CROSS MOTIONS FOR PARTIAL SUMMARY RELIEF GRANTED IN PART:  
July 29, 2010 
CBCA 420, 450, 451, 1307, 1855 
DICK/MORGANTI, A JOINT VENTURE, 
Appellant, 
v. 
GENERAL SERVICES ADMINISTRATION, 
Respondent. 
Kerry L. Kester and Joel D. Heusinger of Woods & Aitken, LLP, Lincoln, NE; 
Barbara G. Werther of Howrey LLP, Washington, DC; John W. Ralls of Howrey LLP, San 
Francisco, CA; and Richard T. Bowles and Kenneth G. Jones of Bowles & Verna LLP, 
Walnut Creek, CA, counsel for Appellant.  
Thomas Y. Hawkins, Jay N. Bernstein, Lesley M. Busch, and Heather R. Cameron, 
Office of General Counsel, General Services Administration, Washington, DC, counsel for 
Respondent. 
Before Board Judges DANIELS (Chairman), BORWICK , and GOODMAN. 
BORWICK, Board Judge. 
In these construction contract cases, the General Services Administration (GSA or 
respondent) moves for partial summary relief on the construction and application of the 
Mark-Up Rate clause and the Daily Delay Rate clause and moves to dismiss portions of 
Dick/Morganti, A Joint Venture’s (DM’s or appellant’s) quantum claim as barred by those 

   
  
  
 
    
  
  
 
    
    
    
  
     
 
    
   
 
   
2 CBCA 420, 450, 451, 1307, 1855 
clauses.1  Appellant cross-moves for summary relief on one issue, whether the Mark-Up Rate 
clause entitles appellant to apply an 18% mark-up on disputed change orders.  We grant 
appellant’s motion for summary relief on that issue. We conclude that appellant may charge 
an 18% mark-up on disputed change orders.  We also grant respondent’s motion for 
summary relief in part.  We conclude that, contrary to appellant’s position, the Mark-Up 
Rate clause is to include appellant’s field support costs.  Appellant may not claim separately 
for those costs.  
We also agree with respondent that the Daily Delay Rate clause applies to all proven 
days of compensable delay, not just the first fifty days of government-caused delay, as urged 
by appellant.  We conclude that the Daily Delay Rate clause applies to all costs, direct and 
indirect,  associated with proven government-caused delay.  The clause limits appellant’s 
recovery for all such costs to the clause’s recovery rate of $8000 per day for proven 
compensable delay. 
Background 
This appeal is from a contracting officer’s decision denying claims under the 
construction phase of a contract for the design and construction of the San Francisco Office 
Building and Federal Courthouse. The firm fixed-price construction contract was entered 
into by respondent and appellant on or about February 14, 2003, at a price of $133,774,965. 
Complaint ¶¶ 12-15; Answer ¶¶ 12-15. On March 18, 2003, respondent issued a notice to 
proceed with a substantial completion date of November 13, 2005, or  970 calendar days 
from the effective date of the notice to proceed.  Complaint ¶ 17; Answer ¶ 17.  The project 
was finished at the end of February 2007. Appellant claims in bidding on the construction 
phase of the project that appellant and its subcontractors relied upon the accuracy, 
completeness, and constructability of the documents.  Complaint ¶ 21.  Appellant alleges 
that the construction documents were full of deficiencies, errors, conflicts, and omissions . 
Id. ¶ 22.  
Appellant alleges that as a result of the drawing deficiencies, appellant and its 
subcontractors had to perform significant extra work, that the work of appellant and its 
subcontractors was delayed, and that the delays were compensable because they were caused 
by the actions or inactions of respondent and its agents.  Complaint ¶ 24.  Appellant alleges 
that respondent repeatedly required appellant to perform extra work without compensation. 
Id. ¶ 25.  In this phase of the appeals, claimant seeks a total of $55,000,000 plus extensions 
1 Respondent also moves for summary relief on certain of appellant’s subcontractor 
pass-through claims.  Those issues will be addressed in a separate opinion.  

