MOTION FOR SUMMARY JUDGMENT DENIED:
March 27, 2020
CBCA 6349, 6463
RLS CONSTRUCTION GROUP, LLC,
Appellant,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
Joseph A. Camardo, Jr. of Camardo Law Firm, P.C., Auburn, NY, counsel for
Appellant.
Harold W. Askins III, Office of General Counsel, Department of Veterans Affairs,
Charleston, SC; and Donald C. Mobly, Office of General Counsel, Department of Veterans
Affairs, Denver, CO, counsel for Respondent.
Before Board Judges DRUMMOND, SHERIDAN, and SULLIVAN.
SULLIVAN, Board Judge.
These appeals arise from two claims for costs incurred as the result of alleged delays
and problems on a construction contract between the Department of Veterans Affairs (VA)
and RLS Construction Group, LLC (RLS). VA moved for summary judgment, contending
for various reasons that RLS cannot recover the five types of costs that it seeks. Because
there are disputed material facts, we cannot conclude as a matter of law that VA should
prevail. Therefore, we deny the motion.


CBCA 6349, 6463 2
Background
I. Relevant Contract Terms
A. Original Contract Terms and Performance
In May 2014, VA awarded to RLS a contract for the construction of a new entrance
at the medical center in Lebanon, Pennsylvania. The award amount was $2.15 million and
the contract required completion within 535 days. Exhibit 16 at 1. The notice to proceed
was issued on June 4, 2014, Exhibit 19, and VA took beneficial occupancy on May 3, 2017.
Exhibit 57. There are 1064 days between these two dates.
The contract contained several clauses relevant to the matters in dispute: Changes
clause, Federal Acquisition Regulation (FAR) 52.243-4 (48 CFR 52.243-4) (2014);
Suspension of Work clause, FAR 52.242-14; and, VA Contract Changes - Supplement
clause, Veterans Affairs Acquisition Regulation (VAAR), 852.236-88 (2014). Exhibit 16
at 20, 29–30.1 This last clause places limits on percentages of profit to be recovered on
changes, the same percentages set forth on VA change order costs summary forms used on
the contract. See, e.g., Exhibit 44 at 66. The contract also contained a Schedule of Work
Progress clause, VAAR 852.236-84, that required RLS to submit a schedule of work progress
when it submitted schedules of costs. Exhibit 16 at 27–28. The Board did not find any of
these schedules in the current record.
B. Modifications
Modifications 2–7. The contract was modified eight times; seven modifications are
relevant to this appeal. In modifications 2–7, VA sought to compensate RLS for work added
to the contract. Exhibits 28, 30, 34, 36, 37, 39. Each of these modifications contained
language releasing any additional claims for costs or time for this additional work. For
example, modification 2 stated:
The purpose of this modification is to increase this contract by $45,776.27.
The increase is needed to fund additional in scope work as described in the
statements of work contained herein. The current contract amount is
$2,150,000. The new contract amount will be $2,195,776.27. This
supplemental agreement represents full and complete compensation for all
1 Although some modifications were issued pursuant to the Changes and
Changed Conditions clause, FAR 52.243-5, this clause does not appear in the contract.

CBCA 6349, 6463 3
costs, direct and indirect, and all time associated with the agreement performed
herein, including but not limited to all costs incurred for extended overhead,
suspension of work, labor inefficiencies and impact costs.
See Exhibit 28 at 1. Each modification included a statement of work that described the
additional work covered by the modification. See, e.g., id. at 2. Modifications 3, 4, 5, and
6 also added days to extend the contract performance date, with the final extension to August
4, 2016. Exhibits 30, 34, 36, 37. The total time included in these modifications is 256 days.
Exhibit 44 at 16. Modifications 2 and 3 were issued under the Changes clause.
Modifications 4–7 were issued under the Changes and Changed Conditions clause.
In modification 4, RLS reserved its right to claim the increased costs associated with
the changes on unchanged work. Exhibit 34 at 1. The releases in modifications 5, 6, and 7
included a release of costs and time associated with “this change’s impact on unchanged
work.” Exhibits 36, 37, 39.
Modification 8. In August 2018, VA issued the final modification to the contract to
increase the contract amount by $107,938.96, to pay costs presented by RLS in a request for
equitable adjustment (REA). Exhibit 44 at 1. The modification was unilateral and issued
pursuant to the Changes clause. Id. The contracting officer determined that RLS was owed
money for five different types of costs, including $71,345.38 for supervisory and direct
expenses. Id. at 3, 16. In the modification, the contracting officer assumed responsibility for
490 days of “previously uncompensated schedule slippage.”Id. at 56.
II. RLS’s Claims
A. Periods of Delay Alleged
The parties dispute how long actual contract performance should have taken absent
the changes that are the subject of the modifications. RLS alleges that, based upon a
schedule provided to VA at the beginning of contract performance, Exhibit 48 at 18, and its
bid documents, Exhibit 49 at 15, it planned to perform the contract in 180 days. VA, in its
response to the REA, determined that performance should have required 318 days. Exhibit
44 at 16. The difference is 138 days.
This difference creates a dispute between the parties as to the number of days of delay
for which VA is responsible. As noted above, the period of performance was 1064 days.
Modifications 2–7 added 256 days of performance time to the contract. VA took
responsibility for another 490 days of delay in modification 8. RLS alleges, based upon

