DENIED: September 25, 2007 
CBCA 54, 84 
BAY SHIPBUILDING COMPANY,
                                                                         Appellant, 
v. 
DEPARTMENT OF HOMELAND SECURITY,
                                                                        Respondent. 
Daniel J. Borowski, Litigation Counsel, Bay Shipbuilding Co., Manitowoc, WI, 
counsel for Appellant. 
Isaac Johnson, Jr., Office of Procurement Law, United States Coast Guard, 
Department of Homeland Security, Washington, DC, counsel for Respondent. 
Before Board Judges STERN , FENNESSY , and SOMERS . 
SOMERS , Board Judge.  
Bay Shipbuilding Co. (BSC) appeals the denial of two claims by the contracting 
officer for the United States Coast Guard, Department of Homeland Security (USCG or 
Coast Guard). In CBCA 84, BSC asserts that the Government is not entitled to damages of 
$17,275.36 arising from BSC’s alleged breach of the contract.   In CBCA 54, BSC seeks 
$23,125 for costs incurred when it encountered excessive underwater hull paint during the 
course of contract performance.    
The parties have elected to submit the case for resolution on the written record without 
a hearing.  The written record includes the appeal files, the pleadings, and the submission by 

      
    
 
  
      
  
       
  
  
 
  
2 CBCA 54, 84 
both parties of multiple briefs with supporting affidavits, declarations, and documentary 
evidence.  
I. CBCA 84: Repair or Replacement of Heat Exchanger Gasket Kits 
Findings of Fact 
On August 5, 2005, the Coast Guard awarded a fixed price contract to BSC for dry 
dock repairs of the USCG Cutter (USCGC) Hollyhock. The contract required BSC to 
perform routine maintenance on the cutter and to repair items as appropriate.  The contract 
expressly stated that the contractor must “furnish all necessary labor, material, services, 
equipment, supplies, power, accessories, facilities, and such other things and services as are 
necessary, except as otherwise specified to perform dry dock repairs and alterations to the 
vessel.”  Appeal File, CBCA 84, Exhibit 4 at 2.  Among other things, the contract required 
BSC to clean, inspect, repair, and reassemble heat exchanger gasket kits for the main diesel 
engine jacket water heat exchangers (MDE heat exchangers).  Specifically, the contract 
stated as follows:    
3.4  Cleaning requirements. The Contractor shall clean all 
interior and exterior heat transfer surfaces to a state free of all 
debris, scale and surface contaminants in accordance with the 
heat exchanger manufacturer’s recommendations, and in 
compliance with all federal, state and local environmental 
regulations. 
. . . . 
3.6  Reassembly .  After all authorized repairs, the Contractor 
shall reassemble each heat exchanger.  Renew all software 
(seals, gaskets, O-rings) and isolation fittings/mounts in 
accordance with the manufacturer’s specifications.  Renew 
fasteners, hoses, thermostats and anodes as applicable.  Apply 
silicone rubber sealant conforming to CID A-A-59588 around 
all fasteners, nozzles or gaskets that penetrate the hull. 
Id., Exhibit 5 at 23. 
Paragraph 3.1 of the General Requirements section of the contract required the 
contractor to “conform to all requirements specified in Std Spec 0000_STD [the Coast Guard 
Maintenance and Logistics Command Atlantic (MLCA) Standard Specification 0000_STD, 

 
 
 
 
    
  
 
 
 
 
