CBCA 3350, 3672 GRANTED IN PART;
CBCA 4658, 4659 DENIED: September 19, 2017
CBCA 3350, 3672, 4658, 4659
YATES-DESBUILD JOINT VENTURE,
Appellant,
v.
DEPARTMENT OF STATE,
Respondent.
Douglas L. Patin and Thomas Lynch of Bradley Arant Boult Cummings LLP,
Washington, DC, counsel for Appellant.
Thomas D. Dinackus, Office of the Legal Adviser, Buildings and Acquisitions,
Department of State, Rosslyn, VA, counsel for Respondent.
Before Board Judges SOMERS, HYATT, and LESTER.
LESTER, Board Judge.
When W.G. Yates & Sons Construction Company (Yates) teamed with Desbuild
Incorporated (Desbuild) in April 2005 for the express purpose of pursuing a contract for the
construction of a nine-building Department of State (DOS) consulate compound in Mumbai,
India, it seemed like an excellent match between two entities with different types of
construction expertise. Yates was, and still is, a construction contractor (headquartered in
Mississippi) with extensive experience in large and complex construction projects in the
United States. Desbuild, a construction contractor headquartered in Maryland that is headed

CBCA 3350, 3672, 4658, 4659 2
by a native of India, had extensive experience with projects in India and elsewhere overseas,
including but not limited to DOS projects in India. In forming Yates-Desbuild Joint Venture
(YDJV),1 these two companies, which had never previously worked together, hoped that the
combination of Yates’ experience with large complex construction projects and Desbuild’s
ability to navigate the Indian skilled construction labor market and knowledge of qualified
local specialized subcontractors would prove successful. Several months later, in September
2005, DOS awarded YDJV the contract for the New Consulate Compound (NCC) project in
Mumbai.
Unfortunately, the NCC project, which was supposed to take twenty-eight months to
complete, ultimately stretched out to almost six years – three-and-a-half years more than
anticipated. YDJV believes that the extensive delays that it experienced on the project
resulted primarily from property tax disputes between the United States Government (USG)
and the Government of India (GoI), and YDJV blames DOS for not disclosing prior to award
DOS’s knowledge that the GoI, to gain leverage in a lawsuit filed by the City of New York
demanding that the GoI pay real property taxes in New York, might block construction
permits for the NCC project unless and until the USG paid its own outstanding NCC and
other property tax bills – tax bills that dated back to the 1970s. Ultimately, YDJV submitted
a certified claim to DOS seeking payment of $23,802,082.48 as compensation for delays,
while the DOS contracting officer assessed liquidated damages of $11,301,352 against YDJV
for 1192 days of delay beyond the contracted substantial completion date.
Based upon our review of the documentary evidence in these appeals, as well as
testimony presented at a thirteen-day hearing, we find DOS responsible for its failure to
notify YDJV, prior to award, of its well-grounded concerns that the GoI was very likely to
delay the issuance of construction permits to force a coordinated resolution of the City of
New York’s lawsuit and the tax dispute over the NCC property. We also find that there are
other excusable delays – including a change in GoI policy during the construction project that
forced YDJV temporarily to remove workers from India and to await issuance of new entry
visas for those workers – that are not YDJV’s fault and for which DOS cannot assess
liquidated damages.
Ultimately, though, despite the problems that the tax dispute and visa issues created,
responsibility for the bulk of the delays on this project rests with YDJV. It was simply
unable to merge the different types of expertise of its founding partners, Yates and Desbuild,
1 For purposes of our decision, “YDJV” refers to the joint venture team of Yates and
Desbuild. When referring to either of the individual companies themselves, we refer to
“Yates” or “Desbuild.”

CBCA 3350, 3672, 4658, 4659 3
in a manner that allowed it to find and motivate local workers and subcontractors capable of
performing, and willing to perform in a timely manner, the level and quality of work that the
construction standards applicable to a DOS project require. While Desbuild had completed
several construction projects for DOS in India and elsewhere, none were of the magnitude
of the NCC project. Desbuild had never had to obtain construction permits from the GoI for
any of its past projects, and Desbuild did not recognize the challenges that it would face in
obtaining the level of skilled labor that it would need for a project of this size or the scope
of the permitting efforts that, even without the complications of the tax dispute, it would need
to undertake. Yates, in contrast, did not have any experience in performing either DOS
contracts or international construction work, and it did not recognize the extent of the
challenge that it would face in attempting to transfer its experiences in the United States to
a foreign country that typically applied different construction methods from those under
which Yates normally worked. Although YDJV suggests that the sheer size of its losses on
this project evidences DOS’s responsibility for significant portions of the delays at issue
here, the size of YDJV’s loss is irrelevant to the question of who caused, or is responsible
for, the delays. We find that YDJV’s inexperience in crucial aspects of a project of this size
in India accounts for the majority of the delay here.
Below, evaluating and applying the critical path method (CPM) analyses that the
parties presented at the hearing of these appeals, we assign responsibility for, quantify, and
allocate costs for this project’s delays after making factual findings about the scheduling and
sequence of contract work on this project.2
Findings of Fact
I. Planning and Solicitation for the Mumbai New Consulate Compound Project
A. The New Consulate Compound
On April 26, 2005, DOS issued solicitation no. SALMEC-04-R0013 (solicitation
R0013) for the design and construction of the NCC in Mumbai. Joint Stipulations of Fact
(JSF) ¶ 1. The NCC was to serve as a new and additional facility in Mumbai to process an
increasing number of applications from Indian citizens for United States visas. Transcript
(Tr.) Vol. 5 at 223-25. It was to be located in a planned commercial area of Mumbai known
as the Bandra Kurla Complex (BKC) and situated on land that the USG had leased two years
earlier (on September 30, 2003) for a ninety-nine-year term from the Mumbai Metropolitan
2 We include in an appendix a list of the acronyms that we use in this decision and
their definitions, as well as a list of the individuals and corporate entities that we mention.

CBCA 3350, 3672, 4658, 4659 4
Regional Development Authority (MMRDA), the special planning authority with
responsibility for the BKC. JSF ¶¶ 18- 19; Appeal File, Exhibit 13328. 3
The compound was to consist of a perimeter wall and nine major buildings: a new
office building (NOB), a general services office (GSO), a 1350-square-meter warehouse,
Marine security guard quarters (MSGQ), the Consul General residence (CG residence) (with
a 630-square-meter swimming pool and separate pool house), a 488-square-meter utility
building, and three separate Compound Access Control structures (a main compound access
control building (MCAC) through which employees would enter the compound, a consular
compound access control building (CCAC) through which visitors would enter the
compound, and a service compound access control building (SCAC)). JSF ¶ 20. Of those
nine buildings, the NOB was not only the largest, but also the most complex and significant
since, unlike any of the other buildings, it was to house a controlled access area (CAA) in
which classified information was to be processed and stored. JSF ¶ 20; Tr. Vol. 10 at 76-79.
The lease for the land into which DOS had entered with MMRDA in September 2003
stated that the USG “shall before commencing construction submit to the Chief, Town &
Country Planning Division of [MMRDA] for his approval” the plans for the project and that
“[n]o work shall be commenced . . . until the said plans, elevations, sections, specifications
and details shall have been so approved.” Exhibit 13327 at 11446;see JSF ¶ 19.
B. Pre-Solicitation Planning
In advance of the solicitation, DOS’s Office of Overseas Building Operations (OBO)
requested preparation of an initial planning survey (IPS). The IPS was an internal DOS
document and was not shared with offerors. JSF ¶ 2. This document, dated November 1,
2003, and prepared by DOS’s contractor, Kling Architects,id. ¶ 2, detailed, among other
things, the local procedures that the awarded contractor would be required to follow to obtain
necessary construction permits, as well as the role that MMRDA and another local authority,
3 All exhibits referenced in this decision are found in the appeal file, unless
otherwise noted. The Department has numbered the pages of the appeal file using a Bates
label which begins “DOS-MUM,” followed by an eight-digit number. For brevity’s sake, we
identify the page only by the one-to-six digit page number. For example, “Exhibit 1 at 1”
refers to the Bates page DOS-MUM 00000001, and “Exhibit 6 at 230” refers to Bates page
DOS-MUM 00000230. Our citation to specific exhibits or testimony should not be
interpreted as meaning that there is no other evidence in the record supporting a specific
factual finding or that have we have relied exclusively upon the cited evidence in making a
finding.

CBCA 3350, 3672, 4658, 4659 5
the Municipal Corporation of Greater Mumbai (MCGM), would play in that process. Exhibit
1494 at 13073.
MMRDA and MCGM are two somewhat separate, though connected, authorities
within the local Mumbai government that are both involved in the issuance of building
permits. MMRDA is a local body within the State Government of Maharashtra that is
responsible for planning and coordinating development activities in the Mumbai
Metropolitan Region and is headed by a Metropolitan Commissioner, who, for the time
periods in this appeal up until August 2007, was Dr. T. Chandrashekhar and, after August
2007, was Mr. Ratnaker Gaikwad. Exhibit 22317. MCGM (or, as it is also known, the
Bombay Municipal Corporation)4 is a separate local body within the State Government of
Maharashtra that possesses authority (including taxing authority) over Greater Mumbai, a
geographical area that encompasses, but is broader than, the Mumbai Metropolitan Region.
MCGM is headed by a Municipal Commissioner, who, for the time periods relevant to this
appeal up until May 2007, was Mr. Johny Joseph 5 and, from May 2007 onward, was Mr.
Jairaj Phatak. Exhibit 22277 at 55. Although MMRDA and MCGM were technically two
separate autonomous bodies, the commissioners for both entities were nominated by and
reported to the Chief Minister for the State Government of Maharashtra, and both entities
depend upon the Government of Maharashtra for a certain amount of their budgets. Id. at
45. Accordingly, the Chief Minister for the state had influence over both MMRDA and
MCGM. Id. at 44-45. Although the Chief Minister (a political position) oversaw the State
Government of Maharashtra, he was assisted by the Chief Secretary (a senior civil service
position). Separate and apart from these local and state bodies, the Ministry of External
Affairs (MEA), or “Foreign Ministry,” was a ministry within the national GoI responsible
for the conduct of India’s foreign relations.
The process that the OBO identified in the IPS for obtaining a building permit was as
follows: First, building plans were to be submitted by the project architect to MMRDA.
Exhibit 1494 at 13031. After approving the plans, MMRDA would issue a plinth
4 Because the city of Mumbai was previously known as Bombay, MCGM is also
known as the Bombay Municipal Corporation. For purposes of this decision, we refer to the
authority as MCGM.
5 In 2007, Mr. Joseph left his position as MCGM Commissioner and was appointed
Chief Secretary for the State Government of Maharashtra. As we will discuss later in this
decision, Mr. Joseph remained involved in the NCC tax and permitting issues, albeit upon
behalf of the state government rather than the local Mumbai government, after he became
Chief Secretary.

CBCA 3350, 3672, 4658, 4659 6
commencement certificate (PCC) indicating MMRDA’s approval of construction up to, but
not beyond, the plinth level – that is, construction up to the level of a slab-on-grade platform.
Id. The plans would then be forwarded to MCGM’s Deputy Chief Engineer, who would
issue a conditional approval (called an intimation of disapproval (IOD)) subject to conditions
that the contractor would have to satisfy before a certificate authorizing further work (beyond
the plinth level) would be issued.Id. at 13031, 13230. Once those IOD conditions had been
satisfied and the contractor had finished the plinth, MMRDA and MCGM would conduct a
joint plinth inspection and identify any IOD conditions (including payment of property taxes)
that still needed to be satisfied. Id. at 13230. Upon compliance with the IOD requirements,
a further work commencement certificate (FWCC) would be granted by both MMRDA and
MCGM, which would permit the contractor to build a structure upon the plinth. Id. The
contractor would then construct the building and, following a detailed inspection and the
contractor’s compliance with any IOD conditions, MCGM would issue an occupancy
certificate. After water connections had been made, MCGM would issue a building
completion certificate. See Exhibit 1494 at 13230.
Also as part of the planning process, OBO in January 2005 prepared a project analysis
package (PAP). JSF ¶ 3; Exhibit 20535. OBO’s planning manager, Steven Rosenfeld, was
the primary author of this document, with assistance from Kling Architects. JSF ¶ 3; Exhibit
22027 at 34087. The PAP described the project’s scope, schedule, and budget.See Exhibit
20535. Much of the text or information contained in the PAP was to be included in the
request for proposal (RFP). Id. at 22874. Some items were designated to be “copied as is
into the RFP” (denoted with an asterisk as “RFP*”), while other information was flagged to
be “otherwise incorporated or considered to correctly construct the RFP” (denoted without
an asterisk as “RFP”).Id.
As part of the process of drafting the PAP, its authors approached MMRDA and
MCGM to obtain information about the permitting process as it would apply to the NCC.
During discussions, MMRDA and MCGM indicated that they wanted to assist in expediting
the NCC construction process. Exhibit 22027 at 34097. In that regard, they indicated that
they would issue separate permits for early foundations and subgrade work, as well as
authorizing “conditional approvals” of foundation work on “a piecemeal basis” to allow work
to start earlier than it normally would if the regular permitting process were to apply.Id. at
34097-98. In the construction industry, a foundation is something different from, and a
precursor to the laying of, the plinth. Tr. Vol. 6 at 288. Foundation work involves putting
vertical shafts into the ground and pouring concrete on top of them – basically, the
installation of piles and grade beams. Id. Before the plinth (or slab on grade) is poured,
other activities such as plumbing, water, mechanical, and electrical lines underlying it may
first have to be laid – activities that are not necessary merely for laying foundations.Id.
Accordingly, in representing that they intended to issue permits for early foundations and

CBCA 3350, 3672, 4658, 4659 7
subgrade work, MMRDA and MCGM were referring to a permit different from, and
preliminary to, the PCC that MMRDA typically issued as part of the normal permitting
process.
Section J.3 of the PAP, concerning local permitting requirements, accepted the
MMRDA and MCGM representations and was labeled “RFP,” signifying that the language
contained therein was being suggested for inclusion in the RFP. Exhibit 20535 at 22899.
The proposed RFP language that it provided was as follows:
OBO’s Planning Manager has coordinated with Post, [OBO’s Project
Execution Office (Construction and Commissioning Division)], and the Host
government to identify the specific documentation and processes required to
obtain permits. . . . The host government will accept a permit application for
site work and foundations, and a final submission defining site plan, building
massing, interior fire exiting, toilets, and elevators.
A local registered Architect or Licensed Surveyor must submit the plans for
approval to the MMRDA. Phased submissions will be entertained for site
development and foundations, but substantial interim drawing[s] must specify
the general extent of the project. Drawings showing fire stairs and exiting,
structural design, and life-safety issues are required. MMRDA approved plans
are forwarded to [MCGM], which is the final authority. Conditional approvals
will be issued to expedite foundation construction.
Id. Like the IPS, the PAP was an internal DOS document and was not shared with offerors.
JSF ¶ 3.
II. Property Tax Disputes with the Government of India
A. The New York City Tax Dispute
During the Department’s planning for the NCC project, the USG and the GoI were
involved in two separate diplomatic disputes concerning reciprocal property tax obligations.
On April 2, 2003, the City of New York filed suit in the Manhattan State Supreme
Court seeking to recover approximately $4.9 million in unpaid real property taxes, plus $11.5
million in accrued interest, allegedly owed by the Permanent Mission of India to the United
Nations. Exhibit 20182. That suit was removed to the United States District Court for the
Southern District of New York pursuant to 28 U.S.C. § 1441(d) (2012). The complaint
alleged that the Indian Mission, which occupied diplomatic office and residential space in

CBCA 3350, 3672, 4658, 4659 8
a GoI-owned building in Manhattan, had failed to pay property taxes to the City from March
1991 to January 2003. Id. The GoI contended that it was exempt from such taxes pursuant
to the Vienna Convention on Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3227, and the
Vienna Convention on Consular Relations, Apr. 24, 1963, 21 U.S.T. 77 (collectively, the
Vienna Convention).6 The GoI wanted DOS’s assistance in resolving the New York City tax
dispute.
B. The Mumbai Property Tax Dispute
At the same time, there was an unresolved issue concerning whether the USG owed
property taxes on the NCC project site at BKC, as well as other USG properties in Mumbai.
Consistent with the GoI’s argument in its dispute with the City of New York, DOS took the
position that, under the Vienna Convention, the USG was exempt from property taxes on its
consulates. In an internal DOS e-mail message dated October 7, 2004, bearing the subject
line “Mumbai Property Tax Issues,” James Leaf, the Department’s management officer for
the U.S. Consulate General in Mumbai, summarized the issue as follows:
The [USG] owns two properties freehold in Mumbai[,] Lincoln House . . . ,
which contains the Consulate and Consul General’s Residence . . . [and]
Washington House, the Consulate apartment building. . . .
The site of the [NCC] project is located in the [BKC] . . . and was leased from
April 1, 2004. We prepaid the 99-year lease and have an option for renewal.
In addition, in April 1995, the [USG] purchased the American Center building
. . . , which houses Public Affairs, [Foreign Commercial Service], and has two
apartments, but leases the ground underneath from the municipal government,
[MCGM]. . . .
[MCGM] has been sending property tax bills for both Washington House and
Lincoln House requesting payment for taxes in arrears since the beginning of
the 1970 fiscal year (starting April 1, 1970) though the Consulate’s records
date back to only 1994. In addition, the government has been requesting the
payment of property taxes for the American Center back to the beginning of
6 This dispute would later be the subject of a case before the United States Supreme
Court titled Permanent Mission of India to the United Nations v. City of New York, 551 U.S.
193 (2007), which, after DOS intervened in the matter on remand, was subsequently resolved
in the GoI’s favor inCity of New York v. Permanent Mission of India to the United States,
618 F.3d 172 (2d Cir. 2010), cert. denied, 564 U.S. 1046 (2011).

CBCA 3350, 3672, 4658, 4659 9
the 1996 fiscal year (starting April 1, 1996). Some, but not all of the
components of the property tax have been waived by [MCGM]. . . .
The Consulate is also in receipt of a full tax bill for the [NCC site]. A letter
was sent from the Consulate to [MCGM] on September 14 requesting an
exemption from all taxes but a reply has not yet been received.
Exhibit 20558 at 298640 (emphasis added).
Responding from a location within the United States, the Tax and Customs Director
for the Office of Foreign Missions (OFM) within DOS discussed the interrelatedness of the
New York City tax dispute and the Mumbai property tax issues, the potential it had to affect
the NOB project, and the Department’s overall effort to address future similar disputes:
Thanks for the briefing, Jim. . . . It’s very complicated on this end too,
especially since in [New York (NY)] where the City has a restrictive view of
the Vienna Convention rights and doesn’t recognize full property tax benefits
for [United Nations] Missions (State Dept disagrees with their position but we
can’t get them to change it). I’m sure you know that India (along with
Mongolia) has sued NY on the issue and we’re waiting for the Fed[eral]
C[ourt] decision on the Foreign Sovereign Immunities [Act] issues involved.
I think it will be very important to try to address the [NCC] construction
project tax issue as distinct from the property tax quagmire. . . .
. . . .
Frankly, Jim, there’s more at stake here than the $6 million foreign tax
exposure on the Mumbai NOB project. This is the first effort under [DOS’s]
new push for getting our tax relief rights under international law . We’re
including Kathmandu, Mumbai, and Suva on the first trip because the
3 situations are very different, are worth alot [sic] of money, and offer varying
degrees of the likelihood of success. One objective has been to force OBO
[and other DOS sections] to work cooperatively to get it done. . . . The second
objective is to get a couple successes on this trip so we can come back and
show that it’s possible and worth the effort. What we learn on this trip will
help us put together a template for the [Department] to follow on future capital
construction projects – the $100 million in foreign tax exposure is just the
start, and goes up as the building program intensifies in [2007] and beyond.

CBCA 3350, 3672, 4658, 4659 10
Exhibit 20558 at 298639 (emphasis added).
In fact, back in 2003, the United States Embassy in New Delhi, India, had already
indicated its employees’ understanding of the reciprocal nature of its request for tax
exemptions and the GoI’s expectation of the same exceptions for its properties in the United
States. The Embassy had sent a diplomatic note to the GoI’s MEA on September 29, 2003,
requesting expeditious approval for DOS to proceed with the lease for the BKC land and
“ministry confirmation that the acquisition of the land and the land itself will be exempt from
the payment of all taxes, stamp duties, and other charges as provided for in Article 23 of the
Vienna Convention.” Exhibit 14169 at 161951. It expressly recognized the reciprocal nature
of tax exemptions that the GoI would expect for property that the GoI would acquire in the
United States:
The Embassy has been advised that the Government of India is planning to
acquire property in the United States for use as a Cultural Center, and will be
seeking similar assurance that the acquisition of the land and the land itself
will be exempt from payment of all taxes, stamp duties, and other charges
under the same provisions of Article 23 of the Vienna Convention on
Diplomatic Relations.
The Embassy anticipates that such reciprocal exemptions will be granted as
provided under the Vienna Convention on Diplomatic Relations. However,
the responsibility for processing requests for tax exemptions from Foreign
Missions in the United States is vested with the Property Section of the Office
of Foreign Missions (OFM) of the U.S. Department of State.
Id. at 161951-52.
Discussions between the USG and the GoI concerning the property tax issue
continued through the end of 2004. Mr. Leaf met with the then-MCGM Commissioner,
Johny Joseph, on or about October 19, 2004, to discuss an exemption from property tax bills
for the entire NOB project. Exhibit 20219. Mr. Leaf then met with a deputy secretary for
the State Government of Maharashtra on December 22, 2004, regarding tax treatment of the
United States Consulate and the NCC project and, as he indicated in an e-mail message to
the DOS OFM’s Tax and Customs Director and other DOS personnel the next day, “repeated
[the Department’s] request for an exemption fromall applicable taxes from the State
Government, including all taxes currently levied by [MCGM].” Exhibit 20188 (emphasis
added). Yet, in a letter from S.G. Shinde, MCGM Assessor and Collector, dated January 28,
2005, titled “Exemption from Property Taxes,” Mr. Leaf was informed that, although foreign

CBCA 3350, 3672, 4658, 4659 11
consulates are typically granted exemptions from some aspects of property taxes, certain
portions “are indispensable.” Exhibit 20219.
Negotiations continued into 2005. An internal DOS email message to Mr. Leaf dated
February 1, 2005, addressed the fact that, before construction of any structures above the
plinth level could occur, MCGM would have to issue a tax “no objection certificate” (NOC),
which, according to a MCGM representative, would occur only if DOS first agreed to pay
the outstanding property taxes for the land on which the NCC was to be constructed:
Following is submitted with regards to Property tax exemption issue related to
BKC land in Mumbai.
. . . .
During multiple meetings with Mr. S.L. Lakeshri (Superintendent, [H/East]
ward of [MCGM], Assessor & Collector office) to gauge implication of non
payment of Property taxes at the time of excavation of [BKC] land. It was
learned that MMRDA is the Principle [sic] body to approve the proposed plan,
hence plan should be approved by MMRDA and a copy of proposed plan
should be submitted to [MCGM] for their information, however a “no
objection certificate (NOC)” certification has to be obtained from[MCGM]
stating that the property tax issue is under review and unsolved. This will
allow the post to complete the project,if [MCGM] does not give the NOC then
post can do construction only till basement level. Only the [MCGM]
Commissioner has powers to give a NOC and . . . also has powers to
reconsider the [amount of the tax].
. . . .
Mr. Lakeshri stated that he will assist the Consulate in getting an approval as
[a] residential/Commercial bldg. only if Consulate assures to pay the property
taxes and the pending bills will be settled in reasonable time frame.
Exhibit 13363 at 23198 (emphasis added). Subsequently, during a March 2005 meeting, the
MCGM representative, Mr. Lakeshri, informed another DOS representative that “under no
circumstances [would it] be possible for [the] USG to get total exemption on property taxes.”
Id. at 23196.
Maintaining the position that the Vienna Convention exempted the USG from
payment of any taxes, DOS officials internally discussed the extent to which non-payment

CBCA 3350, 3672, 4658, 4659 12
of the taxes could negatively affect the NCC project. Exhibit 13363 at 23194-95. In a
March 23, 2005, e-mail message to a DOS negotiator located at the U.S. Consulate General
in Mumbai, the deputy management officer for the United States Embassy in New Delhi,
Gail Cleveland, questioned whether non-payment of taxes by the USG would cause MCGM
to deny issuance of necessary building permits for the Mumbai NCC project:
It’s clear the municipality will keep trying – as you said they’d rather reduce
the [tax] rate and receive something. If we simply don’t pay . . . until this can
be worked via the MEA here, isn’t it likely that we’ll be denied the building
permits we need?
Id. at 23195. In response, the DOS negotiator indicated that he had met with an MMRDA
official to “gauge the consequences” of DOS refusing to pay any taxes and “go[ing] ahead
with the project.”Id. The negotiator explained that, under the local procedures, MMRDA
had limited authority to approve construction above the plinth level; that further construction
required the approval of the MCGM Commissioner; and that, in the event of “any dispute
OR disagreement on tax policy of [MCGM] OR of the host government, we need to [seek
a] NO OBJECTION CERTIFICATE (NOC) from the [MCGM] Commissioner to go ahead
with the project, as only the Commissioner is empowered to do so.”Id. Ms. Cleveland
forwarded the negotiator’s response to (among others) Mr. Rosenfeld, stating that “[t]he tax
issue described in the string of e-mails below has potential to delay the Mumbai N[C]C. We
continue to work the issue.”Id. at 23194.
On the evening of March 23, 2005, Mr. Rosenfeld apprised others at DOS of the
situation developing in Mumbai:
This just in. It appears the City of Mumbai has been trying to collect taxes
from the consulate since 1970 and, of course, the consulate has never paid.
The post received a tax bill on the first six months of ownership on the site for
$333,333±, which they have also ignored. Our position is that the city’s
position is in violation of the Vienna Convention, but they have not stopped
sending bills.
The permitting authorities – MMRDA and the [MCGM] – have been big
supporters of this project and are, I believe, independent of the city on this
development. Post has just shared this problem with us and while it is a risk,
I think it will be resolved or moot prior to any need to secure a building
permit. This issue never came up in any of our conversation[s] with the
MMRDA or the [MCGM]. They may have been being polite, but it was never
raised.

CBCA 3350, 3672, 4658, 4659 13
Exhibit 13363 at 23193-94 (emphasis added).
Ms. Cleveland responded by e-mail message the next morning, stating that DOS “has
never paid the tax bills on the current consulate,” but that, “[o]n the new consulate” that was
to be constructed, DOS “did not just ignore the bill, but went to speak with the relevant
authorities who have lowered the bill, but refuse to acknowledge our exemption under the
Vienna Convention.” Exhibit 13363 at 23193. She indicated that MCGM “apparently will
lower it even further – they just want to get something out of us, which it would be a mistake
to pay” because of the precedent that it would set.Id. Mr. Rosenfeld responded that DOS’s
“only interest is that we get the building permit without a delay, . . . but you are right in not
paying.”Id.
On April 25, 2005, the day before the solicitation for the NCC was issued, the
Consulate General’s office in Mumbai sent a letter (signed by Mr. Leaf) to the Secretary and
Chief Protocol Officer for the State Government of Maharashtra in Mumbai, asking the
Government of Maharashtra to “exempt all USG properties from all taxes under provision
of Vienna Convention (Article 32).” Exhibit 14169 at 161941-42. Mr. Leaf sent another
letter, requesting a response to the first, on June 8, 2005. Exhibits 14169 at 161944, 22165
at 253412. No response was received. 7
Then, on July 5, 2005, the Officer-in-Charge of the United States Embassy in New
Delhi met with, among others, the MEA Chief of Protocol to discuss various outstanding tax
issues associated with several properties and projects, including DOS’s request for tax relief
for the NCC. Exhibit 20535. The MEA protocol chief represented that, because of the
taxation problems at the GoI’s United Nations mission in New York, MEA “could not give
a favorable answer” to DOS’s request for tax relief for the NCC.Id. at 336601. Although
the Officer-in-Charge argued that it was inappropriate to link the NCC taxes to the New York
City tax dispute and that DOS, as part of the Federal Government, could not control the
actions of a city or state government, MEA indicated that it would not offer relief or
assistance on the NCC tax issues until and unless DOS acted to resolve the New York tax
dispute. Id. at 336602.
7 In fact, more than a year later, still with no response to those letters, the U.S.
Consulate General’s office in Mumbai sent another letter on September 12, 2006, seeking
a response. Exhibit 14169 at 161946.

CBCA 3350, 3672, 4658, 4659 14
III. Solicitation and Pre-Contract Matters
As discussed above, DOS issued solicitation R0013 for the design and construction
of the NCC on April 26, 2005. JSF ¶ 1. Before the solicitation was issued, Mr. Rosenfeld
did not amend the PAP to reflect any concerns about the potential effect of tax disputes on
the GoI’s issuance of permits, and OBO did not include any information in the solicitation
about those concerns.
YDJV, having formed as a joint venture entity in April 2005 for the express purpose
of pursuing DOS overseas projects and, in particular, the Mumbai NCC project, JSF ¶ 4,
submitted a proposal in response to the solicitation. In its proposal, YDJV acknowledged
that, if awarded the contract, it would be solely responsible for providing complete design
and construction services for the Mumbai NCC, including management, professional design
services, and construction necessary to meet the contract requirements within established
schedules. Exhibit 1531 at 173806. YDJV also represented that its team would prepare a
project execution schedule, a design submittal schedule, and a master summary schedule for
the project, each of which YDJV would maintain and update every month. Id. at 173812.
It also represented that it would compile and maintain an as-built project schedule to reflect
actual work performance, as well as numerous other schedules, all of which would be
prepared and maintained using P3 software from Primavera Corporation. Id.
From May 25 to 27, 2005, DOS held a pre-proposal conference for prospective
offerors in Mumbai. Exhibit 20319. Two representatives from Yates (Frank Mitchell and
Larry Harrington) and two representatives of Desbuild (Ananth Badrinath and Yogesh Hate),
attended that conference upon behalf of YDJV. As part of that conference, the YDJV
representatives met with MMRDA representatives, who discussed zoning, licensing, and
clearance requirements that might affect the winning bidder. Exhibit 1500. The MMRDA
representatives also explained the permitting process, including a requirement that a local
architect be involved in submitting the permit applications, but indicated that permits would
not be a problem on the project. Tr. Vol. 4 at 15; Exhibit 1500. The record does not indicate
whether, or to what extent, MMRDA said anything about whether it would grant conditional
approvals for foundation work prior to issuance of official foundation permits. YDJV also
met with MCGM representatives, who similarly discussed rules and regulations pertaining
to construction projects, water, and sewage. Exhibit 1500 at 176426. Neither OBO,
MMRDA, nor MCGM mentioned any tax or anticipated permit problems during the pre-
proposal conference. Tr. Vol. 4 at 14-16.

CBCA 3350, 3672, 4658, 4659 15
IV. The Contract
On September 27, 2005, DOS awarded to YDJV contract no. SALMEC-05-C0039 for
the design and construction of the Mumbai NCC at a firm-fixed price of $86,881,576. JSF
¶ 15. The contract required completion of the project within twenty-eight months of the
issuance of the first of five limited notices to proceed (NTPs), the first one relating to design
work. Exhibit 1 at 1, 21, 31; JSF ¶ 15.
The contract price included all work necessary for the project, including “permits,”
as follows:
The Contract Price includes all labor, materials, equipment and services
necessary to accomplish the design and construction required by the Contract
Documents, including applicable customs duties, transportation to the site,
storage, premiums for insurance and bonds required by the Solicitation
Documents and/or the Contract Documents, permits, licenses and inspection
fees, and all other items called for by the contract or otherwise necessary for
performance of the contract.
Exhibit 1 at 14 (clause B.1.1). The contract indicated that “[n]o additional sums will be
payable on account of any escalation in the cost of materials, equipment or labor, or because
of the contractor’s failure to properly estimate or accurately predict the cost or difficulty of
achieving the results required by the contract.”Id. at 16 (clause B.3). Changes in the
contract price or time to perform were to “be made only due to changes made by the
Government in the work to be performed, or by delays caused by the Government.”Id. The
contract language expressly advised the contractor “that the [USG] has no agreements with
the Host Nation Government excluding any tax, including but not limited to Value Added
Tax,”id. at 14 (clause B.1.3), but did not disclose that there was an outstanding, and
unresolved, dispute about whether the USG owed property taxes relating to the project site.
JSF ¶ 16.
A clause titled “Permits and Licenses” (the P&L clause) in section C.1.6.1 of the
contract’s Statement of Work specified that it was YDJV’s responsibility to obtain all
necessary permits and licenses related to the project, but also incorporated information from
the PAP about MMRDA’s willingness to issue “conditional approvals” for foundation work,
prior to issuance of official foundation permits, to assist in expediting foundation
construction:
The Contractor is responsible for obtaining all permits (such as building,
utility, construction, occupancy), developing studies (such as Environmental

CBCA 3350, 3672, 4658, 4659 16
Impact Statement and Traffic Impact Study) and licenses required to execute
the work. The Contractor shall provide all drawings and other design
documents needed to obtain those permits and licenses for which they are
responsible, as well as official translations as required to execute those permit
actions. The host government will accept a permit application for site work
and foundations, and a final submission defining site plan, building massing,
interior fire exiting, toilets, and elevators. A local registered Architect or
Licensed Surveyor must submit the plans for approval to the [MMRDA].
Phased submissions will be entertained for site development and foundations,
but substantial interim drawings must specify the general extent of the project.
Drawings showing fire stairs and exiting, structural design and life-safety
issues are required. MMRDA approved plans are forwarded to the [MCGM],
which is the final authority. Conditional approvals will be issued to expedite
foundation construction.
Exhibit 2 at 100 (emphasis added). That clause also required the contractor to “submit a list
of drawings to the [contracting officer’s representative] for approval prior to releasing
drawings to local permitting and/or licensing agencies for any permits,” with an added
requirement (for security purposes) that all drawings be “labeled by generic terminology (e.g.
office, restroom, mechanical space).”Id.
Relatedly, the contract incorporated by reference the clause at Federal Acquisition
Regulation (FAR) 52.236-7, “Permits and Responsibilities (Nov 1991)” (the P&R clause).
Exhibit 1 at 85. That clause, in relevant part, further prescribed the contractor’s obligations
for obtaining required permits:
The Contractor shall, without additional expense to the Government, be
responsible for obtaining any necessary licenses and permits, and for
complying with any Federal, State, and municipal laws, codes, and regulations
applicable to the performance of the work. The Contractor shall also be
responsible for all damages to persons or property that occur as a result of the
Contractor’s fault or negligence. . . .
48 CFR 52.236-7 (2005).
The contract, through clause H.25, also provided that the Government could, in its
sole discretion, choose to undertake to provide additional services upon behalf of the
contractor – beyond those that the Government was contractually obligated to provide,
including but not necessarily limited to assistance in obtaining tax exemption licenses and

CBCA 3350, 3672, 4658, 4659 17
permits – but that any such extra-contractual effort or assistance would not shift the
contractor’s obligations to the Government:
H.25 OTHER SERVICES NOT TO RELIEVE CONTRACTOR
In the interest of expediting the project, the Government may, in its sole
discretion, undertake to provide additional services for or on behalf of the
Contractor which are not required of the Government under this contract, such
as assisting the Contractor in obtaining customs clearances other than those for
which the Government is responsible, tax exemptions, licenses, permits and
approvals from local governmental authorities. However, the Government
shall be under no obligation to do so, and neither the provision nor the failure
to provide such services nor the manner in which such services are provided
shall relieve the Contractor of or excuse the Contractor from any of its
responsibilities under the contract.
Exhibit 1 at 61.
In addition, the contract included a clause that placed upon the contractor the burden
of complying with all laws, codes, and ordinances of the host country:
H.19 LAWS AND REGULATIONS
H.19.l The Contractor shall, without additional expense to the Government,
be responsible for complying with all laws, codes, ordinances, and regulations
applicable to the performance of the work, including those of the host country,
and with the lawful orders of any governmental authority having jurisdiction.
Host country authorities may not enter the construction site without the
permission of the Contracting Officer. Unless otherwise directed by the
Contracting Officer, the Contractor shall comply with the more stringent of the
requirements of such laws, regulations and orders and of the contract. In the
event of conflict among the contract and such laws, regulations and orders, the
Contractor shall promptly advise the Contracting Officer of the conflict and of
the Contractor’s proposed course of action for resolution by the Contracting
Officer.
Exhibit 1 at 59 (emphasis added).
Clause E.2 of the contract defined when “substantial completion” of the project would
be considered to have been reached:

CBCA 3350, 3672, 4658, 4659 18
“Substantial Completion” means the stage in the progress of the work as
determined and certified by the Contracting Officer or Contracting Officer’s
Representative in writing to the Contractor, on which the work or a portion of
thereof designed by the Government is sufficiently complete and satisfactory,
in accordance with the requirements of the Contract Documents, that it may be
occupied or utilized for the purpose for which it is intended, and only minor
items such as touch-up, adjustments, and minor replacements or installations
remain to be completed or corrected which (1) do not interfere with the
intended occupancy or utilization of the work, and (2) can be completed or
corrected within the time period required for final completion.
Exhibit 1 at 21. It further defined the “Date of Substantial Completion” as the “date
determined by the Contracting Officer or Contracting Officer’s Representative of which
substantial completion of the work has been achieved,” with the added caveat that the
contractor, to achieve substantial completion, would have to “complet[e] certain general
construction work as identified in Section J, Attachment J.1.12, CONTRACTOR
ACCREDITATION WORKSHEET, at a minimum of thirty days prior to substantial
completion.”Id. (clause E.2.2.). That accreditation worksheet required approval of the
completed exterior physical security, interior physical security, telecommunications
operations facilities, shielded enclosures and parent rooms, roof-mounted communications
support equipment, emanations security, telecommunications cabling systems, non-secure
telephone systems, and electrical systems. Exhibit 17.
The contract also incorporated the “Liquidated Damages” clause at FAR 52.211-12
and granted DOS the right to impose liquidated damages of $9481 per day for
contractor-caused delays in completion of the project. Exhibit 1 at 31 (clause F.3). It further
provided that “[l]iquidated damages will be assessed from the completion date indicated in
the contract . . . to the date that substantial completion is actually achieved by the Contractor,
as determined by the Contracting Officer.”Id. at 35 (clause F.12). It further provided that,
given that the contract “consists of multiple phases, projects, or buildings, the liquidated
damages rate will be prorated on the ratio of the estimated price of each phase, project or
building to the Contract Price unless otherwise provided in the Contract Documents.”Id.
Nevertheless, the contract also provided that YDJV would “be allowed time, not money, for
excusable delays as defined in FAR 52.249-10, Default,” including but not limited to acts of
God, acts of the host country government in its sovereign capacity, fires, floods, and
unusually severe weather. Id. at 32 (clause F.9) (emphasis added).
The contract incorporated by reference the “Changes (Aug 1987)” clause at FAR
52.243-4, the “Changes and Changed Conditions (Apr 1984)” clause at FAR 52.243-5, and
the “Suspension of Work (Apr 1984)” clause at FAR 52.242-14.See Exhibit 1 at 91, 93. It

CBCA 3350, 3672, 4658, 4659 19
also contained a special “Equitable Adjustments” clause (clause H.31.1) indicating that
“[a]ny circumstances for which the contract provides an equitable adjustment, that causes a
change within the meaning of paragraph (a) of the ‘Changes’ clause shall be treated as a
change under that clause.”Id. at 63.
V. Performance
Period 1 (Contract Award through September 30, 2007): 362 Days of Delay
A. Initial Preparations
Having awarded the contract to YDJV on September 27, 2005, DOS issued the first
limited NTP on November 17, 2005, and the contract completion date was set for March 16,
2008. JSF ¶ 15; Exhibit 13378 at 173915. 8
Under its original schedule, YDJV planned to submit 35% design drawings to DOS
(as required by its contract) no later than February 13, 2006, and to submit 100% design
drawings no later than June 26, 2006. Exhibit 31000-A at 349. YDJV viewed the
submission of the 35% drawings as a “precursor” to approaching the local GoI authorities
for any construction permits. Exhibit 13387. 9 Further, under the original plan, YDJV
anticipated beginning to lay foundations on June 27, 2006, immediately after completing the
100% drawing design work. Exhibit 31000-A at 354. YDJV did not build into its baseline
schedule time for applying for or obtaining construction permits. Tr. Vol. 7 at 54.
YDJV did not submit the 35% drawings until March 10, 2006, Exhibit 10145, a delay
of twenty-five days under its “as planned” schedule, and it did not submit (and was not ready
to submit) any permit applications by that date. DOS promptly reviewed those applications.
8 DOS subsequently issued four more limited NTPs before issuing the final and full
NTP on June 12, 2006. Exhibit 13453; see Exhibits 13438, 13452.
9 Although the contract did not expressly require that permit applications be delayed
until submission of 35% drawings, Tr. Vol. 10 at 62-64, the GoI permit process required
submission of certain drawings as part of the permit application, essentially making drawing
and design review a precursor to permit application.

