation to trouble call quantities, the 
increased requirements of the RFP (over historical) maintenance program including 
IMP, and environmental services specifically hazardous waste management” (R4, 
tab 2-42.5 at GOV474585).  This satisfies the FAR’s requirement that the contracting 
agency direct the bidder’s attention to the area of concern.  See, e.g., Advanced Data 
Concepts, Inc. v. United States, 43 Fed. Cl. 410, 422 (1999), aff’d, 216 F.3d 1054 
(Fed. Cir. 2000); see also, ORCA Nw. Real Estate Servs. v. United States, 65 Fed. Cl. 
1, 9 (2005) (“The substance of the requirement is that the protestor should be given 
at least one meaningful opportunity to respond to significant weaknesses”).  Chugach 
contends that the Navy’s question was inadequate to put it on notice of the significant 
weakness, because the question did not identify that the concern was the proposed 
hours were low or significantly low (app. br. at 131).  We disagree.  The discussion 
question asks Chugach to make sure the work hour estimates and staffing reflect the no 
limitation to trouble calls and the increased requirements of the new contract as 
compared to the historical trouble call data (R4, tab 2-42.5 at GOV474585).  While 
Chugach contends that this could reflect a proposal that was too high or too low, we do 
not see how references to “unlimited” service calls and “increased requirements” could 
reasonably be interpreted as telling the contractor that its bid was proposing too much 
staffing.  Chugach similarly cites to deposition testimony from a Navy witness who 
was a member of the SSAC, agreeing with Chugach’s question that the Navy’s 
question did not “clearly signal that [Chugach has] a significant weakness” (app. reply 

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at 20 (citing app. ex. 8 at 128)).  However, we do not find testimony by a member of 
the SSAC, six years after the events at issue, to predominate over the plain meaning of 
the document.  The testimony of the contracting officer that denied Chugach’s claim, 
and who was not a member of the SSAC that issued the discussion questions, is even 
less probative (app. reply at 20). 
 
 Even if the initial discussion questions were not enough to satisfy FAR 15.306(d), 
Chugach’s argument ignores the Navy’s determination that the IGE was too 
conservative, that the proposals should be compared to each other, rather than to the 
IGE, and that Chugach’s proposal did not have a weakness (R4, tab 2-43.4 
at GOV1202881).  Chugach submitted a third proposal revision (R4, tab 2-30.3 
at GOV212713_1).  Upon review of the third proposal revision, the Navy issued a third 
set of discussion questions specifically noting that Chugach’s FTE’s for certain annexes 
“appear low” and again asking Chugach to review its staffing (R4, tab 2-44.4 
at GOV7474553).  Once again, these discussion questions directed Chugach to the areas 
of concern, consistent with the requirements of FAR 15.306(d).  In the end, Chugach’s 
technical proposal was rated “good” following discussions (R4, tab 2-45.2 
at GOV475514).  Chugach attempts to evade the impact of these later discussion 
questions by arguing that the Navy’s later steps “only preserved the harm” (app. reply 
at 27) and argues that the SSAC’s decision to rely on a price comparison between 
offerors was unreasonable (id. at 28-34).  If we were to accept Chugach’s argument that 
discussion questions following a proposal revision “only preserve[] the harm” it would 
make the entire proposal review process irrelevant.  Rather, the requirement is simply 
that offerors be provided with a chance to remedy any significant weaknesses.  ORCA 
NW Real Estate, 65 Fed. Cl. at 9.  Further, we find no evidence that the decision to rely 
upon a price comparison between offerors to be unreasonable.  Chugach points to a 
number of purported statistical errors in the evaluation process; however, here 
Chugach’s argument becomes internally contradictory.  Chugach simultaneously 
contends that the government cunningly took advantage of its superior knowledge of the 
true cost of performing the WBOS contract to entice contractors into underbidding the 
contract to the financial benefit of the government while simultaneous contending that 
the government employees performing the price analysis were incompetent.  As we have 
already held that the government did not possess superior knowledge, any statistical 
errors were simply errors and not negligent negotiations.  Moreover, we note that 
Chugach previously endorsed the government’s statistical analysis before the GAO (see 
R4, tab 12-394.1 at MSJ Exhibit 42_9; R4, tab 12-405.1 at 1).  Accordingly, we hold 
that Chugach has not demonstrated that the government violated FAR 15.306(d). 
 