     
3 CBCA 54, 84 
2004 Edition].”  Appeal File, CBCA 84, Exhibit 5 at 2.  The paragraph emphasized in bold 
type the following: 
NOTICE! 
The requirements of paragraph 3.1 (General) applies to all work 
under the scope of this contract, whether explicitly stated in 
work items or not, and also to all other work subsequently 
authorized by changes, modifications, or extensions to the 
contract. 
Id. at 2-3.  
Standard Specification 0000_STD listed and defined various terms used in the work 
items.  Appeal File, CBCA 84, Exhibit 6C at 28. The word “renew” is defined as follows: 
Permanently remove an item and install, in its place, a new and 
unused item which is identical in material, form, fit, and 
function; the new item must: 
•	 Have the same shape, size, dimensions, and other 
physical parameters. 
•	 Have the same ability as the old item, to physically 
interface or interconnect with or become an integral part 
of another item. 
•	 Perform the same action or actions that the original item 
was designed to perform.  
Id. at 30.  
Todd Thayse, the Director of Contract Services for BSC, prepared BSC’s bid for this 
work item, which included 560 hours in labor and $31,000 in materials for a total bid of 
$60,000.  This amount did not include the cost of replacing the MDE heat exchanger gaskets. 
Appellant’s Submission, Declaration of Todd Thayse (May 18, 2006) ¶ 46. 
The contract required BSC to provide a technical representative authorized by the 
manufacturer of the MDE heat exchanger system, Alfa Laval, to provide advice about the 
manufacturer’s proprietary information pertinent to the system, to ensure compliance with 

      
     
 
 
   
 
     
   
            
    
 
     
  
 
    
        
  
 
 
4 CBCA 54, 84 
the manufacturer’s procedures and standards during disassembly, inspection, and reassembly, 
and to assist with the proper cleaning, inspecting, and testing of the heat exchanger.  Appeal 
File, CBCA 84, Exhibit 5 at 24. As the contract required, BSC provided Corey O’Conner, 
who was the manufacturer’s field technical representative.  Mr. O’Conner inspected the 
gaskets in the MDE heat exchangers and opined that the gaskets could be reused.  Thayse 
Declaration ¶¶ 49, 50.  
Relying upon Mr. O’Conner’s statement that the gaskets could be reused, BSC 
advised the Coast Guard in a condition found report (CFR) dated October 11, 2005, that the 
manufacturer’s technical representative had visually inspected the heat exchanger.  BSC 
informed the Coast Guard of Mr. O’Conner’s recommendation that BSC clean the plates by 
hand and then reassemble them by using existing materials unless the materials were 
damaged.  BSC stated that it would submit a second CFR if it determined that replacing the 
gaskets would be necessary. Appeal File, CBCA 84, Exhibit 8C.  BSC suggested that if it 
determined that the gaskets would need to be replaced, it would seek to obtain new gaskets 
from the Government.  Id. BSC’s suggestion ignored the fact that the gaskets do not appear 
on the list of government furnished equipment identified in the contract.  Id., Exhibit 5 at x­
xiii.  
Chief Warrant Officer (CWO) Derrick Johnson responded to the CFR by telling BSC 
that paragraph 3.6 of the contract required BSC to renew, i.e. , replace the existing materials. 
CWO Johnson noted that paragraph 5.1.23 on page 30 of the standard specifications defined 
the term “renew” as to “permanently remove an item and install, in its place, a new and 
unused item which is identical in material, form, fit and function.”  Appeal File, CBCA 84, 
Exhibit 10, Declaration of Kathryn Stark, Contracting Officer (May 1, 2006) ¶ 15. 
Accordingly, CWO Johnson rejected BSC’s contention that the contract permitted reuse of 
the materials under any conditions.  Id . 
Over the course of the next two days, the contracting officer exchanged email 
messages with  BSC’s contract administrator about the dispute. Appeal File, CBCA 84, 
Exhibit 10 at ¶¶ 16, 17, 19.  BSC and the Coast Guard tried to resolve the issue during a 
conference call on October 10.  Id . at ¶ 20. The Government stated that paragraph 3.6 
required the contractor to renew all software.  Id .  The contractor responded that it was 
following the manufacturer’s recommendations for gasket replacement and that the 
manufacturer did not recommend replacing them.  Id.  After the telephone conference, BSC 
stopped work on the item.  On that same day, BSC’s contract administrator, Julie Koch, sent 
an e-mail message to the contracting officer, stating:  
Bay Shipbuilding understands the Coast Guard’s interpretation 
of para 3.6 as to the renewal of software, however, we feel that 

 
   
  
  
 
 
  
   
  
 
 
   