CBCA 6349, 6463 4
VA’s acceptance of 490 days of delay plus the difference of 138 days noted above, that VA
is responsible for 628 days of delay.
B. Types of Costs Claimed
Additional supervisory costs. RLS claims that it is owed direct supervisory costs and
fixed expenses of $71,062.41, for 138 days of delay. Exhibit 53 at 7. VA reimbursed RLS
these supervisory costs in modification 8, but disagreed that VA was responsible for the
additional 138 days because these days fell within RLS’s expected period of performance.
Exhibit 48 at 12. In response to this claim, the contracting officer observed that RLS
exceeded the activity durations for each step of its proposed schedule. Exhibit 44 at 1.
Additional administrative costs. RLS claims that it is owed $179,863.78 for additional
administrative costs it incurred due to VA-caused changes, delays, and disruptions. Exhibit
53 at 7–8. It appears that RLS estimated the costs of the time three senior RLS personnel
spent attending project meetings and providing additional oversight for the project over 628
days of delay. The estimates were developed by deriving the salary costs of these personnel
and then estimating a percentage of their time spent working on the contract. Id. at 63–67;
Exhibit 58 at 68–73.
In briefing, RLS cites to funding documents prepared by VA to obtain additional
funds for modifications to the contract in support of its claim. Exhibit 64. These funding
requests describe design deficiencies and unforeseen site conditions on the project. Id. at
171, 173. RLS also cites to deposition testimony of two of its employees describing RLS’s
efforts to address these design deficiencies. Exhibits 59, 66. RLS highlights that these
design deficiencies required RLS to prepare numerous requests for information (RFIs) and
perform other work to address issues that were not within the scope of the original contract.
Exhibits 28, 30, 34, 36, 37, 39. As an example, RLS describes delays in deciding issues
related to the replacement of a sanitary sewer pipe that was within the scope of the original
contract. Exhibit 66 at 199–206.
Home Office Overhead. RLS seeks $226,975.69 in home office overhead for 628
days of delay. Exhibit 53 at 6. RLS contends that its work on the contract was delayed and
disrupted due to VA-caused delays and that its bonding was “impacted.”Id. In briefing,
RLS explains how the project was held up for a year because it could not begin demolishing
the canopy at the front entrance to the hospital. Exhibit 65 at 180–81. It is unclear whether
RLS adjusted its allocable overhead figures to remove any costs attributable to the senior
administrative personnel costs which it seeks to recover as a direct cost. See Exhibit 58 at
73.