 Having determined that Chugach has not demonstrated that the government 
violated FAR 15.306(d), we need not reach the question of whether Chugach has 
demonstrated harm. 
 

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III.  Mutual Mistake 
 
 Chugach’s next theory is that it and the Navy were mutually mistaken that the 
workload data contained in the solicitation could be “mapped to the current 
requirements” (app. br. at 155).  This is different from the statement in Chugach’s 
complaint, and its claim, that the parties were mistaken in their belief that the contract 
could “be performed by a workforce of a similar size” to that of the existing contractor 
(compl. ¶ 143; R4, tab 4-1 at CFSI21902_45).  The government asserts that this is a 
“new claim” that was not presented to the contracting officer, and thus, that the Board 
is without jurisdiction to entertain it (gov’t resp. at 64-65). 
 
 To determine whether two claims are the “same claim” for jurisdictional 
purposes, we look to see if they involve the same operative facts.  Macro-Z Tech., 
ASBCA No. 60592, 19-1 BCA ¶ 37,358 at 181,659.  Put another way, “[t]he test for 
what constitutes a ‘new’ claim is whether ‘claims are based on a common or related 
set of operative facts.’”  Unconventional Concepts, Inc., ASBCA Nos. 56065 et al., 
10-1 BCA ¶ 34,340 at 169,591 (quoting Placeway Constr. Corp. v. United States, 
920 F.2d 903, 907 (Fed. Cir. 1990)).  Adding facts or legal arguments does not create a 
different claim.  K-Con Bldg. Systems, Inc. v. United States, 778 F.3d 1000, 1006 (Fed. 
Cir. 2015).  “The introduction of additional facts which do not alter the nature of the 
original claim . . . or the assertion of a new legal theory of recovery, when based upon 
the same operative facts as included in the original claim, do not constitute new 
claims.”  Trepte Constr. Co. Inc., ASBCA No. 38555, 90-1 BCA ¶ 22,595 at 113,385-
86.  A claim is new when it “‘present[s] a materially different factual or legal theory’ 
of relief.”  Lee’s Ford Dock, Inc. v. Sec’y of the Army, 865 F.3d 1361, 1369 (Fed. Cir. 
2017) (quoting K-Con Bldg. Sys., Inc., 778 F.3d at 1006).  “Materially different claims 
‘will necessitate a focus on a different or unrelated set of operative facts.’”  Id. 
(quoting Placeway Constr., 920 F.2d at 907).  Here, the operative facts for Chugach’s 
statement of its claim in its rule 11 brief are EJB’s performance data contained in the 
solicitation and the allegation that the parties shared an understanding of how the data 
“mapped” to the requirements of the solicitation.  Chugach does not define “mapping” 
in its brief.  While the term “mapping” has different meanings, we interpret Chugach’s 
brief as using the mathematical definition, meaning to apply a function to the elements 
of its domain.  Put more simply, we interpret the statement as meaning that the parties 
shared a belief that bidders could take the EJB data from the solicitation and, through 
some unstated mathematical formulae, arrive at similar estimates of the number of 
employees required to perform the work in the solicitation.  Similarly, the operative 
facts of Chugach’s statement of its claim in its complaint are EJB’s performance data 
contained in the solicitation and the parties’ belief that the contract could be performed 
by a workforce of a similar size.  Although the complaint and the rule 11 brief are 
worded differently, they are essentially the same theory because both versions 
essentially argue that the parties believed that Chugach could perform with its 

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proposed staffing.  Accordingly, we deny the government’s motion to dismiss Count 
III. 
 