  
    
 
   
 
5 CBCA 54, 84 
we are in following [sic] with the manufacturer’s 
recommendations for gasket replacement as stated in para. 3.7. 
Work has stopped on this job and we cannot move forward until 
this matter is settled. 
Id., Exhibit 8K. The contracting officer disagreed with BSC’s characterization, responding 
that “[w]ork has stopped on this work item because you refuse to comply with the contractual 
requirements to replace the gaskets.” Id., Exhibit 8L.  
Mr. Thayse wrote in an e-mail message dated October 13, 2005, that “as stated many 
times in the last few days the work has stopped because your crew has refused to allow BSC 
to proceed with the work items. . . .” Appeal File, CBCA 84, Exhibit 8M.  The Coast Guard 
responded by letter dated October 13, 2005, which stated in pertinent part:  
Bay Shipbuilding has refused to complete Work item 3 . . . . 
Specifically, Bay Shipbuilding has refused to purchase the 
gaskets needed to complete the work item in accordance with 
the specification. 
. . . . 
Bay Shipbuilding must proceed with the performance of this 
contract pending final resolution of any dispute arising under it. 
Bay Shipbuilding otherwise will be liable for default of this 
contract. Any delay in completion of this work item is the 
responsibility of Bay Shipbuilding.  The Coast Guard will 
purchase the gaskets specified to be replaced in work item 3 in 
order to ensure that this work item is completed in accordance 
with the specification. However, the Coast Guard also reserves 
the right to deduct the cost of the gaskets from the total contract 
price as a requirement of your contract as awarded. 
Id., Exhibit 8N.  The Coast Guard purchased the gaskets for a cost of $17,275.26.  Id ., 
Exhibit 8O. 
On October 13, 2005, Jack Dafgek, Alfa Laval’s Technical Support Manager, sent 
BSC a letter in which he reiterated Mr. O’Conner’s opinion that the gaskets could be reused. 
Appellant’s Submission at 21; Appellant’s Initial Position Statement, Exhibit P.  BSC 
provided a copy of the letter to the Coast Guard.  Thayes Declaration ¶ 53.  

     
   
   
 
 
      
 
 
 
          
 
   
 
 
   
 
  
 
6 CBCA 54, 84 
On October 13, 2005, CWO Johnson issued a contract deficiency report for BSC’s 
failure to have timely ordered the proper gaskets for the main diesel engine coolers.  Appeal 
File, CBCA 84, Exhibit 8E. In the portion of the form entitled “Contractor’s Response,” Ms. 
Koch contended that BSC would have ordered the replacement gaskets if necessary.  Id.  On 
October 14, 2005, BSC installed the gaskets for the MDE heat exchangers under the direction 
of the Alfa Laval technical representative.  Id . at ¶ 55.  
By final decision dated October 28, 2005, the contracting officer stated:  
Concerning work item 3 Clean, Inspect and Test Heat 
Exchangers, by Contract Deficiency Report 003 dated October 
13, 2005, Bay Shipbuilding refused to perform the work item as 
written that specifically required at paragraph 3.6 to “renew all 
software (seals, gaskets, O-rings). . .”  By definition RENEW 
means “. . . Permanently remove an item and install, in its place, 
a new and unused item which is identical in material, form, fit 
and function . . .”  This definition is located in MLCA STD 
000_STD 2004 Edition, General Requirements.  Your refusal to 
perform places your company in breach of the contract.  The US 
Coast Guard purchased the necessary gaskets at a cost of 
$17,275.36 .  This cost is being taken from your funds otherwise 
due your company under this contract.  
Appeal File, CBCA 84, Exhibit 8P. BSC appealed the final decision by letter  dated 
November 9, 2005.  Id ., Exhibit 3.     
Discussion 
The question presented in this appeal is whether the Coast Guard has established that 
it is entitled to damages of $17,275.36 for BSC’s alleged breach of contract.   As a matter of 
law, the Coast Guard bears the burden of proof for its claim.  Whitesell-Green, Inc ., ASBCA 
53938, et al., 06-2 BCA ¶ 33,323 at 165,257 (citing Southwest Welding & Manufacturing Co. 
v. United States , 413 F.2d 1167, 1176 n.7 (Ct. Cl. 1969); Insulation Specialities, Inc ., 
ASBCA 52090, 03-2 BCA ¶ 32,361, at 160,100-01).  As the Government is claiming that it 
is entitled to collect damages from appellant, it must prove that it is entitled to assess 
damages in the amount claimed.  Id . This means that the Government must prove each 
element by a preponderance of the evidence.  Id. (citing 9 Wigmore, Evidence § 2485 
(Chadbourn rev. 1981)).  