CBCA 3350, 3672, 4658, 4659 20
B. The PCC Authorizing Plinth Construction
While preparing its 35% drawings, YDJV began contemplating applying for
construction permits. In a meeting on March 20, 2006, YDJV asked its foundations
subcontractor, Shapoorji Pallonji & Co., Ltd. (Shapoorji), immediately to begin the permit
application process. Exhibit 13425. In a confirmation letter the next day, YDJV recognized
that permit application was “a time consuming and lengthy process which can adversely
impact the completion of the Project.”Id. at 352405. Accompanying YDJV’s letter was
another letter that YDJV had obtained from the U.S. Consulate General for use in the permit
application process, asking relevant authorities to process any permit applications that
Shapoorji submitted as expeditiously as possible. Id. at 352405-06.
Shapoorji hired a permit firm, Vartak & Sons Pvt. Ltd. (Vartak), to submit the YDJV
permit applications. Vartak submitted an application to MMRDA on May 11, 2006
(apparently, as a resubmission following earlier letters in April 2006), for a permit to erect
some temporary structures on the NCC site and to perform other site work, including
construction of a perimeter wall. Exhibits 13455, 13460. MMRDA, after Vartak paid
mandatory development fees that it had initially failed to include with its request, issued that
permit on June 26, 2006. Exhibits 13450, 13460. YDJV had already begun the temporary
structure erection and perimeter wall pile driving before it applied for the permit, Exhibits
900, 901, and all temporary structures were erected before the permit was actually issued.
Exhibit 902. Vartak did not seek permission to construct foundations in its April submissions
or May 11 application.
Vartak did not submit any further applications until August 1, 2006, at which point
it submitted two separate letters titled “The proposed new U.S. Consulate Complex,” one
addressed to MMRDA and one addressed to MCGM, attaching what it described as “detailed
building plans” of the “various permanent structures/buildings proposed” for the NCC and
requesting that MMRDA and MCGM “issue us at your earliest, your formal
sanction/approval to the proposed works as shown on the plans.” Exhibits 20664, 20665.
The letters did not expressly mention either foundations or plinths for the buildings, making
it unclear whether Vartak intended through these letters to obtain a PCC, which was required
under MMRDA and MCGM regulations before a FWCC could be issued, or full FWCCs for
the entire project.10 Regardless of any ambiguity in the letters, they plainly did not request
10 Although the parties have presented evidence about whether both MMRDA and
MCGM needed to issue PCCs to allow for plinth construction, YDJV completed its plinth
work before MCGM ever issued a PCC, and MCGM never took any action against YDJV
for having performed plinth work without an MCGM PCC. To the extent that YDJV was

CBCA 3350, 3672, 4658, 4659 21
a permit limited to foundations or something less than plinth construction, the phased
issuance of permits (except to the extent that Vartak was possibly seeking a PCC prior to
seeking a FWCC), or conditional approvals of foundation construction.
Despite the absence of a foundation permit or a PCC, YDJV began the process of pile
drilling (using augers, or hydraulically-operated piling drill machines) for the NOB
foundation on or about August 9, 2006, Exhibit 912, a delay from YDJV’s planned
commencement of pile installation at the NOB of June 27, 2006.11 At this point, creating the
footprint of the NOB was the critical item, on the critical path of performance, that needed
to proceed if YDJV was to complete the project in the time frame that it had anticipated. Tr.
Vol. 1 at 29, 85.
On September 22, 2006, MMRDA, unaware that YDJV was already beginning pile
work, responded to Vartak’s permit application, returning the submittal because, among other
noted deficiencies, Vartak had failed to attach the actual permit application (known as
Appendix X) to its submission. Exhibit 311. MMRDA also indicated that the application
was unaccompanied by any of the NOCs or certificates that are required for a PCC (including
those from the Mumbai electric, police, fire, airport, river protection, environmental, and
urban planning departments) and did not contain plans of all of the structures or of walkways,
canopies, projections, and porches. Id. Vartak took no action in response before resigning
from the project on November 9, 2006. Exhibit 312;see Exhibit 317 (YDJV acknowledging
that it had requested Vartak’s resignation because of “the inordinate length of time that had
transpired to submit the required permit documentation, and the incompleteness of the permit
application”).
seeking a PCC from MCGM, it is irrelevant to the circumstances of YDJV’s work on this
project.
11 YDJV has argued in its briefs that there was only negligible delay to its planned
late start date of June 27, 2006, for commencing pile installation because it began pile
installation at the warehouse (despite the absence of a foundations permit or a PCC) on July
1, 2006. The original plan, though, was to begin pile installation at the NOB, not the
warehouse, on June 27. The NOB was on the critical path at this point in time, and the
warehouse was not. For reasons that we will explain below, we reject YDJV’s argument that
work on a non-critical item, outside the context of its planned schedule, somehow negates
the delay to the critical NOB item. Further, even YDJV’s own scheduling expert has
attributed the delay in beginning NOB piling (from June 27 to August 9, 2006) as a critical
path delay. Tr. Vol. 7 at 50.

CBCA 3350, 3672, 4658, 4659 22
At about the same time, YDJV informed Shapoorji, its foundations subcontractor, that
Shapoorji would not receive any further subcontracts from YDJV for additional construction
work on the NCC project. Exhibit 13508. Shapoorji had assisted YDJV in preparing its
proposal for the project and had anticipated that it would serve as YDJV’s primary
subcontractor throughout contract performance. Nevertheless, YDJV informed Shapoorji
by letter dated September 22, 2006, that it found Shapoorji’s price for the remaining
construction work too high and was going with a lower-priced subcontractor, Larsen &
Toubro, Ltd. (L&T). YDJV also complained that it was dissatisfied with Shapoorji’s poor
management and staffing of the project for the work currently being done and that, although
it had been asking Shapoorji to hire an experienced project manager for the past five months,
Shapoorji had taken no action to do so. Id. at 352395. Nevertheless, YDJV directed
Shapoorji to continue its work to complete the perimeter wall and piling for the NOB, the
GSO, and the warehouse, as well as to obtain any remaining permits. Id. YDJV indicated
that, at that point in time, it expected the perimeter wall to be completed by October 5, 2006,
and piling work completed by October 15, 2006, id., deadlines that were not met.
As of September 29, 2006, YDJV was reporting a 76-day delay in the project schedule
and that it anticipated continuing slow progress until its new subcontractor, L&T, mobilized
on November 6, 2006. Exhibit 919, 923.
On or about November 16, 2006, Shapoorji hired a new firm, Design Cell, to replace
Vartak as its permit expediter, essentially restarting the entire permit application process
following Shapoorji’s finding (after visits to MMRDA and MCGM) that Vartak had
performed very minimal work. Exhibits 311, 313, 13570; Tr. Vol. 12 at 62.
On or about November 19, 2006, YDJV decided to impose a two-week “stand-down”
on work at the site to allow L&T “to gather workforce and machinery.” Exhibit 927.
Subsequently, MMRDA became aware that YDJV was performing NOB pile and
foundations work without a permit. In a meeting on November 28, 2006, during YDJV’s
“stand-down” period, the MMRDA Commissioner, Dr. T. Chandrashekhar, told
representatives of YDJV (Tom Milos, who was then serving as YDJV’s project manager),
Design Cell (Paritosh Parelkar), and OBO (Robert Browning, the OBO project director) that
the NOB work which YDJV was doing was illegal and verbally told YDJV to shut down its
construction operation until it had obtained a PCC. Exhibit 13582. 12 Mr. Milos quickly
informed the owners of YDJV, Ananth Badrinath and William Yates (both of whom were
12 Dr. Chandrashekhar also informed the then-Consul General that there would be
“some serious problems” if YDJV did not stop work until it had a PCC. Tr. Vol. 9 at 29.

CBCA 3350, 3672, 4658, 4659 23
located in the United States), of the meeting and indicated that, even though MMRDA had
not issued a formal stop work order, he interpreted the absence of such a written order as a
means of “giving [YDJV] an out” because, if a formal stop work order were issued, “it would
be accompanied by fines” that likely would exceed $1.5 million and would have to be paid
by cashier’s check before any work on the project could resume. Id. Mr. Milos
recommended to Messrs. Yates and Badrinath that, even though the action could result in
claims from subcontractors, YDJV immediately stop all project work (other than some
compound perimeter wall backfilling unrelated to the NOB construction) until the PCC could
be obtained, a process that Design Cell had indicated should take approximately five weeks.
Id. YDJV management, including Jeff Cross (the YDJV employee in the United States who
had “overall responsibility for the project,” Tr. Vol. 6 at 184-85), rejected Mr. Milos’
recommendation, even after being told that Design Cell intended to walk away from the
project if YDJV violated the MMRDA Commissioner’s instruction and after a plea from
another YDJV on-site manager, Tom McKenney, regarding the ramifications to the USG
(including fines upon the USG in excess of $1 million) and to YDJV if YDJV did not stop
operations until obtaining the PCC. Exhibits 13586, 13587.
After learning that YDJV intended to continue performing piling and foundation work
despite the MMRDA Commissioner’s admonition, the DOS contracting officer, David
Vivian, issued a letter on November 29, 2006, directing YDJV to “bring [its] performance
in line with the contract and the regulations of the host Government” and, “[t]o that end, . . .
to stop all construction activities on the New Consulate Compound that violates [sic] the
contract and the local authority’s regulations.” Exhibit 315. In response to that letter, YDJV
stopped NOB piling and foundation work, and Mr. Badrinath indicated to the OBO
contracting officer and the OBO project manager that, “upon realizing the adverse impacts
of continued work in the field,” it had ceased piling and grade beam work pending receipt
of appropriate permits. Exhibits 316, 317; Tr. Vol. 4 at 30. 13
13 Despite Mr. Badrinath’s representations, Jeff Cross of YDJV subsequently wrote
a letter to the DOS contracting officer on December 18, 2006, stating that, although YDJV
had stopped work in response to what he called the “stop work order,” YDJV retained its
right to seek compensation for the suspension of work. Exhibit 13607. Mr. Cross identified
YDJV’s understanding that MMRDA was supposed to issue phased permits or, at least,
conditional approvals to expedite foundation construction, and he represented that, by
submitting drawings through Vartak in June 2006 for a site work permit, YDJV had provided
MMRDA with the information that it needed to issue such permits and approvals. Id. Yet,
Vartak had not requested phased permits (except to the extent a PCC constitutes part of a
“phased permit” process), foundations permits, or conditional approvals in its submissions.
Further, YDJV was aware that issuance of foundations permits or conditional approvals for

CBCA 3350, 3672, 4658, 4659 24
Design Cell submitted Appendix X to MMRDA on or about December 15, 2006,
Exhibit 318, and submitted signed drawings on January 5, 2007. Exhibit 13615. On January
19, 2007, MMRDA returned the submittal to Design Cell, noting several deficiencies, the
most important being a floor-to-floor height issue that, if not modified, would cause the
project to exceed a square-meter limit imposed by the Mumbai Development Control
Regulations. Exhibit 324. Those regulations required that, if a building was to have a floor-
to-floor height of more than 4.2 meters, there had to be an environmental impact study
analyzing it (a requirement that did not exist for buildings with lesser floor-to-floor heights).
The OBO Standard Embassy Design, which was available to offerors during the bidding
process, required a certain amount of space between floors in DOS buildings to
accommodate various security and other equipment located in mechanical spaces between
the floors, Exhibit 28 at 1012, and the planned height of the NOB was sufficient to require
such a study. Although YDJV was contractually responsible for any necessary
environmental impact studies, Exhibit 2 at 100 (clause C.1.6.1), it had not arranged for such
a study to support the floor-to-floor height requirements of the NOB.
On February 15, 2007, YDJV representatives met with OBO’s David Louh, a senior
OBO employee who traveled from Washington to Mumbai, to discuss progress on the project
and the permit process. At that meeting, Mr. Louh directed YDJV to proceed with any work
that was legal prior to receipt of a PCC, including under-slab utilities, rebar, and formwork
preparation and fabrication. Exhibit 13819 at 209896; Tr. Vol. 1 at 68. Also at the February
15 meeting, Mr. Louh suggested that YDJV ask MMRDA for a “foundations only” permit,
Exhibit 13819 at 209895, something that YDJV had not previously done. Later that day,
YDJV met with Pravin Malkani, a director of Design Cell, and asked him formally to seek
a foundations permit from MMRDA. Exhibit 20413. In response, Mr. Malkani submitted
a letter to MMRDA, dated February 15, 2007, asking whether MMRDA might issue a
“‘Plinth Certificate’ i.e. A plinth commencement certificate” for the NCC to allow YDJV “to
undertake and complete all sub ground works such as foundation and allied services” before
MMRDA had approved the submitted building plans. Exhibit 20402. Although this letter
did not specifically ask for a “foundations only” permit, we interpret it as seeking conditional
approval to allow foundation work.
foundations was contingent upon submission of a proper request. See Deposition
Designation of Frank Mitchell, Vol. II, at 209 (acknowledging requirement to seek a
construction permit, but that “[f]oundations could be started,” following MMRDA approval,
“with the correct information”). On December 19, 2006, the DOS contracting officer
responded to Mr. Cross’s letter, stating that he “did not issue a Stop Work Order” and
indicating that he was simply trying to preclude the Government from being “fined for the
contractor’s violation of host nation laws and regulations.” Exhibit 321.

CBCA 3350, 3672, 4658, 4659 25
On February 16, 2007, YDJV, in response to Mr. Louh’s February 15 suggestion,
began installing underground utilities and performing backfill and rebar bending, despite the
fact that MMRDA had not issued a PCC. Design Cell submitted new drawings to MMRDA
on February 23, 2007, that resolved the height and environmental clearance issues. Exhibits
329, 13676.
On March 1, 2007, YDJV wrote a letter to Mr. Malkani asking him to submit a formal
written request to MMRDA seeking a foundations permit. Exhibit 20413. Mr. Malkani
responded by letter the next day, stating that, in Design Cell’s opinion, MMRDA regulations
did not provide for a “foundations only” permit and that, “if this needs to be followed up with
MMRDA[,] your clients can call on them and ask them directly in this regard.” Exhibit
20414. Mr. Malkani also testified that he contacted some MMRDA employees who told him
that there was no provision in law allowing for foundation work prior to approval of building
plans. Deposition Designation of Pravin Malkani, Vol. I, at 133-34.
Nevertheless, only four days later, on March 6, 2007, MMRDA verbally approved
Design Cell’s request to start foundations, Tr. Vol. 10 at 143-48, and YDJV began working
on structural concrete that day. There was some subsequent confusion regarding the scope
of the written permit that was subsequently issued – MMRDA first issued an “excavation
only” permit on March 8, Exhibits 13726, 13730, rather than a full foundation construction
permit or a PCC, after YDJV had paid the development fee necessary for such a permit,
Exhibit 942 – but that confusion did not cause further delay because YDJV, despite the
absence of a full PCC, directed its subcontractors to perform all piling and other work up to
the ground floor slab of the NOB. Exhibit 13726; Tr. Vol. 1 at 68, 126. YDJV placed its
first slab for the NOB on or about March 24, 2007. Tr. Vol. 1 at 69.
On March 31, 2007, as a result of a newspaper article discussing the United States’
repeated efforts to obtain tax exemptions under the Vienna Convention, YDJV first became
aware that there were unpaid taxes and a tax dispute involving the NCC property. Exhibit
13763; Tr. Vol. 4 at 32-33. YDJV immediately recognized that the dispute would likely
affect its permit process. Exhibit 13762.
MMRDA provided its formal written approval, through issuance of a PCC, on
April 12, 2007. Exhibit 20427. At the hearing of these appeals, YDJV presented evidence
about subsequent efforts of its permit expediter, Design Cell, to obtain a corresponding PCC
from MCGM, but the MCGM PCC was never issued. Tr. Vol. 1 at 113-21. To the extent
that Design Cell devoted time and energy to that effort, neither that failed effort nor the
absence of a MCGM PCC delayed the project because YDJV went ahead and performed all
of the plinth work at the NOB, and later at the other compound buildings, despite the absence
of a PCC from MCGM. Id. at 125, 126.

CBCA 3350, 3672, 4658, 4659 26
In the PCC that it issued on April 12, 2007, MMRDA stated that, before it would issue
a FWCC authorizing vertical construction of any of the NCC buildings, there first would
have to be a joint inspection of the plinth for each building by both MMRDA and MCGM.
Exhibit 20427. YDJV’s ability to schedule a plinth inspection was delayed because of the
slow performance of the new lower-priced subcontractor that YDJV had hired, L&T.
Tr. Vol. 1 at 126. The plinth for the NOB was not completed until June 29, 2007, Exhibit
13087 at 9796-97, and YDJV’s architect did not request the NOB plinth inspection until
July 18, 2007. Exhibit 14030. MMRDA and MCGM conducted the joint inspection of the
NOB plinth, as well as of the warehouse plinth, twelve days later (on July 30, 2007).
Exhibits 6520, 14040, 21175 at 25693; Tr. Vol. 4 at 150. The NOB and warehouse plinths
were the only two plinths that were ready for inspection at that time. The tax issue did not
affect the NOB or warehouse plinth inspections. Tr. Vol. 1 at 125, Vol. 8 at 6.
C. The FWCC Authorizing Vertical Construction Above the Plinth
MMRDA’s issuance of the PCC permitted YDJV to perform, legally, construction
work for all nine buildings in the NCC up to and including the plinth level. Exhibit 331; Tr.
Vol. 1 at 81-82; Tr. Vol. 10 at 154. Before YDJV would be able to build structures on and
above the plinth, it would need to obtain FWCCs from both MMRDA and MCGM. Several
actions would have to occur before either MMRDA or MCGM would issue a FWCC.
To obtain the MMRDA FWCC for any particular building, YDJV would first have
to obtain a joint plinth inspection, and approval, of the plinth for the building at issue by both
MMRDA and MCGM. Exhibit 13839. In addition, YDJV would have to provide MMRDA
with certain documents, including, but not limited to, an NOC from the Mumbai Police
Commissioner. Exhibit 331 at 7048; Tr. Vol. 1 at 136.
The MCGM would issue its own FWCC only after MMRDA had first issued its
FWCC. In addition, the applicant would have to satisfy several additional prerequisites,
including, among others, (1) submission of a NOC from the Civil Aviation department
approving the proposed height of the building, and (2) submission of a tax NOC from the tax
assessor’s office, an office that is a part of MCGM and reports to the head of MCGM.
Exhibits 8649 at 104364, 20439 at 22060, 22023 at 278.
On February 27, 2007, before the PCC was issued, YDJV provided OBO with copies
of the first of its mechanical drawings, which depicted a cooling system different from the
one that was required by the contract specifications. Exhibit 20406. The drawings also
identified specific rooms by function rather than in a generic manner, which, if submitted to
a foreign authority, would have violated OBO security requirements. Id. at 911547; Tr.
Vol. 1 at 268. In response to YDJV’s subsequent inquiry about the drawings, YDJV’s

CBCA 3350, 3672, 4658, 4659 27
subcontractor, Design Cell, indicated that the drawings were preliminary and that it would
update the drawings to be submitted to support of its FWCC permit application. Exhibits
20407, 20412. Design Cell also indicated that it would ensure that the drawings submitted
were more detailed than it had originally anticipated providing, as requested by OBO.
Exhibit 20407.
On August 2, 2007, Design Cell submitted a request to MMRDA for issuance of a
FWCC for the NOB, but indicated in its request that there was a “slight change in
dimensions” of entrance lobbies on the NOB’s first floor and that Design Cell would soon
be submitting revised drawings for that building to reflect that change. Exhibits 20448 at
267776, 21175 at 25693. It requested a FWCC from MCGM by letter dated August 7, 2007.
Exhibits 20448 at 267779, 21175 at 25693.
For whatever reason, YDJV did not apply for a FWCC for the warehouse when it
applied for the NOB FWCC, even though the joint plinth inspection by MMRDA and
MCGM on July 30, 2007, covered the plinths for both the NOB and the warehouse. Exhibits
14083, 21175 at 25693. Although OBO advised YDJV by letter dated August 17, 2007, that
it seemed important to obtain the FWCC for the warehouse, Exhibit 14083, YDJV took no
action at that time to do so.
YDJV’s permit expediter, Design Cell, did not request the police NOC until July 5,
2007,14 had to resubmit it at least once, and did not obtain it until August 22, 2007. Exhibits
340, 14056, 14068; Tr. Vol. 1 at 114-15. OBO acted reasonably in assisting YDJV in
obtaining the police NOC. See, e.g., Tr. Vol. 1 at 150. The tax issue did not affect issuance
of the police NOC. Tr. Vol. 8 at 6-7.
MMRDA subsequently issued its FWCC for the NOB on September 6, 2007, Exhibit
14126, and the MMRDA FWCC was forwarded to MCGM. On September 28, 2007, despite
the absence of a tax NOC, MCGM issued its FWCC for the NOB after YDJV satisfied the
14 On June 21, 2007, YDJV drafted, for OBO’s signature, a cover letter to the police
commissioner seeking the police NOC. Exhibit 335; Tr. Vol. 1 at 146. After some
deficiencies were corrected, Mr. Browning, OBO’s project director, signed and returned that
cover letter to YDJV on June 29, 2007, Exhibit 22205, and Design Cell submitted it to the
police commissioner on July 5, 2007. See Tr. Vol. 2 at 79.

CBCA 3350, 3672, 4658, 4659 28
various steps necessary for obtaining one. Exhibit 343.15 YDJV’s subcontractor started the
first vertical concrete pour for the NOB on October 3, 2007.
There were significant discussions involving MCGM, DOS, and/or the tax assessor’s
office during this period about whether the Government must pay property taxes on the NCC
land. On June 14, 2007, the OBO project manager, Mr. Browning, and YDJV’s Gene
Rivenbark attended a meeting at the tax assessor’s office at which Mr. Browning was handed
a letter (addressed to Design Cell) indicating that the tax NOC would not be issued until
“payment of following outstanding dues” – that is, the previously assessed property taxes.
Exhibit 13968; Tr. Vol. 10 at 160; see Exhibit 13972. At OBO’s request, the then-Consul
General (CG), Michael Owen, met with the newly appointed MCGM Commissioner, Mr.
Phatak, who assured him that the NCC project was a priority for the GoI, that MCGM
wanted to do all that it could to support the project, and that the property taxes would not be
an issue in granting permits. Tr. Vol. 9 at 85-87; Tr. Vol. 10 at 161. On June 25, 2007,
CG Owen reported to DOS headquarters that the MCGM Commissioner had assured him that
tax issues would not affect issuance of NCC building permits. Exhibit 13993 at 158206. The
MCGM Commissioner reaffirmed that commitment at various times, including during a
meeting on September 17, 2007. Exhibits 14142 at 272765, 14156 at 251401. 16
To the extent that lower-level MCGM personnel raised the tax issue during
discussions with YDJV, its subcontractors, and/or DOS representatives (including at
meetings on August 17 and September 12, 2007), it had no ultimate impact upon MCGM’s
issuance of the FWCC,17 with one limited exception. Exhibit 22277 at 92. After MMRDA
15 Although MCGM’s FWCC for the NOB contained language appearing to limit the
scope of the NOB authorization, the FWCC actually authorized the entirety of the planned
NOB construction.
16 The only evidence suggesting otherwise is a July 2, 2007, cable from the American
Embassy in New Delhi to DOS officials in Washington, D.C., indicating, among a discussion
of numerous other matters, that “[b]uilding permits [for the NCC] are also being withheld,
delaying construction.” Exhibit 10034 at 221550. But there is nothing in the record to
support that statement, made by an individual located away from Mumbai who apparently
was not involved in the NCC project. We do not give credence to a document containing
hearsay that is contradicted by the other evidence in the record.
17 YDJV and its scheduling expert relied upon deposition testimony of a DOS
witness to establish that, during this time period, the MCGM Commissioner was stating that
no building permits would issue until taxes were paid. The witness testimony at trial, as well
as the documentary evidence, establish that the deposition testimony was in error.

CBCA 3350, 3672, 4658, 4659 29
issued its FWCC on September 6, 2007 (an action that had to await issuance of the police
NOC and that was not delayed by the tax dispute), MCGM did not swiftly issue its own
FWCC in response, even though it had previously indicated that it would expedite issuance
and should have taken only a couple of days for MCGM to issue its FWCC in response to
MMRDA’s action. Throughout this period, despite the MCGM Commissioner’s
representations to DOS, there were continued rumblings within MCGM about the tax issue
and about whether the FWCC should be issued without the USG’s agreement to pay the
taxes, even after the September 17, 2007, meeting with the MCGM Commissioner. An
MCGM employee, Mr. Ghade, told a YDJV representative on September 21, 2007, that he
would not issue the FWCC until the tax issue was resolved, despite what the MCGM
Commissioner had said on September 17. Exhibit 14158 at 156901. It was not uncommon
for lower-level MCGM employees, unaware of promises or commitments made by the
MCGM Commissioner, to make statements in conflict with the Commissioner’s until they
received more specific communication and direction from the Commissioner. Exhibit 22277
at 127. OBO and CG Owen subsequently intervened with the MCGM Commissioner to
ensure that the MCGM FWCC was, in fact, issued, but there was a tax-related delay between
September 8, 2007, the date by which MCGM should have issued its FWCC, and September
28, 2007, when MCGM finally issued its FWCC.
D. Summary of Delay Impact
Based upon YDJV’s original plan as set forth in its baseline schedule, YDJV had
planned to submit 35% design drawings to DOS, something that it viewed as a precursor to
its ability to apply for construction permits, no later than February 13, 2006, but it did not do
so until March 10, 2006. Despite having submitted those drawings, it did not at that time
apply for either a foundations permit or a PCC, waiting until August 1, 2006, to submit a
somewhat confusing permit request containing serious deficiencies that YDJV, through its
subcontractor, made no attempt to begin to correct until December 15, 2006.
YDJV had planned to start pilings at the NOB on June 27, 2006, but did not do so
until August 9, 2006, and did so without a permit. Having never requested a foundations
permit or conditional approvals, it had to cease work at a certain point after MMRDA
discovered that it was working without a permit. It made an inquiry about conditional
approval for foundation work on February 15, 2007; MMRDA verbally approved foundation
work on March 6, 2007; and MMRDA issued a permit on March 8, 2007, that YDJV
interpreted as allowing it to commence full plinth work. Subsequently, YDJV’s ability to
schedule a plinth inspection was delayed because of its subcontractor’s slow performance.
The plinth for the NOB was not completed until June 29, 2007, YDJV’s architect did not
request the NOB plinth inspection until July 18, 2007, and the joint NOB plinth inspection

CBCA 3350, 3672, 4658, 4659 30
was not conducted until July 30, 2007. Only at that point could YDJV request a FWCC for
the NOB.
YDJV had planned to begin its first vertical concrete pour for the NOB on
November 6, 2006, but did not do so until October 3, 2007, after it had obtained the required
NOB FWCCs from both MMRDA and MCGM. MMRDA issued its NOB FWCC on
September 6, 2007, after being presented with the necessary police NOC that was issued on
August 22, 2007. Although MCGM should have issued its own NOB FWCC within a couple
of days after the MMRDA FWCC was issued (given the promises of the MCGM
Commissioner that it would be expedited), MCGM did not issue its FWCC until
September 28, 2007, because of internal MCGM administrative delays resulting from the
USG’s tax dispute with the GoI.
There ultimately was a critical path delay totaling 362 days from the start of contract
performance to September 30, 2007. Twenty of those 362 days (from September 8 to 28,
2007) were the result of the tax dispute between the USG and the GoI. Two of those 362
days were caused by flooding in the Mumbai area in August 2006. Tr. Vol. 7 at 50-58, 59,
62-63.
Period 2 (September 30, 2007, to April 1, 2008): 12 Days of Delay
A. Critical Delays by YDJV’s Subcontractor
During this period of time, the critical work that was necessary for the performance
path to continue was the installation of vertical structural concrete at the NOB. YDJV’s
subcontractor, L&T, was tasked with performing that work, but failed to maintain the
schedule that YDJV had planned. There were forty-nine days of delay to the concrete
activities at the NOB, but, by starting NOB finish work earlier than originally scheduled,
YDJV recovered thirty-seven days of that delay. Ultimately, then, there were twelve days
of delay to the critical path of the project. These delays to the schedule that YDJV had
originally planned were unrelated to any tax issues, and responsibility for these days of delay
falls upon YDJV.
YDJV has asserted that, because of the prior delays in the NOB FWCC issuance (for
which it blames DOS), it “made no sense to maintain or ramp up a substantial [vertical
construction] workforce” before there was vertical construction work to be performed, so
L&T released much of its workforce for this project while awaiting the FWCC. Appellant’s
Post-Hearing Brief at 59. Nevertheless, L&T understood that, once it was ready to perform
the vertical work, it would need to use workers that had the proper security badges, and its
decision to release its workers required it completely to remobilize a workforce once the

CBCA 3350, 3672, 4658, 4659 31
FWCC was issued (including work required for the badging process). YDJV complained at
the time that L&T was showing no “sense of urgency” in scheduling, staffing, or performing
work. Exhibit 14177. No evidence was presented at the hearing in this matter showing that
YDJV or L&T had developed a reasonable advance work plan addressing labor and hiring
needs, and there is no evidence of a serious and coordinated effort to develop one during
contract performance. L&T did not begin the effort to remobilize, or to hire and obtain
badges for workers, until after the FWCC was issued. L&T’s failures in the remobilization
effort caused further delays.
L&T’s manpower levels, once the NOB FWCC was issued, were inadequate for the
work required. YDJV asserts that prior delays that it attributes to the Government pushed
L&T’s NOB vertical construction work into a period in which it was more difficult to find
and hire qualified labor than it would have been had there been no prior delays. It asserts that
the labor marketplace had changed since it submitted its bid because of, among other things,
a significant increase in the number of construction projects that were ongoing in Mumbai
at that time. Yet, as previously discussed, all but 22 days of delay in the earlier period were
caused by work deficiencies by YDJV or its subcontractors, rather than by DOS. Further,
the record does not establish that, in establishing its original labor estimates or hiring plans,
YDJV developed any kind of realistic analysis of the Mumbai labor market, and it presented
no viable evidence, beyond speculation, that the labor market was significantly different
during this period of time than it would have been when YDJV had originally planned on
constructing the NOB. Although YDJV was relying on the expertise of one of its joint
venture partners, Desbuild, to assist it in hiring the labor necessary to support the project,
Desbuild did not have prior experience in projects the size of the NCC, and it did not conduct
any studies or analysis about the level of skilled labor that it realistically should have
expected to find in the Mumbai labor market. We find that YDJV did not establish that
changes in the labor market affected or delayed its performance. Instead, any difficulties that
YDJV and/or its subcontractors had in hiring skilled labor during this period were the result
of YDJV’s faulty expectations about the state of the Mumbai skilled labor market.18
18 This finding is consistent with more generalized testimony that YDJV presented
about difficulties it had with subcontractors in Mumbai. Yates’ then-Senior Vice President
for Special Projects, Henry Dearman, testified that YDJV’s subcontractors would repeatedly
make promises to do something (such as a promise to meet a particular deadline or
completion date) that YDJV knew or would later find out the subcontractors could not keep,
but the subcontractors refused to admit that they would not be able to keep it – specifically,
the subcontractors did not want to be seen as unable to accomplish their assigned tasks, no
matter how difficult. Tr. Vol. 1 at 25-26. Mr. Dearman contrasted that situation with the
subcontractors with which he has dealt in the United States, which generally push back

CBCA 3350, 3672, 4658, 4659 32
B. Other Delays Involving Tax Issues
On October 1, 2007, the Consulate General’s office for DOS in Mumbai wrote to the
Chief Protocol Officer for the Government of Maharashtra, once again seeking his assistance
in obtaining tax exemptions for the BKC property and referencing the applicability of the
Vienna Convention to exempt the United States from such taxes. Exhibit 14169. It
referenced the fact that the local municipal authorities were requiring DOS to provide tax
clearance documents from the tax assessment department to obtain necessary building
permits, but that the tax assessment office “will not provide clearance documents until this
tax matter is resolved.”Id. It recognized the “potential operational delays” that would result
if the issue was not resolved swiftly. Id.
While L&T was working on vertical construction at the NOB, it was also laying
plinths for other NCC buildings, pursuant to the PCC that the MMRDA had issued for the
entire NCC project. On December 27, 2007, YDJV requested plinth inspections from the
MMRDA for two of the NCC buildings: the GSO and the CG residence. Exhibit 21175 at
25697; Tr. Vol. 4 at 151-52. Although YDJV initially anticipated fairly swift inspections and
approvals from MMRDA, a MMRDA representative verbally informed YDJV on or just
before January 4, 2008, that MMRDA would not be able to conduct the plinth inspections
because of “tax assessment issues” between the United States and the GoI. Exhibit 20280;
see Tr. Vol. 1 at 211. YDJV quickly reported that news to OBO, which began a series of
inquiries that resulted in the involvement of CG Owen.
On February 8, 2008, the United States District Court for the Southern District of New
York issued a decision in City of New York v. Permanent Mission of India to the United
Nations, 533 F. Supp. 2d 457 (S.D.N.Y. 2008),vacated, 618 F.3d 172 (2d Cir. 2010), finding
that the Vienna Convention only exempted from taxation the “residence of the head of the
mission” and that the City of New York could properly tax those portions of the GoI’s
buildings in New York in which GoI employees other than the GoI’s United Nations mission
head were residing. Four days later, on February 12, 2008, the MCGM Commissioner
informed CG Owen that there would be no more building permits issued for the NCC “until
the NY case was settled.” Exhibit 20103 at 158373. This was a change in the MCGM
Commissioner’s previously stated position, a change resulting from “instructions” that he had
received from MEA. Exhibit 22277 at 131-34. At that point in time, although there were
PCCs permitting the laying of the plinth for the various compound buildings, the only
building permit (or FWCC) that had been issued to allow for vertical construction was for
the NOB.
during the planning process if a proposed deadline is unrealistic or risky. Id.

