# In th e United States Court of Federal Cl aims

No. 05-914C (F iled: April 18, 2017)

************************************* K-CON B U I L DI

NG SYSTEMS, I

NC., * Trial; Contract to Desig n and B uild

* Prefabricated Metal B uilding ; RCF C 15; Plaintiff, * F utility of Supplemental Complaint;

* Contract Disputes Act of 1978; Remission

v. * of L iquidated Damag es; Counterclaim

* for L iquidated Damag es; Contractual THE UNI TED STATES, * Notice Requirement; Abandoned Claim;

* Ex cusable Delay ; Critical Path; Defendant. * Affirmative Defenses

*************************************

W illiam A. Scott, Charleston
, SC, for plaintiff.

Daniel B . Volk, United States Department of Justice, W ashing ton, DC, for defendant.

OP INION AND ORDER

SWEENEY , J udg e

Plaintiff K-Con B uilding Sy stems, I nc. contracted with the United States Coast Guard (“Coast Guard”) to desig

n and construct a prefabricated metal building in Eliz a beth City , North Carolina. B ecause plaintiff did not complete construction by the contract completion date, the Coast Guard assessed liquidated damag e s and, eventually , terminated the contract for default. Plaintiff filed suit challeng ing the default termination and the liquidated damag es assessment, and defendant filed a counterclaim to recover the liquidated damag es still owed by

plaintiff. After the court held a trial, the parties attempted–unsuccessfully

– to reach a settlement. Plaintiff then filed a motion seekingto resolve certain issues raised during the settlement discussions. The court ruled on that motion, dismissing plaintiff’s challeng e to the default termination for lack of jurisdiction. The parties thereafter submitted posttrial briefs, and plaintiff filed a motion for leave to amend its complaint. As set forth below, the court denies plaintiff’s motion for leave to amend its complaint, and concludes that defendant is entitled to recover liquidated damag es in the amount of $199,611.I. F A CTS

This section contains the court’s finding s of fact as required by Rule 52(a)(1) of the Rules of the United States Court of F ederal Claims (“RCF C”). 1

A. The Contracts

1. The F ederal Supply Schedule Contract

Plaintiff is a “desig n-build g eneral contractor” headquartered in Charleston, South Carolina whose business is focused on the federal g overnment. Tr. 86 (Reitmeier); accord Tr. 1268-69 (Combs). Specifically
, plaintiff has fulfilled over 4000 delivery orders for the federal
g overnment throug hout the United States and its territories. I d. at 1268, 1271 (Combs); see also id. at 3643 (Kiernan) (indicating that plaintiff has “had over 3000 delivery orders from the federal g overnment and over 400 of those have been specifically for pre-eng ineered metal building s”).

I n April 2001, the United States General Services Administration (“GSA”) awarded plaintiff a F ederal Supply Schedule contract for Prefabricated Structures and Outdoor Smoking Shelters. J t. Stip. ¶ 1; J X 2. That contract contained a number of clauses from the F ederal Acquisition Reg u lation (“F AR”), including F AR 52.212-4, Contract Terms and Conditions–Commercial I tems (May 1999). 2 J X 2.9; Pl.’s App. SJ 0001-90. Several parag raphs from that clause are relevant here. F irst, parag raph (d) provided:

Disputes. This contract is subject to the Contract Disputes Act of 1978, as amended . . . . F ailure of the parties to this contract to reach ag r eement on any request for equitable adjustment, claim, appeal or action arising under or relating

1 The court derives these facts from the parties’ J oint Stipulation of F acts (“J t. Stip.”), the transcript of testimony

elicited at trial (“Tr.”), the ex hibits admitted into evidence during trial (“PX,” “DX,” or “J

X”), and, as ex

plained below, see infra note 2, plaintiff’s appendix to its posttrial motion to dismiss (“Pl.’s App.”). Citations to the trial transcript will be to the pag e number of the transcript and the last name of the testify ing witness.

2 The trial record contains a portion of the F ederal Supply Schedule contract, and only includes the first eig ht parag raphs of F AR 52.212-4. Plaintiff submitted the entire F e deral Supply Schedule contract with its posttrial motion to dismiss, described in more detail below. The court included quotations from the remaining paragraphs of F AR 52.212-4 in its F ebruary 26, 2014 Opinion and Order. See K-Con B ldg

. Sy s., I nc. v. United States, 114 F ed. Cl. 722, 729- 30 (2014). Neither party

disputes the contents of these parag raphs or the applicability

of these
paragraphs to this case. I d. at 730. According ly
, the court treats those parag raphs as if they

were included in the trial record, and cites plaintiff’s appendix to its posttrial motion to dismiss as the source of those parag

raphs.