    
  
 
   
  
  
 
 
 
     
    
 
  
 
 
 
   
   
  
     
  
 
7 CBCA 54, 84 
The Coast Guard states that the contract expressly required BSC to “renew all 
software (seals, gaskets, O-rings) and isolation fittings in accordance with the manufacturer’s 
specifications.”  The contract defined “renew” as to “permanently remove an item and install, 
in its place a new and unused item which is identical in material, form, fit and function.” 
Accordingly, the Coast Guard contends that the only option presented by the contract 
required BSC to replace all software, including the gaskets. 
BSC challenges the Government’s claim, contending that the contract did not require 
the gaskets to be replaced except in accordance with the manufacturer’s specifications.  BSC 
states that it intended to replace the gaskets if advised to do so by the technical representative 
from Alfa Laval. In that event, BSC intended to submit a CFR for the cost of replacing the 
gaskets.  BSC asserts that the technical representative permitted re-use of the existing 
gaskets, and, accordingly, BSC was not required to replace the gaskets. 
This dispute requires contract interpretation.  The Board will interpret a contract in 
such a way as to give words their plain and ordinary meaning.  Id. at 747-48 (citing Moran 
v. Prather , 90 U.S. 492, 499 (1874);  Forman v. United States , 329 F.3d 837, 842 (Fed. Cir. 
2003); McAbee Construction, Inc. v. United States , 97 F.3d 1431, 1435 (Fed. Cir. 1996); 
Elden v. United States , 617 F.2d 254, 260-61 (Ct. Cl. 1980)).  A contract must be “interpreted 
so as to harmonize and give meaning to all its provisions, and [thus] an interpretation which 
gives a reasonable meaning to all parts is preferred to one which leaves a portion of it 
useless, inexplicable, inoperative, void, insignificant, meaningless, superfluous, or achieves 
a weird and whimsical result.”  Arizona v. United States, 575 F2d 855, 863 (Ct. Cl. 1978); 
see also , e.g. , Gould, Inc. v. United States , 935 F.2d 1271, 1274 (Fed. Cir. 1991); United 
States v. Johnson Controls, Inc. , 713 F.2d 1541, 1555 (Fed. Cir. 1983).  
Here, the contract required BSC to “renew all software (seals, gaskets, O-rings) and 
isolation fittings/mounts in accordance with the manufacturer’s specification.”  “Renew” is 
defined by the contract to mean  to “permanently remove an item and install, in its place a 
new and unused item which is identical in material, form, fit and function. . . .”  The 
definition of “renew” did not include anything that could be interpreted as permitting an item 
to be “reused.” Thus, the plain language of the contract called for the contractor to 
permanently remove all software and install, in its place, new and unused items identical to 
those items replaced.  
BSC’s argument that it could reuse the gaskets ignores the plain meaning of the 
contract definition of “renew.”  Consistent with the definition contained in the contract, 
“renew” means to replace the item, not to repair or reuse. Thus, the only reasonable 
interpretation is that the contract required BSC to replace the gaskets. The contract refers 
to the manufacturer’s specifications for the purpose of requiring the contractor to follow the 

      
 
   
 
 
 
    
 
   
 
  
 
 
  
 
   
 
          