CBCA 3350, 3672, 4658, 4659 33
Subsequently, during a meeting with CG Owen on February 14, 2008, the MCGM
Commissioner and Deputy Commissioner agreed to allow immediate issuance of a FWCC
for two more NCC buildings – the GSO and the warehouse – but they indicated that they
would issue stop work orders for those buildings if the United States had not resolved the tax
issue within sixty days. Exhibit 20103. The MCGM Commissioner indicated during that
meeting that, pursuant to instructions that he had received from a higher authority in the GoI,
MCGM could not issue any other FWCCs until the United States had paid the outstanding
taxes. Id. at 158373. Within DOS, there was a belief that “this newly ‘hardened’ position
by authorities in Mumbai [insisting that DOS pay taxes before FWCCs were issued] has been
precipitated by the New York court case.” Exhibit 20284.
Plinth inspections for the GSO (which was now viewed as tied to the warehouse,
which had previously been subject to a joint plinth inspection) and the CG residence were
performed on February 18, 2008. Exhibits 14334, 20287, 21175 at 25698.19 Nevertheless,
the MCGM engineers mentioned during the plinth inspections that the FWCCs for the GSO,
the warehouse, and the CG residence that MCGM expected to issue would be limited,
permitting construction only to the first floor of each building. Exhibits 14334, 20287,
20288. CG Owen immediately requested clarification and elimination of any such limitation
from the MCGM Commissioner. Exhibit 20287. The FWCC issuance process was not
helped by the fact that YDJV’s amended drawings submitted in support of the FWCC
application contained various errors, including an incorrect location for fuel tanks. Exhibit
22317 at tab 38. The FWCC for the GSO, the warehouse, and the CG residence had still not
been issued by the end of Period 2 (for reasons that will be discussed in the next section).
Notwithstanding that delay, none of these buildings was on the critical path of performance
at this point of the overall NCC project.
By at least mid-March 2008, DOS was making concerted efforts to work out a
bilateral agreement between the United States and the GoI to resolve both the New York tax
dispute and the NCC tax dispute. Exhibit 20290.
19 YDJV requested a plinth inspection of another outbuilding, the CCAC, but the
local authorities declined because the edge forms for the CCAC plinth were still in place,
meaning that the plinth was not finished. Exhibit 14334.

CBCA 3350, 3672, 4658, 4659 34
Period 3 (April 1, 2008, to November 1, 2009): 391 Days of Delay
A. Critical Delays by YDJV’s Subcontractor
During this period (from April 1, 2008, to November 1, 2009), NOB mechanical,
electrical, and plumbing (MEP) became the critical activity on the NCC project. Tr. Vol. 2
at 12. There were 391 days of delay in this 579-day period. Essentially, YDJV lost four days
of every six-day work week. In fact, during the seven-month period from April to November
2008, NOB MEP activities lost almost five months of time, and the contractor fell another
eight months behind over the course of the next eleven months.
As of April 1, 2008, air handling unit and ductwork installation at the first, second,
and third levels of the NOB was expected to drive the critical path of the project through
July 18, 2008 (with an expected duration of three-and-a-half months). That work actually
took seventeen months. As of August 30, 2008, YDJV anticipated that its MEP
subcontractor, Shine Electric Works Pvt. Ltd. (Shine), would complete the already-delayed
ductwork within two weeks – by September 13, 2008. It was not completed by that date. At
a meeting on November 11, 2008, YDJV began its efforts to demand that Shine increase its
MEP manpower levels. Shine complied by December 2008, meeting the increased
manpower levels that YDJV had requested, and it continued to increase manpower levels
over the next several months. Despite that fact, Shine did not complete the MEP work at the
NOB until August 27, 2009.
The cause of this delay was the poor performance of Shine, coupled with YDJV’s
overestimation of the available skilled labor market to perform in accordance with DOS
construction requirements. Shine failed to perform work for extended periods of time and
did not respond adequately (beyond making unsupported excuses for its failure to perform)
to YDJV’s repeated pleas for performance of the work. Further, the work that Shine
performed was not always performed correctly and had to be redone – in fact, from February
2009 through June 2009, Shine was devoting its time to fixing NOB second floor rough-in
work that it had previously done incorrectly. Tr. Vol. 2 at 12; Tr. Vol. 4 at 128-32; Exhibits
12872, 12873, 12869, 14641. YDJV eventually (in May 2009) supplemented Shine’s
workforce by bringing in workers from elsewhere (through another subcontractor, Microtech
M&E Pvt. Ltd. (Microtech)), Tr. Vol. 1 at 210, but it potentially could have reduced delays
by doing so at an earlier date.
Although YDJV attempted at the hearing of this matter to establish that demand for
skilled labor and for construction materials suddenly increased during this period because of
a massive number of new construction projects in the Mumbai area, and that this change in
the available labor market and the availability of building materials caused its delays, the

CBCA 3350, 3672, 4658, 4659 35
evidence does not support YDJV’s allegation. It seems clear, based upon the preponderance
of the evidence, that Shine did not have the experience to handle a job of the magnitude of
this project, that it had not adequately planned its work at the outset of the job, and that
Shine, for unexplained reasons of its own making, elected not to staff the project sufficiently
with workers of adequate skill. 20 To the extent that Shine reported to YDJV during the
project that the skilled labor market had changed so that it suddenly could not find a
sufficient number of skilled workers, that report was an unsupported excuse to gain more
time, rather than a true indicator of the labor market. Tellingly, when YDJV eventually
brought in Microtech to supplement Shine’s work in May 2009, the skilled labor issues
largely abated. Exhibits 12866, 12867 at 340947; Tr. Vol. 2 at 63-67.
After completing above-ceiling ductwork on August 27, 2009, YDJV planned to test
the ductwork before installing above-ceiling fire sprinkler lines and above-ceiling electrical
conduit, work that could not be performed until after the ductwork installation was complete.
By November 1, 2009, the third-level NOB duct testing had still not been completed. Again,
although the reasons for this delay are somewhat unclear, there is no doubt that the fault for
this delay lies with YDJV’s subcontractor, Shine, which simply did not get the work done.
B. Concurrent Delays to the Outbuildings
1. Delays to the Warehouse and Non-MCAC Buildings
As indicated in the preceding section, the MCGM Commissioner and Deputy
Commissioner had informed CG Owen on February 12 and 14, 2008, that no FWCCs for any
additional buildings in the NCC – except for the GSO/warehouse buildings and the CG
residence – would be issued until the NCC tax issues were resolved.
On April 16, 2008, CG Owen learned from a conversation with a high-level MEA
representative that MEA had met with the Maharashtra Chief Minister about the tax and
construction permit issues the prior day and that the Chief Minister wanted to be helpful to
ensure that construction of the NCC could continue. Exhibit 22317 at tab 39. He notified
CG Owen that the Maharashtra Chief Secretary had been instructed to investigate the matter
immediately and that CG Owen should meet with the Chief Secretary expeditiously. Id.
20 Documentation in the record indicates that YDJV, during this delay period, was
blaming Shine for taking skilled workers hired for this project and transferring them to
another embassy project in Hyderabad, India. It is unnecessary for us to define the specific
reasons for Shine’s inability to complete its work in a timely manner, other than to find that
they are not the fault of DOS.

CBCA 3350, 3672, 4658, 4659 36
On April 19, 2008, CG Owen, along with two OBO representatives and two YDJV
employees, met with the Maharashtra Chief Secretary, Johny Joseph (who, until May 2007,
had been the MCGM Commissioner), as well as with representatives of MEA, MCGM, and
MMRDA.21 At the meeting, CG Owen urged the Chief Secretary to delink the NCC
construction permits from the property tax issues because of the importance of the NCC
project to both DOS and the City of Mumbai. At the conclusion of that meeting, the Chief
Secretary directed MCGM and MMRDA to change course and told them not to impede
construction of the NCC in any way, to conduct all necessary inspections and issue all
necessary certificates as expeditiously as possible, and to delink for the time being the
property tax issue from the construction work. He ordered that resolution of the property tax
issue should be pursued on a separate track from the construction authorizations for the time
being, although he indicated that, before MCGM would issue a final occupancy certificate
for the NCC, DOS would first have to resolve all property tax issues involving the NCC.
Exhibits 1001, 20295, 20298.22
On April 21, 2008, YDJV submitted revised final drawings to MMRDA for the
GSO/warehouse and the CG residence, as required to obtain FWCCs for those structures.
Exhibit 20296. Those revised drawings were to be forwarded to the MMRDA Commissioner
for expedited action on or about April 23, 2008. Exhibit 20297. Nevertheless, lower-level
employees within MMRDA and MCGM, unaware of the new direction that had been
announced at the April 19 meeting, did not expedite matters in the manner that should have
occurred. Exhibits 22277 at 151, 22317 at tab 43.
On April 23, 2008, pursuant to an agreement made at the April 19 meeting, MMRDA
and MCGM conducted a joint plinth inspection of the utility building, the CCAC, and the
MSGQ, at which time they discovered that the plinths for two of the buildings (CCAC and
the utility building) did not match the plans that YDJV had submitted for those buildings on
April 21, meaning that YDJV would have to submit revised drawings (delaying YDJV’s
ability to obtain FWCCs). Exhibits 1001, 20297.
21 This meeting followed a preliminary meeting on April 17, 2008, between CG
Owen and the Chief Secretary, after which CG Owen provided a list of the necessary permits
that YDJV needed to proceed with construction. Exhibits 22277 at 146-48, 22317 at tab 41.
22 Based upon the Chief Secretary’s directive, MCGM issued a formal written order
on May 2, 2008, directing that the property tax issues “should not be presently linked with
the issuance of the [FWCC] for the buildings in the layout on the [NCC] plot” and that
“MMRDA will issue the full [FWCC] for all th[e] structures in the layout,” but that the issue
“shall be resolved before grant of occupation for the buildings.” Exhibit 14393.

CBCA 3350, 3672, 4658, 4659 37
MCGM issued the FWCCs for the GSO, the warehouse, and the CG residence on
May 6, 2008, 78 days after the plinth inspections for those buildings. Exhibits 14411, 14417.
The FWCCs for the MSGQ, the CCAC, the utility building, and the SCAC were issued on
June 19, 2008. At this point in time, the only NCC building for which YDJV did not have
a FWCC was the MCAC, but YDJV had not yet finished the plinth for that building and,
therefore, was not yet ready for a joint MMRDA/MCGM plinth inspection, a prerequisite to
issuance of a FWCC.
These delays affected YDJV’s ability to use its warehouse as an on-site laydown and
storage facility to support the NOB construction, as it had originally planned to do. Tr. Vol.
4 at 33; Tr. Vol. 6 at 216.23 Because the warehouse was not available to it, YDJV rented an
off-site storage facility that, depending on traffic, took anywhere from forty minutes to two
hours to reach. Tr. Vol. 4 at 34, 57, 143, 145-46. YDJV could not have set up a sufficiently
secure temporary warehouse or storage facility on-site because it would have required a
permit, which the record makes clear MMRDA and MCGM were declining to issue. Id.
at 57.24 As a result, YDJV had to make regular trips to the off-site storage location to obtain
materials such as electrical conduit, wire, duct hangers, and other items necessary to support
NOB MEP work. Id. at 146; Tr. Vol. 7 at 139-40. Once the FWCC for the warehouse was
issued on May 6, 2008, YDJV began vertical construction. By September 29, 2008, the
warehouse was sufficiently complete to allow it to serve as a secure on-site storage facility.
Exhibit 13087.
Nevertheless, the delays that the absence of an on-site storage building created were
negligible. The main NOB MEP critical path activity from April to September 2008 was
HVAC duct installation, and duct material was not stored at the off-site storage facility.
23 We note that, despite testimony from YDJV about its original plans to finish the
warehouse early so that it could be used for secure on-site storage, YDJV’s actions during
the project did not always match that intent. As previously discussed, MMRDA and MCGM
conducted a joint inspection of the warehouse plinth on July 30, 2007, which was the last
step necessary for YDJV to request a FWCC for the warehouse. Yet, despite a complaint
from the OBO project manager in August 2007 questioning why YDJV had sought a FWCC
only for the NOB and not for the warehouse, YDJV delayed requesting a warehouse FWCC
until November 21, 2007.
24 There was a small secure storage area on-site, but it was exclusively for the use
of materials that were to go into the CAA. Tr. Vol. 4 at 144. YDJV could not place
non-CAA materials in the small secure storage area. Id.

CBCA 3350, 3672, 4658, 4659 38
2. Delays to the MCAC
As indicated above, when FWCCs were issued for the outbuildings in May and June
2008, YDJV had not yet finished the plinth for the MCAC. Accordingly, it was not ready
at that time for a joint plinth inspection, which was a prerequisite to the issuance by
MMRDA and MCGM of a FWCC.
On June 27, 2008, after FWCCs had been issued for all of the NCC outbuildings other
than the MCAC, MEA instructed the local authorities in Mumbai that “no further
construction clearances or occupancy certificate or utility connections be issued to the United
States Consulate in Mumbai without the concurrence of MEA.” Exhibits 1034, 20302.
Plainly, this direction was tied to the outstanding tax issues between the GoI and the United
States. On July 18, 2008, and again on October 13 and 21, 2008, MEA notified the Embassy
in New Delhi of its strong desire to enter into a bilateral agreement on reciprocal exemption
from property taxes at the earliest opportunity. Exhibit 22317 at 26245-47.
Despite the restriction on the issuance of new FWCCs, there was no direction to
rescind or limit previously issued FWCCs, and the local authorities did not do so. The only
direction given, and implemented, was that the local authorities not issue any new FWCCs.
Construction work on all NCC buildings other than the MCAC continued unabated, and
plinth work at the MCAC, which was covered by the previously issued PCC, continued as
well.
When MEA made its announcement restricting further FWCCs on June 27, 2008, the
MCAC was not ready for a FWCC. It was not until December 16, 2008, that the MCAC
plinth was complete, Exhibit 6491, and YDJV was not ready for the MCAC plinth inspection
until December 17, 2008. Exhibit 20116 at 212379. At that point, MMRDA and MCGM
declined to conduct the required joint plinth inspection.
Although the NOB MEP work was the critical path activity at this point in time and
remained so through and beyond November 1, 2009, work at the MCAC was very close to
the critical path and was, at times, concurrent with it during that period. Exhibit 22317 at
107749. High-level officials within DOS, cognizant of the impact of the GoI’s refusal to
grant the FWCC for the MCAC, Exhibits 20604, 20605, 20606, were taking affirmative and
active steps to try to resolve the outstanding tax issues and to have the GoI lift its FWCC
issuance restriction. For example, on January 20, 2009, Paul Folmsbee, who had replaced

CBCA 3350, 3672, 4658, 4659 39
Michael Owen as CG,25 met with various GoI officials, including the MCGM Commissioner,
to encourage issuance of the MCAC FWCC, but the MCGM Commissioner represented that
holding up the FWCCs was the only leverage that he had to get payment of the United States’
outstanding taxes. Exhibits 14557, 21972. On February 11, 2009, David Mulford, the
United States Ambassador to India, met with the GoI’s Foreign Secretary, Shivshankar
Menon, to encourage issuance of the remaining FWCC as well as occupancy certificates, but
it was clear from that meeting that the GoI was linking the City of New York tax case with
the tax issues involving the Mumbai NCC and would not assist unless there was some
corresponding assistance in the City of New York matter. Exhibit 20118 at 107740.
Despite repeated efforts by DOS, the head of MMRDA informed Mr. Browning and
CG Folmsbee at a meeting on June 18, 2009, that he had just received a letter from MEA
reaffirming that MMRDA must not issue any permits or offer any cooperation in the
construction of the Mumbai NCC until tax issues were resolved. Exhibit 22317 at 20402.
On June 23, 2009, at the direction of the Secretary of State, DOS issued Public Notice
6690, Designation and Determination Under the Foreign Missions Act, formally exempting
from local, state, and federal taxation any real property in the United States that a foreign
government owned and was using to house staff of permanent missions to the United
Nations:
I hereby designate exemption from real property taxes on property owned by
foreign governments and used to house staff of permanent missions to the
United Nations or the Organization of American States or of consular posts as
a benefit for purposes of the Foreign Missions Act. I further determine that
such exemption shall be provided to such foreign missions on such terms and
conditions as may be approved by the Office of Foreign Missions and that any
state or local laws to the contrary are hereby preempted. Prior inconsistent
guidance is hereby rescinded.
74 Fed. Reg. 31,788 (July 2, 2009); see Exhibit 14736.
By July 7, 2009, the MEA Chief of Protocol called the Charge d’Affaires at the United
States Embassy in New Delhi to represent that he was in the process of ordering issuance of
all permits and licensing for the NCC project. Exhibit 22317 at 199829.
25 CG Owen had departed his post in Mumbai for another position within the Foreign
Service on July 8, 2008, and was replaced by Mr. Folmsbee. Exhibit 22277 at 155.

CBCA 3350, 3672, 4658, 4659 40
On July 20, 2009, MMRDA and MCGM conducted the joint plinth inspection for the
MCAC, and the final FWCC for the MCAC was issued on August 12, 2009. Exhibits 14531,
14736. YDJV commenced vertical work on the MCAC on August 27, 2009.
Period 4 (November 1, 2009, to August 1, 2010): 205 Days of Delay
A. Visa Issues
From November 1, 2009, through August 1, 2010, the critical item that was affecting,
and stalling, other work on the project continued to be NOB MEP work and, specifically,
telecommunications work in the NOB.
On October 26, 2009, just before this period began, YDJV became aware of an
impending change in the GoI’s visa policy for foreign skilled workers, which the GoI had
publicly announced on August 30, 2009. Exhibits 21184, 21223. Under the GoI’s prior visa
policy, highly-skilled foreign workers entering India to perform work for a particular
corporate entity would receive a business visa, or a “B” visa, permitting them to work within
India for that corporation for a specified period of time. Apparently, a controversy, wholly
unrelated to the NCC project or to any of the parties here, arose in connection with the
issuance of “B” visas to thousands of unskilled and/or semi-skilled foreign workers from
another country who, according to the GoI, should not have been eligible for such visas and
were taking jobs from India’s available labor force. Tr. Vol. 3 at 41-42; Tr. Vol. 4 at 35. In
its August 30 announcement, the GoI stated that all skilled foreign workers would now have
to apply for an employment (or “E”) visa, rather than a “B” visa, and that the application
would have to be made while the skilled worker was in his or her home country. The notice
further stated that any such workers who currently held a “B” visa would, regardless of the
expiration date on the visa, have to depart India no later than September 30, 2009 (a deadline
that was subsequently extended to October 31, 2009), and return to their home countries to
apply for an “E” visa.
YDJV learned of the new policy when some of its American employees were
registering for their business visas with the Mumbai Foreigners Regional Registration Office
on October 26, 2009. That office informed those employees that, pursuant to a direction
from MEA, all foreign workers would have to depart India by October 31 and apply for new
“E” visas from their home countries. Exhibit 21223; Tr. Vol. 4 at 109-10. YDJV began to
make plans to return approximately thirty-nine American YDJV employees and several
employee dependents to the United States, but asked DOS to attempt to intervene with the
GoI to stop the threatened visa action. Exhibit 22122_A. DOS in good faith made such
efforts, to no avail. See Exhibit 22122.

CBCA 3350, 3672, 4658, 4659 41
Applying its new policy, the GoI officially revoked almost all “B” visas, including
those of YDJV’s foreign workers, effective October 31, 2009. Exhibit 21182. Accordingly,
all but two of YDJV’s American staff – approximately thirty-seven American employees –
left Mumbai and returned to the United States, Exhibit 1088 at 204989, and YDJV shut down
the CAA construction. Further, on November 23, 2009, the GoI announced a new quota
system under which the GoI would allow an employer to hire skilled foreign workers only
if the employer’s total foreign workforce did not exceed one percent of its total workforce.
Once this quota was reached, the employer supposedly would be unable to sponsor visas for
additional foreign workers. Exhibit 21244. In addition, the GoI imposed new restrictions
on the issuance of “E” visas that were not always consistently applied by different GoI
offices reviewing “E” visa applications. Exhibit 13087 at 9858.
By November 30, 2009, YDJV had received only five of the “E” visas that it needed.
Exhibit 1088. By December 11, 2009, twenty-seven “E” visas had been issued, although, as
of December 20, 2009, only twenty cleared Americans had returned to the site. Id.
Ultimately, of the thirty-seven workers who had to return home, twenty-three returned to the
Mumbai work site by December 28, 2009, and fourteen either resigned or were dismissed.
Exhibit 12721 at 404.
The departures essentially required YDJV to shut down its CAA conduit work during
this period. Tr. Vol. 3 at 25. That was because any employees entering the CAA area had
to have a security clearance, id. at 15, making it necessary for YDJV (and its
telecommunications subcontractor, American Systems) to use cleared American workers
(CAWs) for all CAA work. Id. at 32. The departures also affected non-CAA work on the
project because of the loss of key oversight, although YDJV was able to continue some work
with its on-site Indian workforce and the few Americans who were allowed to remain. Id.
at 25; Tr. Vol. 4 at 114; Exhibits 21223, 22122. Nevertheless, YDJV was able to restore its
project workforce to pre-departure levels by January 6, 2010. Tr. Vol. 3 at 26; Exhibit
21590.
American Systems had its own difficulties obtaining visas for its American
employees. American Systems had different responsibilities over CAA and non-CAA work.
For non-CAA work, American Systems was supposed to supervise system infrastructure
installation and cable pulls that local Indian employees of another subcontractor, Shine, were
performing; then to use its own American employees to terminate those cable pulls (that is,
to take the end of the wires in each junction box or panel, add the terminal unit onto the
wires, and connect the unit to the system); and to test the system. Tr. Vol. 3 at 47. For CAA
work, YDJV’s electrician employees would install the infrastructure, after which American
Systems would enter the space to pull the wires, terminate the pulls, and test the system.Id.
at 48. Under the original plan, American Systems was to have a supervisor on-site for the

CBCA 3350, 3672, 4658, 4659 42
non-CAA oversight work for approximately eight weeks before six American System
technical employees (over a ten-week period) would perform the remaining non-CAA work
and then perform the CAA installation, termination, and testing work. Id. at 48.
American Systems had planned to begin its telecom work on November 5, 2009, and
was in the process of preparing to bring American workers into India to perform that work
when the GoI changed its visa policy. Exhibit 13087 at 9863. American Systems was not
eligible to sponsor foreign employees for entry into India under an “E” visa because
American Systems was not registered as an Indian company, meaning that it would have to
obtain “B” visas (which did not require sponsorship by an Indian company). Although it had
one employee – a joint citizen of the United States and India – with a pre-existing “B” visa
not subject to the GoI’s recall, who was to oversee Shine’s non-CAA work beginning
November 5, Exhibit 15014, American Systems would need visas for its six additional
CAWs. Between November 30 and December 29, 2009, it submitted a total of only four “B”
visa applications, Exhibit 12721 at 464, two of which were quickly approved and two of
which, for reasons not specified in the record, were quickly rejected. No additional visa
requests were submitted to the GoI until March 12, 2010, and, except for a three-week period
in December 2009 when one of the two approved CAWs went to Mumbai until running out
of work and returning to the United States, the two approved CAWs did not go to Mumbai
until March 15, 2010, at which time the telecommunications wire pull work effectively
commenced. Exhibits 12721 at 464, 13056 at 237. American Systems never fully staffed
its anticipated crew of six telecom CAWs. Tr. Vol. 3 at 94.
Although American Systems was having problems with visas, YDJV’s technical
security services (TSS) subcontractor, AES International Corporation (AES), was not. The
AES TSS workers arrived on site in mid-December 2009, a delay from their intended arrival
date of November 5, 2009. Exhibits 14848, 14898, 14918, 14921. Eventually, YDJV
attempted to mitigate the difficulties that American Systems was having with visas by
seeking the assistance of AES, which told YDJV that it had three telecom technicians with
security clearances coming off another project for whom YDJV, if it hired them as YDJV
employees, could apply for “E” visas as CAWs using their diplomatic passports. Tr. Vol. 3
at 85, 89.
B. Materials Issues
In addition to its visa problems during this period (November 1, 2009, to July 31,
2010), YDJV was also having problems shipping and maintaining adequate materials. As
an example, certain TSS materials were to be on-site by November 5, 2009, for AES to use
in its TSS work, but the materials, including tens of thousands of feet of cable, did not arrive
until February 28, 2010. Exhibits 12721 at 410, 13087 at 9861. In December 2009, certain

CBCA 3350, 3672, 4658, 4659 43
secure telecom materials for the CAA were incorrectly labeled, requiring the secure
procurement process to begin all over again. Exhibit 12721 at 409. In April and May 2010,
there were repeated shortages of random materials that then had to be shipped from the
United States. Exhibit 12721 at 413.
On January 11, 2010, Mr. Badrinath, Desbuild’s president, visited the Mumbai site
and recognized that YDJV needed (at that point in time) at least eight more months to finish
the project. In his view, the “major set back [was] materials, at every front we have some
thing or the other missing.” Exhibit 14985. All materials for the project, with the exception
of some concrete products, were shipped by YDJV from the United States to the project site
in Mumbai. Tr. Vol. 4 at 54. When material was needed, YDJV’s subcontractor would have
to contact YDJV’s home office in Atlanta, which would then have to procure the materials
and air ship them to Mumbai. Id. at 56. Material sent by ocean freight would take two
months to arrive, so YDJV typically shipped by air freight, which generally would take about
ten days to arrive after an order was placed (with a few days added to that to deal with the
assessment and payment of customs duties). Id. at 55. Mr. Badrinath discovered that “[a]t
this stage we are air shipping skimmers for pool, ceramic tiles, stone anchor, caulking, carpet,
grout, fans. These are only few items I have listed. Work on these fronts are at standstill.”
Exhibit 14985. Mr. Badrinth stated, “I can tell you without materials we are in trouble.”Id.
Material shortages, which continued through this period, were generally the result of
waste, shipping errors, mistakes made by subcontractors that required work to be stripped out
and performed a second time, and a lack of a sufficient control system cataloging materials
on hand so that they could be easily located. Tr. Vol. 4 at 56-57, 152.
C. Shine’s Performance Delays
During this period, Shine was simply not keeping pace with the requirements for
completing its non-CAA telecom infrastructure installation work. Three weeks after one of
American Systems’ CAWs arrived to perform non-CAA work on December 8, 2009, that
CAW went back to the United States, mainly because Shine’s slow performance had left him
with nothing to do. Although materials issues may have affected Shine, its employees were
not performing at the pace necessary to support the project. Exhibit 12721 at 409.
D. Summary of Delay
During this period, YDJV was delayed by 205 days. YDJV lost fifty-nine days from
November 1, 2009, to January 6, 2010, because of visa issues surrounding the GoI’s direction
that CAWs leave the country and reapply for “E” visas. YDJV lost another 146 days

CBCA 3350, 3672, 4658, 4659 44
between January 6 and July 31, 2010, arising in part because of continuing visa difficulties,
but mainly because of YDJV subcontractor performance issues and materials shortages.
Period 5: August 1, 2010, to February 1, 2011: 162 Days of Delay
On August 1, 2010, the NOB telecom wiring was completed. At this point, YDJV
was projecting completion of the entire NCC by November 11, 2010 (103 calendar days
later). The critical work driving YDJV’s ability to complete the project by that deadline was
telecom/electrical wire pulls and panel terminations in the NOB, followed by telecom room
punchlist work.26 To meet the projected November 11 completion deadline, YDJV needed
to complete telecom/electrical wire pulls and panel terminations no later than August 16,
2010, and to complete telecom/electrical panel trimout by August 21, 2010. YDJV did not
complete this work as anticipated. Instead, the telecom panel terminations were not
completed until December 23, 2010, and the telecom panel trimout was not completed until
January 28, 2011, resulting in a delay to the critical path of 162 days. The fault for this delay
falls upon YDJV and its subcontractors, which were slowed by, among other things, disputes
about who was responsible for damaged materials and who was responsible for what work.
We cannot attribute any delay during this period to DOS.
YDJV believes that various issues in subcontractors’ ability to obtain visas created
delay during this period. We find no support for YDJV’s position. To the extent that there
were problems in getting subcontractor employees to travel to Mumbai, those problems were
primarily the result of disputes between the employee and its employer or disputes between
YDJV and its subcontractor. Further, in the matter of a visa for YDJV’s commissioning
authority, Brian Kolak of Nelson Engineering, who YDJV expected to conduct visual
inspections of equipment between March 23 and April 23, 2010, any delays in the visa
process did not affect the critical path of contract performance.
26 YDJV’s contemporaneous critical path plan shows the installation of NOB exterior
canopies, which would be followed by NOB exterior punchlist work, as somehow
(inexplicably) driving subsequent NOB interior punchlist work. In meetings at the time,
YDJV recognized that it needed to change its schedule logic because the critical path in its
contemporaneous schedule was incorrect. Canopy installation was not on the critical path.

CBCA 3350, 3672, 4658, 4659 45
Period 6 (February 1, 2011, to October 6, 2011): 167 Days of Delay
A. Delays in Accreditation
Accreditation is a process specific to OBO that required OBO’s inspection and
acceptance of the secured access areas within the NCC. Tr. Vol. 2 at 129-30. Under the
contract, YDJV could not be considered as having achieved “substantial completion” until,
at least thirty days prior to substantial completion, it had completed certain general
construction work identified in a “Contractor Accreditation Worksheet” that was included
as an attachment to the contract. The worksheet covered specific items relating to, among
other things, exterior and interior physical security, telecommunication operations facilities,
roof-mounted communications support equipment, emanations security, electrical systems,
and telephone lines. Exhibits 1 at 21 (clause E.2.2), 17.
Although not specifically laid out in the contract, the OBO accreditation process
typically begins with a pre-accreditation period where teams of subject area experts come to
the site to evaluate the work done in their areas of expertise. Tr. Vol. 2 at 130.
Subsequently, the actual accreditation team comes to the site to validate the work that has
been performed, particularly in the CAA. Id. at 131.
The start date for accreditation had continually been deferred – a scheduled date of
September 13, 2010, was changed to December 1, 2010, to January 17, 2011, and then to
February 18, 2011 – because the project work was not sufficiently complete to permit the
accreditation inspection. On January 24, 2011, OBO’s Mr. Browning sent an e-mail message
to Shane Deville of YDJV, requesting that YDJV complete and return an accompanying
accreditation checklist by January 27, 2011. Exhibit 15730. YDJV and OBO were planning
for pre-accreditation activities to begin on March 1, 2011, and for accreditation to begin on
March 15, 2011. Tr. Vol. 2 at 170-73. Yet again, though, YDJV was not ready for
accreditation, and the accreditation date was pushed to April 18, then May 9, and then June 8,
2011. Ultimately, the accreditation inspection did not begin until July 7, 2011.
YDJV blames the OBO project director, Mr. Browning, for postponing accreditation
unnecessarily and asserts that his actions ultimately delayed the project during this period.
Although it is true that Mr. Browning issued letters directing that accreditation be postponed,
he did so only when it was clear that YDJV was not ready for accreditation. His actions did
not delay the project, but merely recognized the obvious. It would have been irresponsible
for Mr. Browning to require DOS personnel to travel to Mumbai for accreditation only to
have them sit for weeks or even months as YDJV tried to ready itself for the inspection.

CBCA 3350, 3672, 4658, 4659 46
YDJV further complains that its subcontractor employees, who were necessary for the
work that would lead to accreditation, were delayed by problems in obtaining visas. The
record does not support YDJV’s assertion.
Nevertheless, during this period, members of OBO’s inspection team ultimately
experienced delays in obtaining their own visas to allow them to travel to India for the
inspections. See Exhibit 16378; Tr. Vol. 2 at 171-72. Without Mr. Merton Bunker and other
members of the inspection team, the accreditation process could not begin. Tr. Vol. 2 at
180-81. Although YDJV is responsible for being unable to complete work because of
problems in the performance of its subcontractors and for forcing delays in accreditation,
DOS is responsible for forty-two days of concurrent delay resulting from DOS’s problems
obtaining visas for its inspection team.
The first accreditation inspection, which began on July 7, concluded on July 22, 2011.
The inspection team’s report noted several deficiencies, including a lack of occupancy
sensors in every workstation in the secured CAA area of the NOB. On September 12, 2011,
YDJV reported that it had completed 94% of the punchlist work, and it anticipated full
completion by September 24, 2011. On October 2, 2011, the DOS accreditation inspection
team commenced its second accreditation inspection, which finished on October 6, 2011.
To achieve substantial completion under the contract, YDJV, pursuant to clause E.2.1
of the contract, had to obtain a certification from the contracting officer or his representative
that the project “is sufficiently complete and satisfactory . . . that it may be occupied or
utilized for the purpose for which it is intended.” Exhibit 1 at 21. In addition, under the P&L
clause, it was YDJV’s obligation to obtain an occupancy certificate at the end of
construction. Exhibit 2 at 100. After Design Cell submitted the necessary NOCs to
MMRDA in August and September 2011, MMRDA notified YDJV on October 4, 2011, that,
once appropriate fees were paid, it would issue the occupancy certificate. Exhibit 16161.
On October 5, 2011, YDJV paid the fees, and MMRDA issued the certificate. On October 6,
2011, the contracting officer declared that the project was substantially complete.
Ultimately, there were 167 days of delay during this period before substantial
completion was achieved.
B. L&T’s Termination and Court Order
On April 6, 2011, YDJV terminated L&T as its subcontractor. Tr. Vol. 3 at 148;
Exhibit 1161. Following termination, L&T instituted an action in the High Court of
Judicature at Bombay, and, in connection with that action, the court issued an order to YDJV
on April 21, 2011, directing YDJV to perform “no further work . . . at site” pending an

CBCA 3350, 3672, 4658, 4659 47
inspection by a court-appointed commissioner. Exhibit 13212; see Tr. Vol. 3 at 148-49.
Despite its broad language, YDJV understood that the stop work order covered only work
that was encompassed within L&T’s contract – essentially, outdoor sitework in the south
parking lot and landscaping work. Exhibits 1161, 1451 at 83093; Tr. Vol. 3 at 148-49.
Although YDJV asserts that, because L&T had previously performed drywall work in the
NOB and the outbuildings, “the [entire] job site was effectively shut down as a result of that
order,” Tr. Vol. 3 at 149, we can find no support for that assertion in contemporaneous
documentation associated with the project.
The court order halted progress on the sitework and other areas in which L&T had
worked until May 26, 2011, when the order was lifted, and the replacement subcontractor
remobilized and completed the remaining sitework by June 15, 2011. Although YDJV
believes that the court order excusably delayed it by forty-seven days, we cannot find that any
delays arising from the L&T stop work order affected the critical path.
VI. YDJV’s and DOS’s Claims, and Proceedings Before the Board
On August 30, 2012, YDJV submitted a certified claim, titled “REA 0034,” to the
DOS contracting officer, alleging that DOS’s improper withholding of pre-award information
linking tax disputes with the GoI to the issuance of permits, DOS’s issuance of a “stop work”
order prior to the GoI’s issuance of a PCC, the GoI’s change in visa policy, a sudden boom
in construction projects in Mumbai, and other changes caused YDJV to incur substantial
costs that DOS should bear and/or created excusable delays that entitled YDJV to a
non-compensable time extension. In its claim, YDJV requested a compensable time
extension of 868 calendar days, an additional excusable non-compensable time extension of
316 calendar days, and an equitable adjustment in the amount of $23,802,082.48. On
February 21, 2013, the DOS contracting officer issued a decision denying that claim and
asserting a government claim for liquidated damages for 1192 days of delay. YDJV filed its
first notice of appeal with the Board on April 19, 2013, appealing the contracting officer’s
February 21 decision. The Board docketed that appeal as CBCA 3350.
The parties soon thereafter engaged in an extensive and document-intensive discovery
process. The appeal file in this matter consists of more than 17,000 documents, and each
party took numerous depositions.
On December 18, 2013, while discovery was continuing in CBCA 3350, the DOS
contracting officer issued another decision, this time asserting (in a single document) several
government direct cost claims against YDJV totaling $892,810.42. YDJV appealed that
decision to the Board on January 8, 2014, in an appeal docketed as CBCA 3672. At the
parties’ joint request, that appeal was consolidated with CBCA 3350.

