DENIED: November 27, 2013
CBCA 3048
RELIABLE CONTRACTING GROUP, LLC,
                                                         Appellant,
v.
DEPARTMENT OF VETERANS AFFAIRS,
                                                             Respondent.
Reginald A. Williamson and William E. Dorris of Kilpatrick Townsend & Stockton
LLP, Atlanta, GA; and Gregory C. Thomas, General Counsel of Fisk Electric Company,
Houston, TX, counsel for Appellant.
Ogochukwu Ekwuabu, Charlma Quarles, and Phillipa L. Anderson, Office of General
Counsel, Department of Veterans Affairs, Washington, DC, counsel for Respondent.
Before Board Judges DANIELS (Chairman), BORWICK, and SHERIDAN.
SHERIDAN, Board Judge.
This is a claim brought by Reliable Contracting Group, LLC (Reliable), the prime
contractor, on behalf of itself and its first tier subcontractor, Fisk Electric Company (Fisk),
and Fisk’s electrical supplier, DTE Energy Technologies, Inc. (DTE Energy).  Reliable was
contracted to design and construct a new utility plant and electrical distribution system at the
Department of Veterans Affairs (VA) Medical Center (VAMC) in Miami, Florida.  Reliable
seeks an equitable adjustment in the amount of $1,138,662.95 for what it characterizes as a
VA-directed change to remove and replace certain back-up generators at the VAMC.  The
parties have elected to submit the case on the record without a hearing pursuant to Board
Rule 19.  48 CFR 6101.19 (2012).


CBCA 3048 2
Findings of Fact
This case arose out of a contract issued by the VA for the design and construction of
a new utility plant and electrical distribution system at the VAMC in Miami, Florida.  One
of the primary purposes of the project was to upgrade and consolidate the electrical
equipment at the VAMC.  On February 10, 2003, the VA awarded contract V101BC0197 to
Echo Construction Company (Echo), for a total contract amount of $ 20,345,000.  By way
of a March 31, 2003, novation agreement, Echo, Reliable, and the VA agreed to transfer all
rights, titles, and interest in the contract to Reliable. 
The contract required the furnishing and installation of two emergency generation
systems, one to handle essential loads and another to handle back-up equipment and normal
loads.  This appeal involves the emergency generators for the back-up system.  For the back-
up generation system, three back-up emergency generators rated at no less than 1825 kilowatt
(kW) prime were required under the contract.  Reliable subcontracted with Fisk to provide
the back-up generators, and Fisk utilized DTE Energy to supply the generators.  DTE Energy
offered Fisk three model DQKC, 1825 kW emergency generators manufactured by Cummins
Power Generation for installation on the project: serial numbers F000116718, F000116717,
and E000107713.
One of the Cummins generators was delivered to the project and set in place
on June 26, 2004, and another on June 27.1  The generators were inspected by the VA upon
delivery, where it was noticed by the VA’s senior resident engineer (SRE), Leonard Romano,
that the generators showed “a lot of wear and tear including field burns to enlarge mounting
holes.”  On June 27 SRE Romano forwarded a request for information (RFI) to Reliable,
stating:
I am concerned that [the two generators that were delivered] are not “new” as
required by General Conditions 01001, 1.47(a).  They show a lot of wear and
tear including field burns to enlarge mounting holes.  Are they new and will
you certify them as such?  I cannot pay you for these as planned in this
month’s payment without that certification.
Contract section 01001, GENERAL CONDITIONS, provides in pertinent part at
paragraph 1.47(a): “All equipment, material, and articles incorporated into the work covered
1 These two generators were shipped from New York; the third generator was
in Virginia.  It appears that the generator in Virginia was never shipped to the VA project. 