            
8 CBCA 54, 84 
manufacturer’s procedures and standards for reassembly.  This interpretation is consistent 
with the contract requirement that the contractor obtain the services of a technical 
representative who is authorized to “assist with the proper cleaning, inspecting, and testing 
of the heat exchanger, inspection and reassembly of the system.”  Even if the manufacturer’s 
technical representative concluded that the gasket could be reused, that conclusion does not 
supercede the contractual requirement to replace, i.e., to renew, the gaskets.  
In any event, even if the contractor disputed the Government’s interpretation of the 
1contract requirements, both the Contract Disputes Act (CDA) and the Disputes clause  of the
Federal Acquisition Regulation (FAR) provide that pending a final decision of an appeal, 
action, or final settlement, a contractor shall proceed diligently with performance of the 
contract in accordance with the contracting officer’s decision.  41 U.S.C. § 605(b) (2000); 
48 CFR 52.233-1 (2004).  In this case, we find that because the contract did require BSC to 
replace the gaskets and BSC failed to purchase the gaskets necessary to fulfill the contract 
requirements, the Government is entitled to be reimbursed for costs arising from BSC’s 
failure to act.  The Government has presented uncontroverted evidence that it purchased the 
new gaskets for a total cost of $17,275.36.  Therefore, we find that the Government is 
entitled to be reimbursed for the cost of the gaskets, i.e., $17,275.36 . 
II. CBCA 54: Hull Paint Thickness Claim 
Findings of Fact 
In 2002, the Coast Guard contracted with Marinette Marine Corporation (MMC) in 
Marinette, Wisconsin, to build the USCG Hollyhock. Lt. Loring A. Small, a Coast Guard 
engineer assigned to the Coast Guard Project Resident Office at MMC, conducted 
inspections during ship construction and assisted the contracting officer with basic contract 
administration.  During the construction of the Hollyhock, Lt. Small observed that the paint 
thickness on the underwater body exceeded the paint thickness recommended by the 
construction contract and by the paint manufacturer’s application guidelines.  Appeal File, 
CBCA 54, Exhibit 27 at 3. 
During a subsequent inspection of the underwater hull prior to delivery of the 
Hollyhock to the Coast Guard, a diver’s inspection revealed that paint had fallen off, 
1 Although the contract documents do not appear to contain a Disputes clause, 
the clause is incorporated as a matter of law into the contract pursuant to the Christian 
doctrine.  See G.L. Christian & Associates v. United States , 312 F.2d 418, 426 (Ct. Cl. 1963). 

  
  
       
 
 
 
 
       
   
       
 
 
 
   
9 CBCA 54, 84 
exposing bare steel in places.  Accordingly, MMC subcontracted with BSC to correct the 
defective paint. 2   Appeal File, CBCA 54, Exhibit 27 at 3. 
BSC blasted the hull to remove all loose paint and then repainted the hull.  BSC’s 
paint foreman, Jack Schmidt, supervised the paint operation.  The Coast Guard accepted 
delivery of the Hollyhock on October 24, 2004. Appeal File, CBCA 54, Exhibit 25 at 5.   
On June 9, 2005, in response to the Government’s solicitation of bids for drydock 
repairs of the USCGC Hollyhock, BSC submitted a bid of $53,800 for Work Item 2.  Appeal 
File, CBCA 54, Exhibit 26 at 2. Work Item 2 of the contract required BSC to remove and 
reapply the underwater body hull paint system of the USCGC Hollyhock.  BSC’s bid 
included the cost of sandblasting paint from the underwater body hull.  Appellant’s 
Submission, Declaration of Todd Thayse (November 10, 2006) ¶ 17.  However, the contract 
did not provide BSC with any information about the thickness of the paint to be removed, nor 
did BSC inquire about it.  Id. at ¶ 20.  
On August 3, 2005, the contracting officer sent an e-mail message to BSC, 
questioning the amount of BSC’s bid for Work Item 2 because the bid was substantially 
lower than the Government’s estimate.  BSC responded to the contracting officer’s inquiry 
at 12:38 p.m. on that same day, August 3, and asked to review the Government’s estimates.
 Appeal File, CBCA 54, Exhibit 4.  By e-mail message sent at 1:57 p.m., the contracting 
officer agreed to check on the item. Id. , Exhibit 5.  The contracting officer contacted BSC 
by e-mail message at 3:51 p.m and told BSC that she had not yet received the information 
for the government estimate.  Ms. Koch responded by e-mail message at 4:02 p.m., stating: 
Kathy, Underwater body detail – if you get it, fine, but let’s keep 
the ball moving.  We are ready to stand by the pricing submitted. 
Id., Exhibit 6; Position Paper of Bay Shipbuilding Company in Support of its Claim for the 
Cost of Removing Excess Paint From the Underwater Body Hull of the Hollyhock 
(Appellant’s Position Paper), Exhibit B, Declaration of Julie Koch (November 9, 2006) ¶ 12. 
The contracting officer did not provide BSC with any additional information about the 
government’s estimate for Work Item 2.  
2 The Manitowoc Company, Inc., owns both MMC and BSC.  See Thayse 
Declaration ¶ 8.  