CBCA 3350, 3672, 4658, 4659 48
In December 2014, YDJV submitted two additional claims to the DOS contracting
officer for decision. On or about December 14, 2014, it submitted a claim seeking payment
of $53,136 for costs incurred to install occupancy sensors and associated infrastructure in the
CAA of the NOB, which YDJV claimed was a change that DOS had directed YDJV to
perform. On or about December 19, 2014, YDJV submitted another claim, seeking
reimbursement in the amount of $123,612 for utility bills that it paid between August 30,
2011 (the date upon which, according to YDJV, the DOS contracting officer should have
found YDJV had reached substantial completion) and October 6, 2011 (the date upon which
the contracting officer actually found substantial completion). The DOS contracting officer
denied the claims in separate decisions dated February 18 and 20, 2015, and YDJV appealed
those decisions on April 1, 2015, which the Board docketed as CBCA 4658 and 4659. Upon
the parties’ joint motion, the Board consolidated the two new appeals with CBCA 3350 and
3672.
The Board conducted a three-and-a-half week hearing in the consolidated appeals
beginning June 15, 2015. At the hearing, the parties presented a total of sixteen fact
witnesses, submitted the deposition designations of several other witnesses, and presented
oral testimony of five expert witnesses. The expert witnesses included each party’s
scheduling expert, each of whom prepared a delay analysis in which he opined as to the
causes of delay on the project, responsibility for each delay, and the impact of each delay.
YDJV’s scheduling expert, who presented extensive testimony at the hearing about
his detailed schedule analysis of the project, was Charles Y. Choyce, Jr., who is currently the
managing director of the Berkeley Research Group, LLC. Mr. Choyce graduated from law
school in 1979 and subsequently went into private legal practice, during which time he
focused on construction and labor law. In 2000, Mr. Choyce left legal practice to join a
forensic schedule delay analysis firm, where he engaged in extensive training in hands-on
scheduling practices and prepared numerous baseline schedules, schedule updates, and
recovery schedules for major projects. He holds four professional certificates and is a
certified forensic consultant of the Association for the Advancement of Cost Engineering
(AACE). YDJV retained him in late 2008 to assist it in evaluating the project delays, and he
worked with YDJV extensively through the date of the hearing. The Board accepted Mr.
Choyce as an expert in construction scheduling and inefficiency claims.
DOS presented its own scheduling expert, Mark Boe, a founding shareholder (since
1996) in Capital Project Management, Inc. Mr. Boe holds a Bachelor of Science degree from
the United States Coast Guard Academy in Civil Engineering and a Master of Science degree
in Civil Engineering/Construction Management. He has over thirty-five years of experience
in planning, scheduling, design, engineering, construction, project controls, and claims
analysis, and he has worked for the past twenty-five years as a delay and disruption

CBCA 3350, 3672, 4658, 4659 49
consultant and expert on a variety of project types. He holds several professional
memberships and is registered as a planning and scheduling professional with AACE. The
Board accepted Mr. Boe as an expert in critical path method scheduling and delay analysis
and labor of productivity claims.
Following the hearing of these appeals, the parties engaged in extensive briefing. The
appeals are now before the Board for decision.
Discussion
YDJV’s Delay Claim
YDJV seeks more than $23 million in damages for the delays to this project, while
DOS seeks more than $11 million in liquidated damages. Below, we first address the
standards that we will apply in evaluating both parties’ delay claims. We then discuss the
main causes of delay that the parties have raised and our allocation of responsibility for each
of those causes. We subsequently address how each of the causes of delay impacted the
critical path of performance in each period of performance and, for each period, define the
number of days of compensable, excusable, and unexcused delay. Finally, we address the
damages calculation for these delays.
Standards for Evaluating Delay Claims
I. The Use of Critical Path Analysis
In this appeal, YDJV claims that DOS is responsible for numerous delays that it
incurred while constructing the NCC in Mumbai, delays that it asserts caused it to complete
work on the project late and for which it should be compensated. DOS asserts that virtually
all delays on this project were YDJV’s responsibility and that it, in turn, is entitled to recover
liquidated damages for YDJV’s delay in completing the project.
To the extent that the Government causes delays to a contractor’s work under a
contract that increase the contractor’s performance costs, the contractor may seek
compensation for its damages.Mega Construction Co. v. United States, 29 Fed. Cl. 396, 423
(1993). Yet, the mere fact that there is some delay to some aspect of planned contract work
is not enough to establish that the contractor’s ultimate contract performance costs or time
increased.

CBCA 3350, 3672, 4658, 4659 50
In evaluating the effect of Government-caused delays on the contractor’s ultimate
performance time and cost, tribunals generally look to the critical path of contract
performance, a method of delay analysis that the Court of Claims explained as follows:
Essentially, the critical path method is an efficient way of organizing and
scheduling a complex project which consists of numerous interrelated separate
small projects. Each subproject is identified and classified as to the duration
and precedence of the work. (E.g., one could not carpet an area until the
flooring is down and the flooring cannot be completed until the underlying
electrical and telephone conduits are installed.) The data is then analyzed,
usually by computer, to determine the most efficient schedule for the entire
project. Many subprojects may be performed at any time within a given period
without any effect on the completion of the entire project. However, some
items of work are given no leeway and must be performed on schedule;
otherwise, the entire project will be delayed.
Haney v. United States , 676 F.2d 584, 595 (Ct. Cl. 1982). “Where the time frame for
performance of an activity, set by the earliest possible start time and the latest possible finish
time, establishes a time interval equal to the expected activity duration, the activity is termed
‘critical,’” and “[n]o discretion or flexibility exists in the scheduling of that activity.”
J. Richard Margulies, “Delays, Suspension of Work, and Acceleration,”in Construction
Contracting 617, 662 (1991). Items of work for which there is no timing leeway “are on the
‘critical path,’” and “[a] delay, or acceleration, of work along the critical path will affect the
entire project.”Haney, 676 F.2d at 595.
Specifically, then, “to prevail on its claims for the additional costs incurred because
of the late completion of a fixed-price government construction contract, ‘the contractor must
show that the government’s actions affected activities on the critical path.’”George Sollitt
Construction Co. v. United States, 64 Fed. Cl. 229, 240 (2005) (quoting Kinetic Builder’s
Inc. v. Peters, 226 F.3d 1307, 1317 (Fed. Cir. 2000)). Typically, “[i]f work on the critical
path [i]is delayed, then the eventual completion date of the project [i]s delayed.”Affiliated
Western, Inc. v. Department of Veterans Affairs , CBCA 4078, 17-1 BCA ¶ 36,808, at
179,401 (quoting Mega Construction , 29 Fed. Cl. at 425). Conversely, “[a] government
delay which affects only those activitiesnot on the critical path does not delay the completion
of the project.”George Sollitt Construction, 64 Fed. Cl. at 240 (emphasis added). As a
result, “the determination of the critical path is crucial to the calculation of delay damages.”
Wilner v. United States, 24 F.3d 1397, 1399 n.5 (Fed. Cir. 1994) (en banc) (quoting G.M.
Shupe, Inc. v. United States, 5 Cl. Ct. 662, 728 (1984)).

CBCA 3350, 3672, 4658, 4659 51
To satisfy its burden, the contractor must establish what the critical path of the project
actually was and then “demonstrate how excusable delays, by affecting activities on the
contract’s ‘critical path,’ actually impacted the contractor’s ability to finish the contract on
time.”1-A Construction & Fire, LLP v. Department of Agriculture, CBCA 2693, 15-1 BCA
¶ 35,913, at 175,557, appeal dismissed, No. 15-1623 (Fed. Cir. Jan. 28, 2016); see Mega
Construction, 29 Fed. Cl. at 425-26. This is done through “an analysis to show ‘the
interdependence of any one or more of the work items with any other work items’ as the
project progressed.”1-A Construction, 15-1 BCA at 175,557 (quotingMega Construction,
29 Fed. Cl. at 428); see PCL Construction Services, Inc. v. United States, 47 Fed. Cl. 745,
801-02 (2000) (“Part of understanding that an activity belongs on the critical path of a project
is also an understanding of how that activity affects the other activities.”),aff’d, 96 F. App’x
672 (Fed. Cir. 2004). “One established way to document delay is through the use of
[contemporaneous] Critical Path Method (CPM) schedules and an analysis of the effects, if
any, of government-caused events.”PCL Construction Services, 47 Fed. Cl. at 801. In fact,
in situations, as here, where the contractor utilized Primavera scheduling software to create
schedules throughout the life of the project, it would be folly to utilize some other method
of critical path analysis.
Because the critical path of construction can change as a project progresses, “activities
that were not on the original critical path subsequently may be added,”Sterling Millwrights,
Inc. v. United States, 26 Ct. Cl. 49, 75 (1992), and, to preclude post hoc rationalization and
speculation, it is important that the contemporaneous schedules that the contractor uses to
show critical path delay are updated throughout contract performance to reflect changes as
they happened. PCL Construction Services, 47 Fed. Cl. at 801; Norair Engineering Corp.,
ENG BCA 3804, et al., 90-1 BCA ¶ 22,327, at 112,205. “[A]ccurate, informed assessments
of the effect of delays upon critical path activities are possible only if up-to-date CPM
schedules are faithfully maintained throughout the course of construction.”Blinderman
Construction Co. v. United States, 39 Fed. Cl. 529, 585 (1997), aff’d, 178 F.3d 1307 (Fed.
Cir. 1998) (table).
Nevertheless, the existence of contemporaneous schedules does not permit a tribunal
to ignore, or fail to consider, logic errors in those schedules. A CPM schedule, even if
maintained contemporaneously with events occurring during contract performance, is only
as good as the logic and information upon which it is based. CPM “is not a ‘magic wand,’
and not every schedule presented will or should be automatically accepted merely because
CPM technique is employed.” Margulies,supra, at 664. “To be a reliable basis for
determining delay damages, a CPM schedule must reflect actual performance” and must
“‘comport with the events actually occurring on the job.’”J.R. Roberts Corp., DOT BCA
2499, 98-1 BCA¶ 29,680, at 147,009 (quotingBallenger Corp., DOT CAB 72-32, et al., 84-1
BCA ¶ 16,973, at 84,524 (1983)). Tribunals may need to “inquire into the accuracy and

CBCA 3350, 3672, 4658, 4659 52
reliability of the data and logic underlying the CPM evaluation” in appropriate circumstances
and reject CPM analyses if “the logic was not credible or was ‘suspect.’” Margulies,supra,
at 664; see Dawson Construction Co. , VABCA 3306, 93-3 BCA ¶ 26,177, at 130,314
(discounting CPM schedule because, in part, its “logic was not fully revised and updated to
reflect actual construction or what was, in fact, critical”),aff’d, 34 F.3d 1080 (Fed. Cir.
1994).
II. The Effect of Concurrent Contractor Delays
Even if the contractor shows delay by the Government that affects the critical path,
the contractor must also establish that it was not concurrently responsible for delays. “Courts
will deny recovery where the delays [of the Government and the contractor] are concurrent
and the contractor has not established its delay apart from that attributable to the
government.”William F. Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir.
1984); see Coath & Goss, Inc. v. United States, 101 Ct. Cl. 702, 714-15 (1944) (“Where both
parties contribute to a delay neither can recover damage, unless there is in the proof a clear
apportionment of the delay and the expense attributable to each party.”). Nevertheless, any
contractor-caused delays must affect the critical path of contract performance to be
considered “concurrent” – contractor delays that, absent the Government-caused delay,
would have had no negative impact upon the ultimate contract completion date do not affect
the Government’s monetary liability.Blackhawk Heating & Plumbing Co., GSBCA 2432,
76-1 BCA ¶ 11,649, at 55,579 (1975). For the same reasons discussed above, “[b]ecause
concurrent delays which do not affect the critical path of contract work do not delay project
completion, an accurate critical path analysis is essential to the determination of whether
concurrent delays have caused delay damages related to the delayed completion of a complex
construction project.”George Sollitt Construction, 64 Fed. Cl. at 241.
III. Excusable Delays and Liquidated Damages
In these appeals, not only has YDJV raised affirmative delay claims against the
Government, but also the Government has demanded liquidated damages arising out of what
DOS considers to be YDJV-caused delays in project completion.
In response to a challenge to a liquidated damages claim, the Government has “the
initial burden of going forward to show that the contract was not completed by the agreed
contract completion date and that liquidated damages were due and owing,” meaning that
“the period for which the assessment was made” was properly calculated.Central Ohio
Building, Inc., PSBCA 2742, 92-1 BCA ¶ 24,399, at 121,824. Once the Government satisfies
that initial burden, the contractor bears the burden of establishing that any delays on the
project were excusable and that, as a result, “it should be relieved of all or part of the

CBCA 3350, 3672, 4658, 4659 53
assessment.”Id.; see Sauer Inc. v. Danzig , 224 F.3d 1340, 1347 (Fed. Cir. 2000) (“As a
general rule, a party asserting that liquidated damages were improperly assessed bears the
burden of showing the extent of the excusable delay to which it is entitled.”). Obviously, if
the contractor shows that a critical path delay was caused by the Government, the
Government cannot charge the contractor with financial responsibility for that delay.
However, in establishing excusable delay, the contractor may also point to causes outside the
Government’s control – causes of delay that would not entitle the contractor to financial
reimbursement or damages from the Government – but for which the contractor should not
be held financially responsible in the form of liquidated damages.
YDJV’s contract expressly provided that YDJV would “be allowed time, not money,
for excusable delays as defined in FAR 52.249-10, Default,” Exhibit 1 at 32 (clause F.9)
(emphasis added), which are defined in FAR 52.249-10(b)(1) as “unforeseeable causes
beyond the control and without the fault or negligence of the Contractor.” 48 CFR 52.249-
10(b)(1). The non-exhaustive list of excusable delays identified in FAR 52.249-10(b)(1), as
supplemented by clause F.9, includes acts of God, acts of a host country government in its
sovereign capacity, fires, floods, epidemics, strikes, and unusually severe weather. Id.
“Obviously, a contractor has no control over whether it rains, whether there is a flash flood,
or whether there are forest fires, and the Government cannot penalize a contractor . . . when
a delay is caused by such uncontrollable circumstances.” Asheville Jet Charter &
Management, Inc. v. Department of the Interior , CBCA 4079, 16-1 BCA ¶ 36,373, at
177,301.
Nevertheless, the mere fact that a delay is caused by a type of activity listed in the
contract as generally excusable does not give the contractor carte blanche to rely upon such
excuses. “The purpose of the proviso,” which is “to protect the contractor against the
unexpected, and its grammatical sense both militate against holding that the listed events are
always to be regarded as unforeseeable, no matter what the attendant circumstances are.”
United States v. Brooks-Callaway Co., 318 U.S. 120, 122-23 (1943). As the Supreme Court
has explained, “[a] quarantine, or freight embargo, may have been in effect for many years
as a permanent policy of the controlling government” and, if so, may not meet the definition
of a cause “unforeseeable” at the time of contract award, even if quarantines and freight
embargoes are listed in the contract as examples of possible excusable causes of delay. Id.
at 123.
Further, even if an unforeseeable cause of delay occurs, the contractor cannot sit back
and fail to take reasonable steps in response to it – once such an unforeseeable event occurs,
the contractor affected by it has an obligation to attempt to mitigate the resulting damage to
the extent that it can. Restatement (Second) of Contracts § 350 (1981); see Signal
Contracting, Inc., ASBCA 44963, 93-2 BCA ¶ 25,877, at 128,736 (contractor facing contract

CBCA 3350, 3672, 4658, 4659 54
delay “has a duty to mitigate [its] damages” to the extent that it reasonably can). If the
contractor fails to do so, it “may not recover those damages which could have been avoided
by reasonable precautionary action on its part.”Midwest Industrial Painting of Florida, Inc.
v. United States, 4 Cl. Ct. 124, 133 (1983).
To the extent that the contractor can show that excusable delay affected the critical
path of performance, the Government can recover liquidated damages only to the extent that
there were additional delays for which the contractor was responsible (beyond those that
were excusable) and that “there is in the proof a clear apportionment of the delay and the
expense attributable to each party.”Sauer, 224 F.3d at 1347;see Robinson v. United States,
261 U.S. 486, 488 (1923) (“Since the contractor agreed to pay at a specified rate for each
day’s delay not caused by the government, it was clearly the intention that it should pay for
some days’ delay at that rate, even if it were relieved from paying for other days, because of
the government’s action.”). For the same reasons that a CPM analysis is necessary to
determine whether and the extent to which a contractor is entitled to delay damages for
Government-caused delays, such an analysis is equally necessary to permit a tribunal to
assess when, and the extent to which, the Government is entitled to recover liquidated
damages for a contractor’s delays in performance.Fireman’s Fund Insurance Co. v. United
States, Nos. 93-441C, et al., 2001 WL 36415627, at *47-*48 (Fed. Cl. Aug. 1, 2001).
Specific Alleged Causes of Delay on this Project
I. YDJV’s Superior Knowledge Claim
A. General Standards
YDJV asserts that DOS is liable for breach of contract based upon the agency’s failure
to disclose its superior knowledge of the pre-existing tax disputes between the USG and the
GoI, which ultimately delayed the permitting process and further construction on the project.
DOS counters that the fixed-price, design-build nature of its contract placed substantial risks
on YDJV as the contractor. Under such a contract, DOS contends, the contractor’s
“commitment to a fixed-price strongly suggest[s] that it . . . assumed all the uncovered risks
inherent in its promised performance” and that, “by accepting responsibility for design, the
contractor . . . assumes the risks of any defects or deficiency in the design” and “must
determine the cause of,” and resolve, any problems as they arise. Respondent’s Post-Hearing
Brief at 2-3.
“The essence of a firm fixed-price contract is that the contractor, not the government,
assumes the risk of unexpected costs.”Lakeshore Engineering Services, Inc. v. United
States, 748 F.3d 1341, 1347 (Fed. Cir. 2014). Nevertheless, “under certain circumstances

CBCA 3350, 3672, 4658, 4659 55
the government owes a duty to disclose critical information to a contractor that is necessary
to prevent the contractor from unknowingly pursuing ‘a ruinous course of action.’”CAE
USA, Inc. v. Department of Homeland Security, CBCA 4776, 16-1 BCA ¶ 36,377, at 177,350
(quoting McDonnell Douglas Corp. v. United States, 182 F.3d 1319, 1329 (Fed. Cir. 1999)
(quoting Helene Curtis Industries, Inc. v. United States, 312 F.2d 774, 778 (Ct. Cl. 1963))).
If the Government violates its duty of disclosure, it alters the contractor’s assumption of the
risk of unexpected costs to the extent that the lack of information ultimately increases the
contractor’s costs:
Where the Government has made no misrepresentations, has no duty to
disclose information, and does not improperly interfere with performance, the
fixed-price contractor of course bears the burden of unanticipated increases in
cost; the Government can rightly rely on him to fulfill the agreement he chose
to make. In the same way, an end-product specification normally leaves it to
the contractor to perform as best he can, but that does not excuse the defendant
from liability if it breaches an independent duty to reveal data or if the
end-product specification embodies a material misrepresentation misleading
the contractor.
Helene Curtis Industries, 312 F.2d at 777-78 (citations omitted).
Nevertheless, “[t]he superior knowledge doctrine only applies ‘in limited
circumstances.’”CAE USA, Inc., 16-1 BCA at 177,351 (quotingGAF Corp. v. United States,
932 F.2d 947, 949 (Fed. Cir. 1991)). Generally, the superior knowledge doctrine affords
relief to a contractor only to the extent that the Government fails “to disclose to [the]
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) (quotingGiesler v. United States, 232 F.3d 864, 876 (Fed. Cir. 2000)).
The Court of Appeals for the Federal Circuit has applied the following four factors in
evaluating whether the superior knowledge doctrine applies in a given situation:
The doctrine of superior knowledge is generally applied to situations where
(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.

CBCA 3350, 3672, 4658, 4659 56
Scott Timber, 692 F.3d at 1373 (quoting Hercules, Inc. v. United States, 24 F.3d 188, 196
(Fed. Cir. 1994), aff’d, 516 U.S. 417 (1996)).
It is clear that the doctrine does not require the Government to volunteer each and
every piece of information known to it.CAE USA, Inc., 16-1 BCA at 177,351. In fact, doing
so unnecessarily could deter or confuse bidders and reduce competition.See American Ship
Building Co. v. United States, 654 F.2d 75, 81 (Ct. Cl. 1981) (“In borderline situations, talk
that would discourage bidders from bidding must be eschewed; the need for the warning
must therefore be manifest.”). The superior knowledge doctrine only requires disclosure of
“the ‘vital’ and ‘essential’ information” that a contractor needs, as it develops its proposal
or bid, to understand the performance or cost risks that it would be undertaking if awarded
the contract in question. CAE USA, Inc., 16-1 BCA at 177,352; see ECOS Management
Criteria, Inc., VABCA 2058, 86-2 BCA ¶ 18,885, at 95,260 (a necessary element of superior
knowledge claim is that “the ‘special’ knowledge withheld was ‘vital to the successful
completion of the contract’” (quotingPiasecki Aircraft Corp. v. United States, 667 F.2d 50,
59 (Ct. Cl. 1981) (quotingH.N. Bailey & Associates v. United States, 449 F.2d 376, 382-83
(Ct. Cl. 1971))).
The existence of a duty of disclosure “depends upon a variety of factors, including the
ease of discovering the information from other sources.”Meredith Construction Co., DOT
CAB 1549, 85-1 BCA ¶ 17,896, at 89,618. “[T]he Government is under no duty to volunteer
information in its files if the contractor can reasonably be expected to seek and obtain the
facts elsewhere . . . .”H.N. Bailey, 449 F.2d at 383. If a situation is not one in which “a
Government agency withheld or concealed vital informationwhich it alone had, and which
it knew that bidders did not have,” the superior knowledge doctrine does not apply.
T.F. Scholes, Inc. v. United States, 357 F.2d 963, 970 (Ct. Cl. 1966) (emphasis added); see
Scott Timber, 692 F.3d at 1373 (“the doctrine only applies if ‘the government was aware the
contractor had no knowledge of and had no reason to obtain such information’ and ‘any
contract specification supplied misled the contractor or did not put it on notice to inquire’”).
A contractor asserting that the Government withheld vital information bears the
burden of establishing by “specific evidence” each element of its superior knowledge claim.
GAF Corp., 932 F.2d at 979. This includes the burden of establishing that the undisclosed
information ultimately contributed to delays in, or increased costs of, its performance. Bay
Shipbuilding Co. v. Department of Homeland Security, CBCA 54, et al., 07-2 BCA ¶ 33,678,
at 166,742.

CBCA 3350, 3672, 4658, 4659 57
B. The NCC Tax Dispute
YDJV complains that DOS breached the contract by failing, prior to award, to disclose
that there were unpaid taxes on the NCC property, the nonpayment of which ultimately
delayed the GoI’s issuance of some building permits. “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.’”Bay Shipbuilding, 07-2 BCA at 166,743 (quoting L.W.
Matteson, Inc. v. United States, 61 Fed. Cl. 296, 316 (2004)).
By the time that DOS awarded this contract to YDJV, the GoI had made clear to DOS
that it was planning to tie the issuance of NCC building permits to the United States’
resolution of outstanding tax issues. Some of the DOS officials at the United States Embassy
in New Delhi were concerned that the GoI was going to hold NCC building permits hostage
to get the tax issues resolved, and there was discussion within DOS about how to resolve the
issue, with the constant understanding that the United States, in reliance on the Vienna
Convention, would not pay the taxes. At the same time, the City of New York was pursuing
a lawsuit against the GoI, seeking payment of real estate taxes on a GoI compound housing
the GoI’s United Nations workers, and the GoI made clear that it wanted DOS’s assistance
in resolving that dispute. On several occasions between 2003 and the date of contract award
in 2005, the GoI had identified to DOS representatives the reciprocal nature of DOS’s
request for tax exemptions on United States properties in India and the GoI’s expectation of
the same exemptions for its properties in the United States. Although some individuals
within DOS believed that the GoI would not actually withhold permits or that the issue would
be resolved diplomatically before it could affect the NCC construction,27 those beliefs, with
the benefit of hindsight, were incorrect.
Had the situation been what it had been for many years preceding 2003, we would be
more forgiving of DOS’s non-disclosure about tax disputes. Since the 1970s, the local GoI
authorities had been sending tax bills to the United States for the NCC and other properties,
and DOS had routinely responded byreferencing the Vienna Convention’s protection against
such taxes. Historically, the GoI authorities had never taken any action following DOS’s
responses, making non-payment seem a non-issue. See, e.g., Tr. Vol. 9 at 16-18, 22-23. To
satisfy its duty of disclosure, the Government need only provide “vital” information affecting
27 In 2004, DOS launched what it called the Diplomatic Tax Relief Initiative, which
was to assist in negotiations with foreign governments to obtain savings from foreign taxes.
Exhibits 1474, 1475. The creation of such a program did not eliminate the risk that the NCC
permits would be delayed for tax non-payment and did not justify non-disclosure of the risk.

CBCA 3350, 3672, 4658, 4659 58
performance costs or duration,Scott Timber, 692 F.3d at 1373, and it seems unlikely that, had
the two governments’ historical dealings remained static, DOS would not have had any
reason to suspect that non-payment was an issue that could affect permit issuance. DOS has
no obligation to disclose information about its diplomatic relations with a foreign
government where there is no viable reason to suspect that the information will affect project
costs or duration.
Here, though, DOS had specific information, and specific concerns, about the
likelihood that the GoI was going to try to use payment of the outstanding tax bills (or DOS’s
assistance in resolving the City of New York’s lawsuit against the GoI for unpaid taxes) as
leverage for the issuance of building permits for the specific NCC project at issue here. It
was folly for DOS to withhold knowledge of that type of specific targeted collection effort
from offerors when, at the same time, it was placing on bidders the obligation to obtain those
building permits and burdening them with the risk that there would be delays in permit
issuance. In such circumstances, DOS had an affirmative obligation to warn YDJV of the
strong possibility that permits would be held hostage over the tax disputes. Its failure to
disclose that information, while simultaneously writing the contract in a manner that placed
upon YDJV the risks associated with the permits, breached its duty of disclosure.
DOS raises several arguments in response to YDJV’s superior knowledge claim:
First, DOS argues that “consular facilities are exempt from property taxes” and that,
pursuant to the Vienna Convention, there should not have been any question about the NCC’s
exemption status. Respondent’s Post-Hearing Brief at 36. Whether thereshould have been
a question about the NCC status is irrelevant here. The only issue is whether DOS knew that
the GoI was likely to stall issuance of NCC building permits as a means of getting action on
the GoI’s tax disputes. DOS knew, or should have known, that. DOS could not assign to
YDJV the risk that the GoI would refuse to issue or delay issuing NCC building permits
when, at the same time, it knew, but failed to disclose, that the GoI was likely to do so.
Second, DOS argues that its employees did not actually believe that the GoI would
follow through and interfere in the NCC permit process, meaning that DOS did not possess
information or have knowledge about possible NCC permit problems. We reject DOS’s
argument. Although some DOS employees may have believed that these issues would be
resolved through diplomacy before permits became an issue, that view was not universally
accepted within DOS. DOS made a judgment call in discounting specific information in its
possession that the GoI might interfere in the permit issuance process. When it failed to
disclose that information to offerors, DOS decided to take a risk that its judgment call was
correct. If it had been, and the GoI had continually issued permits without regard to the tax
disputes, DOS’s gamble would have paid off. DOS could not, however, make such a

CBCA 3350, 3672, 4658, 4659 59
judgment call while, at the same time, shifting to YDJV the risk that the judgment call was
wrong. When the agency failed to disclose the risk, the agency assumed financial
responsibility for that risk.
Third, DOS argues that the information at issue here was not solely in DOS’s
possession. News about the City of New York lawsuit, it asserts, was reported in various
newspapers, as well as in public filings in the United States district court in which the case
was pending. We agree that “the Government is under no duty to volunteer information in
its files if the contractor can reasonably be expected to seek and obtain the facts elsewhere.”
H.N. Bailey, 449 F.2d at 383;see Max Jordan Bauunternehmung v. United States, 10 Cl. Ct.
672, 679 (1986) (Government “is under no obligation to volunteer information that is
reasonably accessible from another source”),aff’d, 820 F.2d 1208 (Fed. Cir. 1987). Here,
though, the information that DOS was required to share was not the mere existence of the
New York lawsuit, but the fact that the GoI was specifically and expressly tying the NCC
permits to that lawsuit and/or the unpaid NCC property taxes. It was the specific information
about the connection between the permits and the tax disputes that DOS uniquely held and
that it had an obligation to share.
Fourth, to the extent that DOS is arguing that information about diplomatic relations
with a foreign nation is sensitive and should not be lightly shared with the public, we
understand DOS’s concerns. Premature public disclosure of behind-the-scenes diplomatic
efforts can create tensions with the foreign governments with which DOS must engage. At
times, general warnings to contractors about potential risks may be sufficient to satisfy the
duty of disclosure while still allowing the Government to maintain the confidential or even
classified nature of specific information. See J.A. Jones Construction Co. v. United States,
390 F.2d 886, 893 n.14 (1968) (“While some aspects of the Air Force’s plans undoubtedly
were classified, the evidence falls short of proving that a general warning to plaintiff would
have rent the security blanket.”);Northrop Grumman Corp. v. United States, 63 Fed. Cl. 12,
18-19 (2004) (rejecting the Government’s contention that a “classified information”
exception applies to the superior knowledge doctrine). Here, DOS did not provide even a
general warning about possible permit issuance problems. In any event, diplomacy concerns
cannot justify risk-shifting to the contractor without knowledge-sharing.
Fifth, DOS argues that information about tax disputes and permits is not the type of
information that the superior knowledge doctrine covers. It asserts that the doctrine is limited
to technical information about “a process, or method, or characteristic of a metal or
compound,” Respondent’s Post-Hearing Brief at 47 (quotingWright Industries, Inc., ASBCA
18282, 78-2 BCA ¶ 13,396, at 65,493), or “particular components or materials,
manufacturing methods, prior research and/or production historyand problems.”Id. (quoting
Ideker, Inc., ENG BCA 4389, et al., 87-3 BCA ¶ 20,145, at 101,975-76). We disagree. The

CBCA 3350, 3672, 4658, 4659 60
duty to disclose applies to “vital knowledge of a fact that affects performance costs or
duration.”Henry H. Norman v. General Services Administration, GSBCA 15070, et al., 02-2
BCA ¶ 32,042, at 158,351. If DOS knew that the GoI was definitely (or even likely) going
to refuse to issue building permits, that would be a “fact” that would clearly affect both
YDJV’s costs and project duration. That there was a question in DOS’s mind as to whether
the GoI would actually refuse to issue the permits, despite the information that DOS was
receiving to the contrary, does not lessen the risk that the contract awardee would undertake
and the cost and duration impacts that would result if the permits were not issued. DOS
should have warned its contractor of this risk.
As we will discuss below, for at least a period of time, DOS was correct in believing
that the GoI would not stop the NCC project and would actually issue building permits. For
quite some time, the GoI issued permits, even while it was threatening not to do so. The
evidence makes clear that the local GoI authorities wanted the NCC project to succeed, and
they were attempting to help move the project along for long periods of time. And DOS was
working hard, with some success, to get the local GoI authorities to do that, to YDJV’s
benefit. As we will discuss below, YDJV is not entitled to time extensions or delay damages
for periods of time when the GoI, though complaining about unpaid taxes, did not actually
delay the project. Nevertheless, at a certain point, the GoI took action on its pre-award
threats to interfere in the permit process, and that action affected the project duration. DOS
must assume responsibility for that delay.
C. Measuring Damages for a Superior Knowledge Violation
If the Government breaches its duty to disclose superior knowledge, the Government
must “bear the loss, if any, resulting from the breach of that duty.”J.A. Jones Construction,
390 F.2d at 893. It is the contractor’s burden to show that “the nondisclosure . . . caused its
additional . . . expenditures.”Id.
A failure to disclose superior knowledge is typically viewed as a constructive change
under the Changes clause of the contract. See, e.g., Chemical Technology, Inc. v. United
States, 645 F.2d 934, 946 (Ct. Cl. 1981); Miller Elevator Co. v. United States, 30 Fed. Cl.
662, 678 (1994),appeal dismissed, 36 F.3d 1111 (Fed. Cir. 1994);Johnson & Sons Erectors,
ASBCA 24564, 81-1 BCA ¶ 15,082, at 74,599; Norair Engineering Corp., GSBCA 2394,
72-1 BCA ¶ 9305, at 43,142; Ralph C. Nash, Jr.,Government Contract Changes10-9 to -11
(2d ed. 1989). Pursuant to the Changes clause, “[w]hat would otherwise be breaches [of
contract] are converted into claims for equitable adjustment, compensable under the
contract.”Johnson & Sons Erectors Co. v. United States, 231 Ct. Cl. 753, 757 (1982). The
Court of Claims, however, sometimes treated a pre-award failure to disclose vital information
as a breach of contract, rather than a constructive change.See, e.g., American Ship Building

CBCA 3350, 3672, 4658, 4659 61
Co. v. United States , 207 Ct. Cl. 1002, 1004 (1975); Hardeman-Monier-Hutcherson v.
United States , 458 F.2d 1364, 1372 (Ct. Cl. 1972); Helene Curtis Industries , 312 F.2d at
777.
The Court of Claims long ago indicated that the question of whether pre-award
failures to disclose constitute changes or breaches can vary by situation: “It is not impossible
they will [fall within the Changes clause], not impossible that in some circumstances they
will be breach claims.”Johnson & Sons Erectors, 231 Ct. Cl. at 759. Nevertheless, where
a contractor’s claim is redressable under a contract clause, the boards of contract appeals
have generally permitted recovery under the clause rather than as a breach, see Cleereman
Forest Products, AGBCA 2000-101-1, 02-1 BCA ¶ 31,664, at 156,462 (2001) (Westbrook,
J., concurring), and clause H.31.1 of YDJV’s contract expressly directs us to utilize the
Changes clause if we can. Exhibit 1 at 91. Whether a breach or a change, though, the
recoverable damage is essentially the same in the circumstances here: the contractor is
“entitled to recover that part of its loss on the . . . contract attributable to” the Government’s
failure to disclose the vital information. Helene Curtis Industries , 312 F.2d at 779; see
Baltimore Contractors, Inc. v. United States, 12 Cl. Ct. 328, 344 (1987) (whether a superior
knowledge claim is considered a breach or a change, “[t]he court considers the remedies for
these breach of contract claims to be coextensive with the remedies for . . . changed condition
and constructive change claims because only damages actually sustained are recoverable in
this situation”).
In its post-hearing brief, YDJV argues that a different rule of damages should apply.
Specifically, it argues that, had it known that the GoI might delay NCC permits, it would
never have competed for this contract. As a result, it believes that it is entitled to be placed
in the position that it would have occupied if it had never entered the contract in the first
place, although, rather than asking for reimbursement of all costs that it expended in
performance, it limits its monetary request to mirror the delay damages and direct cost claims
that it has submitted (an amount that it asserts is far less than what it lost on this project). As
support for its argument, it cites a Court of Claims decision,Atlantic Dredging Co. v. United
States, 53 Ct. Cl. 490 (1918), and a Supreme Court decision affirming it, United States v.
Atlantic Dredging Co., 253 U.S. 1 (1920). YDJV is essentially seeking damages under a
restitution theory, but limiting its claimed recovery to what it would receive under an
expansive view of the reliance damages theory. See Glendale Federal Bank, FSB v. United
States, 239 F.3d 1374, 1380, 1382 (Fed. Cir. 2001) (“The idea behind restitution is to restore
– that is, to restore the non-breaching party to the position he would have been in had there
never been a contract to breach,” while the “underlying principle in reliance damages is that

CBCA 3350, 3672, 4658, 4659 62
a party who relies on another party’s promise made binding through contract is entitled to
damages for any losses actually sustained as a result of the breach of that promise.”).28
We reject YDJV’s damages argument, for the following reasons:
First, restitution is “‘a fall-back position’ for the injured party who is unable to prove
expectancy damages,”Hansen Bancorp, Inc. v. United States, 367 F.3d 1297, 1309 (Fed. Cir.
2004) (quoting Glendale, 239 F.3d at 1380), a situation that does not exist here. Further, it
“is ‘available only if the breach gives rise to a claim for damages for total breach and not
merely to a claim for damages for partial breach.’”Id. (quoting Restatement (Second) of
Contracts § 373). The superior knowledge withholding affected only one aspect of the
construction period and did not constitute a total breach. A restitution theory is inappropriate
here.
Second, theAtlantic Dredgingdecisions that YDJV cites do not say what YDJV wants
them to say. In Atlantic Dredging, the contractor was to perform certain dredging work
based upon maps and specifications that incorrectly described the character of the material
to be dredged. After finding that the Government’s contractual misrepresentations
constituted a breach of contract, the Court of Claims awarded the contractor all of its
performance costs, less amounts already paid, as damages, Atlantic Dredging, 53 Ct. Cl. at
500, 504, and the Supreme Court affirmed that award, finding that it was “simply
compensatory of the cost of the work, of which the government got the benefit.”Atlantic
Dredging, 253 U.S. at 12. YDJV argues that, under the rationale of Atlantic Dredging, it is
entitled to recover all of the more than $26 million in costs that has claimed “since [that
amount] is much less than its actual $59M loss caused by the government’s breach.”
Appellant’s Post-Hearing Brief at 10. Yet, inAtlantic Dredging , the reason that the
contractor recovered all of its performance costs is because they were all caused by the
Government’s breach. The Court of Claims, in its decision, cites with approval another
decision in which the Supreme Court had held that the contractor’s recovery for a
government misrepresentation in the contract was limited to “the damages incurredbecause
of the different character of material found behind the dam than that described in the
specifications.”Hollerbach v. United States, 233 U.S. 165, 172 (1914) (emphasis added).
The decisions in Atlantic Dredging do not support YDJV’s entitlement to recovery of any
and all costs that it spent and thinks it ought to be paid. YDJV still must prove that it
28 Although YDJV compares its theory to a request for reliance damages, it more
closely appears to resemble a request for partial restitution, as it seeks to recover its requested
damages amount without regard to whether it can prove that the claimed costs were
specifically tied to and caused by the tax dispute/permit issuance problem.