CBCA 3048 3
by this contract shall be new and of the most suitable grade for the purpose intended.” 
Contract section 16208, ENGINE GENERATORS, provides:
1.3  QUALITY ASSURANCE
. . . . 
     E.  Factory Test:  The Government shall have the option of
witnessing the following tests at the factory. . . .
  1.  Load Test . . . .
  2.  Quick Start Test . . . .
Fisk wrote DTE Energy on June 28, 2004, about the “serious concerns” that Reliable
and the VA had about the two Cummins generators that were delivered to the project site. 
Fisk noted: 
My foreman noted that the units were in “BAD CONDITION” and proceeded
to install them. 
. . . .
[Reliable] and the VA have indicated to Fisk Electric, that the two units appear
to be used and have given directive (see attached) for Fisk to remove them
from the site until proven otherwise.  Our purchase order indicates new
generators are to be installed, please provide written documentation to that
effect.
Reliable’s June 28, 2004, directive to Fisk stated:
As you are aware [the VA] has very serious doubts and concerns as to whether
the equipment furnished is in compliance with the contract.  As is apparent
from the photographs previously sent you the units were manufactured four
years ago and from markings and wear on the units themselves, there are
concerns that the units have been previously installed and used.  The [VA] had
made it clear that these units will be rejected if they are not in 100%
compliance with the contract documents in every respect.  
[T]his is a very serious matter which reflects poorly on Fisk and has adverse
implication for Reliable’s relationship with [the VA] and has monumental
impact to the schedule of this project.  We simply cannot allow this equipment

CBCA 3048 4
to remain on site without immediate and conclusive proof that they are in
100% compliance with the contract documents and hereby are notifying Fisk
to remove the generators at once from the project site.  
To compound the problem, the steel erector is fully mobilized (with a crane)
and prepared to begin erection this week.  We have no alternative but to hold
Fisk responsible for any delays and/or damages arising out of this matter,
including but not limited to the interruption to the progress of the work and all
costs associated with the immediate removal of the non-compliant equipment.
DTE Energy had purchased the Cummins generators from DSA Encore, which wrote
to DTE Energy on June 28, explaining that:
These [Cummins] generators had been sold to another company who took
delivery of the units, but never installed or started the units.  They sat in place,
uninstalled/unused, until DSA Encore picked up the units and delivered them
to Galasso Riggers where they remained until now.  
Upon delivering the generators to Galasso Riggers, DSA Encore hired
Cummins Power to perform preventative maintenance and start the units, prior
to preparing them for storage.  
The generators have only a few test hours on them, and come with a full 1-year
warranty.
While there is evidence in the record that this letter was emailed to Fisk, it is unclear from
the record that Reliable or the VA received this email or the information contained in the
letter.  
On June 29, 2004, SRE Romano again wrote to Reliable, informing it that the
Government would not accept used equipment and asking for an explanation about the
generators:
To avoid any confusion or additional delay on your part . . . be advised that the
Government will not accept used equipment. . . . Only two of the three
[generators] ever showed up and they are not only used but also abused.  It is
inconceivable to me that you would have ever considered pulling off such a
deception on the Government.  I strongly advise for the sake of your
company’s reputation that you immediately provide a full explanation of the

CBCA 3048 5
above complete with your time to salvage the timely completion of this
contract.
Reliable again wrote to Fisk on June 29, 2004, advising that Reliable was taking the
matter very seriously and “as we discussed with you, the equipment on site is clearly
unacceptable by anyone’s standards.”  Reliable urged Fisk to have conforming equipment
delivered to the project as soon as possible due to the “critical nature of [the generators] to
the schedule and overall success of the project,” and asked that Fisk “immediately coordinate
with our field staff the removal of the unacceptable equipment from the site at the earliest
possible opportunity.”
Reliable also wrote to SRE Romano on June 29, saying it was in contact with Fisk,
which had assured that “they were as surprised as anyone at the condition of the equipment
delivered to the site.”  Reliable informed the VA that it had “directed [Fisk] to remove the
nonconforming generators from the project site.”  The June 29 correspondence between
Reliable and Fisk, as well as Reliable and the VA, stresses the importance of the contract’s
schedule, the impact the unacceptable generators were having on the schedule, and the
importance attached to resolving the generator issue.  
Fisk wrote to Reliable on June 29, 2004, saying that Fisk had requested the run hour
status of the two generators delivered to the project and had a representative from Cummins
physically view the generators and witness the history of them from the control panel. 
According to the estimation of the Cummins representative, the units were in “good
condition and [the representative] acknowledges that he had received information that they
are new generators from Cummins.”  The two generators’ control panels showed,
respectively, start hours (7 and 12), engine hours (3 and 2), control hours (9 and 4) and
kilowatt hours (2071 and 2251).  Fisk concluded to Reliable that “[t]he readings indicate that
the generators appear to only have been in test and start up condition.  At this time we are
waiting for the documentation from the manufacturers indicating a complete history and a
definitive plan of action from DTE to remedy the condition of the generators in place.”  Fisk
wrote Reliable on June 30, 2004, that a Cummins representative had accessed the generator
control panels via a laptop computer and “the control panel readings indicated both
generators had only factory startup and test run times.”  Fisk concluded: “In that the
generators appear to have been inadequately stored, we have directed DTE Energy to provide
us with their plan of action for removing the generators from the project and for providing
the generators in compliance to the purchase order.”  Fisk told Reliable it was “searching the
market place for other units in the event this issue cannot be resolved with DTE Energy.”