   
 
     
 
 
   
     
 
  
  
   
   
    
 
   
     
 
10 CBCA 54, 84 
The contract included a provision entitled Site Visit (APR 1984), 48 CFR 52.237-1, 
which stated: 
Offerors or quoters are urged and expected to inspect the site 
where services are to be performed and to satisfy themselves 
regarding all general and local conditions that may affect the 
cost of contract performance, to the extent that the information 
is reasonably obtainable. In no event shall failure to inspect the 
site constitute grounds for a claim after contract award.  
Appeal File, CBCA 54, Exhibit 5 at 11.  There is no evidence that BSC took the opportunity 
to perform a site visit,
3  request access to the ship, review the paint logs included in the 
documents of the hull history, or ask about the thickness of the underwater body paint prior 
to submitting its bid.  Id. , Exhibit 25, Declaration of Vanessa A. Nemara (November 27, 
2006) ¶ 19; Exhibit 26, Declaration of Kathryn E. Stark (December 4, 2006) ¶ 6.    
Once BSC confirmed its bid on Work Item 2, the Coast Guard awarded the contract 
on August 9, 2005.  On September 7, 2005, BSC reported to the Coast Guard that BSC had 
discovered higher than standard coating on the underwater hull of the vessel.  Appeal File, 
CBCA 54, Exhibit 10; Thayse Declaration ¶ 30, Exhibit F.  BSC noted that “especially high 
readings” were found in the sea chests (boxes inside the hull that take cooling water) and 
thruster tunnels (tunnels which help maneuver the vessel in port), which were part of the 
underwater body hull.  Thayse Declaration  ¶ 30, Exhibit F.  BSC sought additional 
compensation for the cost of removing the excess paint.   
CWO Johnson denied BSC’s request for additional compensation on September 7, 
2005.  Thayse Declaration ¶ 31, Exhibit G.  CWO Johnson stated: 
Bay Ship [Building] Company has been the only contractor to do 
any Underwater Body Paint repair on the Hollyhock.  If the 
paint system has been applied not IAW [sic] they had some part 
in the  process.  For this work item BSC had more information 
than any other bidder, due to there [sic] past work. . . . Thruster 
tunnels and sea chests were not part of the paint repair in Oct 03. 
This area may need to be addressed. 
3 BSC argues that it was not reasonable for the contractor to incur the costs of 
traveling to the site for a site investigation, nor would a site investigation have necessarily 
revealed the thickness of the paint on the underwater hull.  