     
    
 
 
 
  
  
  
 
 
      
  
  
 
     
 
    
 
 
3 CBCA 420, 450, 451, 1307, 1855 
of time for alleged breach of contract (first claim), breach of the implied warranty of plans 
and specifications (second claim), and cardinal change (third claim). 
The first claim of the complaint contains allegations commonly found in construction 
contract disputes.  Appellant alleges that respondent furnished construction documents that 
were substantially defective and inadequate to permit performance of the work without an 
unreasonable number of corrections, clarifications, and re-design, resulting in an excessive 
number of requests for information (RFIs).  Complaint ¶ 34a. Appellant alleges that the 
defective design documents caused appellant and its subcontractors damages due to delays, 
acceleration, inefficient and out of sequence performance, and stacking of trades.  Id. ¶ 34b. 
Appellant alleges that respondent failed to respond in a timely manner to appellant’s RFIs 
for correction and clarification of the defective plans and inconsistent specifications.  Id. 
¶ 34c. Appellant alleges that respondent issued changes in the plans and specifications that 
far exceeded in number and consequences the scope of the design changes that would 
reasonably have been anticipated.  Id. ¶ 34d.  Appellant alleges that respondent ordered 
changes in the plans and specifications in an untimely manner and without sufficient notice 
to appellant to allow it to reschedule and resequence operations in an orderly and efficient 
fashion.  Id. ¶ 34e. Appellant alleges that respondent imposed overly strict requirements and 
inspections beyond those called for in the contract, id. ¶ 34f; failed to exercise its 
responsibilities as owner of the project to minimize adverse impact on the work, particularly 
as respects inspection of the work, id. ¶ 34g; refused appellant’s requests for time extensions 
to which it had become entitled, id . ¶ 34h; and refused appellant’s requests for equitable 
adjustments due to it under the contract that would be sufficient to compensate it for the 
numerous delays, disruptions, inefficiencies, and acceleration of the work, id . ¶ 34i. 
Appellant alleges that respondent failed to pay it for the additional amounts due it for the 
added work performed as a result of the changes, id. ¶ 34j; failed to pay the entire contract 
price based on the assertion of improper back-charges and liquidated damages, id. ¶ 34k; and 
failed to pay mark-ups on change orders as called for by the contract, notwithstanding 
having agreed to pay and notwithstanding having actually paid those mark-ups during the 
performance of the project, id. ¶ 34l.  
Undisputed Contract Provisions 
The solicitation and resulting contract contained certain clauses pertinent to the mark­
up and daily delay rate to be applied in administering contract costs, particularly those 
regarding changes, delays, and disputes about changes and delays: 
552.243-71   Equitable Adjustments (APR 1984). 

  
   
  
 
   
 
 
   
 
  
  
 
4 CBCA 420, 450, 451, 1307, 1855 
(a) The provisions of the “Changes” clause prescribed by FAR [Federal 
Acquisiiton Regulation] 52.243–4 are supplemented as follows: 
(1) Upon written request, the Contractor shall submit a proposal, in 
accordance with the requirements and limitations set forth in the “Equitable 
Adjustments” clause, for work involving contemplated changes covered by 
the request.  The proposal shall be submitted within the time limit indicated 
in the request or any extension of such time limit as may be subsequently 
granted.  The Contractor’s written statement of the monetary extent of a claim 
for equitable adjustment shall be submitted in the following form: 
. . . . 
(ii) For proposals in excess of $5,000, the claim for equitable adjustment shall 
be submitted in the form of a lump sum proposal supported with an itemized 
breakdown of all increases and decreases in the contract in at least the 
following detail: 
Direct Costs 
Material quantities by trades and unit costs (Manufacturing burden associated 
with material fabrication performed will be considered to be part of the 
material costs of the fabricated item delivered to the job site) Labor 
breakdown by trades and unit costs (Identified with specific item of material 
to be placed or operation to be performed) Construction equipment 
exclusively necessary for the change Costs of preparation and/or revision to 
shop drawings resulting from the change Workers’ Compensation and Public 
Liability Insurance Employment taxes under FICA and FUTA Bond 
Costs—when size of change warrants revision 
Mark-up rate on Direct Costs 
The Mark-up rate on direct costs submitted on the Total Evaluated Price 
[Form] by the Contractor shall be used as the rate on all equitable adjustments 
during both the Design Assist Phase and the Construction Phase. 

  
     
 
 
  
      
 
 
    
  
        
 