CBCA 3350, 3672, 4658, 4659 63
incurred extra costsbecause ofthe Government’s failure to disclose vital information and the
specific cost impact resulting from that nondisclosure. TheAtlantic Dredging decisions did
not eliminate that obligation.29
Third, as for the factual underpinning of its argument, we find that YDJV failed to
prove that it would not have accepted this contract had DOS disclosed the possibility of
permit issuance delays resulting from tax disputes. We understand that, by necessity, the
testimony that YDJV provided on this point had to be, and was, post hoc rationalization.
YDJV did not know about the tie between the tax disputes and the permit process when it
was preparing its offer, so it could provide no contemporaneous evidence that it evaluated
such a possibility. Nevertheless, the post hoc rationalizations that YDJV provided focused
exclusively on whether YDJV would have accepted a contract placing upon YDJV the entire
risk of permit delays resulting from tax disputes. Yet, the contract that we ultimately have
here is one that places the financial burden associated with any permit delays resulting from
tax disputes upon DOS, not YDJV. YDJV’s witnesses did not sufficiently attempt to explain
why they would have rejected a contract placing that burden on DOS, and we reject YDJV’s
factual premise that such a contract would have been unacceptable to YDJV back in 2005.
II. The Government’s Alleged Warranty of the Permit Process
A. Responsibility for Obtaining Permits
FAR 52.236-7, titled “Permits and Responsibilities” (P&R), was incorporated into this
contract and very broadly places upon the contractor the obligation and responsibility for
obtaining all necessary permits and licenses: “The Contractor shall, without additional
expense to the Government, be responsible for obtaining any necessary licenses and permits.”
48 CFR 52.236-7. Taken on its own, the clause clearly and unambiguously assigns to the
contractor responsibility for and risk associated with obtaining permits from host or local
29 There is support for the concept that, if a contractor agrees to accept a contract
because of either a fraudulent or material misrepresentation by the Government upon which
the contractor is justified in relying, the contract is voidable by the contractor.Restatement
(Second) of Contracts § 164(1). We need not address the circumstances in which such a
contract may be voidable because that concept only applies to executory contracts for which
some performance remains to be completed. Here, YDJV has completed its contract work.
“The power of a party to avoid a contract for non-fraudulent misrepresentation . . . is . . . lost
if the contract has been so far performed or the circumstances have otherwise so changed that
avoidance would be inequitable and if damages will be adequate compensation.”
Restatement (Second) of Contracts § 381(2).

CBCA 3350, 3672, 4658, 4659 64
governments. Blaze Construction, Inc., IBCA 3651-96, 98-2 BCA ¶ 30,035, at 148,618. It
is consistent with the general rule that, absent fault or negligence by the Government or some
other contractual provision creating a right to the contrary, the Government is not liable or
responsible for damages resulting from the acts of third parties. Oman-Fischbach
International (JV) v. Pirie, 276 F.3d 1380, 1385 (Fed. Cir. 2002).
Nevertheless, the P&R “clause can be constrained by other contractual provisions that
specifically limit the scope of the contractor’s obligations for permitting requirements.”
Bell/Heery v. United States, 739 F.3d 1324, 1331 (Fed. Cir. 2014). Further, to the extent that
“the Government makes positive statements in the specifications or drawings for the
guidance of bidders, . . . a contractor has a right to rely on them regardless of contractual
provisions requiring the contractor to make investigations.”Arcole Midwest Corp. v. United
States, 113 F. Supp. 278, 280 (Ct. Cl. 1953). If those positive statements are incorrect, and
the contractor is misled by them, the contractor may be entitled to recover for any damage
that it incurs from having been misled.Railroad Waterproofing Corp. v. United States, 137
F. Supp. 713, 715 (Ct. Cl. 1956).
Here, the contract contains an additional clause, the “Permits and Licenses” (P&L)
clause (clause C.1.6), that modifies, or places some limits upon, the P&R clause. In the P&L
clause, DOS purported to explain, albeit in a very general and broad manner, how the GoI
would go about dealing with permit applications. It states that the GoI would “accept a
permit application for site work and foundations, and a final submission defining site plan,
building massing, interior fire exiting, toilets, and elevators,” while also identifying some
detailed submission requirements that YDJV would have to satisfy to obtain permits. Exhibit
2 at 100. It provided that “[p]hased submissions will be entertained for site development and
foundations, but substantial interim drawings must specify the general extent of the project.”
Id. At the end of the clause, DOS represented that “[c]onditional approvals will be issued
[by the local GoI authority] to expedite foundation construction.”Id.
The permitting process that the GoI actually followed was a bit different from what
DOS described in the contract. Generally, MMRDA would issue a site work permit, prior
to issuance of the PCC that would precede issuance of a FWCC, that did not deal with
foundation work. In fact, in this case, YDJV’s subcontractor submitted a permit application
on May 11, 2006, for general site work (including the erection of temporary structures and
construction of a perimeter wall) without mentioning foundations and without providing the
supporting interim drawings that the P&R clause described as being required, Exhibit 13460,
and then later submitted a somewhat confusing application on August 1, 2006, that
mentioned neither foundations nor plinths. The normal permitting process that MMRDA and
MCGM had described as being required involved obtaining a PCC for construction of up to
the plinth level, an inspection of the completed plinth by both MMRDA and MCGM, and

CBCA 3350, 3672, 4658, 4659 65
then issuance of a FWCC by both MMRDA and MCGM allowing for vertical construction.
The normal permitting procedure at MMRDA and MCGM did not involve issuance of
foundations permits or conditional approvals of foundations. As we previously found, a
foundation is something different from a plinth, and, reading the contract provision about the
permitting process, YDJV reasonably would have anticipated separate foundation and plinth
permits. Nevertheless, YDJV never requested a foundation permit. Although it eventually
asked MMRDA for conditional approval allowing for foundation work, it did not do so until
February 15, 2007, at which point it received verbal approval for foundation work nineteen
days later and written approval two days after that. With regard to PCCs, the contractor
could apply for a separate PCC for each of the nine buildings on the NCC, but elected to
submit a single PCC application for all of the NCC buildings. It submitted separate FWCC
applications for each of the nine NCC buildings.
YDJV complains that, based upon the language of the P&L clause, it reasonably
believed that the GoI was going to “fast track” its permit requests to speed the laying of
foundations and construction of the entirety of the NCC project. The term “fast tracking” is
one that YDJV created for use in this litigation – it does not appear in the contract or, as far
as we could tell, in any of the contemporaneous documents created during the contract
bidding or performance process. It is a concept that finds some limited support in the
contract language, but not to the extent that YDJV attempts to stretch it.
In evaluating YDJV’s argument, we consider the extent to which the P&L clause
created some type of warranty upon which YDJV was entitled to rely when preparing its
offer and whether such a warranty affected YDJV’s risk assumptions under FAR 52.236-7
(beyond and without regard to the superior knowledge issues that we have already discussed).
“[A] warranty is an assurance by one party to an agreement of the existence of a fact upon
which the other party may rely; it is intended precisely to relieve the promisee of any duty
to ascertain the facts for himself.”Oman-Fischbach, 276 F.3d at 1383 (quoting Dale
Construction Co. v. United States , 168 Ct. Cl. 692, 699 (1964)). “To establish that the
representation constitutes a warranty, [a contractor] must show that ‘(1) the Government
assured the [appellant] of the existence of a fact, (2) the Government intended that appellant
be relieved of the duty to ascertain the existence of the fact for itself, and (3) the
Government’s assurance of that fact proved untrue.’”Regency Construction, Inc. v.
Department of Agriculture, CBCA 3246, et al., 16-1 BCA ¶ 36,468, at 177,707 (quoting
Oman-Fischbach, 276 F.3d at 1384 (quotingKolar, Inc. v. United States, 650 F.2d 256, 258
(Ct. Cl. 1981))), appeal pending, No. 16-2600 (Fed. Cir. docketed Sept. 1, 2016).
Although the Government is typically not liable for the sovereign acts of a foreign
government, an agency can bind itself through contractual provisions that create warranties
to pay damages to the contractor if the foreign government engages in conduct contrary to

CBCA 3350, 3672, 4658, 4659 66
the agency’s warranty.See Swinerton & Belvoir, ASBCA 24022, 81-1 BCA ¶ 15,156, at
74,987-88 (discussing how agency, through warranty, can assume liability for another
agency’s sovereign acts). Nevertheless, “not all statements in a contract are warranted.”
Swinerton & Belvoir , 81-1 BCA at 74,988. Unless YDJV can establish that DOS made
warranties about the GoI’s permit process that turned out not to be true (to YDJV’s financial
detriment), “the Government is not liable for damages resulting from the actions of third
parties.”Oman-Fischbach, 276 F.3d at 1385 (quoting Dale Construction, 168 Ct. Cl. at
698).
The linchpin of a warranty is the extent to which the contract language reads as a
promise or a guarantee to the contractor, as compared with a mere factual representation.
A warranty is “[a]n express or impliedpromise that something in furtherance of the contract
is guaranteed by one of the contracting parties.”Black’s Law Dictionary1821 (10th ed.
2014) (emphasis added). It differs from a representation, which is “[a] presentation of fact
. . . made to induce someone to act” or “the manifestation to another that a fact . . . exists.”
Id. at 1493. While “a warranty is conclusively presumed to be material, . . . the burden is on
the party claiming breach to show that a representation is material.”Id. at 1821. Further, “a
warranty must be strictly complied with, while substantial truth is the only requirement for
a representation.”Id. “[A] warranty is an essential part of a contract, while a representation
is usu[ally] only a collateral inducement.”Id.
B. Representations That Did Not Create Actionable Warranties
Although there were some errors in DOS’s description of the MMRDA/MCGM
permitting process, most of them did not rise to the level of actionable warranties, for the
following reasons:
First, although DOS erred in suggesting that there would be a single site work and
foundations permit, given that the site work permit was requested separately from other
permits, YDJV cannot complain about that misstatement in the contract. Vartak’s initial
application for a permit in May 2006 was limited to temporary structures and site work,
without reference to foundations. Further, even if Vartak had sought a foundations permit,
the contract representation about such permits indicated that, although “[p]hased submissions
will be entertained for site development and foundations, . . . substantial interim drawings
must specify the general extent of the project.” Exhibit 2 at 100. For YJDV to rely upon the
Government’s alleged warranty about foundations permits, YDJV would have to have
submitted those substantial interim drawings with its foundations permit application, which
it did not do. As a result, any error in describing the coupling of the site work and
foundations permits was harmless.

CBCA 3350, 3672, 4658, 4659 67
Second, most of the language that DOS included in the P&L clause purporting to
describe the permit application process was stated in a very general way. Any contractor
reading it would have to find it too vague to use as a sole source for explaining how to
submit permits. The P&L clause lacked any detail as to where or how to submit permit
applications, the specific information that MMRDA would need in an application, or the
amount of time that MMRDA would need for review. As a result, despite the language in
the P&L clause, the contractor would have to conduct further investigation to identify
specific requirements for the permit process, and YDJV (through the permit expediters that
it hired) did just that. In addition, MMRDA and MCGM representatives were a part of the
pre-proposal conference that YDJV attended from May 25 to 27, 2005, and they discussed
the permitting process or permitting requirements at that time, explaining the PCC and
FWCC process. See Tr. Vol. 8 at 230. YDJV cannot viably argue that it relied on the vague
descriptions in the P&L clause as fully defining exactly what the process would be. See T.
Brown Constructors, Inc. v. Pena, 132 F.3d 724, 729 (Fed. Cir. 1997) (“for a contractor to
prevail on a claim of misrepresentation, the contractor must show that the Government made
an erroneous representation of a material fact that the contractor honestly and reasonably
relied on to the contractor’s detriment”). We must view the availability of MMRDA and
MCGM at the pre-proposal conference and the explanations that they made there of the
permitting process as placing YDJV on notice of information beyond that contained in the
P&L clause. The bulk of the statements about foundations permits in the P&L clause are
simply too vague and general to constitute a “warranty” about the permitting application
process.
Third, to the extent that YDJV is complaining that MMRDA did not provide for
“phased submissions . . . for site development and foundations,” as indicated in the P&L
clause, we find that MMRDA actually accepted a series of phased site work and foundations
submissions and issued a series of permits in response, including a backfill permit in
February 2006, an excavation permit in April 2006, the perimeter wall and temporary
structures permit in June 2006, and the PCC for all of the NCC buildings in April 2007.
Accordingly, YDJV cannot show that the representation was incorrect. In any event, to the
extent that any of YDJV’s permit applications could be viewed as an attempt at phased
submissions, those applications were never accompanied bythe “substantial interim drawings
. . . specify[ing] the general extent of the project” that the P&L clause indicated were
required. As previously stated, YDJV cannot claim that it was damaged by misinformation
in the clause when it did not comply with the purported requirements in the first place.
Had YDJV actually complied with the requirements identified in the P&L clause when
seeking permits, we might concentrate more fully on the extent to which specific
representations in the clause could be viewed as a warranty. Because YDJV did not do so,
we need not engage in a more detailed review.

CBCA 3350, 3672, 4658, 4659 68
C. Representations Creating A Warranty
There were two representations in the P&L clause that rose to the level of a warranty.
First, DOS affirmatively represented that MMRDA and MCGM would issue permits for
foundations. Although DOS has argued that “foundations,” in the context of the P&L clause,
intended to refer to the plinth permits, or PCCs, that MMRDA would normally issue through
its regular permit process, plinths, as we previously found, are different from foundations.
Second, the P&L clause indicated that “[c]onditional approvals [by the local GoI authorities]
will be issued to expedite foundation construction.” Exhibit 2 at 100.
These affirmative statements about how the GoI would modify its standard permit
procedures to accommodate the NCC project were direct representations upon which YDJV
was entitled to rely when it was preparing its offer. These statements were taken from the
PAP that DOS’s employee, Mr. Rosenfeld, wrote following his meetings with MMRDA
during the solicitation development process. They were included in the solicitation to
encourage contractors to submit offers and were intended to indicate the willingness of
MMRDA and MCGM to help in expediting the construction process through the foundation
level. The fact that DOS included the statements in the P&L clause in good faith, believing
that they were true, makes no difference. Womack v. United States, 389 F.2d 793, 800 (Ct.
Cl. 1968). DOS could have added a caveat to its assertions, stating that the local authorities
had suggested that they would issue foundation permits and conditional approvals for
foundations but that DOS could not force them to do so (leaving the risk of the local
authorities’ noncompliance upon YDJV). DOS did not add such a caveat. DOS created a
warranty, which “amounts to a promise to indemnify the promisee for any loss if the fact
warranted proves untrue.”Dale Construction, 168 Ct. Cl. at 699.
This warranty, though, does not justify YDJV’s purported belief that the GoI
authorities were going to “fast track” the entire NCC project. The “conditional approvals”
language is limited tofoundation construction. The P&L clause says nothing about the GoI
authorities agreeing to expedite or provide conditional approvals ofall construction permits
for the NCC project, including those involving vertical construction above the plinth level.
YDJV’s reliance upon this clause to argue that the GoI was required to expedite every permit
that YDJV requested and grant conditional permit approvals throughout the NCC project is
unfounded. Further, nothing in YDJV’s proposal evidences that YDJV anticipated a “fast
track” approach at that time, suggesting that “fast tracking” is a post hoc rationalization to
justify a monetary recovery rather than an actual understanding upon which YDJV relied
during contract performance.

CBCA 3350, 3672, 4658, 4659 69
Further, we cannot find that YDJV suffered any damage from any misrepresentation
arising out of the warranty.30 YDJV never applied for a “foundations only” permit, separate
and apart from its larger PCC applications that necessarily encompassed foundations, and it
delayed asking MMRDA for a conditional approval for foundation work until February 15,
2007. Once it asked for conditional approval, MMRDA, despite some initial confusion about
the request, granted it nineteen days later, a time lag between request and response that we
do not find unreasonable in the circumstances here. YDJV understood that the issuance of
a foundations permit or conditional approval was not automatic or self-effecting. YDJV still
had to ask for it. See Deposition Designation of Frank Mitchell, Vol. II at 209
(acknowledging requirement to seek a construction permit, but that “[f]oundations could be
started,” following MMRDA approval, “with the correct information”). Although YDJV has
argued that Vartak, one of its first permit expediters, tried inartfully to seek a foundations
permit as early as August 2006 through a larger permit request that it submitted and that its
attempt was rejected, Vartak’s application made no request for a foundations permit or
conditional approval for foundation work. In fact, at the time, Vartak was telling YDJV that
it did not evenneed a permit to begin constructing foundations, and YDJV began that work
without any permit for the work. YDJV cannot complain that DOS’s P&L clause was
misleading and caused it to suffer damage before YDJV itself ever complied with the
requirements that the P&L clause said were necessary for obtaining a foundations permit and
when it proceeded to perform the work without the permit.See T. Brown Constructors, 132
F.3d at 729 (to recover damages for contractual misrepresentation, contractor must honestly
and reasonably rely on misrepresentation to its detriment).
Similarly, reading the P&L clause as a whole, which we must, Jane Mobley
Associates, Inc. v. General Services Administration , CBCA 2878, 16-1 BCA ¶ 36,285, at
176,954, it is clear that any conditional approvals allowing for foundation work would come
after submission of, and were to be in response to, a proper permit application. YDJV’s
efforts to submit such a permit application were severely delayed. It is impossible to read
the P&L clause as guaranteeing, or warranting, conditional foundation construction approvals
before the contractor ever met its obligation to submit a proper construction permit
application. Further, once Design Cell submitted a conditional approval request on February
15, 2007, MMRDA approved it. Again, the warranty was not self-executing. For the Board
to find that YDJV was damaged by a breach of the warranty, YDJV first would have to have
30 In its post-hearing brief, DOS argues that, in fact, the GoI authorities issued
“conditional approvals” in the written PCC and the NOB FWCC documents, given that both
of them had “conditions” written into them. Respondent’s Post-Hearing Brief at 19. The
“conditional approvals” language in the P&L clause relates to foundation construction, not
plinth or vertical construction work.

CBCA 3350, 3672, 4658, 4659 70
taken steps to engage in the warranted process. In the circumstances here, we cannot find
that YDJV is entitled to any damages arising out of any error in this warranty or that any
error caused delay.31
III. Responsibility For the Police “No Objection Certificate”
One of the prerequisites for obtaining a FWCC was the issuance by the police
commissioner in Mumbai of a “no objection certificate.” MMRDA would not issue its
FWCC without the police NOC. YDJV’s permit expediter was late in applying for the police
NOC and received it only a short time before the FWCC was actually issued. Although the
P&R and P&L clauses expressly place responsibility upon YDJV for obtaining permits,
YDJV argues that any delays in its application for or receipt of the police NOC are DOS’s
fault and responsibility. We reject YDJV’s argument.
The language of the P&R and P&L clauses makes very clear that responsibility for
all aspects of the process of obtaining permits falls on the contractor. Those clauses are
“risk-shifting device[s] [whose] primary purpose is to place upon the contractor, and not the
Government, the burden of ascertaining the scope and extent of local requirements which
impinge upon [the contract] work.”Gardner Construction Co., DOT CAB 73-3, 74-1 BCA
¶ 10,406, at 49,146 (1973); see McKenzie Engineering Co. , ASBCA 53374, 05-2 BCA
¶ 33,090, at 164,040 (P&R clause is stated in “broad terms” to place the permitting burden
on the contractor and to require the contractor “to assure compliance with relevant laws and
regulations”).
31 YDJV also argues that the P&L clause evidences a mutual mistake of fact that
justifies reformation of the contract. We reject the argument because the description of how
the GoI would process permit applications is not the type of “fact” covered by the doctrine.
“A party’s prediction or judgment as to events to occur in the future, even if erroneous, is not
a ‘mistake’ as that word is defined [under the doctrine of mutual mistake of fact].”
Dairyland Power Cooperative v. United States, 16 F.3d 1197, 1203 (Fed. Cir. 1994) (quoting
Restatement (Second) of Contracts § 151 cmt. a). Further, YDJV has not established that
“the mistake had a material effect on the bargain,” as required to find a mutual mistake.
Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir. 1990).
In addition, YDJV argues that the P&L clause constitutes a defective specification or
constructive change, asserting that the “government may be liable if it misinforms the
contractor about the laws applicable to the contract.” Appellant’s Post-Hearing Brief at 31
(quoting John Cibinic, Ralph Nash & James Nagle,Administration of Government Contracts
257 (4th ed. 2006). This argument fails for the same reasons as YDJV’s warranty arguments.

CBCA 3350, 3672, 4658, 4659 71
YDJV cites testimony from its witness, Pravin Malkani of Design Cell (YDJV’s
second permit expediter), suggesting that the police NOC is always obtained by the owner
of the property – here, DOS – rather than the contractor, establishing a trade custom that
should override the contract language. As an initial matter, we find any evidence of a trade
custom too insignificant to warrant reliance. There is no evidence, beyond Mr. Malkani’s
testimony, to support the existence of a trade custom. Nothing in the Mumbai permitting
regulations, see Exhibit 1467, states that only the owner itself, as opposed to another person
upon behalf of the owner, may submit the request for a police NOC. In fact, YDJV’s
argument is rather odd given that virtuallyall of the permits – the PCC, the FWCC, and other
NOCs that had to be obtained from other offices – were submitted in the name of the owner.
Under the rationale underlying YDJV’s theory, it should have been DOS’s responsibility to
obtain all NOCs and permits. It appears that YDJV has singled out the police NOC as being
DOS’s responsibility only because its failure timely to apply for this particular certificate
negatively affects its delay argument.
Beyond that, it appears to be the custom in the Mumbai area for entities to hire and
utilize permit expediters to assist in navigating the somewhat complicated permitting process.
That is precisely what happened here: YDJV’s subcontractor, Design Cell, prepared a letter
for a DOS representative’s signature asking for the police NOC, and DOS promptly signed
and returned it to Design Cell for submission after noting some deficiencies in the exhibits
that were to accompany it. There is no indication that the police commissioner objected to
that procedure. In fact, the police commissioner actually signed the NOC that Design Cell
submitted. Design Cell, upon behalf of YDJV and DOS, followed the same practice in
applying for the PCC and the FWCCs. We reject YDJV’s argument that there was some
trade custom limited to police NOCs that required some different process.
Further, even if there were a trade custom applicable to police NOCs, we could not
find that it overrides the express language of the P&R and P&L clauses. YDJV citesMarine
Construction & Dredging, Inc., ASBCA 38412, et al., 95-1 BCA ¶ 27,286 (1994), to argue
that trade custom does just that. In Marine Construction, the Armed Services Board of
Contract Appeals (ASBCA) held that the P&R clause did not shift responsibility for
obtaining a wetlands permit where “it is a customary practice in the dredging industry for the
project owner, including the Government, to obtain the wetlands permits.”Id. at 135,955.
In that case, though, the Government, at the outset of contract performance, had already
obtained a wetlands permit that allowed the contractor to perform dredging in a certain
waterway, but not in the area that dredging was needed under the contract. The agency
attempted, but was unable, to obtain a new permit for the work in the excluded area, but led
the contractor to believe that all wetlands permits were in order. To conduct the necessary
dredging, a new wetlands permit was needed, the issuance of which would require significant
studies and testing, and, pursuant to the applicable regulations, only the agency could submit

CBCA 3350, 3672, 4658, 4659 72
it. Although the ASBCA identified trade practice in its discussion, the board’s focus was the
agency’s failure to disclose known problems in obtaining the permit while leading the
contractor to believe that the permit was already in place.
We do not read the ASBCA’s decision inMarine Constructionas conflicting with the
general rules of contract interpretation, which allow a tribunal to accept evidence that a “term
in the contract . . . has an accepted industry meaning different from its ordinary meaning” if
a party shows that, applying the trade practice or custom to the actual language of the
contract, it reasonably relied upon its interpretation when entering into the contract.Jowett,
Inc. v. United States, 234 F.3d 1365, 1369 (Fed. Cir. 2000). Nevertheless, any interpretation
that ignores actual contract language, including the language of the P&R and P&L clauses,
would conflict with the Federal Circuit’s guidance inBell/Heery, 739 F.3d at 1334, which
directed that the “plain language of the [P&R] clause . . . unequivocally assignsall of the risk
for complying with the permitting requirements” upon the contractor “without additional
expense to the Government.” Further, it appears that the ASBCA’s central holding inMarine
Construction was that the agency’s failure to disclose superior knowledge affected its ability
to hold the contractor to the risk-shifting in the P&R clause, rendering its comment about
trade custom superfluous.32
In addition, even if the P&R and P&L clauses could be read as somehow leaving some
permitting obligations with DOS, other language in this contract makes clear that DOS had
truly transferred all responsibility for permits to YDJV. Under clause H.25 of the contract,
titled “Other Services Not To Relieve Contractor,” DOS agreed that, “[i]n the interest of
expediting the project, the Government may, in its sole discretion, undertake to provide
additional services for or on behalf of the Contractor which are not required of the
Government under this contract, such as assisting the Contractor in obtaining . . . permits.”
Exhibit 1 at 61. That clause makes clear that “the Government shall be under no obligation
to [provide that assistance], and neither the provision nor the failure to provide such services
32 YDJV also cites to the decision of one of our predecessor boards, Christopher
Construction Co., IBCA 109, 59-1 BCA ¶ 2129, as placing various permit responsibilities
on the Government despite the P&R clause. There, plumbing specifications conflicted with
the local county’s plumbing code, meaning that the contractor could not obtain a permit
without a change in the specifications, and the Government had not paid an availability
charge for which, outside the context of the contract, it was responsible. It was the defect
in specifications that caused the Government’s liability. Nothing in that decision supports
an argument that, in contracts containing the risk-shifting P&R clause but no other clauses
limiting or affecting that shift in risk, the Government remains ultimately responsible for
applying for permits.

CBCA 3350, 3672, 4658, 4659 73
nor the manner in which such services are provided shall relieve the Contractor of or excuse
the Contractor from any of its responsibilities under the contract.”Id. To the extent that
DOS had an implied duty of good faith to assist in the permitting process, it met any such
obligations, responding swiftly to Design Cell’s request for review and signature and
contacting the police commissioner’s office to seek expedited consideration.
Finally, we find that, during contract performance, YDJV waived any argument
imposing a duty upon DOS to obtain the police NOC. YDJV never suggested during
performance that it was DOS’s obligation to obtain that NOC. To the contrary, YDJV,
through its permit expediter, affirmatively assumed and handled that responsibility, albeit
with some delay. If, during contract performance, YDJV was being delayed by DOS’s
failure to apply for a police NOC that it thought was DOS’s responsibility, YDJV had to say
something while DOS could still correct or minimize its error. YDJV, if aware of a breach,
could not surprise DOS with news of that breach only after contract completion. YDJV’s
silence during performance was a waiver. See, e.g., E. Walters & Co. v. United States, 576
F.2d 362, 367-68 (Ct. Cl. 1978); Ling-Temco-Vought, Inc. v. United States, 475 F.2d 630,
636-39 (Ct. Cl. 1973).
IV. Labor Shortages
YDJV alleges that, beginning around September 2007, it was unable to hire sufficient
local labor to staff this project because of an extraordinary and unprecedented “boom” in
construction projects in the Mumbai area, which was siphoning off all available labor. YDJV
argues that the delays caused by the labor shortage are not only excusable (entitling it to a
time extension), but also compensable.
YDJV’s contract provided that YDJV would “be allowed time, not money, for
excusable delays as defined in FAR 52.249-10, Default.” Exhibit 1 at 32 (clause F.9). “To
establish entitlement to an extension based on excusable delay, [a contractor] must show that
the delay resulted from ‘unforeseeable causes beyond the control and without the fault or
negligence of the [c]ontractor,’” as well as that the delay affected overall contract
completion. Sauer, 224 F.3d at 1345 (quoting 48 CFR 52.249-10(b)(1)). The contract listed
various examples of excusable delays, including but not limited to acts of God, acts of the
host country government in its sovereign capacity, fires, floods, and labor strikes. Exhibit
1 at 32. That list is not exhaustive, however. As expressly stated in clause F.9.2 of the
contract, the important requirement for finding any delay to be excusable, regardless of
whether it is listed in the contract as an example of a possible excusable delay, is whether the
delay was beyond the control and without the fault of the contractor:

CBCA 3350, 3672, 4658, 4659 74
In each instance, the failure to perform must be beyond the control and without
the fault or negligence of the Contractor, and the failure to perform
furthermore (1) must be one that the Contractor could not have reasonably
anticipated and taken adequate measures to protect against, (2) cannot be
overcome by reasonable efforts to reschedule the work, and (3) directly and
materially affects the date of final completion of the project.
Id.
“A contractor is responsible for providing the labor needed in order to perform the
contract, and its failure to do so is not an occurrence beyond its reasonable control and
without its fault or negligence except in the most unusual circumstances, such as where the
Government contributes to the unavailability of the labor or where abnormal circumstances
exist which could not have been anticipated.”Business Management Research Associates,
Inc. v. General Services Administration , CBCA 464, 07-1 BCA ¶ 33,486, at 165,991.
Although it is perhaps somewhat unsettled as to what types of “abnormal circumstances”
might justify an excusable delay arising from labor problems, those circumstances do not
include “a general labor shortage, the unavailability of skilled operatives or technical
specialists, [or] the loss of employees on whose assistance a contractor may have counted.”
Hydro Fitting Manufacturing Corp. , ASBCA 11768, et al., 70-1 BCA ¶ 8211, at 38,183.
That is, a contractor’s “general difficulties in obtaining the required labor” do not create a
basis for excusable delay, Business Management, 07-1 BCA at 165,991 (quoting Robert
McMullan & Son, Inc., ASBCA 11998, 68-1 BCA ¶ 7068, at 32,678), and “[p]erformance
of a contract is not excused by unusual or unexpected expense.”Industrial Engineering Co.
v. United States, 92 Ct. Cl. 54, 60 (1940).
YDJV claims that the “abnormal circumstances” that it faced in performing this
contract were that construction in the Mumbai area suddenly, and unforeseeably, increased
in such a monumental way that it stretched the available local construction labor market
beyond its capacity. Because of that, it and its subcontractors were unable to hire the large
number of workers that they needed for this job. We find YDJV’s evidence insufficient to
establish that a change in the labor market affected its work.
Although, in its pre-project survey, YDJV determined that the availability of skilled
workers in Mumbai was positive, it submitted no evidence of the reasonableness of that
original assumption or that it, or its subcontractors, had adequately analyzed how they could
find all of the workers, both skilled and unskilled, that it needed for a project of this size.
There was no detailed pre-performance work plan showing how many workers YDJV would
actually need at any given time and how it would find them. It intended to rely on
subcontractors to find workers, but it repeatedly complained about its subcontractors’ efforts

CBCA 3350, 3672, 4658, 4659 75
during performance and about its own inability to motivate them to perform to YDJV’s
standards. In addition, YDJV complained during the hearing that the security requirements
of this project may have scared off Indian workers and made it more difficult to staff this
project, given that workers arriving at the job site each day would have to wait in line to go
through an access control facility, which included an x-ray machine and an iris (eye) scanner,
before they could enter the compound. Tr. Vol. 4 at 126. But that fact was known to YDJV
before the contract was awarded, and any disincentive that it caused in labor hiring is not
something that YDJV can claim was unforeseeable or unknown to it at the time of contract
award.
Further, despite YDJV’s attempt to prove a sudden extraordinary construction boom
in late 2007, the evidence of record only reflects that there was a modest increase in
construction spending in Mumbai during this period, but that the rate of increase had been
fairly steady for several years. We cannot find based upon the existing record that YDJV’s
labor hiring problems – and the poor performance of its subcontractors, which YDJV
repeatedly criticized during the period of its alleged labor shortages – were the result of
anything other than YDJV’s original misunderstanding of what the Mumbai labor market
would support. “That Appellant’s labor time and costs turned out to be greater than had been
anticipated is not . . . sufficient of itself to establish that the conditions encountered were
either unknown or unusual within the meaning of the changed conditions clause of the
contract.”Vulcan Asphalt Co., VABCA 428, 1961 WL 189, at *1 (Nov. 30, 1961). YDJV
is not excused for and cannot evade responsibility for delays caused by YDJV’s problems in
hiring labor.
Because YDJV’s labor shortage experience does not amount to an excusable delay,
YDJV cannot prevail on its further argument that, because prior government delays pushed
contract performance into a period of labor shortages, the labor shortage delays are
compensable. Further, for reasons that we will discuss later, the Government is not
responsible for the fact that YDJV’s work was pushed into the period of the alleged labor
shortages, further defeating YDJV’s compensability argument.
V. Visa Delays
As discussed in our findings of fact, in the fall of 2009, the GoI imposed a new visa
policy for foreign workers, apparently because it wanted to encourage companies to hire local
Indian labor. The GoI required most foreign workers then in India to depart no later than
October 31, 2009, and, once back in their home countries, to apply from there for new visas
through an application process that was generally more stringent than the GoI had previously
imposed. Because of security requirements on the NCC project, there were certain jobs that
American workers had to perform.