   
 
 
 
 
 
 
 
   
 
  
  
  
 
11 CBCA 54, 84 
Appeal File, CBCA 54, Exhibit 11; Thayse Declaration ¶ 31, Exhibit G.  CWO Johnson told 
BSC to prepare another CFR about the excess paint on the sea chests and thruster tunnels. 
Thayse Declaration ¶ 32, Exhibit H.  Upon receipt, the Coast Guard approved an equitable 
adjustment of $4801 for the additional costs of removing the paint millage from the sea 
chests and thruster tunnels.  Thayse Declaration ¶ 33, Exhibits H-J.  
On December 7, 2005, BSC submitted a formal request for an equitable adjustment 
for $23,125, the costs incurred in removing the excess paint from the remainder of the 
underwater body hull.  Appeal File, CBCA 54, Exhibit 34; Koch Declaration ¶ 30, Exhibit 
J.  The contracting officer denied the request by decision dated January 30, 2006, asserting 
that BSC had superior knowledge of the thickness of the underwater hull paint based upon 
the fact that BSC had applied the paint in question during construction of the USCGC 
Hollyhock.  Appeal File, CBCA 54, Exhibit 35; Koch Declaration ¶ 33, Exhibit K.  The 
contracting officer stated: 
It is the Contracting Officer’s determination that the U.S. Coast 
Guard is not responsible for compensating Bay Shipbuilding for 
the removal of the underwater body hull paint beyond what was 
paid as part of this contract.  You can not [sic] create the 
situation under one contract [the construction contract] and 
obtain additional compensation under another for a situation that 
you alone created.  
Appeal File, CBCA 54, Exhibit 35.  BSC appealed the contracting officer’s decision.   
Discussion 
BSC contends that it encountered difficulties in removing the paint from the 
underwater body hull because the existing coat exceeded the amount of paint that BSC had 
anticipated when it bid the project.  BSC argues that the Government possessed superior 
knowledge about the condition of the hull based upon the fact that the Government initially 
questioned BSC’s estimate as being too low. BSC states that the extra costs involved in 
removing excessive paint accounted for the difference between BSC’s estimate and the 
Government’s.  BSC argues that it had no reason to suspect that the underwater hull had 
excessive paint and, therefore, did not account for the excessive thickness when it prepared 
its bid.  BSC claims that it incurred actual additional labor and material costs of $23,125 to 
remove the additional millage from the underwater body hull.  
BSC can establish entitlement to an equitable adjustment only if it can prove that the 
Government had misrepresented the amount of paint present on the underwater hull or 

 
 
  
    
    
 
  
 
 
 
  
 
      
   
  
 
 
   
 
    
  
12 CBCA 54, 84 
possessed superior knowledge about the paint thickness.  See Walker Boat Yard, Inc. , 
DOTBCA 4133, 03-2 BCA ¶ 32,397, at 160,324 (citing United States v. Spearin , 248 U.S. 
132, 136 (1918);  Marine Industries Northwest, Inc. , ASBCA 51942, 01-1 BCA ¶ 31,201, 
at 154,043.  As there is no evidence suggesting that the Government misrepresented the 
condition of the hull, BSC’s argument must focus upon its contention that the Government 
possessed superior knowledge about the underwater hull.  
BSC has the burden of establishing that the Government possessed superior knowledge 
about the condition of the underwater hull paint.  AT&T Communications, Inc. v.  Perry , 296 
F.3d 1307, 1312 (Fed. Cir. 2002); Hercules, Inc. v. United States , 24 F.3d 188, 196 (Fed. Cir. 
1994).  The superior knowledge doctrine imposes an implied affirmative duty upon a 
contracting agency “to disclose to a contractor otherwise unavailable information regarding 
some novel matter affecting the contract that is vital to its performance.”  Giesler v. United 
States , 232 F.3d 864, 876 (Fed. Cir. 2000).  When analyzing a claim that the Government 
breached its duty to disclose superior knowledge, the Board “must focus its inquiry on the 
government’s knowledge at the time of contracting and its relationship to the contractor’s lack 
of knowledge.”  L.W. Matteson, Inc. v. United States , 61 Fed. Cl. 296, 316 (2004); accord 
Max Jordan Bauunternehmung v. United States , 10 Cl. Ct. 672, 679 (1986) (“The 
government’s liability for failure to provide information arises from a conscious omission to 
share superior knowledge it possesses in circumstances where it permits a contractor to pursue 
a course of action known to be defective.”). Appellant has not met this burden because it has 
failed to establish that the Government possessed knowledge that the contractor did not.  
BSC presents declarations from various witnesses to show that the Coast Guard knew, 
but failed to disclose to BSC, that the paint on the hull was excessively thick.  On this point, 
the Government does not dispute the fact that it knew about the condition of the paint when 
it accepted the ship in 2004.  Rather, although the Government does not necessarily agree that 
the paint on the hull was excessively thick, the Government has submitted uncontroverted 
Declarations showing that the contractor had the same information as did the Government 
about the condition of the hull based upon the fact that BSC had been hired as the painting 
subcontractor in 2003 and painted the hull.  Specifically, Lt. Small stated that he worked at 
the Coast Guard Project Resident Office at Marinette Marine Corporation (MMC) in 
Marinette, Wisconsin, from July 2002 until May 2004, as the contracting officer’s technical 
representative.  During that time period, Lt. Small conducted inspections during the 
construction of the USCGC Hollyhock and discovered the application of excessive paint on 
the underwater hull.  He reported this to the prime contractor, MMC, which subcontracted 
with BSC to repaint the hull. The same BSC personnel, specifically BSC paint foreman Jack 
Schmidt and BSC’s Julie Koch, worked on BSC’s subcontract to repaint the underwater hull 
in 2003 and on the current contract. 