 Turning to the merits of Count III, for a party to recover under the mutual 
mistake theory it must demonstrate: 
 
 (1) the parties to the contract were mistaken in their belief regarding a fact; 
 (2) that mistaken belief constituted a basic assumption underlying the contract; 
 (3) the mistake had a material effect on the bargain; and 
(4) the contract did not put the risk of the mistake on the party seeking 
reformation. 
 
National Australia Bank v. United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006) (citing 
Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir. 1990)).  Chugach has not 
established the existence of a mutual mistake. 
 
 Chugach contends that the parties were mistaken in their belief that “the volume 
and type of trouble calls in the solicitation data . . . aligned with the volume and type 
of trouble calls for the WSBOS contract” (app. br. at 156).  Chugach cites to the 
Navy’s reliance on historical data to prepare the IGE as evidence that the Navy shared 
in this belief (id.).  The Navy counters that Chugach is alleging that the parties “were 
mistaken about a prediction of the future, not about a fact existing in the present” 
(gov’t resp. at 66).  Under the appropriate standard of review, we denied the 
government’s motion to dismiss Chugach’s mutual mistake count.  Chugach III, 
19- 1 BCA ¶ 37, 380 at 181,719.  Pursuant to Rule 11, we are permitted to make 
findings of fact based upon the record, and we find that Chugach’s theory of recovery 
asserts a mistake of judgment and not a fact in existence.  Accordingly we find that 
Chugach cannot establish the existence of a mutual mistake.  Kellogg Brown & Root 
Servs., Inc., ASBCA Nos. 59385, 59744, 20-1 BCA ¶ 37,656 at 182,830 
(“Assumptions about future facts cannot establish a mutual mistake claim.”) (citing 
Dairyland Power Coop. v. United States, 16 F.3d 1197, 1202-03 (Fed. Cir. 1994).  
Additionally, the fixed price contract explicitly placed the risk of the alleged mistake 
on Chugach.  The contract provides that the “Contractor shall perform all required 
repairs below the stated liability limits, regardless of the volume of work, with no 
additional cost to the Government (R4, tab 1-14.2 at GOV17267).  Chugach contends 
that, just because the contract is a fixed price contract, it doesn’t prohibit a finding of 
mutual mistake (app. reply at 93).  Chugach also makes the unpersuasive argument 
that “[b]y providing the historical data and directing offerors to use that data to 
develop their proposals, the Navy intended to bear the risk of the mistake” (id.).  Here, 
the contract clause quoted above specifically assigns the very risk that Chugach 
complains of to Chugach.  We deny count III of Chugach’s complaint. 
 

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IV.  Constructive Change 
 
 Chugach additionally asserts a constructive change claim.  For a contractor to 
recover under a constructive change theory, it must demonstrate:  1) that it performed 
work beyond the requirements of the contract; and 2) that the additional work was 
ordered by the government.  See, e.g., Bell/Heery v. United States, 739 F.3d 1324, 
1335 (Fed. Cir. 2014).  Here, Chugach does not identify any tasks that it performed 
that were beyond the requirements of the contract.  Rather, Chugach asserts that its 
proposed staffing levels were incorporated into the contract, and that the Navy 
required it to perform work requiring a larger staff than contained in its proposal (app. 
br. at 158-63).  Chugach also alleges that the Navy’s purported negligent negotiations 
and withholding of superior knowledge can establish the government’s fault and result 
in a constructive change (app. br. at 163).  As we have already determined that the 
government did not engage in negligent negotiations or withhold superior knowledge 
we can reject this argument without further analysis. 
 
 Turning to Chugach’s primary argument, we first review the language of the 
contract.  Chugach relies upon the performance work statement of the solicitation 
provision, which states that “[t]he proposal presented by the offeror to whom the 
award is made will be incorporated, in whole or in part, into the contract at time of 
award” (R4, tab 3-1 at GOV18537), as providing that Chugach’s proposal was 
incorporated in its entirety, including its proposed staffing levels (app. br. at 104, 159).  
However, Chugach cites selectively from the performance work statement.  The 
contractual provision provides, in full, that: 
 
All terms and conditions of the contract award, 
performance work statement, and all attachments are 
applicable.  The proposal presented by the offeror to whom 
the award is made will be incorporated, in whole or in part, 
into the contract at time of award.  If the Contractor’s 
proposal contains terms or conditions more favorable to 
the Government, these more favorable terms and 
conditions shall be performed.  However, the minimum 
requirements of the performance work statement must be 
met.  
 