CBCA 6349, 6463 5
VA concedes for the purposes of the motion that RLS can meet the first two legal
requirements for the recovery of home office overhead, but asserts that RLS cannot show that
it was on standby. As support, VA cites the testimony of an RLS manager that RLS
continued working on the project, albeit at a “snail’s pace.” Exhibit 59 at 122. VA also
proffers a table that shows the payments to RLS over the contract period. Exhibit 60. The
table shows twenty-eight payments issued between June 2014 and December 2017, ranging
in amount from $25,000 to $250,000. Exhibit 60. As support for the contention that RLS
could obtain other work, VA cites to RLS’s financial statement for 2018, which shows that
RLS completed eleven other projects and had six other ongoing projects in that year. Exhibit
56 at 17.
Profit. RLS seeks $71,679.29, in profit. Exhibit 53 at 6. RLS calculated this amount
by applying a fifteen percent mark-up to its claims for direct and overhead costs. Id. RLS
alleges that it seeks this amount because of “the risk, financing, lost bonding, [and] lost
opportunities that RLS has been forced to incur as the result of the VA-caused changes,
disruptions and delays.”Id. at 10.
Proposal Preparation Fees . RLS claims $27,501.11, in proposal preparation fees.
Exhibit 53 at 6. The Board is unable to determine when these costs were incurred and for
what purpose. According to RLS’s claim, RLS “incurred contract administration proposal
preparation fees and costs associated with the various VA-caused problems and delays,” but
then suggests that the costs were incurred in the preparation and review of the second claim.
Id. at 10. RLS submitted a spreadsheet that tallies the hours for RLS personnel, but it does
not appear that the record includes the legal bills for the proposal preparation fees that RLS
seeks to recover. Id. at 63–67.
Discussion
I. Additional Supervisory Costs
RLS seeks supervision costs for an additional 138 days of performance, based upon
its contention that it would have performed the contract in 180 days rather than the 318 days
that VA determined in modification 8. VA disputes that RLS is entitled to additional
amounts for the 138 days that were within RLS’s period of performance. VA moved for
summary judgment, arguing that the contract term was 535 days and RLS cannot recover
costs based upon purported performance in less time.
VA’s motion, predicated solely upon the original contract performance period, misses
the mark. RLS’s claim is one for “early completion,” i.e. but for the alleged delays and
problems caused by VA, it would have finished the contract within 180 days. To prevail,

CBCA 6349, 6463 6
RLS must demonstrate that “it intended to complete the work before the contract completion
date.”Skyline Painting, Inc., ENG BCA 5810, 93-3 BCA ¶ 26,041, at 129,459. RLS’s intent
“must be supported by the course of [RLS’s] actions during contract performance that would
have led to such early completion absent unreasonable Government-caused delays.”Elrich
Contracting, Inc. v. General Services Administration,GSBCA 10936, 93-1 BCA ¶ 25,316,
at 126,142 (1992).
In response to VA’s motion, RLS cites to a submitted schedule and its bid documents,
both of which project finishing in 180 days. These documents are evidence of intent
sufficient to overcome VA’s motion. However, to recover on its claim, RLS will have to
establish that it “(1) intended to complete the contract early; (2) had the capability to do so;
and (3) actually would have completed early but for the [VA’s] actions.”Interstate General
Government Contractors, Inc. v. West, 12 F.3d 1053, 1059 (Fed. Cir. 1993). If any of these
delays were RLS’s responsibility, its claim for early completion will fail.See, e.g., Swanson
Products, Inc., ASBCA 48002, 96-2 BCA ¶ 28,289. We will await the presentation of
evidence at hearing before deciding whether RLS can recover on this aspect of its claim.
II. Additional Administrative Costs
VA challenges, for three reasons, RLS’s ability to recover the costs of the time that
three senior RLS officials spent coordinating the work over the term of the contract. One,
RLS signed releases for these costs. Two, since the contract is a fixed-price contract, RLS
cannot recover costs that were simply greater than it anticipated for work in the original
scope of work. And, three, RLS’s damages, based upon estimates developed after
performance, are too speculative.
Before addressing the specifics of VA’s motion, the Board makes the following
observation about the current record in this case. It is sparse and lacks details about what
problems RLS experienced and how these problems relate to the additional work covered by
the modifications. While RLS contends that VA is responsible for the problems and delays
that it experienced on the contract, there is little support for those claims in the current
record. In its response to VA’s motion, RLS describes a few discrete problems, such as the
direction to wait before moving ahead with the demolition of the canopy and discovery of
piping at the front entrance, and cites to supporting documentation and deposition testimony.
The record, however, does not contain an explanation as to whether those problems were
addressed by modifications to the contract or, if not, how those problems tie to the costs
claimed. At hearing, RLS has the burden to explain these problems and differentiate them
from work covered by the modifications.