-2-to this contract shall be a dispute to be resolved in accordance with the clause of

F AR 52.233-1, Disputes, which is incorporated herein by reference.

J X 2.9. Second, parag

r aph (f) provided:

Ex cusable delay s. The Contractor shall be liable for default unless nonperformance is caused by an occurrence bey

ond the reasonable control of the Contractor and without its fault or neg lig ence such as, acts of God or the public
enemy , acts of the Government in either its sovereig n or contractual capacity
, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delay s of common carriers. The Contractor shall notify the Contracting Officer in writing

as soon as it is reasonably possible after the commencement of
any ex cusable delay , setting forth the full particulars in connection therewith, shall remedy such occurrence with all reasonable dispatch, and shall promptly g ive written notice to the Contracting Officer of the cessation of such occurrence.

I d. Third, paragraph (m) provided:

Termination for cause. The Government may terminate this contract, or any part hereof, for cause in the event of any default by

the Contractor, or if the Contractor fails to comply

with any contract terms and conditions, or fails to provide the Government, upon request, with adequate assurances of future performance. I n the event of termination for cause, the Government shall not be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor shall be liable to the Government for any and all rig hts and remedies provided by

law. I f it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience.

Pl.’s App. SJ 0014. F inally , paragraph (t) incorporated by reference F ederal Supply Schedule contract clause I -F SS-249-B
, Default (May 2000), id., which provided: 3

I n addition to any

other clause contained herein related to termination, the following is applicable to orders placed under F ederal Supply Schedule contracts.

Any orderingoffice may , with respect to any one or more orders placed by it under the contract, ex e rcise the same rig ht of termination, acceptance of inferior

3 Plaintiff provided the full tex t this provision in its posttrial motion to dismiss. Mot. to Dismiss 8 (quoting B earing Point, I nc. v. United States, 77 F ed. Cl. 189, 192 (2007)). The court reproduced this tex t in its F ebruary 26, 2014 Opinion and Order, K-Con B ldg . Sy s., I nc., 114 F ed. Cl. at 730, and as noted above, see supra note 2, neither party disputes the contents of this provision or the applicability of this provision to this case.

-3-articles or services, and assessment of ex cess costs as mig ht the Contracting

Officer, ex c ept that when failure to deliver articles or services is alleg e d by the Contractor to be ex cusable, the determination of whether the failure is ex cusable shall be made only

by the Contracting Officer of the General Services Administration, to whom such alleg ation shall be referred by the ordering office and from whose determination appeal may be taken as provided in the clause of this contract entitled “Disputes.”

2. The Coast G uard’s Solicitation

On September 2, 2003, the Coast Guard, throug h its F acilities, Desig n, and Construction Center (Atlantic) (“F DCC L A NT”), 4 solicited proposals under the F ederal Supply Schedule for Prefabricated Structures and Outdoor Smoking Shelters for the design and construction of a prefabricated metal building to house an Aviation Repair and Supply Center (“AR& SC”) component repair shop at the Coast Guard Support Center in Eliz abeth City , North Carolina. J t. Stip. ¶¶ 3-4, 10; J X 1.1; J X 2.1; J X 20.3; see also Tr. 2454 (Schmitt) (explaining that the AR& SC is a command that maintains and repairs aircraft). Specifically , the Coast Guard soug ht a 4700-square-foot building to house a hy draulic test lab, a workshop, office space, and storag e space. J t. Stip. ¶¶ 4-5. The contractor was to desig n the building based on the drawing s and specifications included in the request for proposals (“RF P”). J X 1.3, .10-.11, .140; accord J X 1.47 (“[ Specification] Section 01158, ‘GSA Procurement Desig n/B uild Criteria,’ and Drawing s contain abbreviated minimum facility requirements.”), .48 (“The desig n and desig n data indicated on the drawing s are the minimum requirements, i.e., baseline drawing requirements, to be used by

the Contractor to develop the project desig n. The Contractor shall add to, supplement, and complete these drawing s to fully comply with this GSA Procurement . . . .”). The contractor would then use that desig n to construct the building . J X 1.79. Additionally , the contractor was required to “[ d] isconnect, dismantle if necessary
, remove, relocate, reinstall, connect, and test” certain g overnment-furnished equipment. J X 1.40; accord J X 1.58 (listing “ex isting and/or new equipment” that the Coast Guard intended to install in the new building
, and providing that the contractor was required to “coordinate the desig n and provide support[ ] and utilities for” that equipment). Among the g o v ernment-furnished equipment were three pieces of hy