CBCA 3350, 3672, 4658, 4659 76
One of the examples of excusable delay in clause F.9, which incorporates and
supplements FAR 52.249-10(b)(1), is “acts of the government of the host country in its
sovereign capacity.” Exhibit 1 at 32. The power to control the visa process is clearly a
sovereign prerogative, see Chae Chan Ping v. United States, 130 U.S. 581, 603-04 (1889),
and the GoI’s action in changing its visa rules and in forcing American workers to depart
India plainly constitutes an “act[] of the host country government in its sovereign capacity.”
Critical path delays resulting from the GoI’s action requiring YDJV’s American workers to
depart India, return to the United States, and apply for new visas are generally excusable.
Nevertheless, to the extent that an unexpected action, like the GoI visa order,
negatively affects work on a contract, the contractor that is injured by it is required to take
steps to mitigate the resulting damage,Signal Contracting, 93-2 BCA at 128,736, and it will
not be able to recover damages that it could have avoided had it taken reasonable
precautionary action. Midwest Industrial Painting, 4 Cl. Ct. at 133. YDJV’s subcontractor,
American Systems, did not always take reasonable actions in response to the GoI visa
change. It never submitted visa applications for the full number of workers that it had
intended to have on-site, and, after some of the initial visa applications for American Systems
workers were denied, it waited almost three months before submitting new applications.
Even then, it never submitted applications sufficient to provide for the six CAWs that it
originally intended. Although YDJV explains that American Systems was having trouble
finding qualified workers who were willing to go to India, it does not show that the GoI’s
change in visa policy created that situation. American Systems did not take reasonable steps
to mitigate delay after the GoI’s visa policy change, and YDJV is responsible for the actions,
or lack thereof, of its subcontractor. Living Tree Care Inc. v. Department of the Interior ,
CBCA 2008, et al., 11-2 BCA ¶ 34,850, at 171,442.
VI. Delays Associated with the L&T “Stop Work” Court Order
On April 6, 2011, as YDJV was trying to finish the project so that accreditation could
occur, YDJV terminated L&T’s subcontract, an act that caused L&T to file a wrongful
termination action in the High Court of Judicature in Mumbai. That court issued a stop work
order against YDJV on April 21, 2011, enjoining any work encompassed within L&T’s scope
of work. The stop work order was lifted on May 26, 2011, and YDJV’s replacement
contractor was able to complete the L&T work by June 15, 2011.
YDJV claims that the court order caused forty-seven days of excusable delay because,
it asserts, delays caused by acts of a host country government in its sovereign capacity are
excusable under the clause F.9, which incorporates and supplements FAR 52.249-10(b)(1),
48 CFR 52.249-10(b)(1). It is difficult to see how a court order would qualify as an act of
a host government in its sovereign capacity. A sovereign act involves “[w]hatever acts the

CBCA 3350, 3672, 4658, 4659 77
government may do, be they legislative or executive, so long as they be public and general.”
Horowitz v. United States, 267 U.S. 458, 461 (1925) (quoting Jones v. United States, 1 Ct.
Cl. 383, 384 (1865)). A court acts in a judicial capacity, not a legislative or executive
capacity, taking a court order out of the sovereign acts doctrine. See Superior Timber Co.,
IBCA 3459, 97-1 BCA ¶ 28,736, at 143,431 (1996) (“the sovereign acts doctrine refers to
acts of the Government in its ‘legislative or executive’ capacity, . . . rather than to judicial
decisions”). Further, the court order at issue here was not “public and general,” but was
specifically directed to YDJV and required YDJV, and only YDJV, to stop work. See
Orlando Helicopter Airways, Inc. v. Widnall , 51 F.3d 258, 262 (Fed. Cir. 1995) (“A
sovereign act is public and general in nature, not private and contractual.”). YDJV’s cited
basis for excusable delay does not apply here.
Yet, the listing in clause F.9 of “acts of the government of the host country in its
sovereign capacity” is only one of several examples of what can constitute an excusable
delay. That list is not intended to be exhaustive.Asheville Jet Charter, 16-1 BCA at 177,304
n.9. The purpose of the excusable delays clause is to protect a contractor if an event is truly
unexpected, unforeseeable, and caused by circumstances beyond the contractor’s reasonable
control and without his fault or negligence. Brooks-Callaway Co., 318 U.S. at 123-24;
Asheville Jet Charter , 16-1 BCA at 177,301. Even those actions actually listed in FAR
52.249-10(b)(1) will not be considered excusable if, in a given situation, they were not
outside the contractor’s reasonable control or were the fault of the contractor.Asheville Jet
Charter, 16-1 BCA at 177,301;see Tri-State Construction Co., IBCA 63, 57-1 BCA ¶ 1184,
at 3287 (“the m[e]re fact that strikes are among the enumerated causes of [excusable] delay
does not make every strike and its consequences unforeseeable”).
It is the contractor’s burden to establish that a particular delay is excusable.MLJ
Brookside, LLC v. General Services Administration , CBCA 3041, 15-1 BCA ¶ 35,935, at
175,623. Generally, “it is the duty of a contractor to ensure its ability to perform the contract
it is awarded,” including the hiring of sufficient labor and subcontractors, and tribunals “have
been hesitant to excuse a contractor when it failed to provide that labor.”Asheville Jet
Charter, 16-1 BCA at 177,301. Typically, “tribunals ‘will not allow excusable delay from
a labor problem other than a strike except in the most unusual circumstance as where the
Government also contributed to the delay . . . or where abnormal circumstances exist which
could not have been anticipated.’”Id. (quoting NTC Group, Inc., ASBCA 53720, et al., 04-2
BCA ¶ 32,706, at 161,810).
YDJV did not satisfy its difficult burden here. It presented no evidence as to whether,
in the Indian court system, the type of “no further work” order that it received was unusual
or unforeseeable following termination of a local subcontractor. It presented no evidence
about any negotiations in which it engaged with L&T before termination or whether such

CBCA 3350, 3672, 4658, 4659 78
negotiations might have resolved any need for L&T to seek the temporary stop work order
that it obtained. We cannot find that the court order created unforeseeable excusable delay
entirely outside YDJV’s control. Further, we cannot find that the delays alleged affected the
critical path of contract performance.
VII. Alleged Breaches of Duties of Good Faith
YDJV argues that there were several actions that DOS undertook, usually through Mr.
Browning (the on-site OBO project manager), that violated DOS’s implied duty of good faith
and fair dealing. Specifically, YDJV maintains that Mr. Browning’s actions improperly
precluded YDJV from obtaining an earlier substantial completion finding. We recognize that
every contract “imposes an implied obligation ‘that neither party will do anything that will
hinder or delay the other party in performance of the contract.’”Essex Electro Engineers,
Inc. v. Danzig , 224 F.3d 1283, 1291 (Fed. Cir. 2000) (quoting Luria Brothers & Co. v.
United States , 369 F.2d 701, 708 (Ct. Cl. 1966)). The Government’s insistence that a
contractor comply with contract requirements “does not constitute hindrance of
performance.”Sach Sinha & Associates, Inc. , ASBCA 46916, 96-2 BCA ¶ 28,346, at
141,563. We address YDJV’s complaints below.
YDJV asserts that DOS unfairly imposed new fire inspection standards as part of the
accreditation process (in response to criticism by the Office of the Inspector General about
old standards) and that the new standards somehow affected accreditation. However, YDJV
has not shown that it relied on the old standards, which were not a part of the contract, when
preparing its proposal or that any such reliance was reasonable. Further, it has not shown
how the new standards actually impacted the accreditation results. It has shown no cause of
delay from DOS’s use of the new standards or any breach of a good faith duty.
YDJV further complains that Mr. Browning failed to cooperate in the accreditation
process and that this failure contributed to delays in contract completion. As evidence, it
cites to a document showing that one of OBO’s inspectors was relieved to see “a
management change” – that is, the replacement of Mr. Browning as on-site project manager
by another OBO employee – between the first accreditation inspection in July 2011 and the
second one in early October 2011 – which, according to the OBO employee, made the second
inspection run more smoothly and with less opposition. YDJV asserts that Mr. Browning
was focusing on minor issues that should not have stymied an earlier finding of substantial
completion and that, in fact, another OBO employee was pushing to have the accreditation
team find substantial completion effective August 30, 2011, over Mr. Browning’s objections.
The desire by the other OBO employee essentially to waive some defects and omissions in
the job completion, so that OBO could be done with YDJV and take over fixing any
deficiencies itself, does not mean that Mr. Browning’s insistence on full contract compliance

CBCA 3350, 3672, 4658, 4659 79
and completion was a breach of the duty to act in good faith or a failure to cooperate. To the
extent that there were instances in which Mr. Browning was unwilling to waive contract
requirements or was viewed by YDJV as too strict or unbending, we do not find that they rise
to the level of a breach of a duty to cooperate. Mr. Browning was simply attempting, in good
faith, to perform his responsibilities. That another employee might have been more forgiving
or willing to bend does not mean that Mr. Browning acted improperly.
To the extent that YDJV is complaining that there should have been an earlier
substantial completion date – August 30, 2011, instead of October 6, 2011 – we disagree.
Unlike many contracts, the NCC contract expressly defines the meaning of “substantial
completion.” One of those requirements is that, “as determined and certified by the
Contracting Officer or Contracting Officer’s Representative in writing to the Contractor, . . .
the work . . . is sufficiently complete and satisfactory, in accordance with the requirements
of the Contract Documents, that it may be occupied or utilized for the purpose for which it
is intended, and only minor items such as touch-up, adjustments, and minor replacements or
installations remain to be completed or corrected.” Exhibit 1 at 21. Before occupancy could
be achieved, MMRDA had to issue an occupancy certificate,see Tr. Vol. 2 at 282, and that
was not issued until October 5, 2011, the day before the contracting officer declared the
project substantially complete. Although YDJV complains that there were various actions
necessary preceding issuance of an occupancy certificate – obtaining various certificates and
paying various fees – that it blames DOS for not completing in a timely fashion, the P&R and
P&L clauses placed most of those responsibilities on YDJV, and YDJV did not perform
those responsibilities in time to obtain substantial completion by August 30, 2011. Based
upon the timing of when YDJV completed those requirements, along with the deficiencies
that were identified during the first accreditation inspection, we find that DOS was justified
in not finding substantial completion before October 6, 2011.
YDJV generally complains that Mr. Browning was overly difficult throughout the
contract administration process and that his behavior affected the entire project. He was too
persnickety, YDJV says, and made everything more difficult than it needed to be. Again, as
stated above, we do not find his conduct on this project to constitute anything other than a
good faith attempt to exercise his oversight responsibilities properly. He routinely responded
to any request for assistance by YDJV promptly and actively, and he made suggestions and
identified concerns when he foresaw problems on the horizon. That he might not have
waived defects and discrepancies and might have required YDJV and its subcontractors to
follow the rules is not a cause for a breach claim. In any event, YDJV has not tied any
instances in which Mr. Browning was allegedly too strict or unhelpful to any specific delays
in its CPM analysis, meaning that any such instances were not shown to affect the critical
path of contract performance.

CBCA 3350, 3672, 4658, 4659 80
VIII. The Parties’ Challenges to Expert Witnesses
Each of the parties presented the testimony of a scheduling and delay expert – Mr.
Choyce for YDJV, and Mr. Boe for DOS – who had developed, through significant time and
effort, a schedule and delay analysis of the NCC construction project. The reports and
analysis of each expert were extensive, and the Board found the work that each expert
performed helpful in organizing and categorizing the delays that occurred during
performance.
YDJV objects to Mr. Boe’s analysis in its entirety, arguing that his modified method
finds no support in industry standards or literature. Mr. Boe has used what he calls a
“modified contemporaneous period methodology” to assess the causes of and duration of
delays on the project. He defines that method as “an analytical scheduling technique used
to determine the schedule impact of delay-causing events on contract completion,” through
which “delay to the project is measured by examining as-built progress along the critical path
from the previous update (or slice in time) and changes to the critical path forecasted as of
the status date.” Exhibit 12721 at 320. He has asserted that he “modif[ied] the method
somewhat, by placing somewhat more emphasis on measuring the as-built delays.”Id. He
did so, he asserts, because YDJV went through several series of schedules during the course
of the project, some of which were unreliable. Id. at 321. His modification to provide
greater reliance on as-built documentation, he asserts, was an attempt to focus on data with
greater reliability.
We reject YDJV’s challenge to Mr. Boe’s analysis. Both Mr. Choyce, YDJV’s own
expert, and Mr. Boe developed their schedule analyses by reference to the guidance of AACE
International Recommended Practice No. 29R-03 (Apr. 25, 2011) (the RP) applicable to
forensic schedule analysis. Tr. Vol. 12 at 26-28. “The purpose of the AACE International
Recommended Practice 29R-03 Forensic Schedule Analysis is to provide a unifying
reference of basic technical principles and guidelines for the application of [CPM]
scheduling in forensic schedule analysis.” Exhibit 20635 at 23883 (RP No. 29R-03, ¶ 1.1,
at 9). Yet, the AACE recognizes in the RP itself that “[f]orensic scheduling analysis, like
many other technical fields, is both a science and an art,” relying “upon professional
judgment and expert opinion and usually requir[ing] many subjective decisions.”Id. “One
of the most important of these decisions is what technical approach should be used to
measure or quantify delay and identify the effected activities in order to focus on causation,”
and another “is how the analysist should apply the chosen method.”Id. In accordance with
that guidance, the RP makes clear that it is not intended to be, and should not be interpreted
as, a standard of practice that must be blindly applied without accounting for defects in
underlying data or analyzing the appropriateness of following particular strictures:

CBCA 3350, 3672, 4658, 4659 81
This RP is not intended to establish a standard of practice, nor is it intended to
be a prescriptive document applied without exception. Therefore, a departure
from the recommended protocols should not be automatically treated as an
error or a deficiency as long as such departure is based on a conscious and
sound application of schedule analysis principles. As with any other
recommended practice, the RP should be used in conjunction with professional
judgment and knowledge of the subject matter. While the recommended
protocols contained herein are intended to aid the practitioner in creating a
competent work product it may, in some cases, require additional or fewer
steps.
Id.; see Tr. Vol. 12 at 29 (Boe: describing the RP as a “reliable guide” that is “not
prescriptive”). Even YDJV’s expert, Mr. Choyce, agrees that the RP “is not intended to . . .
be a prescriptive document that’s rigidly followed as to every rule.” Tr. Vol. 7 at 259.
“Pursuant to Federal Rule of Evidence 702, so long as ‘scientific, technical, or other
specialized knowledge will help the trier of fact to understand the evidence or to determine
a fact in issue,’ a ‘witness who is qualified as an expert by knowledge, skill, experience,
training, or education may testify in the form of an opinion or otherwise.’”Yates-Desbuild
Joint Venture v. Department of State, CBCA 3350, et al., 15-1 BCA ¶ 35,996, at 175,847.
If an expert’s opinion is to be admitted into evidence and used as a guide by the deciding
tribunal, the expert’s opinion must be credible; to be credible, it must be reliable; and to be
reliable, it must meet the standards of Federal Rule of Evidence 702. Id. at 175,847-48.
Although YDJV asserts that Mr. Boe’s opinions are not credible or reliable because they
depend upon an unrecognized methodology, we find his analysis to be fully compliant with
the guidance of the RP. Although CPM analysis is widely recognized as a useful and
effective tool in evaluating construction schedule delays, it cannot always be applied in a
simple cookie-cutter fashion, especially in projects of great complexity and scope, and it is
not a “magic wand.” Margulies,supra, at 664. A proper CPM analysis requires the
application of an expert’s well-considered judgment in evaluating the logic underlying the
various pieces of information that support the analysis. CPM analyses that are unsupported
by that type of judgment and critical consideration may be suspect or not credible. Id. We
find Mr. Boe’s thorough and thoughtful analysis both credible and helpful.
By contrast, despite the obvious time and effort that he devoted to his analysis, we
find Mr. Choyce’s opinions less helpful, in part because it appears to discount or minimize
the considerable evidence in the record, generated by YDJV itself during contract
performance, that repeatedly indicates YDJV’s frustrations with and difficulties handling and
motivating its subcontractors in India.

CBCA 3350, 3672, 4658, 4659 82
One particular cause of delay obtained short shrift in Mr. Choyce’s analysis – a cause
that, the Board believes, cannot be ignored. A proper schedule analysis must account for all
activities that were necessary to complete the project.Fru-Con Construction Corp., ASBCA
53544, et al., 05-1 BCA ¶ 32,936, at 163,162. On the NCC project, one of the necessary
activities was for YDJV to obtain the police NOC, which YDJV had to obtain before
MMRDA, under its regulations, would issue its FWCC. In his analysis of delays during the
period leading to the FWCC issuances, YDJV’s expert notes the application for the police
NOC as a “dot” on his critical path analysis graphic, recognizing that YDJV applied for it
on June 29, 2007, but without tying it to any of the activities necessary for the FWCC
issuance. Exhibit 30007 at 19. His chart further notes, again through a “dot” that is
untethered from the other activities on the schedule, that the police NOC was received on
August 21, 2007, but his CPM graphic blames the entirety of any delay in obtaining the
FWCC during this period – or, at least, from June 15, 2007, onward – upon the “ongoing tax
issue preventing NOB FWCC.”Id. Yet, without the police NOC, MMRDA could not issue
its FWCC. Even if we agreed with YDJV’s expert that tax issues delayed MMRDA’s
issuance of the NOB FWCC (which we do not) and that DOS bore financial responsible for
that delay, we would still have to account, under a proper CPM analysis, for YDJV’s
concurrent failure to have obtained the police NOC at an earlier date than it did. That is, had
DOS resolved the tax issue that YDJV’s expert asserts precluded YDJV from obtaining the
FWCC earlier than it did, YDJV would still not have been able to obtain the MMRDA
FWCC before (at the earliest) August 21, 2007, because it did not have the police NOC.
Normally, as previously discussed, if there are concurrent delays precluding an
activity, and each party is responsible for one or more of those delays, neither party may
recover damages for that delay unless those delays can be apportioned. William F.
Klingensmith, Inc., 731 F.2d at 809. Had YDJV’s expert acknowledged that the police NOC
was necessary to issuance of the MMRDA FWCC, and that it was YDJV’s responsibility to
obtain the police NOC (which it was under this contract), he could not have found that YDJV
was entitled to 154 days of compensable delay from March 16 through September 30, 2007,
as he did. See Exhibit 30007 at 17. In fact, he could not have found any non-concurrent
compensable delay time for the FWCC delay until some time after the police NOC was
issued on August 21. The willingness of YDJV’s expert to ignore the interplay of a
necessary requirement for FWCC issuance with other activities, and to plot it simply as a
“dot” on a graphic rather than as a necessary contract activity tied into the CPM analysis,
caused us to approach the other parts of his analysis more critically.

CBCA 3350, 3672, 4658, 4659 83
Assignment of Responsibility for Delays
Based upon our findings of fact and our discussion above of several of the main
allegations of delay on the NCC project, we now assign responsibility for delays throughout
this project in each of the periods of performance previously discussed:
Period 1 (Contract Award to September 30, 2007): 362 Days of Delay
A. Period 1A (from Contract Award to March 24, 2007)
As discussed in our findings of fact, the delays to the critical path began soon after
contract performance commenced. YDJV was twenty-five days late in submitting its 35%
design drawings; its permit expediter did not request a permit for temporary structures and
site work until May 11, 2006, and did not obtain it until June 27, 2006; and YDJV did not
begin NOB pilings until August 9, 2006 (rather than the planned start date of June 27, 2006),
and, even then, began that work without having applied for a PCC or a foundations permit.
YDJV does not contest responsibility for delay during these early stages of the project.
After August 9, 2006, though, YDJV attributes at least some of the subsequent delays
during this period, which ends with MMRDA’s issuance on March 24, 2007, of the PCC for
all nine buildings in the NCC complex, as the fault of the Government. Particularly, YDJV
argues that any delay resulting from what it calls the contracting officer’s “stop work” letter
of November 29, 2006, is the Government’s responsibility. We reject YDJV’s position and
place responsibility for delay during this subperiod upon YDJV.
It is clear that YDJV’s problems during this subperiod arose because it hired, through
its subcontractor, a permit handler that did not perform its job properly. That handler,
Vartak, submitted an application for a site work and temporary structures permit in early June
2006, which MMRDA quickly granted, but it inexplicably delayed applying for any further
permits until August 1, 2006, in a submission that was minimalist at best. The application
was unclear as to what type of permit was being sought, although we previously found that
it most likely was intended to constitute a PCC application, and Vartak did not attach to it
the documentation necessary for a PCC. In fact, Vartak failed even to attach Appendix X to
its submission letter, which is the actual formal permit application. Vartak eventually
resigned on November 9, 2006, at YDJV’s request, after having failed to respond to
MMRDA’s request for the missing documentation. YDJV is responsible for its
subcontractor’s failures.
Despite the absence of any permit other than one for site work and temporary
structures, YDJV began to perform foundations construction work, and it was able to move

CBCA 3350, 3672, 4658, 4659 84
the project ahead doing so. Nevertheless, in late November 2006, MMRDA discovered that
YDJV was performing such work without a permit and strongly suggested that YDJV
voluntarily stop and obtain a valid PCC encompassing such work, indicating that, if
MMRDA had to take formal action to end the unauthorized work, MMRDA would have to
impose significant fines. When YDJV ignored that warning, DOS wrote a letter directing
YDJV to comply with the GoI laws and regulations. Although YDJV has argued that this
letter improperly directed YDJV to stop work and that YDJV is entitled to delay or
suspension of work damages for that direction, that letter only directs YDJV to comply with
its contract requirements. Clause C.1.6.1 of the contract made YDJV responsible for
obtaining all necessary permits, Exhibit 2 at 100, and clause H.19 of the contract expressly
made YDJV responsible, “without additional expense to the Government,” for “complying
with all laws, codes, ordinances, and regulations applicable to the performance of the work,
including those of the host country.” Exhibit 1 at 59;see id. at 85 (incorporating similar
requirements of the P&R clause at FAR 52.236-7). The contracting officer’s letter of
November 29, 2006, expressly directs YDJV to stop any construction activities that violate
those contract requirements, without specifying what activities YDJV had to stop (even
though, as we recognize, the contracting officer was strongly suggesting that the NOB plinth
activities should await issuance of a PCC). We do not view a letter insisting that YDJV
comply with its contract obligations as some type of contract change or cause of delay.
YDJV cannot impose financial liability upon DOS for being required to comply with its
contract obligations.
YDJV also argues that it is entitled to delay damages for the period of time that it was
forced to stop work while awaiting a PCC because the GoI’s failure to issue a “foundations
only” permit or conditional approvals of permits allowing for foundation work was a breach
of DOS’s warranty, as set forth in the P&L clause. Although, as we found above, the P&L
clause warranted that the local GoI authorities would issue foundations permits and
conditional approvals allowing for foundation construction, YDJV never submitted a
foundation construction permit request, and it did not request conditional approval allowing
for foundation work until February 15, 2007. MMRDA granted that approval nineteen days
later, a time lag that we do not view as unreasonable in the circumstances here. As we found
above, the warranty was not self-executing, but required action by YDJV before the GoI was
required to provide conditional approvals. Having failed to undertake that action in a timely
manner, it cannot pass liability for the absence of conditional approvals or a lack of a
“foundations only” permit onto DOS for this period of delay. YDJV’s problems during this
subperiod were of its own making.33
33 YDJV was able to mitigate some of the delay that would have resulted from its
failure timely to obtain a PCC by performing work without the PCC, technically in violation

CBCA 3350, 3672, 4658, 4659 85
In addition, despite YDJV’s attempts to establish otherwise, it is clear that the delays
in obtaining the PCC during this subperiod had nothing to do with the property tax issues
discussed in section II of our findings of fact. Exhibit 22023 at 33729; Exhibit 22277 at 92.
YDJV presented no evidence that MCGM had discussed the tax issue with MMRDA at this
point, and there is no evidence that MMRDA was somehow intentionally delaying the permit
review process. Accordingly, although, as we have found, DOS is responsible for any delays
caused by its withholding of superior knowledge about the likelihood that the GoI would
attempt to tie ongoing tax disputes to the issuance of permits, that issue did not cause delays
during this subperiod.
B. Period 1B (from March 25 to September 30, 2007)
During this subperiod, which commences with MMRDA’s issuance of the PCC and
YDJV’s first slab pour at the NOB, YDJV began working to construct the plinths for various
buildings – particularly the NOB, which was on the critical path, and the warehouse – and
to obtain a FWCC for the critical path NOB. Before Design Cell could submit the NOB
FWCC application, YDJV had to complete the NOB plinth and obtain a joint inspection (and
approval) of the plinth from MMRDA and MCGM. Construction of the plinth was delayed
by the slow performance of YDJV’s subcontractor, L&T. Design Cell submitted the joint
plinth inspection request on July 4, 2007, but, because of an error in the submission, had to
resubmit the request on July 20, 2007. MMRDA and MCGM inspected both the NOB and
the warehouse plinths on July 30, 2007, a period of time within the fourteen-day period
provided by local GoI regulations. Design Cell then submitted the NOB FWCC application
on August 2, 2007. To the extent that there were delays in Design Cell’s ability to submit
the NOB FWCC application, they were not caused by DOS, which was working to assist
YDJV in ensuring that the drawings to be submitted with the application were correct and
appropriate. After the August 2 submission, Design Cell had to submit revised drawings, as
well as pay a development fee (which occurred on August 22, 2007) and submit missing
NOCs (the last of which (the police NOC) was submitted to MMRDA on August 24, 2007),
and the MMRDA issued its FWCC on September 6, 2007.
of local Mumbai government requirements, and that illegal work benefited the construction
schedule. Tr. Vol. 1 at 81-82. Nevertheless, to the extent that OBO sometimes turned a
blind eye to what YDJV was doing (that is, performing plinth work without a PCC) or even,
at times, may have encouraged it (through the actions of an OBO employee pushing YDJV
to perform), that did not somehow waive OBO’s right to insist that YDJV comply with local
permitting laws. YDJV’s contract required it to comply with such laws.

CBCA 3350, 3672, 4658, 4659 86
YDJV argues that the tax disputes between the GoI and the USG caused the local GoI
authorities to delay action on the FWCC application. It is true, as we have previously
discussed, that there were indications from lower-level employees within MCGM during this
subperiod that tax issues would preclude issuance of the MCGM FWCC for the NOB, but
those representations were overridden by the MCGM Commissioner, who made clear that
MCGM was not, at that time, going to stall the NCC project based upon the outstanding tax
disputes. Nevertheless, there was potentially one slight delay in the NOB FWCC issuance
caused by the tax dispute: after MMRDA issued its FWCC on September 6, MCGM
employees initially declined to issue the MCGM FWCC (a necessary prerequisite to
performing NOB structural work) because there was no tax NOC. Apparently, the lower-
level employees were unaware of the MCGM Commissioner’s direction to the contrary. That
FWCC was finally issued, after the MCGM Commissioner intervened, on September 28,
2007. DOS’s expert witness attributes thirteen days of compensatory delay to the MCGM
lower-level employees’ initial refusal to issue the MCGM FWCC, but DOS argues that the
time between the issuance of the MMRDA and MCGM FWCCs – a period of only
twenty-two days (from September 6 to 28) – is reasonable and should not be viewed as a
delay at all. In other circumstances, we might find a twenty-two-day period for an agency’s
review and action upon an application to be reasonable. Here, though, MCGM employees
admitted that they delayed issuing the FWCC because of the tax dispute and the absence of
a tax NOC, and the MCGM FWCC was to be issued expeditiously – presumably, within a
couple of days after MMRDA issued its FWCC. We have attributed any delays arising from
the tax disputes to DOS, in light of its failure to disclose its superior knowledge about the
tax/permit linkage prior to contract award. In the circumstances here, assuming that the
MCGM employees should have issued the MCGM FWCC within two rather than twenty-two
days, we grant YDJV twenty days of compensable delay arising from MCGM employees’
failure to abide by their Commissioner’s direction, a delay associated with the tax disputes
that DOS failed to disclose prior to award.
YDJV argues that DOS caused additional delay throughout the period leading to
issuance of the first FWCC – the MMRDA FWCC – because DOS did not apply for and
obtain a police NOC in a timely manner. As we discussed above, it was YDJV’s obligation
to apply for and obtain the police NOC, and YDJV could not obtain the MMRDA FWCC
without it. Design Cell delayed submitting the documentation necessary for obtaining the
police NOC until July 5, 2007, and did not receive it until August 22, 2007. Any delays in
applying for that NOC and in obtaining it fall upon YDJV. Even if DOS had been
responsible for other delays leading to the issuance of the September 6 MMRDA FWCC,
YDJV would have been concurrently responsible for the delays in obtaining the police NOC.
To the extent that YDJV is arguing that tax disputes delayed the police NOC, there is no
viable evidence to support YDJV’s argument. To the extent that YDJV is arguing that OBO
breached its duty of good faith and fair dealing in failing sufficiently to assist it in obtaining

CBCA 3350, 3672, 4658, 4659 87
the police NOC, we disagree, as OBO did everything that was asked of it and acted
affirmatively to assist in having the police commissioner expedite issuance of the certificate.
YDJV cannot blame DOS for the late police NOC.
We find that, of the 362 days of delay during the period from contract award to
September 30, 2007, responsibility for 340 of those days falls upon YDJV. We find twenty
days of compensable delay based upon MCGM employees delaying issuance of the MCGM
FWCC prior to September 28, 2007, and two days of excusable delay during the period for
flooding.
Period 2 (September 30, 2007, to April 1, 2008): 12 Days of Delay
As previously found, the critical path at this time revolved around the installation of
vertical structural concrete at the NOB. YDJV’s subcontractor, L&T, was tasked with
performing that work, but failed to maintain the schedule that YDJV had planned. There
were forty-nine days of delay to the concrete activities at the NOB, but, by starting NOB
finish work earlier than originally scheduled, YDJV recovered thirty-seven days of that delay.
Ultimately, then, there were twelve days of delay to the critical path of the project. YDJV
bears responsibility for those delays. Although YDJV attributes this delay to manpower
issues that were affected by a construction boom in Mumbai, we have rejected that argument.
To the extent that the delay in issuance of the NOB FWCC “prevented a timely ramp-up of
the concrete workforce,” as YDJV alleges, Appellant’s Post-Hearing Brief at 59, very little
of the Period 1 delay (only twenty of the 362 delay days) is attributable to DOS.
At the same time that L&T was having performance problems, however, the linkage
between GoI/USG tax disputes and the GoI’s issuance of permits was becoming a bigger
political issue. On October 1, 2007, CG Owen had written to the state government asking
for assistance because the local GoI authorities were threatening to defer issuance of further
permits. YDJV requested plinth inspections for three buildings – the warehouse (for a
second time), the GSO, and the CG residence – on December 27, 2007, but the inspections
did not happen before, on February 12, 2008, the MCGM Commissioner announced that
there would be no more permits issued until tax issues were resolved. CG Owen was able
to negotiate a resolution on February 14 through which the requested plinth inspections
would happen (as they did on February 18), with FWCCs to follow, but with direction that,
if the tax disputes were not resolved swiftly, the FWCCs would be rescinded. By the end of
this period (April 1, 2008), the FWCCs had not yet been issued.
Although the delayed plinth inspections and FWCCs clearly caused delays to these
three outbuildings during this period, none of them were on the critical path during this
period. “If the concurrent delays affected only work that was not in the critical path, . . . they

CBCA 3350, 3672, 4658, 4659 88
are not delays within the meaning of the rule since timely completion of the contract was not
thereby prevented.”Santa Fe, Inc., VABCA 1943, et al., 84-2 BCA ¶ 17,341, at 86,410
(quoting Fischbach & Moore International Corp., ASBCA 18146, 77-1 BCA ¶ 12,300, at
59,224).
Nevertheless, in March 2009, the contracting officer issued contract modification no.
M026, granting YDJV a seventy-day time extension for excusable delay to these outbuildings
resulting from these tax issues,see Exhibit 264, and “[w]e may not assume that the post hoc
extension was some sort of gratuity.”Norair Engineering Corp. v. United States, 666 F.2d
546, 548 (Ct. Cl. 1981). We apply twelve days of the grant of excusable delay from contract
modification no. M026 to this period (and will apply the remaining fifty-eight days in the
next period). This excusable delay is concurrent with the twelve days of delay for which
YDJV is responsible. Because a period of contractor-caused delay is simultaneous with a
period of excusable delay, “there are said to be concurrent delays, and the result is an
excusable but not compensable delay.”Morganti National, Inc. v. United States, 49 Fed. Cl.
110, 132 (2001) (quoting Utley-James, Inc., GSBCA 5370, 85-1 BCA ¶ 17,816, at 89,109,
aff’d, 14 Cl. Ct. 604 (1988)), aff’d, 36 F. App’x 452 (Fed. Cir. 2002). Accordingly, the
twelve days of delay during this period, even though concurrently caused by L&T’s slow
performance, are excusable.
Period 3 (April 1, 2008, to November 1, 2009): 391 Days of Delay
During this 579-day period, YDJV experienced 391 days of delay, losing four days
of every six-day work week. During the seven-month period from April to November 2008,
NOB MEP activities lost almost five months of time, and YDJV fell another eight months
behind over the course of the next eleven months. As previously discussed, the cause of
most of this delay, particularly for work at the NOB, was the poor performance of YDJV’s
subcontractor. Although YDJV has argued that the delay was caused by an unexpected
construction boom in Mumbai, which created a severe local labor shortage, we have, as
previously discussed, rejected that argument.
Nevertheless, the tax dispute with the GoI caused significant concurrent delays during
this period relating to the outbuildings. As previously discussed, the contracting officer
granted YDJV seventy days of excusable delay to the outbuildings through contract
modification no. M026, fifty-eight days of which we apply in this period. It was not until
May 6, 2008, that YDJV was able to obtain the FWCCs for the GSO, the warehouse, and the
CG residence, a period of seventy-eight days after the plinth inspections for those buildings.
That delay resulted in large part because lower-level employees within MMRDA and MCGM
were not made aware of the change in direction that had been ordered. Although
construction began on these buildings, the warehouse was not sufficiently complete, such that

CBCA 3350, 3672, 4658, 4659 89
YDJV could use it for on-site storage of supplies and materials, until September 29, 2008.
Because the on-site warehouse was unavailable, YDJV had to use off-site storage far from
the NCC site, adding significant travel time each work day to allow for delivery (and return
travel for storage) of supplies and materials. That delay ran from early April to late
September 2008 and sufficiently impacted activities on the critical path to constitute
compensable delay. We find that YDJV is entitled to a total of 100 days of delay associated
with the warehouse (inclusive of the fifty-eight days of excusable delay that the contracting
officer previously granted). These days would be compensable but for the fact that they are
wholly concurrent with YDJV’s own delays to the critical path NOB work during the same
period.
Further, as discussed in our findings of fact, there was a new direction from MEA on
June 27, 2008, to the local Mumbai authorities not to issue any further permits without
MEA’s concurrence, pending resolution of the outstanding tax disputes. At that point, the
only building that still needed a FWCC was the MCAC. Nevertheless, the MCAC plinth was
not ready for inspection until December 17, 2008. At that point, MMRDA and MCGM
declined to conduct a joint plinth inspection, meaning that YDJV could not obtain a FWCC
for the MCAC. Only after the tax dispute was resolved, with the Secretary of State issuing
a public notice on June 23, 2009, designating the GoI’s New York property as tax exempt
pursuant to the Vienna Convention, did MMRDA and MCGM agree to conduct the plinth
inspection. That inspection occurred on July 7, 2009, and the FWCC for the MCAC was
issued on August 12, 2009. The MCAC was either on or extremely close to the critical path
from late December 2008 until the MCAC FWCC was issued in August 2009. Through
contract modification no. M034, dated March 11, 2009, the contracting officer, David
Vivian, granted YDJV compensable time of twenty days for the MCAC delay. Exhibit 273;
Tr. Vol. 11 at 121-22. Like DOS’s expert, Mr. Boe, we accept the contracting officer’s
finding of twenty days of compensable delay, but add an additional 217 days (representing
the remaining period from December 17, 2008, to August 12, 2009) of delay resulting from
that refusal to inspect, which was the result of the tax/permit linkage that DOS had failed to
disclose to YDJV prior to award. This 217-day delay, for which we hold DOS responsible
under the superior knowledge doctrine, would be compensable but for the fact that YDJV
was concurrently responsible for delay on the critical path work at the NOB.
In addition, in contract modification no. M022, the contracting officer granted three
days of excusable delay beginning November 27, 2008, arising out of terrorist attacks in
Mumbai, which we credit to this period. See Exhibit 259.
In summary, we find that YDJV is entitled to twenty days of compensable delay in this
period, 337 days of concurrent delay (100 days for warehouse delays and 237 days for the
MCAC delays, inclusive of the excusable delay days that the contracting officer granted

CBCA 3350, 3672, 4658, 4659 90
through modification no. M026), and three days of excusable delay resulting from the
terrorist attacks. YDJV is responsible for thirty-one days of non-concurrent unexcused delay.
Period 4 (November 1, 2009, to August 1, 2010): 205 Days of Delay
On October 31, 2009, the GoI changed its visa policy and forced virtually all of
YDJV’s CAWs out of the country, requiring them to apply for new visas (under a new visa
category) while stationed in their home countries. As discussed above, the GoI’s direction
is an act of the host country government in its sovereign capacity, and any resulting delay is
excusable under clause F.9 and FAR 52.249-10(b)(1). This direction seriously disrupted
YDJV’s work, including the critical path NOB MEP work, and, for the period from October
31, 2009, to January 6, 2010, we find YDJV entitled to fifty-nine days of excusable delay.
YDJV argues that this delay should be compensable, rather than merely excusable,
because DOS’s earlier delays pushed YDJV’s work into this time period (when it otherwise
would have been finished with the contract). Although it is possible that the Government can
become financially responsible for pushing a contractor into a period of excusable delay
(typically seen where a Government-caused delay pushes work into a period of extended
adverse weather),see John Cibinic, Jr., James F. Nagle & Ralph C. Nash, Jr.,Administration
of Government Contracts498-99 (5th ed. 2016), we reject YDJV’s argument here. Although
DOS may have been concurrently responsible for some of the delays preceding the GoI’s
order regarding visas, YDJV is equally responsible for concurrent delays and is primarily
responsible for other delays that pushed its work into this period.34
For the period from January 6 to August 1, 2010, the primary causes of YDJV’s delays
were subcontractor performance issues and materials shortages. Although YDJV complains
that one of YDJV’s subcontractors, American Systems, was having extreme difficulty
obtaining visas for its workers, the record makes clear that American Systems was not
actually applying for worker visas in a reasonable manner (waiting more than two months
after visa applications were denied before submitting new applications) and that its failure
to staff a crew of six CAWs, as originally planned, was because it had trouble recruiting
individuals who were willing to work in India at whatever salary American Systems was
offering. The failure to take reasonable action to obtain visas for necessary workers in
response to the GoI’s direction on visas constitutes a failure to mitigate, which limits YDJV’s
34 That being said, we also reject DOS’s request, in footnote 141 of its post-hearing
brief, that we charge YDJV with financial responsibility for these excusable delays because
YDJV pushed work into Period 4. DOS shares enough responsibility for concurrent delays
to undermine the factual basis for its request.