(R4, tab 3-1 at GOV18537) (emphasis added)  Moreover, the solicitation’s “List of 
Documents, Exhibits and Other Attachments” includes a number of documents to be 
incorporated into the contract, but the list does not include attachment J.M-5 (the FTE 
worksheet) (id. at GOV18586).  Interpreting the contract as a whole, we find that, to 
the extent Chugach’s proposal was incorporated into the contract, the full time 
equivalent staffing worksheet does not relieve Chugach from meeting the performance 

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standards of the contract.  As stated in the solicitation, “the minimum requirements of 
the performance work statement must be met” (id. at GOV18537). 
 
 Chugach relies upon the contract’s order of precedence clause to argue that its 
obligations pursuant to the contract were limited to the work it was capable of 
performing with its proposed staffing levels (app. br. at 160-61).  As noted above, the 
staffing worksheet is not an attachment expressly incorporated into the contact, thus 
the order of precedence clause is irrelevant.  Even if the staffing worksheet were 
incorporated into the contract, Chugach’s proposed interpretation of the attachment as 
limiting the work required pursuant to the terms of the contract would only apply to 
the extent that there was an inconsistency between contract documents.  However, 
Chugach has not identified a conflict between its staffing proposal and the express 
provision that “the minimum requirements of the performance work statement must be 
met” (R4, tab 3-1 at GOV18537).  Chugach additionally cites to deposition testimony 
of a retired contracting officer as evidence that Chugach’s proposal was incorporated 
into the contract (app. reply at 95-96).  However, interpretation of the terms of the 
contract is the province of the Board and the deposition testimony of retired 
government workers is not probative.  Similarly, Chugach’s citation of parol evidence 
such as comments on the draft of the solicitation, comments by the technical 
evaluation team regarding proposals submitted by various offerors, negotiations with 
offerors, a purported “agreement on staffing levels,” and comments supporting the 
contract award decision (app. reply at 96-99) are irrelevant where, as here, the 
solicitation is not ambiguous. 
 
 Chugach also fails to establish that the Navy directed it to perform work beyond 
the contract requirements.  At most, Chugach demonstrates that the Navy encouraged 
Chugach to meet the terms of the contract.  Chugach contends that it was not a 
volunteer and that the Navy pressured it to increase staffing beyond the levels 
contained in its proposal (app. br. at 162-63).  However, as held above, Chugach’s 
proposed staffing levels were not incorporated into the contract and Chugach was 
required to satisfy the minimum requirements of the contract’s performance work 
statement.  To the extent the government “pressured” Chugach to satisfy the minimum 
requirements of the contract’s performance work statement, this did not constitute a 
constructive change to the contract.  In fact, the evidence of record demonstrates that it 
was Chugach, and not the Navy, that made the decisions to increase staffing levels 
(R4, tab 5-5 at 77-78; tab 5-2 at 81). 
 
V.  Improper Withholding of Payment 
 
 The final count of Chugach’s complaint seeks return of payments withheld by 
the government.  In the WBOS contract, the government retained payments for 
specific tasks that Chugach failed to perform.  Specifically, in a November 14, 2015 
decision, the administrative contracting officer withheld $450,580.83 for certain 