 
5 CBCA 420, 450, 451, 1307, 1855 
Daily Delay Rate 
The Daily Delay Rate shall be an allowable cost added to the Equitable 
Adjustments with the following exceptions: 
[Listed exceptions not applicable here] 
. . . . 
Equitable adjustments for deleted work shall include credits for direct costs 
plus the mark-up rate. On proposals covering both increases and decreases in 
the amount of the contract, the application of the mark-up rate [is] on the net 
change in direct costs for the Contractor or subcontractor performing the 
work. 
Respondent’s Motion for Summary Relief, Exhibit 8, Attachment V. 
Section H of the contract contained the following pertinent provision: 
4. Contract Modification Mark-Up Rate. 
A. The contractor shall provide a bid on the “Total Evaluation Price Form” in 
Section B for his mark-up rate that will be in the form of a single mark-up to 
be applied to the total direct cost of any modification, and will be inclusive of 
all prime and first tier subcontractor overheads, general and administrative 
cost, bonds, insurance, site overhead, miscellaneous costs such as small tools 
and the like, and all other indirect and direct costs associated with any contract 
modification.  This rate offered by the contractor shall be accepted by the 
government and used in contract modifications in lieu of negotiating 
overhead, commission, and profit and will be applied to the overall total direct 
costs on each modification for the prime contractor and first tier 
subcontractor.  (No other mark-ups, fees or other indirect costs will be 
allowed the prime contractor or first tier subcontractor on either their own 
work or on work being performed by lower tier subcontractors.) 
. . . . 
B. Clause GSAR [General Services Administration Acquisition Regulation] 
552.243-71, Equitable Adjustments (APR 1984) is hereby modified to provide 
that the Mark-Up rate offered by the Contractor on the Total Evaluated Price 

 
 
 
 
        
 
     
  
  
6 CBCA 420, 450, 451, 1307, 1855 
Form in Section B shall be used in determining all equitable adjustments, 
additive or deductive, which may be negotiated or [_____] [sic] under the 
contract.  The mark-up rate shall also be used, when applicable, in 
determining any entitlement claimed by the Contractor under the Disputes 
clause.  
C. Equitable adjustments will be determined as follows: 
. . . . 
4. The Mark-Up Rate identified on the Total Evaluation Price Form 
shall be applied to the negotiated direct costs to establish a price for the 
contract modification on the following conditions: 
a. Less than 25% of the work for which the 
equitable adjustment is being negotiated has been 
completed; and 
b. The Contractor agrees that the equitable 
adjustment represents a complete settlement, and 
releases the Government from all claims for time 
or money arising in whole or in part out of the 
circumstances giving rise to the equitable 
adjustment.  
5. If either condition 4.a. or 4.b. is not satisfied, a rate equal to 
the bid Mark-Up rate, less 5 percentage points, shall be applied 
to the negotiated direct costs to establish a price for the contract 
modification.  
5. Compensable Delay Costs 
The contractor shall provide an offer on the “Total Evaluation Price Form” in 
Section B for his daily delay rate to be used as the sole daily delay cost to 
include all contractor and subcontractor (at any tier) field overhead, home 
office overhead, general overhead, general and administrative costs, 
commissions, profits, bonds, insurance fees and any other direct and indirect 
costs which are the result of delays caused solely by the government.  The rate 
will be multiplied by the number of days delay shown on the Evaluation Form 
(based on historical data) and added to the contractor’s offer for evaluation 

   
    
 
   
  
 
   
  
     
 
  
         
 
  
  
7 CBCA 420, 450, 451, 1307, 1855 
purposes only.  The rate offered shall be accepted by the government and used 
to negotiate government-caused delays provided that the contractor can 
demonstrate that the delay was caused solely by the government and resulted 
in  a delay to the critical path of the contract was evidenced by the current and 
up-to-date CPM [critical path method] schedule that has been approved by the 
Contracting Officer.  Recovery of such sum shall be the Contractor’s sole 
remedy for compensable delays.  For all delays, the daily delay cost covers all 
costs and mark-ups related to delay.  Therefore, the contract modification 
mark-up covered under paragraph 4) above does not apply to delay 
modifications or to any portion of a modification that addresses delay.  
. . . . 
6. [misnumbered “4” in document] Evaluation Estimates on the Price 
Evaluation Form 
The estimated modification [for] direct costs and compensable delay times set 
forth on the Total Evaluated Price Form are based upon the Government’s 
estimate of reasonably possible occurrences.  In no way do they establish 
entitlement, and under no circumstances will the Government be liable to the 
contractor should actual modification quantities or compensable delays vary 
by any degree from the evaluation estimates.  
Respondent’s Motion for Summary Relief, Exhibit 7; Appellant’s Opposition, Exhibit 8. 
Section L, ¶ IIB.3, provided in pertinent part: 
Evaluated Future Modifications Mark-Up Rate.  State a percentage mark-up 
rate to be applied to work performed under the Contract. Apply the rate to the 
estimated modification direct costs provided on the Total Evaluated Price 
Form. 
. . . . 
This rate must include all prime and first tier subcontractor overheads, general 
and administrative costs, bonds, insurance, commission, profit, and all other 
direct and indirect costs which may be associated with work performed under 

  
 
 
       
 
 
      
           
  
   
        
 
   
  