CBCA 3048 6
Around July 1, 2004, Reliable told Fisk to have the Cummins generators removed
from the VA project.  They were removed that day and shipped to OK Generators, which had
factory certified technicians capable of testing and servicing the Cummins generators.  
OK Generators tested the Cummins generators at its facility.  While it was invited to
do so, the VA did not observe the testing.  DTE Energy provided Fisk with a proposal around
July 8, 2004, to address the generator issue.  The proposal was set forth in a letter from DTE
Energy to Fisk stating it had verified that the two Cummins generators in issue “are unused
and warrantable”:
These units are fully backed by the standard DTE Energy Technologies
warranty and the underlying Cummins . . . 1 year warranty for new engines. 
Prior to our purchase of these units, they were purchased by DSA Encore and
placed in enclosures but never run.  In accordance with your request, a
representative from the local Cummins authorized service group went to the
job site, powered the units, and took readings of the run hours on two of the
three units; they were 2 hours and 3 hours.  The third unit has been powered
and shows 3 hours of run time.  These run times represent factory test time and
pre-startup activities and are typical of new units.
DTE Energy went on to propose that the Cummins generators be tested and evaluated,
adjusted as necessary, and “pre-conditioned”; and that the generators be returned to the site
on July 19, 2004.2  Fisk forwarded the DTE Energy proposal to Reliable on July 9, which
emailed it to SRE Romano on that same date.3
SRE Romano responded to Reliable on July 15, 2004, by quoting the contract’s
General Conditions provision 01001, 1.47(a) and stating: “[p]reviously owned equipment is
not new and as noted in DTE’s letter, DSA Encore had previously owned the generators
being offered.  Previous ownership makes them used.”  The SRE went on to state that “only
new generators with all the submittal data called for in 16208, 1.4[,] reviewed and approved
by the Prime Contractor and [VA] Engineer of Record[,] will be considered,” and “[t]he new
2 The pre-conditioning activities for the generators included: evaluation;
cleaning, removing rust, and painting the exterior surfaces; changing the oil and filters;
replacing the coolant; and cleaning, removing rust, and painting the mufflers.
3 In forwarding the proposal, Reliable noted that SRE Romano was on leave
from the project and would not return until July 15, 2004.  

CBCA 3048 7
generators are to be factory tested and the government selects the option of witnessing this
test.” 
On July 16, 2004, Fisk directed DTE Energy “to proceed with supplying submittals
and generators as per our purchase order, specifications and contract documents.”  According
to Reliable, DTE Energy wrote Fisk on July 21, 2004, to address the SRE’s concerns about
the generators, but SRE Romano attests that he has no recollection of receiving a copy of that
letter prior to receiving Reliable’s claim.  The record shows that, internally, Fisk’s purchasing
agent objected to SRE Romano’s conclusion that “previous ownership of [the Cummins
generators] makes them used,” and urged Fisk management to take exception to the SRE’s
conclusion.  However, the record does not contain documentary evidence that Fisk contacted
Reliable or that Reliable contacted the VA to take exception to the SRE’s conclusion.
At Reliable’s urging, Fisk started to look at supplying the VA project with three
Caterpillar 3516, 2000 kW generators for the emergency generation system.  Fisk used
Pantropic Power, Inc. and High Plains Power Systems, Inc. to supply the Caterpillar
generators.  Reliable’s submittal on the Caterpillar generators was approved on October 13,
2004.  On April 19, 2005, Reliable provided to SRE Romano certifications from Pantropic
and High Plains that the Caterpillar generators were “new.”
On April 3, 2007, Reliable submitted to the VA a certified claim in the amount of
$1,100,623 on behalf of Fisk “for the additional costs incurred due to the VA issued directive
to replace the [Cummins] 1825 kW emergency generators.”4  When the VA contracting
officer failed to issue a timely final decision, Reliable appealed the deemed denial of the
claim to this Board, where it was docketed as CBCA 3048.  On November 20, 2012, the
contracting officer (CO), Ed Nicholson, issued a contracting officer’s final decision denying
the claim.  CO Nicholson recounted some of the facts leading up to the issue and noted that
the VA SRE had asked Reliable to certify the generators were “new” and it failed to do so,
instead verifying that the generators were “unused” and “warrantable.”  CO Nicholson wrote
that “unused” and “warrantable” do not indicate that the units are “new”; he concluded that
the generators were “previously owned” and “reconditioned,” as defined by Federal
Acquisition Regulation (FAR) 52.211-5(a), in that they had to be “restored to the original
normal operating condition.”5  Additionally, the contracting disagreed that the Cummins
4 The claim was subsequently adjusted to $1,138,662.95.
5 The clause found at FAR 52.211–5 MATERIAL REQUIREMENTS, for use
in solicitations and contracts for supplies that are not commercial items, provides, among
other things, definitions for the terms “new” and “reconditioned.”  “New means composed
of previously unused components, whether manufactured from virgin material, recovered