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identified preventative maintenance tasks that Chugach failed to perform, and two 
positions that Chugach had not staffed (app. supp. R4, tab 1414 at CSUP 49777-78).  
For these items, the Navy estimated the value of the work pursuant to 5252.242-9304 
by estimating the number of hours Chugach would have incurred to fill the vacant 
positions and perform the work (see app. supp. R4, tab 1416.01 at CSUP 49832-33).  
Chugach does not challenge this withholding, except to the extent that it prevails in 
one of its other theories and demonstrates that it performed additional work not 
required by the contract (app. reply at 104).  As we denied counts I through IV of 
Chugach’s complaint, we hold that the government is entitled to the amounts 
specifically identified and withheld.  The November 14, 2015 decision also indicated 
that the Navy would make temporary withholdings of 10% of the total contract 
amount, with the withholding to become permanent at the end of the fiscal year (app. 
supp. R4, tab 1416.01 at CSUP49833).  The Navy subsequently reduced the 
percentage of withholding to 5 %, and released 40% of the prior withholdings (R4, 
tab 11-6 at GOV1723225_3).
8 
 
 Chugach challenges this withholding for two reasons.  First, Chugach contends 
that the contract does not provide the government with the ability to withhold a fixed 
percentage of the contract (app. br. at 164-65).  Second, Chugach contends that the 
government is not entitled to retainage because the government caused Chugach’s 
inability to meet the contract requirements (app. br. 165).  Chugach drops this second 
argument in its reply brief, and asserts that the government failed to establish the 
propriety or amount of its withholdings (app. reply at 109-14). 
 
 Turning to Chugach’s first argument, we find that the contract does not prohibit 
the Navy from retaining funds based on a percentage of contact value.  Contract clause 
5252.242-9304 provides in relevant part: 
 
In the event the price of non-performed or unsatisfactory 
work cannot be determined from the prices set out in the 
Schedule or on the basis of the actual cost to the 
Government, estimating methods may be used to 
determine an amount, which reflects the reduced value of 
services performed.  The Government may estimate the 
cost using wage rates and fringe benefits included in the 
wage determinations included in the contract, Government 
estimates of the Contractor’s overhead and profit rates, and 
Government estimates of material costs if applicable. 
 
 
8 It is not clear from the document whether the 40% release applied to the $450,580.83 
or just to the 10% retainage (R4, tab 11-6 at GOV1723225_3). 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
64 
 
(R4, tab 3-1 at GOV18542)  Chugach interprets the clause as limiting the 
government’s ability to determine the value of the non-performed or unsatisfactory 
work to estimates of wage rates, overhead, profit, and material costs (app. reply at 107-
08).  Chugach cites to various rules of contract interpretation, such as specific 
language qualifying general language, expression unius est exclusion alterius, an 
interpretation giving meaning to all parts being preferable to one that renders another 
part superfluous, and the rule of contra proferentem (app. reply at 108-09).  However, 
all of Chugach’s arguments ignore the language of the clause providing that 
“estimating methods may be used” to estimate the costs  (R4, tab 3-1 at GOV18542).  
In a separate sentence, the provision states that the government “may use” certain 
specified estimating techniques “if applicable” (id.).  The contractual language 
providing that the government “may estimate” the costs in the specified manner, if 
applicable, does not limit government to estimating costs solely in that manner. 
 
 As we have denied Counts I through IV of Chugach’s complaint, we similarly 
find that Chugach had not demonstrated that the government was responsible for 
Chugach’s failure to perform under the contract.  This leaves only Chugach’s 
argument in its reply brief that the Navy failed to establish the propriety or amount of 
its withholdings.  As an initial matter, we must consider whether Chugach’s argument, 
raised in its reply brief, is timely.  As a general rule, arguments raised for the first time 
in a reply brief are waived.  See, e.g., Buck Town Contractors & Co., ASBCA 
No. 60939, 18-1 BCA ¶ 36,951 at 180,059.  However, here, the retainage is a 
government claim, and the government bears the burden of proof.  The government 
submitted declaration testimony to support its retainage as part of its post-hearing 
response brief.  Thus, Chugach’s reply brief was its first opportunity to respond to the 
government’s new evidence.  The government subsequently requested, and was 
permitted to file, a sur-reply brief.  Thus, we find that consideration of Chugach’s 
argument from its reply brief does not prejudice the government.  
 