8 CBCA 420, 450, 451, 1307, 1855 
this contract.  Upon award of the Contract, the mark-up rate offered by the 
awardee shall be used in determining all equitable adjustments, additive or 
deductive, which may be negotiated under the Contract.   
Appellant’s Opposition, Exhibit 9.  
Appellant’s Statement of Undisputed Facts Regarding Appellant’s Bid for Mark-Up Rate 
and Daily Delay Rate 
In accordance with the instructions in the solicitation, appellant included a mark-up 
on its bid form.  The rate was 18%.  Appellant’s Statement of Undisputed Facts ¶ 2; 
Declaration of Ronald G. Brookfield (June 22, 2010) ¶ 15.  Appellant bid a daily delay rate 
of $8000.  Declaration of John T. Sebastian (June (undated by day) 2010) ¶ 15.  
Appellant’s Statement of Undisputed Facts Regarding Appellant’s Reliance on 
Respondent’s Statement 
Appellant states that it built the project according to the construction documents of 
February 14, 2003, that respondent provided to it and that those construction documents 
were represented to be 100% complete.  Sebastian Declaration ¶ 6.  Appellant proposed to 
build the project in accordance with those documents for a bid price of $133,774,965.  Id. 
¶ 7. In bidding the $8000 daily delay rate, appellant states that it relied on respondent’s 
representations in the solicitation that there would be no more than fifty days of delays 
caused by respondent.  Id. ¶¶ 12, 14.  In bidding the $8000 daily delay rate, appellant states 
that it did not anticipate that there would be delays of 473 days, which appellant attributes 
mostly to respondent.  Id. ¶ 13.  Had appellant known that there would be government-
caused delays beyond fifty days, appellant’s declarant says that appellant would have bid a 
considerably higher number.  Id. ¶ 76.  
In addition, appellant states that the construction documents were flawed.  During the 
course of the project construction, appellant states that GSA revised 91% of the original 
drawings and issued fifty-three new drawings as a result of instructional bulletins, in 
addition to other directed and constructive changes.  Sebastian Declaration ¶ 17.  
Respondent’s Statement of Undisputed Facts Regarding Appellant’s Application of Mark-
Up Rate 
Section I of DM’s claim seeks an 18% mark-up on the claimed additional field labor, 
field supervision, materials, equipment, and consulting costs allegedly incurred by DM due 

  
 
 
 
  
   
  
  
  
 
  
 
 
   
  
     
9 CBCA 420, 450, 451, 1307, 1855 
to the alleged imposition by GSA of concrete finish standards that were higher than 
specified. 
Section II of DM’s claim seeks an 18% mark-up on claimed extra costs allegedly 
incurred by DM to perform “various work activities” to identify, process, and administer 
RFIs which allegedly were the result of GSA’s “defective and deficient design on the 
Project.” 
Section III of DM’s claim seeks payment for open and disputed change order requests 
(CORs) submitted by DM to GSA on the project.  In addition to the alleged direct cost of 
performing each COR, DM claims entitlement to “direct field support costs” allegedly 
associated with and allocated to the disputed CORs, in the amount of $6,039,843, plus an 
18% mark-up on said “direct field support costs” in the amount of $1,087,172 (rounded 
figure). 
Section IV of DM’s claim seeks payment for “direct field support costs” associated 
with two specific open and disputed CORs:  Disputed Issue No. 364, “Rebar Congestion,” 
and Disputed Issue No. 590, “Concrete Finish.”  In addition to the alleged direct cost of 
performing each of these CORs, DM claims entitlement to “direct field support costs” plus 
an 18% mark-up on these “direct field support costs.”  
The “direct field support costs” claimed by DM in sections III and IV of its claim are 
an allocated portion of the $16,613,939 overrun allegedly experienced by DM to its 
budgeted costs.  This portion is composed of typical site overhead items, such as project 
supervisory personnel, office personnel, and office expenses.  Respondent maintains that 
recovery of these costs is limited to the contract mark-up rate. 
Section V of DM’s claim seeks payment for acceleration and overtime costs paid by 
DM to various subcontractors, plus an18% mark-up of those costs, plus claimed overtime 
expended by DM in operating the elevator, plus an 18% mark-up of those costs.  
Section VIII of DM’s claim seeks a mark-up of 7.27% on each of the amounts 
claimed by DM’s subcontractors, and passed through by DM as part of this appeal.  The 
7.27% rate is compounded on the subcontractors’ 10% mark-up to arrive at a total mark-up 
on the subcontractor claims of 18%. 
Respondent states that because neither of the conditions set forth in Section H, 
paragraph 4, of the contract for application of the 18% rate have been satisfied, the proper 

 
  
  
 
 
  
   
 
  
 
 
    
      
 
  
 