CBCA 3350, 3672, 4658, 4659 91
ability to claim excusable delay.Midwest Industrial Painting, 4 Cl. Ct. at 133. We find that
continuing visa problems, outside the control of YDJV and its subcontractors, impacted the
critical path by sixty days between January 6 and August 1, entitling YDJV to an additional
sixty days of excusable delay, which, combined with the 59 days of excusable delay that we
found above from November 1, 2009, to January 6, 2010, entitles YDJV to a total of 119
days of excusable delay during Period 4. YDJV must bear responsibility for the remaining
eighty-six days of unexcused delay during Period 4.35
Period 5 (August 1, 2010, to January 31, 2011): 162 Days of Delay
During this period, the critical work necessary to drive contract performance was
telecom work at the NOB. The fault for the delays to the critical path during this period falls
upon YDJV and its subcontractors, which were slowed by, among other things, disputes
about who was responsible for damaged materials and who was responsible for what work.
YDJV cannot attribute the delay during this period to DOS, and the 162 days of delay here
are unexcused.
Period 6 (February 1, 2011, to October 6, 2011): 167 Days of Delay
This period involves delays in the commencement of the accreditation process and the
designation by the contracting officer of substantial completion of the project. As discussed
in our findings of fact, accreditation was delayed by the poor performance of YDJV’s
subcontractors and by YDJV’s inability to motivate them to complete the job. In fact, during
this period, YDJV terminated one of its subcontractors, L&T, which promptly filed a lawsuit
in the Mumbai court and obtained a “stop work” order against YDJV for any work covered
by L&T’s subcontract. As discussed above, YDJV has not established the factual
underpinnings to render any delay caused by the stop work order excusable. Nevertheless,
DOS is responsible for forty-two days of concurrent delay during this period resulting from
problems obtaining visas for its inspection team.
35 Having found that DOS is not responsible for the GoI’s change in visa policy, we
reject YDJV’s labor inefficiency claim arising out of that policy change.

CBCA 3350, 3672, 4658, 4659 92
We summarize the totality of our findings regarding responsibility for delays on the
NCC project in the chart below:
Delay (Calendar Days)
Period Total Compensable
(DOS Responsible)
Excusable
Or Concurrent
Unexcused
(YDJV Responsible)
1 362 20 2 340
2 12 0 12 0
3 391 20 340 31
4 205 0 119 86
5 162 0 0 162
6 167 0 42 125
TOTALS 1299 40 515 744
Damages for Delay
As indicated above, we find that YDJV is entitled to forty days of compensable delay,
plus an additional 515 days of excusable (but not compensable) delay, but is responsible for
744 days of unexcused delay. We now must assess and allocate damages for these delay
days.
DOS’s damages are easy to compute. The contract here contains a liquidated damages
provision allowing DOS to assess damages of $9481 for each day of contractor-responsible
delay, which is the amount that the contracting officer used in imposing such damages in his
decision of February 21, 2013. Other than through its argument that DOS’s withholding of
superior knowledge should bar any award to DOS, an argument that we rejected above,
YDJV has not challenged the enforceability of the liquidated damages provision.
Accordingly, we can award liquidated damages by multiplying $9481 by the number of delay
days for which DOS is entitled to compensation. See Wadena Sheet Metal & Heating ,
GSBCA 2313, 67-1 BCA ¶ 6266, at 29,006 (“where a contract contains a provision for
liquidated damages for delay, such as the one involved here, it is not necessary for the
Government to prove or even allege any damage or loss under such a provision”). Because
liquidated damages are not available for periods of concurrent or excusable delay, Ace
Constructors, Inc. v. United States , 70 Fed. Cl. 253, 293-94 (2006), aff’d, 499 F.3d 1357

CBCA 3350, 3672, 4658, 4659 93
(Fed. Cir. 2007), we would normally apply the $9481 figure to the 744 days of YDJV’s
unexcused delay to identify DOS’s liquidated damages award.
We have to offset that amount by the forty days of compensable delay to which YDJV
is entitled. Defining the amount of that offset is more cumbersome. It is clear that YDJV
is entitled to compensation for non-concurrent delays for which DOS is responsible that were
sequential to, but separate and apart in terms of timing (and capable of being apportioned)
from, YDJV-caused delays. See R.P. Wallace, Inc. v. United States, 63 Fed. Cl. 402, 409-10
(2004) (sequential delay occurs “where one party and then the other cause different delays
seriatim or intermittently,” but not at the same time). Generally, it is the contractor’s burden
“to provide a basis for making a reasonably correct approximation of the damages which
arose” from delays for which the Government is financially responsible. Wunderlich
Contracting Co. v. United States , 351 F.2d 956, 969 (Ct. Cl. 1965). Unlike the liquidated
damages provision upon which the Government can rely, there is no provision in the contract
here that defines exactly what “daily rate” the Board should apply as a means of awarding
YDJV damages for its days of compensable delay or precisely how YDJV’s damages should
be measured.
In their post-hearing briefs and through testimony at the hearing (particularly that of
the parties’ damages experts, Theodore E. Needham III (presented by YDJV) and Robert
Peterson (presented by DOS)), YDJV has identified and DOS has responded to numerous
claimed costs, broken into categories, that YDJV allegedly incurred because of project
delays, including, among others, Yates’ supervisory labor costs, Desbuild’s supervisorylabor
costs, Yates’ executive supervision costs, subcontractor costs, increased workers’
compensation insurance costs, other insurance costs, Yates’ extended general conditions
costs, Desbuild’s general conditions costs, and extended outside professional services costs.
YDJV has divided each of these costs into daily rates (some of which vary depending upon
the project time period at issue). DOS has stipulated to the amount of some of the costs, but
has objected to and is litigating either the manner of calculation or the cost support in other
categories.
It is less than clear to the Board from the parties’ submissions exactly how much
YDJV is seeking, in total, for each period of delay. There are multiple daily rates that the
Board apparently is expected to locate, evaluate, and piece together into a comprehensive
damages award, and the amount of each rate may change depending upon the time period for
which the costs are being claimed. In its briefing, YDJV has identified and discussed lots
of pieces to its multitude of daily rates, but it never completely puts them together, leaving
the Board to guess at whether the Board has identified all of the delay costs that YDJV seeks
in a particular period.

CBCA 3350, 3672, 4658, 4659 94
In these circumstances, we believe that, rather than attempting to construct a total
daily rate for each of the periods in which YDJV was granted some compensable delay, the
most appropriate means of addressing YDJV’s compensation is to deduct the forty days of
YDJV’s compensable delay from the 744 days of liquidated damages to which DOS is
entitled. From the record, it appears that YDJV’s daily rates, when totaled, at least somewhat
approximate the $9481 figure in the liquidated damages claim. Even though the forty days
of compensable delay are sequential to, rather than concurrent with, unexcused delay days,
we believe it most appropriate in the circumstances here to reduce DOS’s compensable
liquidated damages award by those forty days, for a total of 704 days.
We award DOS liquidated damages covering 704 days, totaling $6,674,624, plus
interest consistent with the requirements of FAR 52.232-17, which is incorporated into this
contract. See Exhibit 1 at 11;see also Advanced Injection Molding, Inc. v. General Services
Administration, GSBCA 16504-R, 05-2 BCA ¶ 33,097, at 164,064 (discussing manner in
which interest is applied on government claims). In a post-hearing joint stipulation, the
parties agreed that DOS retained $4,720,366.10 from YDJV’s final contract balance payment
to account for DOS’s liquidated damages assessment. That amount, which DOS may retain,
should be deducted from what YDJV must affirmatively pay and from the calculation of
interest.
The Parties’ Direct Cost Claims
I. YDJV Claims
A. Consultant and Legal Costs Claim (CBCA 3350)
1. Entitlement
In and among the costs listed in its original delay claim (CBCA 3350) that were to be
included in daily rates for any days of delay for which YDJV wanted to be compensated,
YDJV listed several costs that, rather than constituting a part of its daily rates, appear to have
been set forth as direct cost claims. One of those was YDJV’s claim for costs that it incurred
in attempting to negotiate through mediation a settlement of this matter during contract
performance, as well as the costs that it incurred in preparing its original REA, which was
later converted into a claim. We say that YDJV “appears” to address this issue as a direct
cost claim because YDJV’s briefing on this issue is sparse, and the claim was barely
mentioned during the hearing. Its consultant and legal costs claim is simply in a chart along
with, and not differentiated from, the costs that it includes in the daily rates for its delay
claim, and, in its pre- and post-hearing briefing, it does not differentiate whether this claim
is for inclusion in a daily rate or is a direct cost claim. We had to look to YDJV’s certified

CBCA 3350, 3672, 4658, 4659 95
cost claim, which it submitted on August 30, 2012, to see that YDJV did not break its
consultant and legal costs down into a daily rate, but set it forth as a single direct cost.
Exhibit 22081 at 39305. We treat it as such here.
“[C]onsultant costs” and legal fees “incurred by a contractor in connection with
negotiations relating to the additional compensation to which the contractor was entitled by
reason of government-caused delay of the job [are] allowable as contract administration
costs, even [if] the negotiations eventually failed.”Tip Top Construction, Inc. v. Donahoe,
695 F.3d 1276, 1281 (Fed. Cir. 2012) (citing Bill Strong Enterprises, Inc. v. Shannon , 49
F.3d 1541, 1550 (Fed. Cir. 1995), overruled in part on other grounds by Reflectone, Inc. v.
Dalton, 60 F.3d 1572, 1579 & n.10 (Fed. Cir. 1995) (en banc)). Such costs remain
recoverable so long as the contractor is incurring them “for the genuine purpose of materially
furthering the negotiation process.”Bill Strong Enterprises , 49 F.3d at 1550; see Foxy
Construction, LLC v. Department of Agriculture , CBCA 5632, 17-1 BCA ¶ 36,687, at
178,628 (“the contractor is entitled to pursue negotiation before submitting a formal claim
and to treat the costs that it incurs in that negotiation process as contract administration
costs”). This typically includes REA preparation costs if the REA is not submitted as a
“claim” upon which the contractor is seeking a decision.See Moshe Safdie & Associates,
Inc. v. General Services Administration, CBCA 1849, et al., 14-1 BCA ¶ 35,564, at 174,304.
Once the contractor’s primary purpose becomes an effort “to promote the prosecution of a
CDA claim against the Government,” any subsequently incurred costs are considered claim
prosecution costs, which are not recoverable.Bill Strong Enterprises, 49 F.3d at 1550 (citing
FAR 31.205-33). Classifying a cost as either a contract administration cost or a cost
incidental to claim prosecution requires the Board to “examine the objective reason why the
contractor incurred the cost.”Id.
The consultant and legal costs that YDJV seeks, totaling $385,463, were incurred
between February 2007 and April 2012. See Exhibit 40009. In its pre-hearing brief, YDJV
states that these costs were incurred “in preparing a request for equitable adjustment.”
Appellant’s Pre-Hearing Brief at 87. Yet, reviewing the invoices that YDJV submitted in
support of the claim, it is clear that some of the costs – particularly the legal fees – were
incurred for other reasons, including dealing with general contract administration matters
rather than in preparing to negotiate with the Government. For its part, DOS does not dispute
that costs incurred in furtherance of a mediation in which the parties participated from March
through December 2010 are recoverable as contract administration costs, but asserts that
costs incurred after December 2010 could not have been for the purpose of negotiation
because there were no further efforts after that point by YDJV to resolve the parties’ disputes
amicably. DOS argues that, although YDJV prepared and submitted what it titled an REA

CBCA 3350, 3672, 4658, 4659 96
in April 2012, after contract performance was complete, 36 YDJV converted that REA into
a certified claim on August 30, 2012, before the contracting officer could respond to the REA
and without ever contacting DOS to attempt to discuss or negotiate the REA. According to
DOS, YDJV’s efforts after December 2010 were not legitimate efforts to negotiate and do
not satisfy the definition of recoverable contract administration costs.
YDJV argues in response to DOS’s challenge that, because DOS stipulated to the fact
that $385,463 in consulting and legal costs were incurred, “it is improper to challenge those
costs” now “as it undermines the stipulation process.” Appellant’s Post-Hearing Reply Brief
at 74. We reject YDJV’s argument. DOS only stipulated to theamount of the claimed costs
and the fact that YDJV incurred them, eliminating YDJV’s obligation to provide cost support
for the claim at the hearing. DOS did not stipulate that the costs were something other than
claim prosecution costs or that YDJV was legally entitled to recover them. The burden of
proving the recoverability of its claimed contract administration costs remains on the
contractor. See Southwest Marine, Inc., DOT BCA 1665, 96-1 BCA ¶ 28,168, at 140,595
(“Appellant shoulders the burden of proving its entitlement to REA preparation expenses.”).
Although the evidence in the record on this claim is very thin, DOS has stipulated in
its post-hearing brief that at least $319,979.93, the amount incurred prior to December 2010,
is recoverable. Respondent’s Post-Hearing Brief at 227 & n.219. It argues against recovery
of any post-2010 costs by stating that, in preparing its REA, YDJV must have been intending
to prosecute a claim because the parties’ prior mediation efforts had ended without success.
With some hesitancy, we reject DOS’s argument. YDJV submitted its April 2012 REA
without a claim certification and without requesting a contracting officer’s decision,
indicating that it was not intending to submit a claim at that time. We recognize that, in the
206-page REA itself, YDJV never expressly requested or even suggested negotiation
between the parties, but merely stated that the majority of the project delays were DOS’s
responsibility, that YDJV was entitled to 868 days of compensable delay and 112 days of
excusable delay, and that YDJV would “address its damages in a separate document.”
Exhibit 463 at 8113. That “separate document” was ultimately submitted on August 30,
2012, with a request for a contracting officer’s decision and a certification converting the
REA into a claim. Exhibit 22081. Although there is some question about YDJV’s intentions
when submitting the REA in April 2012, and despite the paucity of evidence that YDJV
submitted on this point (including the complete absence of any testimony at the hearing about
36 There is no reason that a contractor cannot submit an REA, for purposes of
negotiation and as an administrative matter that benefits the contract purpose, after contract
performance is complete. Ahtna Environmental, Inc. v. Department of Transportation ,
CBCA 5456, 17-1 BCA ¶ 36,600, at 178,308 n.3 (2016).

CBCA 3350, 3672, 4658, 4659 97
YDJV’s motivations in preparing and submitting an REA rather than a claim), we find it
more likely than not that the REA was prepared with the intention of reopening negotiations,
making its consultant costs incurred up until April 2012 potentially recoverable.
Having reviewed the invoices that YDJV included in the record to support this claim,
we find that some of the legal fee invoices evidence general work on contract performance
issues, rather than on development of negotiation positions with DOS, and that a $265
consultant invoice from September 2011 deals with an arbitration with a YDJV
subcontractor, L&T. Such costs are, at best, considered to be the costs of performing a fixed-
price contract, which are not recoverable as the direct costs resulting from a change under
the rationale of Bill Strong. See Viacom, Inc. v. United States, 70 Fed. Cl. 649, 660 (2006)
(absent a contract change or breach, “[f]irm-fixed-price contracts do not ordinarily involve
any direct cost-reimbursement”);Marcel Watch Corp., GSBCA 3558-R, 72-2 BCA ¶ 9747,
at 45,548 (the Board has no authority “to direct an adjustment in a fixed price contract to
cover . . . increased cost[s]” absent a Government-caused change or suspension of work).
We reduce YDJV’s claim by $4750 to account for costs not shown by the invoices to be
associated with YDJV’s efforts to negotiate with DOS a resolution of the parties’ disputes.
YDJV’s direct cost award for its consultant and legal costs is $380,713.
2. Overhead Markup
YDJV seeks to apply two markups to the costs that it incurred in preparing its REA
and negotiating with the Government. First, it seeks to apply a corporate overhead markup
of 6%.37 Second, it seeks to apply a profit markup of 13.5% on its costs and overhead. DOS
has not directly addressed whether such markups should apply to an REA preparation and
negotiation claim, but it argues generally that, if they are added, rates of 3.76% and 10% are
more appropriate.
With regard to the corporate overhead markup, the Board has previously applied an
overhead markup to this type of contract administration cost,see Moshe Safdie & Associates,
37 To the extent that there are other overhead costs identified in its claim that it might
have attempted to add as a markup to its consultant and legal costs award, YDJV has waived
them. YDJV’s briefing on this claim is minimal, and we have had difficulty understanding
exactly what it seeks in addition to its direct costs. We extracted YDJV’s request to add the
corporate overhead markup from its original August 30, 2012, claim. If YDJV attempted to
seek any other overhead markups in its briefing to the Board, we were unable to identify
them. Even in YDJV’s August 2012 claim submission, we could not see any explicit or
implicit request to add any other overhead markups to the consultant and legal costs claim.

CBCA 3350, 3672, 4658, 4659 98
14-1 BCA at 174,303-04, and we see no reason not to apply overhead to these contract
administration costs. See Optimum Services, Inc., ASBCA 59952, 16-1 BCA ¶ 36,490, at
177,826 (applying overhead markup to REA preparation costs); C.H. Hyperbarics, Inc. ,
ASBCA 49375, et al., 04-1 BCA ¶ 32,568, at 161,161 (same). Without disparaging the valid
concerns that DOS has raised about YDJV’s 6% figure (including the absence of any actual
cost data showing that YDJV incurs corporate overhead costs at that level), we accept
YDJV’s use of a 6% overhead rate. YDJV based its final proposal on a 6.8% overhead
markup, and the parties routinely used a 6% overhead markup in negotiated change orders.
3. Profit Markup
With regard to the profit markup, profit is traditionally added to an equitable
adjustment as “a reasonable and customary allowance.”United States v. Callahan Walker
Construction Co., 317 U.S. 56, 61 (1942);see Structural Services, HUD BCA 81-582-C18,
82-2 BCA ¶ 15,890, at 78,804 (“An equitable adjustment . . . for excusable delay by
definition includes the contractor’s profit and overhead expense incurred as a result of the
increased work.”). Tribunals, including this one, have added profit to awards of costs
incurred in preparing and negotiating REAs. See, e.g., Optimum Services, 16-1 BCA at
177,826; Moshe Safdie & Associates , 14-1 BCA at 174,303, 174,308; C.H. Hyperbarics,
04-1 BCA at 161,161; Unarco Material Handling, PSBCA 4100, 00-1 BCA ¶ 30,682, at
151,526 (1999).
In defining the amount of the profit markup, the Board “is not delegated uncontrolled
discretion,” but must attempt to “apply guidelines prescribed by authority” in applicable
regulations “to determine reasonableness of profit.”Newport News Shipbuilding & Dry
Dock Co. v. United States, 374 F.2d 516, 530 (Ct. Cl. 1967). The regulation applicable here
provides that, “[i]f a change or modification calls for essentially the same type and mix of
work as the basic contract and is of relatively small dollar value compared to the total
contract value, the contracting officer may,” but is not required to, “use the basic contract’s
profit or fee rate as the prenegotiation objective for that change or modification.” 48 CFR
15.404-4(c)(6). Nevertheless, it also directs agencies to use a “structured approach” when
analyzing and negotiating the profit to be applied to an equitable adjustment, id.
15.404-4(c)(2), and DOS’s policy, as set forth by regulation, is to use the structured approach
for profit/fee analysis that was contained in the Department of Health and Human Services
(HHS) FAR Supplement at the time this contract was awarded.Id. 615.404-4(b)(2). Under
HHS Form 674, “Structured Approach Profit/Fee Objective,”38 the agency considers various
38 HHS deleted any reference to Form HHS 674 from its FAR Supplement in 2015,
see 80 Fed. Reg. 72150, 72187 (Nov. 18, 2015); 80 Fed. Reg. 11266, 11272 (Mar. 2, 2015),

CBCA 3350, 3672, 4658, 4659 99
cost factors and objectives, weight ranges, and assigned weights in creating its ultimate
weighted profit/fee objective. 49 Fed. Reg. 13960, 14047 (Apr. 9, 1984).
In this instance, although YDJV applied a profit rate of approximately 13.8% in
developing its original contract proposal, every modification to which the parties agreed
during contract performance provided for a profit rate of only 10%. “If the contract neither
establishes nor precludes a rate for profit, the parties’ rate for change orders may be relevant,
as contemporaneous conduct establishing a reasonable rate.” John Cibinic, Jr. & Herman M.
Braude, “Cost Recovery & Major Pricing Elements,”in Construction Contracting 685, 764
(1991). Further, “[a] ten percent profit factor usually has been accepted by the boards and
courts as the standard in the construction industry.”Id. (citing cases); see 2 Ralph C. Nash,
Jr. & Steven W. Feldman, Government Contract Changes § 16:21, at 31-32 (3d ed. 2007)
(10% is the typical profit rate that tribunals apply in resolving disputes). In deciding to
request a 13.5% markup here, YDJV did not apply or address the HHS weighted approach,
and it did not explain why it agreed to 10% markups throughout contract performance. In
addition, if the work being compensated through a change is less demanding or involves a
lesser risk than the original contract work, the awarded rate of profit should reflect that risk
reduction. Varo, Inc., ASBCA 15000, 72-2 BCA ¶ 9717, at 45,360.
In considering and applying the regulatory guidance, the Board retains some, albeit
not uncontrolled, discretion in deciding upon the appropriate profit rate to apply. White
Buffalo Construction, Inc. v. United States, 546 F. App’x 952, 955 (Fed. Cir. 2013). Here,
where the parties routinely and consistently used a 10% profit markup in contract
modifications, where the contract administration costs for negotiation and REA preparation
that are being compensated are different and of a less technical and “risky” nature than the
design and construction work that YDJV was performing under its contract, and where
YDJV has not applied the weighted average approach upon which DOS would have been
required to rely had the parties been negotiating a change, we elect to apply a 10% profit
markup.
Adding overhead and profit to YDJV’s direct costs, we award YDJV $443,911.36 for
its consultant and legal costs claim, with interest running from August 30, 2012, the date
upon which YDJV submitted the certification for the claim.
but the form was available at the time of YDJV’s contract award and performance.

CBCA 3350, 3672, 4658, 4659 100
B. Warehouse Rental Costs (CBCA 3350)
In its delay claim as part of CBCA 3350, YDJV seeks $88,213 as reimbursement for
costs that it incurred to rent an off-site storage facility. It asserts that it originally intended
to store materials in the warehouse that it was to construct on the NCC site, but, because of
delays caused by tax disputes between the USG and the GoI, the on-site warehouse
construction was significantly delayed, meaning that YDJV had to find an alternative means
of temporary storage of materials. We have previously found DOS responsible for failing
to disclose the possibility of permit delays resulting from the USG’s tax dispute with the GoI,
and we further found that failure to have caused significant delays in the construction of the
on-site warehouse. Accordingly, we find DOS responsible for YDJV’s need to rent an off-
site warehouse facility.
DOS has stipulated to the amount of YDJV’s costs. For the same reasons discussed
with regard to the consultant and legal costs claim above, we apply markups for overhead and
profit at rates of 6% and 10%, respectively. Accordingly, inclusive of overhead and profit
markups, YDJV is entitled to recover its off-site storage facility rental costs in the amount
of $102,856.36, with CDA interest running from August 30, 2012.
C. Other Possible Direct Cost Claims in CBCA 3350
In the delay claim underlying CBCA 3350 and in YDJV’s briefing and expert reports,
YDJV has identified several other costs that could be considered to be direct cost claims, and
DOS stipulated to the amount of (but not liability for) several of them. These costs include
additional equipment rentals allegedly caused by the delay; escalations in the prices of filters
provided by Johnson Controls, of various roofing materials, and of other materials provided
by Shaw Industries, Inc., and ETS-Lindgren; and increased charges from various outside
professional services. See Damages Stipulation (July 7, 2015). Yet, there is scant if any
discussion of these costs in YDJV’s briefing or at the hearing of this matter. The mere fact
that DOS stipulated to theamount of these costs does not constitute proof of entitlement. To
the extent that YDJV was pursuing any of these costs as direct costs resulting from delays
caused by DOS, we find that YDJV has failed to prove causation.
D. Occupancy Sensor Change Order Claim (CBCA 4658)
YDJV appeals the contracting officer’s decision, dated February 18, 2015, denying
YDJV’s claim for increased costs, totaling $53,136, arising out of the installation of
occupancy sensors in the classified access area of the NOB.

CBCA 3350, 3672, 4658, 4659 101
As previously discussed, the NOB contains a secured area, the CAA, where classified
information was to be processed and stored. JSF ¶ 20; Tr. Vol. 10 at 76-79. The contract
required that “[e]very workspace and office in the Controlled Access Areas (CAA) shall be
protected by volumetric detection alarms . . . .” Exhibit 53 at 3366. The volumetric detection
alarms, which YDJV calls “occupancy sensors,” were a security requirement that enabled
DOS personnel to monitor each workstation in the CAA space at times when the space was
unoccupied.
YDJV designed the CAA space as part of its design responsibilities under the contract.
As part of that design, it placed computer workstations that were authorized for processing
classified information in offices that it created inside the CAA space, each of which had its
own door and special lock, and it placed occupancy sensors in each of those offices that were
capable of monitoring the workstations in those offices. It also elected to place classified
information workstations in two alcoves off a corridor that connected those offices within
the CAA. Those alcoves were not separated from the rest of the CAA by doors, and YDJV
did not place occupancy sensors in areas that would focus on the classified information
computer workstations in those two alcoves. During the accreditation process, DOS
recognized the problem with the location of the occupancy sensors and, more specifically,
that there were no volumetric (or occupancy) sensors that completely monitored the
workstations in the alcoves. At DOS’s request, YDJV added sensors to the two alcoves. The
contractor then submitted a claim for the costs associated with having to add them.
YDJV argues that it is entitled to an equitable adjustment for adding the occupancy
sensors in the alcoves because it reasonably interpreted the contract language as requiring
only that, as Britton Miles, who was a project manager on the NCC project for YDJV for a
portion of the contract performance period, explained, “the perimeter doors and the corridor
spaces leading up to these workstations provided [the] protection” that the contract clause
required. Tr. Vol. 3 at 7. YDJV viewed DOS’s direction to add occupancy sensors in the
workstation spaces themselves as a request for further protection of those workstations,
beyond what the contract clause required.
YDJV is essentially arguing that the occupancy sensor contract clause is ambiguous.
“When a contract is susceptible to more than one reasonable interpretation, it contains an
ambiguity.”Metric Constructors, Inc. v. National Aeronautics and Space Administration,
169 F.3d 747, 751 (Fed. Cir. 1999). In such circumstances, where “some substantive
provision of a government-drawn agreement is fairly susceptible of a certain construction and
the contractor actually and reasonably so construes it, in the course of bidding or
performance, that is the interpretation which will be adopted – unless the parties’ intention
is otherwise affirmatively revealed.”WPC Enterprises, Inc. v. United States, 323 F.2d 874,
876 (Ct. Cl. 1963). Nevertheless, “[t]o show an ambiguity it is not enough that the parties

CBCA 3350, 3672, 4658, 4659 102
differ in their respective interpretations of a contract term.”Metric Constructors, 169 F.3d
at 751. “Rather, both interpretations must fall within a ‘zone of reasonableness.’”Id.
(quoting WPC Enterprises, 323 F.2d at 876).
We cannot agree with YDJV that the clause here is ambiguous. The contract clause
clearly states that “[e]very workspace . . . in the [CAA] shall be protected by volumetric
detection alarms.” Exhibit 53 at 3366. There are three basic types of sensors – perimeter,
volumetric, and proximity – and volumetric sensors are “designed to detect the presence or
actions of an intruder almost anywhere” within a specific area. U.S. Geographical Survey
Manual: Physical Security Handbook 440-2-H, ch. 5, ¶ 6.D(2) (Aug. 2005), available at
https://www2.usgs.gov/usgs-manual/handbook/hb/440-2-h/440-2-h-ch5.html. As Richard
Plunkard, DOS’s technical security specialist for the project, testified, volumetric sensors
“see change in heat sources” through a “passive infrared” system and need “line-of-sight
coverage for a given area.” Tr. Vol. 10 at 270-71. Although YDJV protected every self-
enclosed office inside the CAA with a volumetric (or occupancy) sensor, it did not protect
every workspace with one. It instead relied on detection devices in other parts of the CAA
that would have identified if and when someone entered CAA space, but those sensors did
not necessarily continue to monitor activity inside a specific alcove workspace. That did not
satisfy the contract requirement for each workspace to be protected by a volumetric detection
alarm. YDJV is not entitled to an equitable adjustment. CBCA 4658 is denied.
E. Utility Bill Claim (CBCA 4659)
Clause H.39.4.4 of the contract provides that the contractor “shall arrange to receive,
and make payment of, bills by utilities for the Contractor’s consumption and use for their
products and services, until the date of substantial completion of the project.” Exhibit 1 at
55. On or about December 18, 2014, YDJV submitted a certified claim seeking $123,612
in costs incurred to pay a utility bill for municipal electrical service for the NCC project from
September 1 through 30, 2011. The basis for YDJV’s request for reimbursement of these
costs is its belief that the contracting officer should have found that it reached “substantial
completion” on the NCC project in late August 2011, rather than October 6, 2011.
As we previously explained, to achieve substantial completion under the contract,
YDJV, pursuant to clause E.2.1 of the contract, had to obtain a certification from the
contracting officer or his representative that the project “is sufficiently complete and
satisfactory . . . that it may be occupied or utilized for the purpose for which it is intended.”
Exhibit 1 at 21. In addition, under the P&L clause, it was YDJV’s obligation to obtain an
occupancy certificate at the end of construction. Exhibit 2 at 100. After Design Cell
submitted the necessary NOCs to MMRDA in August and September 2011, MMRDA
notified YDJV on October 4, 2011, that, once appropriate fees were paid, it would issue the

CBCA 3350, 3672, 4658, 4659 103
occupancy certificate. Exhibit 16161. On October 5, 2011, YDJV paid the fees, and
MMRDA issued the certificate. On October 6, 2011, the contracting officer declared that the
project was substantially complete. For these reasons and those discussed earlier in this
decision, YDJV has no basis for seeking an earlier substantial completion date or for
recovering utility costs incurred during the month of September 2011. CBCA 4659 is denied.
II. The Government’s Counterclaims (CBCA 3672)
A. Water Treatment Deletion Claim ($337,921)
DOS seeks a price reduction of $337,921 for its deletion of one of two water treatment
systems that the contract originally required YDJV to construct. YDJV disputes the amount
of the requested price reduction. We grant DOS’s claim in the requested amount.
Pursuant to clause 2.2.2.7 of the NCC contract, YDJV was required to design and
construct on the NCC two separate water treatment systems, one dealing with municipal
water and a separate system dealing with on-site well water:
Use of municipal water is limited to drinking and to fire protection. In
addition to municipal water, this project requires an on-site water well for
backup domestic water supply and irrigation.The Contractor shall design and
construct two separate water treatment systems, one each for municipal water
and on-site well water. Depending on the water treatment requirements, three
or four single or double split water storage tanks may be required for the
following:
1. Fully treated domestic water (stored in double or split tank)
2. Irrigation . . .
3. Pre-treated municipal water
4. Pre-treated well water
Exhibit 2 at 107 (emphasis added).
The 2005 OBO International Codes Supplement (ICS), which was incorporated into
the contract along with the 2003 International Plumbing Code that it was intended to
supplement, added the requirement that the separate water treatment systems have parallel
modules and component isolation values to allow for continual operation of the separate
systems during maintenance:

CBCA 3350, 3672, 4658, 4659 104
611.1 Design. . . . The potable water system design must be approved by the
[contracting officer’s representative] . . . . Potable water will be treated and
maintained downstream of general water storage. All potable water treatment
system components shall be designed with parallel modules and component
isolation valves that allow continual operation during maintenance.
613.1 General . . . . General water storage tanks shall be designed with a split
tank design that will allow for maintenance of the tank while keeping water
distribution systems on-line.
Exhibit 21 at 562.
By June 2006, YDJV had informed OBO that, “[f]rom reading the test results of the
waste extracted from the well, it is evident that the well water can not be used as domestic
waste without extravagant expense” and that the “water tested from the municipality will also
require treatment.” Exhibit 13085 at 8334. It suggested that, rather than well water, tanker-
truck supplied water might be a more viable drinking water source. OBO responded by
indicating that “[a]n on-site water well and a water treatment system specifically for the on-
site well were part” of the contract and that “[t]he design and installation of such a system
should have been contemplated in your proposal.”Id. at 8339. It further indicated that the
contract “requires treatment of municipal water” and separately “requires an on-site well for
backup domestic water supply and irrigation, and a water treatment system specifically for
the well water.”Id. at 8340. Nevertheless, the parties soon agreed that the well water option
identified in the contract was not viable as a backup source of drinking water for the NCC,
and OBO agreed that it would replace well water with water brought to the NCC site by
tanker-truck. Accordingly, OBO deleted all of the components needed for the well water
treatment system from the contract.
Subsequently, the parties began to discuss the credit that OBO was due for the
deletion of the well water treatment system. Initially, after suggesting a $381,000 dollar
figure that it swiftly withdrew, YDJV stated that no credit was due. OBO insisted to the
contrary – that “[a] credit is due for the deletion of the well water treatment system as well
as other work associated with ground water extraction system that will not be
constructed/installed.” Exhibit 13085 at 8394. The parties have never been able to agree on
the credit, and, on December 18, 2013, the DOS contracting officer issued a decision taking
a $340,986 credit for the deletion of the well water treatment system work. During
proceedings before the Board, DOS reduced the claimed credit to $337,921.
To the extent that DOS’s deletion of the well water treatment system work from the
contract reduced the costs that YDJV would have had to expend on this project, DOS is

CBCA 3350, 3672, 4658, 4659 105
plainly entitled to a price reduction for the deletion. When the Government deletes work
from contract requirements, the Government is entitled to a downward adjustment in the
contract price reflecting the amount that the contractor saved as a result of that deletion.
Celesco Industries, Inc., ASBCA 22251, 79-1 BCA ¶ 13,604, at 66,683. “The agency bears
the burden of proof to substantiate the [amount of the] deductive change for deleted work.”
Rodriguez Construction LLC v. General Services Administration, CBCA 4452, 16-1 BCA
¶ 36,351, at 177,229.
The water treatment systems that YDJV designed and had planned to construct did not
completely comport with the contract requirements. As originally written, the contract
required two completely separate water treatment systems: one for municipal water and
another for well water. Well water was supposed to serve as a backup if the municipal water
system stopped working. Because the well water treatment system needed to be fully
functional if the municipal water system went down, the well water treatment system needed
to be completely separate. Further, as set forth in paragraph 611.1 of the OBO ICS, each
separate system had to have “parallel modules and component isolation valves [to] allow
continual operation during maintenance.” That is, if DOS cleaned the piping and changed
the filters on the municipal water system, the “parallel module” would allow DOS to
continue providing municipal water to the NCC during that cleaning process. See Tr. Vol.
10 at 251 (“for maintenance purposes you can switch [the municipal water treatment system]
over to another sited duplex[], or a parallel system, so that you can clean one half of that
water treatment facility while still maintaining the flow of the [municipal] water to the site”).
YDJV’s original design viewed the “parallel modules” as tying the municipal and well
water systems together and did not anticipate truly separate systems. That is, there was one
parallel module that was used for both systems. Under YDJV’s plan, if DOS used the well
water system while cleaning the municipal water system, the well water would still run
through the “parallel module” for the municipal water treatment system, which was not the
intent of the contract terms. The systems were supposed to be independent. Because of how
it had planned to build its systems, YDJV viewed DOS’s deletion of the well water system
as having little if any impact on its overall costs because YDJV still had to construct most
of the system that it had originally planned to accommodate the municipal water treatment
system.
In considering an appropriate price reduction here, we have to consider the work that
YDJV’s contract originallyrequired it to perform, as opposed to the unapproved reduced
level of work that YDJV had hoped to perform. In a similar situation inS.N. Neilson Co. v.
United States, 141 Ct. Cl. 793 (1958), the contractor, misled by a bid submitted to it by a
subcontractor, had underpriced electrical work in its original offer. When, after award, the
contracting officer eliminated certain underground duct work from the contract, the

CBCA 3350, 3672, 4658, 4659 106
contractor became aware that it had unintentionally underpriced that work in its offer and
suggested a price reduction in the underpriced amount that it had included in that offer.
Nevertheless, the actual costs that the contractor would have incurred to perform that work,
had it not been deleted, would have been significantly greater than the contractor’s suggested
price reduction. The Court of Claims held for the Government, stating that the contractor “is
not entitled to use its mistaken estimated figures, which have no relation to actual costs, in
determining the equitable adjustment.”Id. at 797. Instead, the Court upheld an award based
upon an estimate prepared by an outside consultant of the actual costs that the contractor
most likely would have incurred. Id. at 806-07; see Plaza Maya Limited Partnership ,
GSBCA 9086, 91-1 BCA ¶ 23,425, at 117,500 (1990) (“the costs that would have been
incurred in performing the deleted work, and not the amount included in the contractor’s
proposal or bid, are the controlling consideration”).
At the hearing of this matter, DOS presented the testimony of a construction cost
estimating expert, Christopher Payne, Executive Vice President of McDonough, Bolyard &
Peck, regarding his development of an estimate of the costs that YDJV would have incurred
had it been required to construct a well water treatment system that was entirely separate
from the municipal water treatment system. He developed his estimate using standard
construction industry cost estimating techniques, as well as through a review of YDJV’s bid
and supporting materials. YDJV has not successfully challenged the validity of his estimate.
Accordingly, we find that DOS is entitled to recover $337,921 on this claim, plus interest
consistent with FAR 52.232-17. To the extent that YDJV based its offer on some other
figure, or upon a misunderstanding of the well water system requirements, it does not affect
DOS’s right to a price reduction based upon a more accurate cost estimate.39
B. Windows Claim ($464,000)
DOS seeks compensation for damage to 346forced entry ballistic resistance (FE/BR)
windows and forth-one FE/BR doors that YDJV, pursuant to the terms of its contract, was
required, but failed, to protect prior to installation. YDJV does not dispute that DOS is
entitled to some relief for the damage to the windows and doors, but it believes that recovery
39 This decision only addresses the price reduction for the deletion of the well water
treatment system. It does not account for any increased costs resulting from the addition to
the contract of systems or structures to allow for tanker-truck supplied water. We understand
from representations made at the hearing that costs for that addition to the contract were
compensated through a separate contract modification. To the extent that they were not, this
decision is not intended to resolve or preclude further negotiations between the parties
regarding those costs.