CBCA 6349, 6463 7
Releases. VA argues that the release language in modifications 2–7 bars RLS’s
claims for these costs. VA is correct that release language that is clear on its face will
preclude the recovery of costs within its scope.Stobil Enterprise v. Department of Veterans
Affairs, CBCA 5698, 19-1 BCA ¶ 37,428. “[W]hen a bilateral contract modification does not
contain any reservation of claims, the modification constitutes an accord and satisfaction as
to the subject matter of the modification and the contractor cannot later narrow the scope of
the modification.”Trataros Construction, Inc. v. General Services Administration, GSBCA
15344, 03-1 BCA ¶ 32,251, at 159,459.
Here, the broad language of the releases bars RLS from recovering any additional
costs incurred as a result of the additional work covered by the releases. RLS also may not
recover for additional costs of unchanged work affected by the additional work covered by
modifications 5–7. The problem is that the Board cannot discern whether the administrative
costs RLS seeks were incurred as a result of this additional work or are tied to other problems
and issues encountered during performance of the contract. For example, RLS highlights
VA’s delay in releasing the work to demolish the front entrance canopy, but the Board cannot
discern whether this delay was encompassed within one of the modifications. While failure
to make this showing at hearing will preclude recovery by RLS, the Board cannot find on
VA’s motion that the release language bars the claims for these costs.
Fixed-price nature of the contract. VA also challenges RLS’s ability to recover these
costs because the costs were incurred to address work that was within the original scope of
work. VA is correct. If these costs were incurred in connection with work within the
original scope of the contract, the fixed-price nature of the contract would provide a basis for
denying these costs. BCPeabody Construction Services, Inc. v. Department of Veterans
Affairs, CBCA 5410, 18-1 BCA ¶ 37,013. RLS assumed the risk of unexpected costs on the
original scope of work. Lakeshore Engineering Services, Inc. v. United States , 748 F.3d
1341, 1347 (Fed. Cir. 2014). If, however, VA caused problems that were outside the scope
of the original contract and not covered by the modifications, the fixed-price nature of the
contract is not a bar to recovery. Because we cannot discern the origin of these costs, we
cannot grant VA’s motion on this basis.
Too speculative. VA challenges RLS’s ability to recover these costs because RLS
cannot prove its loss with any degree of certainty. VA notes, in particular, that RLS has
provided no contemporaneous records, choosing instead to estimate its costs after contract
completion.
RLS is seeking what it says were increased costs of its performance. It may recover
these costs based upon estimates only if it had “no more reliable method for computing
damages” and the evidence that it presents “is sufficient for [the Board] to make a fair and

CBCA 6349, 6463 8
reasonable approximation of the damages.”Dawco Construction Inc. v. United States, 930
F.2d 872, 880 (Fed. Cir. 1991). RLS bears the burden “to justify its failure or inability to
substantiate its damages by direct proof.”United Facility Services Corp. v. General Services
Administration, CBCA 5272, slip op. at 7 (Jan. 30, 2020).
To recover these costs, after specifically identifying the additional problems or delays
that led to the incurrence of these costs, RLS will have to justify its use of estimates and
explain why it could not track these costs contemporaneously. In addition, the salaries of
these individuals, based upon their positions, typically are included in home office overhead.
Interstate General , 12 F.3d at 1058. If RLS seeks to recover both these direct costs and
home office overhead based upon theEichleay formula, Melka Marine, Inc. v. United States,
187 F.3d 1370, 1375 (Fed. Cir. 1999) (Eichleay formula to be used to calculate amount of
unabsorbed home office overhead during period of indefinite delay), RLS will have to
establish that it has eliminated the costs of these individuals from itsEichleay calculation to
ensure that it is not seeking a double recovery. While RLS bears a heavy burden to prove
entitlement, VA has not provided a basis for summary judgment on these costs.
III. Home Office Overhead Costs
VA moves to preclude RLS’s claim for home office overhead, asserting that RLS
cannot establish that it was on standby, the third prong of the entitlement test. VA stipulates
that RLS can meet the first two prongs because the “VA assumed responsibility for all delays
associated with the contract performance with the issuance of modification 8.” Respondent’s
Motion at 27.
To recover home office overhead, a contractor must prove that (1) “there was a
government-caused delay to contract performance (as originally planned) that was not
concurrent with a delay caused by the contractor or some other reason,” (2) “the original time
for performance of the contract was thereby extended,” and (3) “it was required to remain
on standby during that delay.”P.J. Dick Inc. v. Principi , 324 F.3d 1364, 1370 (Fed. Cir.
2003). “[T]he ‘standby’ test focuses not on the idleness of the contractor’s work force
(either assigned to the contract or total work force), but on suspension of work on the
contract.”Interstate General, 12 F.3d at 1057. During a period of uncertain delay, the
contractor cannot mitigate its home overhead costs because it is required to remain ready to
perform. Id. at 1057–58. The “[s]uspension or delay of contract performance results in
interruption or reduction of the contractor’s stream of income from direct costs incurred.”
Id. at 1057.
VA asserts that, because RLS kept its workforce working on the project, albeit at a
lower level of effort, RLS cannot show that it was on standby. As noted above, the