 
10 CBCA 420, 450, 451, 1307, 1855 
mark-up on the amounts claimed by DM in Sections I, II, III, IV, V, and VIII of its claim 
submittal is 13%.  Respondent’s Statement of Undisputed Facts ¶¶ 13-20.  
Appellant states that in nearly all circumstances when respondent negotiated changes 
with appellant during the project, it consistently allowed an 18% mark-up, even when more 
than 25% of the work had been completed and even when the work was entirely complete. 
Declaration of Vincent C. Petito (June 22, 2010) ¶ 9.  According to appellant, GSA in its 
pre-negotiation position (PNP) nearly always used an 18% mark-up rate in its independent 
estimates of appellant’s change order requests.  Id. GSA’s unilateral change orders 
overwhelmingly used the 18% mark-up rate.  Id. Through early settlement negotiations 
GSA allowed an 18% mark-up on change order requests.  Brookfield Declaration ¶ 24.  In 
over 100 negotiated change order requests, GSA allowed an 18% mark-up rate on submitted 
costs included in GSA unilateral modifications.  Petito Declaration ¶ 12.  It was not until 
the end of 2009 that GSA took the position that it would only allow the 13% mark-up rate. 
Id. 
As for direct field support costs, appellant states that such costs are booked in its 
accounting system as direct costs, not overhead costs. Brookfield Declaration ¶¶ 40, 48, 50. 
Appellant states that it backed out field support costs from base bid work, and then allocated 
the remaining field support costs to disputed change order requests.  Id. 
Respondent’s Undisputed Facts Regarding Appellant’s Application of Daily Delay Rate 
Section VI of DM’s claim seeks compensation for “non-direct overhead costs” at the 
rate of $2689.49 per day, which DM multiplies by 356 days of compensable delay to arrive 
at an amount due of $957,457, plus 18% markup (total amount claimed of $1,129,799).  
DM, on behalf of its subcontractor Webcor Concrete, seeks to recover $1,672,447 
plus 10% mark-up for 268 days of alleged government-caused delay for a total of 
$1,839,691. 
DM, on behalf of its subcontractor Bay Area Reinforcing (BAR), seeks to recover 
time related delay costs of $430,372 plus 10% markup for 134 days of alleged compensable 
delays, i.e. 106 days of government-caused delay and 28 days of adverse weather delays. 
The total claimed is $517,409. 
DM, on behalf of its subcontractor Boyett Door and Hardware, seeks to recover 
$670,459, inclusive of mark-up, for 260 days of alleged government-caused delay.   

  
 
     
  
 
 
 
 
      
       
     
    
  
   
  
11 CBCA 420, 450, 451, 1307, 1855 
DM, on behalf of its subcontractor Marelich Mechanical Company (MMC), seeks to 
recover $948,562, inclusive of mark-up, for an alleged 473 days of government-caused 
delay.  The claim on behalf of MMC also includes the labor escalation costs and extended 
general conditions costs allegedly incurred by its subcontractor, Syserco, as a result of 
project delays. 
DM, on behalf of its curtainwall, glazing, metal panel, skylight, and sunscreen 
subcontractor, Permasteelisa Cladding Technologies, Inc., claims $1,606,119, inclusive of 
mark-up, for an alleged 232 days of government-caused delay. 
DM, on behalf of an interior finish subcontractor, ISEC, Inc. claims $174,831 plus 
10% mark-up for an alleged 420 days of government-caused delay.  The total plus mark-up 
is $192,314.  
DM, on behalf of its subcontractor for metal fabrications, metal stairs, catwalks, and 
sunscreen supports, T&M Manufacturing, claims $1,251,010, inclusive of 10% mark-up, 
for an alleged 406 days of government-caused delay.  
DM, on behalf of Performance Contracting, Inc., its subcontractor for metal stud 
framing, drywall, cement panels, and acoustical work, claims $1,734,866, plus 10% mark­
up, for 484 days of alleged government-caused delay.  Included are claimed expenses for 
additional jobsite management, administrative expenses, unabsorbed home office overhead 
expenses, storage and personnel standby costs, labor escalation costs, and material escalation 
costs.  The total plus mark-up is $1,908,352.  
DM, on behalf of its electrical subcontractor, Rosendin Electric, Inc., seeks recovery 
of $2,203,972, plus mark-up, for sixteen months of alleged government-caused delay. 
Included in this claim are costs for additional general foreman field supervision, additional 
material handler, extended home office overhead, escalated labor, and extended jobsite 
overhead.  The total plus mark-up is $2,424,369. Respondent’s Statement of Undisputed 
Facts ¶¶ 27-36.  
Respondent maintains that the extended performance time-related damages alleged 
by appellant and its subcontractors to have resulted from delays for which respondent is 
responsible total $12,488,084.  Id. ¶ 37.  Appellant does not disagree with the figure, 
but disputes the characterization of its claim as being solely time-related; appellant maintains 
that the claim also includes direct costs which it maintains are excluded from the daily delay 
rate. Appellant’s Statement of Genuine Issues ¶¶ 26-27.  