 
    
  
   
  
   
          
  
 
     
  
 
   
 
 
 
 
       
   
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13 CBCA 54, 84 
We conclude that appellant has failed to meet its burden of proving by a preponderance 
of the evidence that the Government withheld superior knowledge.  Both parties knew about 
the thickness of the paint applied during the construction of the ship.  Appellant has presented 
no evidence to establish that the data available to each had changed based upon a subsequent 
paint job or any other circumstance known only to the Government.   
Moreover, the fact that the Government asked BSC to review its bid for the paint work 
because it was substantially lower than the Government’s estimate should have put BSC on 
notice that the its bid should be reexamined. However, when the Government did not respond 
to BSC’s request for information regarding the Government’s estimate as quickly as BSC 
wanted, BSC elected to confirm its bid without further investigation.  This may have been 
poor judgment by BSC, but it is not a ground for recovery.  In any event, as stated above, BSC 
knew or should have known the same information as the Government concerning the 
underwater hull. 
In addition to its argument that the Government possessed superior knowledge about 
the condition of the paint, BSC contends that the Government’s arguments on appeal must be 
rejected because they are different from the facts and conclusions set forth in the contracting 
officer’s final decision quoted above.  Appellant’s Reply Brief at 4 (“[T]he appeal should be 
decided solely on the grounds set forth in the Contracting Officer’s final decision.”).  BSC is 
incorrect on this point.  “[W]here an appeal is taken to a board or court, the contracting 
officer’s award” of time or money “is not to be treated as if it were the unappealed 
determination of a lower tribunal which is owed special deference or acceptance on appeal.” 
Assurance Co. v. United States , 813 F.2d 1202, 1206 (Fed. Cir. 1987).  Because the findings 
of fact in the contracting officer’s final decision are not binding on the parties, the contractor 
bears the burden of proving by preponderant evidence “the fundamental facts of liability and 
damages de novo.”  Wilner v. United States , 24 F.3d 1397, 1401 (Fed. Cir. 1994)( en banc ). 
Further, “a contractor is not entitled to the benefit of any presumption arising from the 
contracting officer’s decision.  De novo review precludes reliance upon the presumed 
correctness of the [prior] decision.”  Id. (citing Renegotiation Board v. Bannercraft Clothing 
Co., 415 U.S. 1, 23 (1974)). Therefore, the Board is not bound by the contracting officer’s 
final decision in reaching its findings on appeal.  
Decision 
These appeals are DENIED . The Government’s claim for $17,275.36 in CBCA 84 is 
granted.  BSC’s claim for $23,125 in CBCA 54 is denied. 
JERI KAYLENE SOMERS 
Board Judge 

 
14 CBCA 54, 84 
We concur: 
____________________________ _______________________________ 
JAMES L. STERN EILEEN P. FENNESSY 
Board Judge Board Judge