CBCA 6349, 6463 9
entitlement to home office overhead does not depend upon whether RLS’s workforce was
idled. Instead, it depends upon whether there was a suspension or delay of indefinite
duration. Similarly, the testimony VA cites regarding the constant presence of employees
and subcontractors on the site does not defeat RLS’s ability to show that VA required RLS
to be ready to “resume full-scale work at any time.”Melka Marine, 187 F.3d at 1376.
VA also contends that the stream of payments was not interrupted, relying upon the
list of contract payments RLS received. Contrary to VA’s contention, this chart does not
establish that RLS “received [twenty-eight] payments on average approximately every 38
days in the amount $95,478.43.” Respondent’s Motion at 31. Instead, it shows that VA paid
RLS varying amounts over varying periods of time during the three years of contract
performance. This evidence does not provide a basis for summary judgment.
Finally, VA relies upon RLS’s financial statements as evidence that RLS could and
did take on additional work during the period of alleged delay. In response, RLS cites to
deposition testimony that RLS could not obtain additional bonding during this period. RLS’s
ability to take on additional work during this period remains an issue of fact that will be
decided after the hearing in this matter.
IV. Profit
VA challenges RLS’s claim for profit, asserting that recovery of profit is not allowed
under the Suspension of Work clause. If it is allowed in this case, however, VA also asserts
that fifteen percent is unreasonable and that RLS should be limited to the recovery permitted
by the VA Contract Changes - Supplement clause.
A contractor may not recover profit under the Suspension of Work clause. FAR
52.242-14. However, a contractor may recover profit under the Changes clause. FAR
52.243-4. While some of RLS’s claimed costs may arise pursuant to the Suspension of Work
clause, others may arise under the Changes clause. In addition, modification 8, a unilateral
modification, was executed under the Changes clause. Until the Board understands the basis
for the claims presented, we cannot determine that RLS is not entitled to any profit on its
claim.
VA also asks the Board to find that, because RLS’s financial records show a profit in
2018, any recovery of profit on its claims would be unreasonable. VA cites no case law
support for its position and the Board is unwilling to make such a finding on the current
record. However, the Board and its predecessors have applied the limits to the profits
contained in the Contract Changes - Supplement clause, VAAR 852.236-88(b)(5).See, e.g.,
BC Peabody Construction Services, Inc. Thus far, RLS has not provided a basis upon which

CBCA 6349, 6463 10
the Board could deviate from those limits, but we will await the presentation of evidence
before deciding this issue.
V. Proposal Preparation Fees
VA seeks summary judgment on RLS’s claim for proposal preparation fees, asserting
that the costs were incurred after RLS decreed in its first claim that a dispute existed between
the parties. RLS asserts that these costs were incurred in pursuit of negotiation of an
equitable adjustment that VA promised it would grant at the end of contract performance.
RLS does not cite to any documentation in support other than the material in its second
claim.
A contractor may recover legal fees that it incurred in connection with preparing
proposals and for negotiations relating to additional compensation.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). However,
these costs must be incurred in pursuit of negotiations, not the prosecution of a claim against
the Government, Bill Strong, 49 F.3d at 1550, or in other matters of contract administration.
Yates-Desbuild Joint Venture v. Department of State , CBCA 3350, et al. , 17-1 BCA
¶ 36,870. RLS bears the burden to prove that these costs are recoverable. Id.
VA seeks summary judgment because the costs were purportedly incurred in the
presentation of a claim to the contracting officer after the declaration of a dispute. Based
upon the description of the costs in the second claim, VA’s challenge has merit. However,
neither party has presented sufficient evidence as to what these costs were or when and why
they were incurred. Instead, they have provided merely competing assertions as to when or
why the costs were incurred. The Board cannot grant summary judgment on this basis.
At hearing, RLS will have to establish why the costs it seeks were incurred and when
they were incurred. Further, it will have to show that the costs it seeks were not incurred in
preparation of cost proposals or negotiation of additional work covered by the contract
modifications or claims for unchanged work related to modifications 5, 6, and 7.

CBCA 6349, 6463 11
Decision
VA’s motion isDENIED. The hearing in this appeal will begin on June 24, 2020.
Marian E. Sullivan
MARIAN E. SULLIVAN
Board Judge
We concur:
Jerome M. Drummond Patricia J. Sheridan
JEROME M. DRUMMOND PATRICIA J. SHERIDAN
Board Judge Board Judge