  
 
 
 
   
  
  
    
  
 
    
  
    
  
  
12 CBCA 420, 450, 451, 1307, 1855 
Discussion 
The parties have cross-moved for summary relief. Summary relief is appropriate 
when the moving party is entitled to judgment as a matter of law, based on undisputed 
material facts.  The moving party bears the burden of demonstrating the absence of genuine 
issues of material fact. All justiciable inferences must be drawn in favor of the non-movant. 
Government Marketing Group v. Department of Justice , CBCA 964, 08-2 BCA ¶ 33,955, 
at 167,990-91 (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986);  Anderson v. Liberty 
Lobby, Inc., 477 U.S. 242 (1986)). 
When, as here, both parties have moved for summary relief, each party’s motion must 
be evaluated on its own merits and all reasonable inferences must be resolved against the 
party whose motion is under consideration.  First Commerce Corp. v. United States , 335 
F.3d 1373, 1379 (Fed. Cir. 2003); DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314, 1322 
(Fed. Cir. 2001); Metlakatla Indian Community v. Department of Health and Human 
Services, CBCA 181-ISDA, et al., 09-2 BCA ¶ 34,307, at 169,466; Government Marketing 
Group, 08-2 BCA at 167,991 (citing California v. United States, 271 F.3d 1377, 1380 (Fed. 
Cir. 2001)). The mere fact that both parties have moved for summary relief does not impel 
a grant of one of the motions.  California , 271 F.3d 1377, 1380; see also Electronic Data 
Systems, LLC v. General Services Administration, CBCA 1552, 10-1 BCA ¶ 34,316, at 
169,505 (2009). 
Pure contract interpretation, however, is a question of law that may be resolved on 
summary relief.  Electronic Data Systems, 10-1 BCA at 169,505 (citing P.J. Maffei Building 
Wrecking Corp. v. United States, 732 F.2d 913, 916 (Fed. Cir. 1984)).  Based upon a review 
of the parties’ statement of undisputed facts, and the terms and conditions of the contract, 
the Board concludes that there are no material disputed facts and that this case is appropriate 
for summary resolution, since the issues presented involve a matter of pure contract 
interpretation. 
We now turn to the construction of the Mark-Up and Daily Delay Rate clauses at 
issue in this case.  As the Board recently noted: 
Contract interpretation begins with the language of the written agreement. 
Foley Co. v. United States , 11 F.3d 1032, 1034 (Fed. Cir. 1993).  When 
interpreting the contract, the Board is bound to consider the document as a 
whole and interpret it in such a way as to give reasonable meaning to all of its 
parts.  McAbee Construction, Inc. v. United States , 97 F.3d 1431, 1434-35 
(Fed. Cir. 1996).  An interpretation will generally be rejected if it leaves 
portions of the contract language meaningless, useless, ineffective, or 

 
  
 
   
 
   
 
        
    
 
           
 
 
 
 
 