CBCA 3350, 3672, 4658, 4659 107
should be limited to $40,800 (approximately $105 per window or door). DOS originally
sought $438,810, which equates to approximately $1130 per window or door, but appears
to have increased its request in its post-hearing brief to $464,000.
The NCC contract required YDJV to install FE/BR windows and doors at the
perimeters of the various NCC buildings. Exhibit 2 at 120. DOS, rather than YDJV, was
to procure the FE/BR windows and doors and then make them available to YDJV as
“Government Furnished Contractor Installed Equipment.” Exhibit 2 at 109, 111, 112, 114,
115. Once procured, the FE/BR windows and doors would remain stored at the
manufacturer’s warehouse until YDJV was ready for them, at which point YDJV would “be
responsible for shipping” them “from the manufacturer’s warehouse to the NCC project
site.”Id. at 120. The cost of the FE/BR windows is significant. 40
The contract incorporated the P&R clause at FAR 52.236-7, which provided that the
contractor shall “be responsible for all damages to persons or property that occur as a result
of the Contractor’s fault or negligence” and “shall also be responsible for all materials
delivered and work performed until completion and acceptance of the entire work.”
Exhibit 1 at 85 (clause I.66). Similarly, clause H.35.2 provided that YDJV “shall be
responsible for all materials delivered and work performed until final completion of and
acceptance of the entire work.”Id. at 65 ; see Exhibit 89 at 4567 (OBO Project-Specific
Division 1 Specifications § 01101, ¶ 3.2.I: “The Contractor shall be responsible for all
materials delivered . . . until completion of the works and final acceptance by the USG as
defined herein.”);id. at 4573 (¶ 3.7: “The Contractor shall coordinate and supervise the
protection, cleaning, and maintenance work at the Project Site during receipt, handling,
storage, installation, curing, and similar stages of construction execution to effect minimum
exposure to hazards by personnel and minimum deterioration to the work.”); Exhibit 93 at
4634 (§ 01401, ¶ 3.2: “monitor protective measures in relation to construction activities”).
After the windows were delivered to the NCC job site, construction workers on the
site etched graffiti – sometimes a random series of scratches, other times methodically laid-
out rows of scratches, random words or letters, rows of dots, designs that somewhat
resemble tic-tac-toe games, and/or other scribblings – into the mylar coatings on the interior
side of the glass of more than 400 FE/BR windows, as well as on the glass of forty-one
doors. Exhibit 16003. The etchings in approximately sixty-two of the windows were so
severe that YDJV agreed, without objection, to replace the windows at its own expense.
Exhibit 461. Nevertheless, there remain 346 windows and forty-one doors with varying
40 DOS estimates that replacement of the windows would cost approximately $1.25
million. Exhibit 13084 at 8458. It has not sought replacement costs.

CBCA 3350, 3672, 4658, 4659 108
degrees of etched graffiti, some more significant than others (with some involving very
noticeable etching in the primary vision area of the window). The parties jointly inspected
the materials, and they mutually signed off on drawings that memorialize the scratches in
each window and door. See Exhibit 16003. Although OBO originally insisted that YDJV
replace more of the windows and doors than it did, OBO eventually relented and allowed
the remaining damaged windows to be installed, subject to OBO’s right to a price reduction
for the damage.
There is no question that YDJV is liable for the damage to the Government-supplied
windows and doors. The contract expressly required YDJV to take responsibility for and
to protect those windows and doors after they were delivered to the job site. Leaving them
sufficiently unprotected in a manner that allowed its subcontractors’ construction workers
to carve graffiti into the majority of blast-resistant windows on the compound in no way
meets YDJV’s contractual obligations. Yet, for the most part, the windows and doors,
though aesthetically defective, remain functional, and the etchings did not affect the
ballistic-resistant or blast characteristics of the windows and doors. Tr. Vol. 10 at 258.
YDJV has questioned whether there was sufficient damage to all of the 387 windows
and doors included in DOS’s damages calculation to warrant including them in the damages
assessment. In determining which windows were sufficiently damaged to warrant a price
adjustment, DOS tried to find a standard to apply that would provide solid guidance and
support for such a determination. It settled on the “Q3” standard in the American Society for
Testings and Materials (ASTM) Standard Specification for Flat Glass, Designation
C1036-06, Tr. Vol. 10 at 259, which “covers quality requirements for flat, transparent, clear,
and tinted glass” by defining when a blemish in glass (measured by depth and other factors)
renders the glass unacceptable. Exhibit 445 at 7850. YDJV does not believe that the
standard applies here because, by its own terms, the Q3 standard “does not apply to glass
thicker than 12 mm (½ in.)” and indicates that “[a]llowable blemishes for glass thicker than
12 mm (½ in.) shall be determined by agreement by the buyer and seller,” Exhibit 445 at
7852, but it identifies no alternative standard applicable to determining when etched graffiti
should be viewed as causing compensable damage. Although DOS’s expert has argued that
the ASTM standard applies because each piece of glass in the windows falls below that
thickness before being pressed together with other pieces of glass, we find it unnecessary to
decide whether the standard applies here. Either with or without the standard’s guidance, the
result is the same. DOS delivered blemish-free windows and doors to YDJV, and they were
damaged by the mostly intentional conduct of the construction workers that YDJV allowed
on the site. The parties have documented the specific damage to each window and door in
a joint review of each one. See Exhibit 16003. Having studied that jointly prepared
document and considered the testimony of witnesses, we find damage to each of the 387
windows and doors included in DOS’s calculations.

CBCA 3350, 3672, 4658, 4659 109
We must, then, identify an appropriate means by which to measure compensation for
that damage. “The primary objective of damages for breach of contract is to place the
non-breaching party ‘in as good a position pecuniarily as he would have been by
performance of the contract,’” assuming that the breaching party had fully and properly
performed its obligations. White v. Delta Construction International, Inc., 285 F.3d 1040,
1043 (Fed. Cir. 2002) (quotingMiller v. Robertson, 266 U.S. 243, 257 (1924)). Generally,
“[i]f work that is partially completed is damaged prior to acceptance by the Government, it
is the contractor’s obligation to restore it without additional compensation,”Fox
Construction, Inc. v. General Services Administration, GSBCA 11543, 93-3 BCA ¶ 26,193,
at 130,402, and a proper measure of damages for breach of that obligation can be the cost
of restoring the damaged structures to the condition that the parties contemplated when they
entered into the contract.Missouri Baptist Hospital v. United States, 555 F.2d 290, 294 (Ct.
Cl. 1977). Yet, sometimes the cost of repair “will be clearly disproportionate to the probable
loss in value to the injured party.”Restatement (Second) of Contracts § 348 cmt. c.
In such circumstances, if “the work is otherwise adequate for its intended purpose,”
Granite Construction Co. v. United States , 962 F.2d 998, 1006-07 (Fed. Cir. 1992), the
damaged party may not recover the full cost of repair because such an award would
constitute economic waste:
Damages based on the cost to remedy the defects would then give the injured
party a recovery greatly in excess of the loss in value to him and result in a
substantial windfall. Such an award will not be made. It is sometimes said
that the award would involve “economic waste,” but this is a misleading
expression since an injured party will not, even if awarded an excessive
amount of damages, usually pay to have the defects remedied if to do so will
cost him more than the resulting increase in value to him.
Restatement (Second) of Contracts§ 348 cmt. c;see Granite Construction, 962 F.2d at 1007
(under the doctrine of “economic waste,” the Government may have to limit its remedy, in
appropriate circumstances, to a downward adjustment in the contract price) ; Short v.
Greenfield Meadows Associates, No. 07-CA-14, 2008 WL 2589659, at *3 (Ohio Ct. App.
June 24, 2008) (“Economic waste exists when the cost to remedy the defect is grossly
disproportionate to the good to be attained.”). Determining whether requiring strict
compliance would result in economic waste is dependent upon weighing “the purpose to be
served, the desire to be gratified, the excuse for deviation from the letter, [and] the cruelty
of enforced adherence.”Triple M Contractors, Inc., ASBCA 42945, 94-3 BCA ¶ 27,003,
at 134,531-32 (quoting Jacob & Youngs, Inc. v. Kent, 129 N.E. 889, 891 (N.Y. 1921));see
Fire Security Systems, Inc. v. General Services Administration, GSBCA 12120, et al., 97-2

CBCA 3350, 3672, 4658, 4659 110
BCA ¶ 28,994, at 144,405 (contractor’s deviation from specifications reduced the reliability
of installed system to detect and respond to fires).
DOS has agreed not to require YDJV to replace all damaged windows and doors and
allowed installation of all but sixty-two of the damaged windows and doors (which YDJV
voluntarily agreed to replace). However, the parties cannot agree upon the dollar amount
that DOS should receive as a result of the damage or the manner in which those damages
should be measured. As previously mentioned, DOS originally requested that we order
YDJV to pay $439,810, a cost that it estimated (using a complicated set of calculations) it
would take to reglaze all of the damaged windows and doors, but, in its post-hearing brief,
DOS increased its request to $464,000. DOS acknowledges, however, that it does not intend
either to replace or to reglaze the windows or doors, at least at this point in time. Its original
estimates depended upon the concept that the life of the windows would likely be reduced
by five years or so because of the etchings, but even it now questions that original
assumption, and the evidence in the record does not establish that the etchings have any
effect whatsoever on longevity. For its part, YDJV has offered to pay $40,800, which was
an amount that a YDJV representative had originally negotiated with the on-site DOS
project manager as compensation for the thirty-eight most severely damaged windows that
were not being replaced.
We reject out of hand YDJV’s request that we enforce the “agreement” that it reached
with the on-site DOS project manager, which YDJV argues would “give effect to the
party-to-party commercial dealings between DOS and YDJV.” Appellant’s Post-Hearing
Brief at 118. YDJV acknowledges that the DOS representative only agreed torecommend
acceptance of YDJV’s offer to his superiors and that the DOS representative did not purport
to create and lacked authority to consummate any agreement. The DOS contracting officer
rejected that recommendation as too low. We cannot enforce an agreement that YDJV
acknowledges never occurred, nor can we enforce an agreement that, even if it was made,
was made with a government employee without actual authority to make it.See Pearson E.
Dubar v. Department of Agriculture, CBCA 1895, 10-2 BCA ¶ 34,497, at 170,147 (“The
actions of a government employee without actual authority cannot bind the Government.”).
Further, with exceptions not relevant here, Federal Rule of Evidence 408 prohibits the use
of evidence about conduct or statements made during compromise negotiations about a
claim. Walsh/Davis Joint Venture v. General Services Administration, CBCA 1460, 12-1
BCA ¶ 34,968, at 171,904.
We must also reject DOS’s cost-of-repair request. DOS does not intend to repair the
etchings in the existing windows and doors, in part because of the disruption to its staff that
would result in doing so and in part because the damage is something with which DOS has
decided to live. As a result, an award in the amount of the cost of repair – in excess of

CBCA 3350, 3672, 4658, 4659 111
$430,000 – would seem to constitute economic waste in the circumstances here, particularly
because the “defects [are] essentially cosmetic rather than structural” and the constructed
material is “functional as built.”Asp v. O’Brien, 277 N.W.2d 382, 384 (Minn. 1979). DOS
is using the windows and doors, and there is no viable evidence of a reduction in the useful
life of the windows and doors as a result of the graffiti. The cost-of-repair award that DOS
seeks would “substantially overcompensate [the] owner” because the owner, DOS, would
not use the money for repairs, “granting [the] owner a windfall.” Hal J. Perloff, “The
Economic-Waste Doctrine in Government Contract Litigation,” 43 DePaul L. Rev. 185, 186
(Fall 1993). We cannot grant cost-of-repair damages here.
Typically, “[i]f an award based on the cost to remedy the defects would clearly be
excessive and the injured party does not prove the actual loss in value to him, damages will
be based instead on the difference between the market price that the property would have
had without the defects and the market price of the property with the defects.”Restatement
(Second) of Contracts § 348 cmt. c; see Asp, 277 N.W.2d at 384 (“If reconstruction is not
possible without unreasonable economic waste, the proper measure of damages is the
difference in value between what was contracted for and what was actually built.”). Market
value is generally determined from “what a willing buyer would pay in cash to a willing
seller.”Almota Farmers Elevator & Warehouse Co. v. United States , 409 U.S. 470, 474
(1973). The rationale for awarding diminished value damages is that the injured party
“could always sell the property on the market even if it had no special value to him.”
Restatement (Second) of Contracts § 348 cmt. c.
The remedies identified in the Restatement for the situation here seem plainly
inadequate. It seems impossible to apply a market value approach to a secure DOS consulate
compound, the true value of which would seemingly not be properly represented in a
“market value” sale of the property in its current form.See United States v. 50 Acres of
Land, 469 U.S. 24, 30 (1984) (market value is generally too difficult to prove for “properties
that are seldom, if ever, sold in the open market,” meaning that the tribunal “‘cannot predict
whether the prices previously paid, assuming there have been prior sales, would be repeated
in a sale’” (quotingUnited States v. 564.54 Acres of Land, 441 U.S. 506, 513 (1979))). At
the same time, it would be unfair simply to forgive YDJV’s failure to protect the windows
and doors from the mostly intentional actions of its subcontractors’ workers – a violation of
its express contract obligations – and force DOS to live with damaged windows and doors
with no recompense.
Fortunately, there is case precedent to support a tribunal’s ability to fashion and apply
other standards “when market value has been too difficult to find, or when its application
would result in manifest injustice to owner or public.”United States v. Commodities
Trading Corp., 339 U.S. 121, 123 (1950) (discussing concept of “market value” in takings

CBCA 3350, 3672, 4658, 4659 112
cases under the Fifth Amendment). We undertake that effort here, but we first have to reject
the alternative theories of assessing damage, based upon a variety of rationales, that DOS
presented through its expert witness, Mr. Payne. Mr. Payne has calculated an alternative
damages award of $198,583 based upon cost estimating principles assuming that the
scratches in the windows will cause a two-year reduction in the windows’ useful life, but the
record evidence does not support the assumption. He suggests different figures based upon
different documents found in YDJV’s files in which different YDJV employees suggested
different ways to resolve this conflict – an award of fifty percent of the cost of each window,
a suggestion that someone at YDJV thought that $1200 per window would be reasonable,
and a $365,000 figure based upon an unsigned and unsent letter found in YDJV’s files – but
we cannot bind YDJV to its negotiation strategies and thought processes during its attempts
to settle this dispute any more than we can bind DOS to the unapproved “agreement” that
YDJV asked us to enforce.
In the end, we are left with the firm belief that the etchings in the windows and doors
that are now installed at the Mumbai NCC clearly have a negative aesthetic impact upon the
consulate that will continue to plague DOS until the useful life of those windows and doors
comes to an end. The record shows that the intended traffic through the NCC was expected
to be, and is, of an extremely high volume, and the fact that the large majority of the
windows in the complex are scratched with graffiti has to affect visitors and DOS employees
at the site alike. Where, as here, the NCC was to be a conduit to, and a first impression of,
the United States for many of the NCC’s visitors, the fact that so many windows in a brand
new complex have noticeable graffiti certainly has to have a negative impact upon their
impressions of the United States. We recognize that there are decisions in which boards
have declined to award other than nominal damages in economic waste situations in which
a decline in market value could not be measured. See, e.g., Valley Asphalt Corp., ASBCA
17595, 74-2 BCA ¶ 10,680, at 50,770-71 (awarding nominal damages of $1000 where value
of runway with uneven elevations was not measurably less than value of runway as
promised). Yet, it appears clear that, when there are adverse aesthetic impacts from the
breach that strongly affect a property’s aesthetic value, those aesthetic impacts may be
considered in evaluating economic waste. See Toombs & Co., ASBCA 34590, et al., 91-1
BCA ¶ 23,403, at 117,433 (1990) (citing fact that “deformed boots had no adverse aesthetic
impact” as factor in considering damages in economic waste situation);Bromley Contracting
Co., GSBCA 6965, 85-3 BCA ¶ 18,428, at 98,545 (declining to apply economic waste
doctrine when there was a strong aesthetic reason for requiring strict compliance with
contract requirements). Further, the willfulness or intentional nature of the contractor’s
action causing the defective work has been considered as a factor in evaluating the
application of the economic waste doctrine. See H.L.C. & Associates Construction Co. v.
United States, 367 F.2d 586, 600 (Ct. Cl. 1966) (“courts have refused to apply the test of
substantial performance where the contractor’s deviation from the specifications was

CBCA 3350, 3672, 4658, 4659 113
intentional”). Here, although there is no evidence that YDJV itself acted willfully or
intentionally to damage the FE/BR windows and doors, it clearly failed to take the necessary
steps, as required by its contract, to preclude willful and intentional conduct by the
construction workers that it allowed on the site.
“[A]llowing a contractor to avoid covering repair costs under the guise of the
economic-waste doctrine – even when the repairs are arguably wasteful – is a harmful
precedent, because it encourages abusive bidding and inefficient contracting costs in
addition to leaving the government under-compensated.” Perloff,supra, at 231. An award
of only nominal damages in the circumstances here would serve as an incentive to
contractors to ignore contract provisions requiring them to protect their construction sites
and the materials on those sites. Although the damage here is somewhat esoteric, it is real,
and DOS is entitled to compensation for it. Alas, there is scant evidence in the record to
define how to value the intangibles at issue here. DOS presented little if any evidence about
the effect of the damaged windows on employee morale, on the effect upon visitors, or on
any effect upon efficiency in the workplace. Although Mr. Payne suggested that valuation
under a “reduced aesthetic standard” theory would be expected to reduce the value of the
windows and doors by fifteen to twenty percent, supporting a credit of between $190,000
and $315,000, there is nothing in the record to support that analysis or to indicate why the
figures he chose have any more of a reasonable basis than any other numbers.
With no information in the record that truly informs how to measure the intangible
reductions in value here, we are left with YDJV’s admissions – in its pre-hearing and post-
hearing briefs – that it should pay $40,800 for the damage to the windows. Yet, that figure
would amount to no more than a credit of approximately $105 per window or door. In light
of the contractual breach of duty that created the situation that allowed for the intentionally
destructive behavior that occurred, such a figure appears a paltry award for the damage at
which DOS employees have to look every day. In the end, we elect here to fashion an award
in the manner of a “jury verdict,” given that there is clear evidence that the Government was
injured and there is no more reliable method for computing damages. See WRB Corp. v.
United States, 183 Ct. Cl. 409, 425 (1968) (discussing “jury verdict” approach). Although
such an approach is disfavored, the type of breach and damage at issue here leaves us with
no other reasonable alternative. After considering the evidence in the record, including our
review of the extent of damage to the various windows, the original cost of the windows,
and the savings from which YDJV has benefitted in not having either to repair or to replace
these 387 windows and doors, we award DOS $100,000 (or approximately$250 per window
or door) upon this claim, plus interest consistent with FAR 52.232-17.

CBCA 3350, 3672, 4658, 4659 114
C. Fuel Claim ($54,839)
The contract required YDJV to provide a generator that DOS could use to supply the
compound with electrical power for an extended period of time if the local electrical grid was
not operating. As part of that requirement, YDJV was to provide underground fuel tanks
with the generators and, at the time of substantial completion, was to deliver the tanks filled
with fuel. At the hearing, DOS presented evidence that the fuel tanks were not full when
YDJV achieved substantial completion on October 6, 2011, and that, when DOS requested
that YDJV fill the tanks, YDJV declined to do so, requiring DOS to fill the tanks itself at a
cost of $54,839.
In its post-hearing brief, YDJV represented that it no longer disputes this claim or the
claimed quantum. Accordingly, we grant the Government’s claim in the amount of $54,839,
plus interest consistent with FAR 52.232-17.
D. Furniture Storage Cost Claim ($56,630)
Under clause 3.5.1.2 of the contract, DOS was to procure furniture that YDJV would
then install in the CG residence. In turn, YDJV was to “take full responsibility for the
furniture from receipt and shipment to project site” and “ensure that the furniture installations
[were] whollyintegrated with the construction and commissioning schedule and accreditation
process.” Exhibit 2 at 119. The contracting officer, in his decision asserting this claim,
stated that “YDJV’s continued performance beyond the contract required completion date
resulted in the Government incurring costs for storage and detention (demurrage) charges”
from January 1, 2009, through July 26, 2010, the date on which YDJV was ready to accept
the furniture and install it in the CG residence. Exhibit 16237 at 50453.
The basis underlying this affirmative government claim is somewhat different from
that underlying the three previously described government claims (through which the
Government sought a monetary credit for deleting a portion of the contract requirement for
water treatment installations, compensation for scratched and damaged windows, and
compensation for underfilled fuel tanks). The costs in those three claims were incurred (or,
with regard to the water treatment plant deletion, were avoided) for reasons other than project
delays. The basis underlying DOS’s furniture claim is different. As the DOS contracting
officer acknowledges in his decision, the furniture storage costs were incurred because of
YDJV’s delays in completing contract performance. Absent those delays, YDJV would have
been able to install the furniture at the CG residence when the contract schedule originally
contemplated it, and no storage costs would have been incurred.

CBCA 3350, 3672, 4658, 4659 115
DOS’s request for these furniture storage costs, incurred as a result of YDJV’s delays,
is barred by the contract provision allowing DOS to assess liquidated damages.
“[A] liquidated damages clause is designed tosubstitute a sum agreed upon by the parties for
any actual damages suffered as a result of a breach.” 24 Samuel Williston & Richard A.
Lord, A Treatise on the Law of Contracts § 65:1, at 229 (4th ed. 2002) (emphasis added).
The substitution of liquidated for actual delay damages is binding on both parties and
becomes the means by which the Government recovers monetary damages for delay:
When they liquidated in advance the amount of the damages they fixed the
amount which the one could be required to pay or the other be entitled to
recover in case of breach, and the clause as much limits the defendants’ right
to recover as it affects the plaintiff’s obligation to pay. Both are bound by the
liquidated damages clause.
Sorenson v. United States , 51 Ct. Cl. 69, 83-84 (1916); see MFG Properties v. General
Services Administration , GSBCA 13236, 96-1 BCA ¶ 27,929, at 139,473 (1995) (“The
Government gives up the right to obtain actual damages for any harm covered by a liquidated
damages provision.”);Desert Sun Engineering Corp., IBCA 725-8-68, 69-1 BCA ¶ 7431,
at 34,512 (1968) (the Government cannot “collect both actual and liquidated damages” for
the same delays); William Schwartzkopf, John J. McNamara & Julian F. Hoffar,Calculating
Construction Damages §12.4, at 147 (1992) (“The assessment of both liquidated and actual
damages is not normally permitted.”).
“[A]n enforceable liquidated damages provision . . . is both a sword and a shield.”
J. Richard Margulies, “Owner Remedies for Contractor Default,”in Construction
Contracting 837, 892 (1991). If the contractor delays contract completion, the Government
gets to “avoid [having] to prove with certainty . . . the actual damages incurred as a result of
a breach” and is entitled automatically to recover the pre-set stipulated amount, even if its
actual damages would otherwise have been uncertain or unmeasurable. Safeco Credit v.
United States, 44 Fed. Cl. 406, 414 (1999);see DJ Manufacturing Corp. v. United States, 86
F.3d 1130, 1133 (Fed. Cir. 1996) (“By fixing in advance the amount to be paid in the event
of a breach, liquidated damages clauses save the time and expense of litigating the issue of
damages.”). Conversely, though, in situations in which the Government can prove that its
actual delay damages exceed the stipulated liquidated damages amount, “the same policy that
justifies use of the stipulation offensively precludes arbitrary dismissal of the provision.”
Margulies, supra, at 892;see Trans World Airlines v. Travelers Indemnity Co., 262 F.2d 321,
325 (8th Cir. 1959) (“No other or greater damages can be awarded, even though the actual
loss may be greater or less.” (quoting 15 Am. Jur.Damages § 264, at 697)). If the injury is

CBCA 3350, 3672, 4658, 4659 116
covered by the liquidated damages provision, that provision becomes the exclusive means
by which that injury is compensated.41
It is true that a contract can contain language “stipulating for liquidated damages in
limited situations only,” leaving the party seeking damages free to claim actual damages for
any harm not encompassed within the liquidated damages clause.United States v. American
Surety Co., 322 U.S. 96, 101-02 (1944);see Wells Construction, IBCA 737-10-68, 69-2 BCA
¶ 7866, at 36,564. In the circumstances here, though, we see nothing in the standard FAR
liquidated damages provision that somehow excludes the furniture storage costs incurred as
a result of the delays from the general liquidated damages pool. DOS’s claim for an
affirmative recovery of its furniture storage costs resulting from YDJV’s contract
performance delays, separate and apart from the liquidated damages award that we discussed
above, is precluded by the liquidated damages provision.
Decision
For the foregoing reasons, CBCA 3350 is GRANTED IN PART. DOS is entitled
to recover liquidated damages in the amount of $6,674,624. The parties have stipulated that
DOS withheld $4,720,366.10 as a retainage from the contract balance to address the
liquidated damages assessment. DOS is entitled to keep the amount withheld, and YDJV
must affirmatively pay the remaining balance of $1,954,257.90, plus interest on the
affirmative payment (but not on the amounts that DOS previously withheld)42 consistent with
41 To the extent that the Government could recover actual, but proven, damages in
addition to liquidated damages arising from the same delay, it would raise questions about
the extent to which the liquidated damages provision is actually an unenforceable penalty
rather than a stipulated substitute for actual damages.See Graybar Electric Co., IBCA 773-
4-69, 70-1 BCA ¶ 8121, at 37,732-33 (discussing when a liquidated damages provision
becomes an unenforceable penalty). An enforceable liquidated damages amount must, when
the parties stipulate to it, “bear[] some reasonable relationship to the probable actual
damages.”Martin Marietta Corp., NASA BCA 1079-18, 81-2 BCA ¶ 15,431, at 76,476.
42 The current version of FAR 52.232-17, promulgated effective October 2010,
expressly provides that the Government cannot recover interest under that clause on amounts
otherwise payable to the contractor that the Government withheld and applied to a contract
debt. 48 CFR 52.217(f)(3) (2016). Although the earlier June 1996 version of FAR
52.232-17 applicable to this contract, see Exhibit 1 at 11, does not contain that express
language, the version of FAR 32.614-1 in effect at the time of YDJV’s contract award made
clear that interest under FAR 52.232-17 would not be charged against amounts otherwise

CBCA 3350, 3672, 4658, 4659 117
FAR 52.232-17. On its direct cost claims for consultant and legal costs and for warehouse
rental costs, YDJV is entitled to recover a total of $546,767.72, with CDA interest running
from August 30, 2012.
CBCA 3672 is GRANTED IN PART. The Board grants the Government’s water
treatment system deletion claim ($337,921) and its undelivered fuel claim ($54,839), and the
Board grants in part the Government’s claim for damaged FE/BR windows and doors
($100,000), for a total award of $492,760, plus interest consistent with FAR 52.232-17. The
Board denies the Government’s claim for furniture storage costs.
CBCA 4658 and 4659 , through which YDJV seeks costs associated with the
Government’s direction to correct missing occupancy sensors and for utility bill
reimbursement, are DENIED.
_____________________________
HAROLD D. LESTER, JR.
Board Judge
We concur:
____________________________ _____________________________
JERI KAYLENE SOMERS CATHERINE B. HYATT
Board Judge Board Judge
payable to the contractor that the Government had “withheld as a credit against the contract
debt.” 48 CFR 32.614-1(c)(2) (2005).

CBCA 3350, 3672, 4658, 4659 118
APPENDIX
Acronyms/Abbreviations Used in the Decision
AACE Association for the Advancement of Cost Engineering
AES AES International Corporation (YDJV subcontractor)
ASBCA Armed Services Board of Contract Appeals
ASTM American Society for Testings and Materials
“B” VisaBusiness Visa
BKC Bandra Kurla Complex (area of Mumbai)
CAA Controlled Access Area
CAW Cleared American Workers
CCAC Consular Compound Access Control
CG Consul General
CPM Critical Path Method
DOS Department of State
“E” VisaEmployment Visa
FAR Federal Acquisition Regulation
FE/BR Forced Entry / Ballistic Resistance
FWCC Further Work Commencement Certificate
GoI Government of India
GSO General Services Office
HHS Department of Health and Human Services
ICS International Codes Supplement
IOD Intimation of disapproval
IPC International Plumbing Code
IPS Initial Planning Survey
JSF Joint Stipulations of Fact
L&T Larsen & Toubro, Ltd. (YDJV subcontractor)
MCAC Main Compound Access Control
MCGM Municipal Corporation of Greater Mumbai
MEA Ministry of External Affairs
MEP Mechanical, Electrical, and Plumbing
MMRDA Mumbai Metropolitan Regional Development Authority
MSGQ Marine Security Guard Quarters
NCC New Consulate Compound (Mumbai)
NOB New Office Building
NOC No Objection Certificate
NTP Notice to Proceed
OBO DOS Overseas Building Operations

CBCA 3350, 3672, 4658, 4659 119
OFM Office of Foreign Missions
P&L Permits and Licenses
P&R Permits and Responsibilities
PAP Project Analysis Package
PCC Plinth Commencement Certificate
REA Request for Equitable Adjustment
RFP Request for Proposals
RP AACE International Recommended Practice 29R-03
SCAC Service Compound Access Control
SED Standard Embassy Design
Tr. Hearing Transcript
TSS Technical Security Services
USG United States Government
YDJV Yates-Desbuild Joint Venture
Individuals/Other Corporate Entities Identified in the Decision
American Systems YDJV Telecommunications Subcontractor
Ananth Badrinath Desbuild’s Owner
Mark Boe DOS’s Scheduling Expert
Robert Browning OBO Project Director
Merton Bunker Member of OBO Inspection Team
Dr. T. Chandrashekhar MMRDA Metropolitan Commissioner until August 2007
Charles Y. Choyce, Jr. YDJV’s Scheduling Expert
Gail Cleveland Deputy Management Officer, U.S. Embassy, New Delhi
Jeff Cross YDJV Employee
Henry Dearman Yates Senior Vice President for Special Projects
Desbuild Desbuild Incorporated
Design Cell Shapoorji’s Second Permit Expediter
Shane Deville YDJV Employee
Paul Folmsbee Consul General at Mumbai after July 8, 2008
Ratnaker Gaikwad MMRDA Metropolitan Commissioner after August 2007
Mr. Ghade MCGM Employee
Larry Harrington Yates Employee
Yogesh Hate Desbuild Employee
Johny Joseph MCGM Municipal Commissioner until May 2007, then
Chief Secretary for the State Government of Maharashtra
Kling Architects DOS Contractor
Brian Kolak Nelson Engineering Employee

CBCA 3350, 3672, 4658, 4659 120
S. L. Lakeshri Superintendent, H/East Ward, MCGM Assessor & Collector
Office
James Leaf DOS Management Officer, U.S. Consulate General, Mumbai
Sunil Lal GoI Chief of Protocol
David Louh OBO Employee
Pravin Malkani Director, Design Cell
Tom McKenney YDJV On-Site Manager
Shivshankar Menon Foreign Secretary, GoI
Microtech Microtech M&E Pvt. Ltd. (YDJV subcontractor)
Britton Miles YDJV Project Manager
Tom Milos YDJV Project Manager
Frank Mitchell Yates Employee
David Mulford United States Ambassador to India
Theodore E. Needham III YDJV’s Damages Expert
Michael Owen Consul General at Mumbai until July 8, 2008
Paritosh Parelkar Design Cell Representative
Christopher Payne DOS Cost Estimating Expert Witness
Robert Peterson DOS’s Damages Expert
Jairaj Phatak MCGM Municipal Commissioner beginning May 2007
Richard Plunkard DOS Technical Security Specialist
Gene Rivenbark YDJV Employee
Steven Rosenfeld OBO Planning Manager
Shapoorji Shapoorji Pallonji & Co., Ltd. (YDJV subcontractor)
S.G. Shinde MCGM Assessor and Collector
Shine Shine Electric Works Pvt. Ltd. (YDJV MEP subcontractor)
David Vivian DOS Contracting Officer
Vartak Vartak & Sons Pvt. Ltd. (first permit firm hired by Shapoorji)
Yates W.G. Yates & Sons Construction Company
William Yates Yates Owner