 As we noted in Aegis Defense Services, LLC, d/b/a GardaWorld Fed. Servs., 
ASBCA No. 62442 et al., 22-1 BCA 38,099 at 185,029, the amount of a reduction in 
contract amount is a matter of quantum, but the government must demonstrate harm in 
the entitlement phase.  In Aegis, the government asserted a diminution in value.  Here 
the Navy asserts that work was not performed or was performed late.  However, the 
Navy never identifies the work that it contends was not performed or was performed 
late. 
 
 The Navy submitted a number of proposed factual findings relating to its 
withholding of contractual amounts (see Navy Proposed Findings of Fact ¶¶ 375-84).  
The only costs specifically identified in the factual findings pertain to the deductive 
modification that Chugach is not challenging (see Navy Proposed Findings ¶¶ 376, 

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
65 
 
383).  At best, the Navy relies upon the declaration of the former Contracting Officer’s 
Representative that: 
 
CFSI did fail to perform some work in accordance with the 
contract requirements, including the scheduled PM work 
based on the EJB work plans.  The result was a large 
backlog of PM work orders that CFSI failed to complete in 
a timely manner.  CFSI also failed to perform trouble calls 
in a timely manner and to staff some of the key personnel 
positions (e.g., Electrical Supervisor and Utilities 
Manager), for periods of time in FY15 and FY16.  
NAVFAC estimated the cost of the FY16 non-performed 
work as 5% of the contract value of the recurring work. 
 
(Gov’t ex. 1 ¶ 20)  This conclusory statement is unsupported by citation to any 
workpapers or documentation of non-performed work.  Moreover, Mr. Sandoval does 
not state that he personally estimated the value of the non-performed, but just that 
“NAVFAC” estimated the cost without identifying the individual or individuals that 
purportedly estimated the value to be 5 percent (id.). 
 
 The Navy additionally cites to its performance evaluations and Chugach’s 
responses (gov’t ex. 8 at CFSI161578_1-2; R4, tab 11-2 at GOV172310_2; R4, tab 11-
4 at GOV172317_2-3; R4, tab 11-6 at GOV172325_3; app. supp. R4, tab 1428 
at CSUP49928-29).  These documents demonstrate that there was a backlog of work 
that Chugach had not performed timely.  However, contract clause 5252.242-9304 
applies when work cannot be reperformed.  The clause also permits the government to 
require performance and to pay the contract amount.  Here, the government cites to a 
March 29, 2016 email from Chugach’s Robert Haunton with the subject line “Backlog 
Reduction.xlsx” as evidence that Chugach had not performed the work required by the 
contract (gov’t resp. at 82; gov’t proposed finding of fact ¶ 385 (citing gov’t ex. 8 
at CFSI161578_1-2)).  However, the cited document, and the attachment provided by 
Chugach (app. ex. 17) also demonstrate that Chugach was increasing its staffing levels 
to reduce the backlog, implying that the work was being performed, albeit late.  Thus, 
we hold that the government has not demonstrated by a preponderance of the evidence 
that Chugach failed to perform contractual work, and therefore, is not entitled to a 5% 
withholding of the contract amount. 
  

DOCUMENT FOR PUBLICE RELEASE.  The decision issued on the date below is subject 
to an ASBCA Protective Order.  This version has been approved for public release. 
66 
 
CONCLUSION 
 
 For the reasons stated above, Chugach’s appeal is denied with regard to Counts 
I, II, III, and IV.  Chugach’s appeal with regard to Count VI,  pertaining to the 5% 
withholding, is granted and remanded to the parties to determine quantum.   
 
 Dated:  June 8, 2023 
 
 
 
 
 
 
 
 
 
 
 
DAVID D’ALESSANDRIS 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
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 No. 61320, Appeal of Chugach 
Federal Solutions, Inc., rendered in conformance with the Board’s Charter. 
 
 Dated:  June 9, 2023 
 
 
 
 
 
 
 
 
 
PAULLA K. GATES-LEWIS 
Recorder, Armed Services 
Board of Contract Appeals