13 CBCA 420, 450, 451, 1307, 1855 
superfluous.  Gould, Inc. v. United States , 935 F.2d 1271, 1274 (Fed. Cir. 
1991); Connor Brothers Construction Co. , VABCA 2519, et al., 95-1 BCA 
¶ 27,409 (1994). 
F.A. Wilhelm Construction Co. v. Department of Veterans Affairs, CBCA 719, 09-2 BCA 
¶ 34,228, at 169,181.  
Construction of the Mark-Up Clause 
Appellant argues that the plain terms of the Mark-Up clause--subclause H4B-- permit 
it to claim the 18% mark-up rate it entered onto the Total Evaluated Price Form in 
calculating disputed equitable adjustments and that the 5% reduction imposed by subclause 
H4C only applies to negotiated equitable adjustments before the onset of a dispute. 
Appellant’s Motion for Summary Relief at 1; Appellant’s Opposition to Respondent’s 
Motion for Summary Relief at 7-8.  Respondent argues that subclauses H4B and H4C must 
be read together so as to harmonize and give meaning to all of the clause’s parts. 
Respondent’s Opposition Memorandum at 3.  Respondent claims that appellant’s reading 
of subclause H4C is “narrow and constricted.”  Id. at 5.  
Appellant prevails on this issue. Contrary to respondent’s position, subclauses H4B 
and H4C are not harmonized and are not related to each other. Indeed, H4B clearly states 
that “the mark-up rate [identified on the Total Evaluation Price Form, i.e., the 18%] shall 
also be used, when applicable, in determining any entitlement claimed by the Contractor 
under the Disputes clause.”  In other words, under subclause H4B, appellant was allowed 
to use the 18% mark-up rate in submitting claims to the contracting officer under the 
Disputes clause and establishing its damages in this appeal. The 5% mark-up reduction of 
subclause H4C, at paragraph 5 applies to “the negotiated direct costs to establish a price for 
the contract modification” in circumstances where the conditions of clause H4C, at 
paragraph 4, were not met. Subclause H4B does not explicitly cross-reference the 5% 
reduction of subclause H4C, paragraph 5, to mark-ups for claims that are in dispute either 
before the contracting officer or before this Board.    
Construction of the Daily Delay Rate Clause 
Appellant argues that the daily delay rate of $8000 per day it submitted as required 
by the Daily Delay Rate clause of H5 only applies to the first fifty days of government-
caused delay because of representations by the Government that there would be no more 
than fifty days of government-caused delay on the project.  Appellant’s Opposition 
Memorandum at 20-22.  Appellant has submitted declarations of its officials that they relied 
upon those representations in submitting the $8000 figure and if they had known that the 

 
 
 
  
  
 
  
 
 
  
   
 
  
 
   
 
  
     
    
   
14 CBCA 420, 450, 451, 1307, 1855 
project would be delayed by 473 days, appellant would have bid a higher daily delay rate. 
Id. at 22.  Appellant placed particular focus on the phrase “based on historical data” in 
clause H5 and the phrase “reasonably possible occurrence” phrase in clause H6.  Id. 
In short, appellant would have us read the Daily Delay Rate clause in H5 and H6 as 
establishing an express condition that there would be no more than fifty days of government-
caused delay on the project, which, if unfulfilled by the Government, would relieve 
appellant of the duty of compliance with the $8000 Daily Delay Rate clause.  See, e.g., 
Charron v. United States, 200 F.3d 785, 790-91 (Fed. Cir. 1999); Restatement  of Contracts 
§ 225 (1981); 13 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts 
§ 38:6 (4
th  ed. 2000 & Supp. 2010).  However, clause H5 stated that the fifty-day delay 
estimate was for “evaluation purposes only.” That provision does not represent a promise 
that there would be only fifty days of government-caused delay.  Electronic Data Systems, 
10-1 BCA at 169,507-08 (contract statement that bidders should base pricing on 420,000 
units of smart card enrollment “for estimating purposes only” not a commitment to order 
420,000 units).  
The purported reliance of appellant’s officials on the Government’s fifty-day 
estimation of government-caused delay as a limitation of clause H5 to only the first fifty 
days of any government-caused delay is unavailing.  Other provisions of the clause make it 
clear that the daily delay rate applied to all government-caused delay.  Clause H5 states 
clearly that the daily delay rate was to “be used as the sole daily delay cost” and  “used to 
negotiate government-caused delays,” not just the first fifty days of government-caused 
delays.  Furthermore, the clause states in pertinent part: “Recovery of such sum shall be the 
Contractor’s sole remedy for compensable delays.  For all delays, the daily delay cost covers 
all costs and mark-ups related to delay.” There is no limitation in this language to only the 
first fifty days of government-caused delay.  Consequently, the daily delay rate applies to 
all of appellant’s claims of government-caused delay, not just the first fifty days.
2 
2 Appellant has not shown that its reliance on the fifty-day provision was reasonable 
or that the Government acted with deliberate misconduct so as to estop the Government from 
enforcing the delay rate.  Premo v. United States, 599 F.3d 540, 547 (6 
th Cir. 2010); Melrose 
Associates, L.P. v. United States, 45 Fed. Cl. 56, 58 (1999).  Nor, as appellant argues, is this 
clause an unallowable exculpatory clause, which exempts an agency from liability imposed 
by a required remedy granting clause, as in the case of Clark Concrete Contractors, Inc. v. 
General Services Administration , GSBCA 14340, 99-1 BCA ¶ 30,280, at 149,756-57. 
Rather, it is a limitation of liability clause in which the parties mutually agreed that the 
amount of liability for proven compensable delays would be $8000 per day.  Such a 
supplementation of a remedy-granting clause is permissible.  Reliance Insurance Co. v. 