CBCA 3048 8
generators were “of the most suitable grade for the purpose intended under the contract,”
particularly as “Fisk was as surprised as anyone at the condition of the equipment delivered
to the site,” and had originally concluded that “the equipment on site is clearly unacceptable
by anyone’s standards.”  CO Nicholson concluded the Cummins generators were “previously
owned” by DSA Encore and “required reconditioning in order to meet the contract
requirements.” 
Discussion
The dispute before us involves a question of contract interpretation and whether the
Cummins generators that Reliable offered to the VA were new and otherwise met the terms
of the contract.  To resolve this issue of interpretation, we look first to the plain language of
the contract.  See Foley Co. v. United States, 11 F.3d 1032, 1034 (Fed. Cir. 1993).  The
intention of the parties is gleaned from the contract’s clauses interpreted as a whole, giving
meaning to all provisions wherever possible.  An interpretation which gives a reasonable
meaning to all parts of an instrument will be preferred to one which leaves a portion of it
useless, inexplicable, inoperative, void insignificant, meaningless or superfluous; nor should
any provision be construed as being in conflict with another unless no other reasonable
interpretation is possible.  Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl.
1965).  We need not go beyond the four corners of this contract to decide the merits of the
dispute before us.  Id. at 976.
General Conditions provision 01001, 1.47(a) of the contract required Reliable to
provide that equipment was “new and of the most suitable grade for the purpose intended.” 
The contract provision specifically addressing the generators, section 16208, 1.3.E, also
required that the testing of the generators occur at the factory with the VA having the option
of witnessing the tests.  Reading the contract as a whole, to be considered new, each of the
generators had to be capable of being tested at the factory.  We believe that Reliable
understood this, and that is why, when the generator issue arose, it did not overly involve
itself in attempting to convince the VA that the generators were “new.”  Clearly, the
Cummins generators, which had been in storage for four years, could not be factory-tested
and did not meet the requirement of being “new.”  Further, it appears that at the time when
the Cummins generators issue arose and was being addressed by the VA, neither Reliable nor
Fisk characterized the Cummins generators as “new.”  Conversely, when the Caterpillar
material in the form of raw material, or materials and by products generated from, and reused
within, an original manufacturing process; provided that the supplies meet contract
requirements, including but not limited to, performance, reliability, and life expectancy.”  48
CFR 52.211-5(a).  “Reconditioned means restored to the original normal operating condition
by readjustments and material replacement.”  Id.  This clause was not included in the contract
before us.

CBCA 3048 9
generators were offered, Reliable and Fisk readily verified that the generators were “new,”
and appropriate certifications were forwarded to the VA.  The VA accepted the Caterpillar
generators and the certifications that they were “new,” and we decline appellant’s invitation
to look behind those certifications to analyze whether the Caterpillar generators had defects
similar to the Cummins generators. 
Decision
For the reasons set forth above, the Board DENIES the appeal.
                                                 
PATRICIA J. SHERIDAN
Board Judge
We concur:
                                                                                                  
STEPHEN M. DANIELS ANTHONY S. BORWICK
Board Judge Board Judge