 
 
 
  
 
  
  
 
 
 
   
    
  
   
 
 
  
 
 
 
      
     
 
15 CBCA 420, 450, 451, 1307, 1855 
Application of the Mark-Up Clause 
Respondent maintains that appellant’s claim of direct field support costs of 
$6,039,843 for 468 open and disputed CORs plus an 18% markup on those costs, and its 
claim for direct field support costs of $4,298,466 plus and 18% mark-up for disputed CORs 
364 (rebar congestion) and 590 (concrete finish) must be dismissed because the direct field 
support costs are to be included in the mark-up rate applied to the claimed direct costs of 
those CORs, which are $12,452,263 for the 468 open CORs and $7,554,171 for CORs 364 
and 590.  Respondent’s Motion for Summary Relief at 10. The total of field support costs 
claimed is $10,338,309. Appellant argues that because its accounting system treated direct 
field support costs as direct costs, those costs should not be included in the mark-up rate, but 
should be marked up as a direct cost.  Appellant’s Opposition at 18-19.  
We agree with respondent that direct field support costs of the type claimed by 
appellant here are included in the mark-up rate of subclause H4A.  That rate includes a 
mark-up which by its terms is “inclusive of all prime and first tier subcontractor overheads, 
general and administrative cost, bonds, insurance, site overhead, miscellaneous costs such 
as small tools and the like, and all other indirect and direct costs associated with any contract 
modification.”  (Emphasis supplied.) 
Appellant relies on the case of AMEC Construction Management, Inc. v. General 
Services Administration, GSBCA 16233, 06-1 BCA ¶ 33,141 (2005), reconsideration 
denied, 06-1 BCA ¶ 33,177, as support for its position.  As respondent notes, that case 
actually supports respondent’s position.  Here, as in the AMEC case, in its accounting system 
the contractor treated field support costs as direct costs, not as overhead costs.  The 
Government argued that those costs should be treated as overhead costs included in the 
mark-up rate.  The board disagreed, holding that because appellant had treated those costs 
as direct costs, and because there was no express contract term mandating treatment of those 
costs as overhead, those general conditions costs could have been appropriately treated as 
direct costs under the contract.  AMEC, 06-1 BCA at 164,247.  This case is similar to Jack 
Picoult, GSBCA 3516, 72-2 BCA ¶ 9621, in which the board held that a contractor’s field 
overhead costs were included in the mark-up rate when the contractor’s  mark-up rate 
included the costs of field supervisors and assistants. As in Picoult , the Mark-Up clause in 
the contract expressly included site overhead as costs within the clause.  Appellant may not 
treat its field support costs as direct costs subject to the mark-up rate.  Its field support costs 
are to be included in the mark-up rate.  
United States , 931 F.2d 863, 865 (Fed. Cir. 1991).  

  
  
 
    
         
           
 
 
    
  
  
    
   
  
16 CBCA 420, 450, 451, 1307, 1855 
Application of the Daily Delay Rate Clause 
Respondent urges that appellant is limited to the $8000 daily delay rate for all costs 
of claimed government-caused delay.  Thus respondent states that if all delays are 
compensable, appellant can recover no more than $2,784,000 for the delay representing what 
respondent characterizes as appellant’s claim of 406 days of compensable delay. 
Respondent’s Motion for Summary Relief at 14.  Appellant responds that the Daily Delay 
Rate clause: 
is entirely concerned with costs in the nature of overhead and profit.  It does not state 
that damages for disruption acceleration, lost productivity, loss of efficiency or 
cumulative impact are included in the daily rate. It further does not state that labor 
and material escalation, increased storage costs, increased stocking costs, standby 
costs, overtime premium and extended rental caused by Government-issued changes 
are subsumed within the daily delay rate.  In fact these costs are not delay costs 
because they are not time-related. They are direct costs associated with and caused 
by GSA’s changes to [appellant’s] work.  
Appellant’s Opposition at 26.  
Appellant is incorrect as to the narrow reading of clause H5.  The clause states that 
the rate covers not only overhead costs, but also “any other direct and indirect costs which 
are the result of delays caused solely by the government.”  Additionally, the clause states that 
“recovery of such sum shall be the Contractor’s sole remedy for compensable delays.  For 
all delays, the daily delay cost covers all costs and mark-ups related to delay.”  The clause, 
therefore, is comprehensive as to what time-related delay costs are included within its 
purview. 

 
_______________________________ 
_______________________________ _______________________ 
17 CBCA 420, 450, 451, 1307, 1855 
Decision 
Appellant’s and Respondent’s cross motions for partial summary relief are granted 
in part. 
ANTHONY S. BORWICK 
Board Judge 
We concur: 
STEPHEN M. DANIELS ALLAN H. GOODMAN 
Board Judge Board Judge