draulic test equipment–an HPTS-1000 with a 25-horsepower motor, an HA-60VM with a 40-horsepower motor, and an HS-25 with a 75-horsepower motor. J X 1.58; accord J X 1.15. The motor for each piece of equipment was separate from the equipment’s hy draulic testing sy stem, and in the case of the HS-25, the motor was mounted to the equipment’s ex terior. Tr. 2813-17 (F edei). The g overnment-furnished equipment also included a chiller. J X 1.58; accord J X 1.15. The chiller was connected to each of the three pieces of hy draulic test equipment by

a pair of pipes, one that supplied chilled water to collect the heat g enerated inside of the equipment and another that returned the heated water to the chiller to be rechilled. PX 332.18-.19, .22; Tr. 201-02 (Ramsey ), 2813, 2815, 3075-76 (F edei); accord id. at 501-03

4 The F D CC L ANT was located in Norfolk, Virg inia. J X 1.1.

-4-(Tempel) (explaining that the chiller removed heat that was g enerated in the equipment,

preventingthe heat from being rejected into the room).

I n rendering

desig n services, the contractor was required to provide the Coast Guard with civil, site, g eotechnical, landscaping , architectural, structural, fire protection, plumbing
, mechanical, electrical, and telecommunications desig ns, as well as with all “specified” calculations pertinent to the designs. J X 1.49-.74, .78; see also Tr. 229 (Ramsey ) (admitting that the contract required plaintiff to submit mechanical calculations with its desig n). Of particular importance in this case is the mechanical desig n, in other words, the desig n f o r the building ’s heating , ventilation, and air conditioning (“HVAC”) sy stem. The pertinent specification provided:

1 .13.2 Sy stem Description

The HVAC sy stems shall be desig ned to accommodate all building operations. Use of Carrier Air-conditioning Mfg . equipment is desired to match equipment currently being installed throug hout AR& SC to minimiz e trainingand repair parts.

. . . . 1.13.3 HVAC Sy stems

The HVAC sy stems shall be desig ned to meet the followingdesig n conditions:

Space W inter (F DB ) Summer (F D B /F W B [ ) ] Outside 19 93/78 I nside 70 76/50%RH (ty pical)*

*Spaces shall not ex c eed 60% RH during any occupied hours at full or partial load.

(F = Deg r ees F ahrenheit) (F DB = Deg rees F ahrenheit Dry B ulb) (F W B = Deg rees F ahrenheit W et B ulb) (F DP = Deg rees F a

hrenheit Dew Point) (RH = Relative Humidity )

1 .13.4 Sy stem Description

1.13.4.1 Heating a

nd air conditioning shall be provided by split sy stem heat pump air conditioners. Ductless split sy stem air conditioners with electric resistance heat or heat pumps may

be provided for isolated spaces where appropriate. . . .

-5-Provide air conditioning in all normally occupied spaces including offices, telecommunications rooms, test labs, work shops, corridors and toilets. . . .

. . . .

1.13.9 Ex isting hy draulic test equipment chiller: Disconnect chiller from ex isting equipment (HA-60, HPTS-1000, and HS-25) in Hang ar 75 Annex , relocate chiller to new location, and run new distribution pipingto the relocated equipment (HA-60, HPTS-1000, and HS-25), as shown on sheet A102. Use piping materials, insulation, and connections equivalent to the ex isting

.

J X 1.64-.66; accord J X 1.15 (indicating , on sheet A102, that the contractor was to “provide insulated chilled water piping between relocated chiller . . . & hy draulic test consoles HA-60, HPTS-1000, & HS-25” and “match valving & connections that ex ist[ ] in Shop 241 in Hang ar 75”); see also Tr. 497-99 (Tempel) (noting that the desig n parameters for the HVAC sy stem were located in parag

raphs 1.13.3 and 1.13.4.1 of the specification).

Proposals were due by

September 17, 2003. J X 1.1.

3. P laintif

f ’s P roposal

On Aug ust 28, 2003, prior to issuing its RF P, the Coast Guard conducted a prebid meeting at the Coast Guard Support Center in Eliz abeth City . J X 5.1; Tr. 102-04 (Reitmeier). Attending the meeting were a number of Coast Guard employ ees, plaintiff’s sales manag er Georg e Reitmeier, and representatives of another prospective offeror. J X 5.1; accord Tr. 102 (Reitmeier). The Coast Guard presented “Conceptual Desig n Site and F loor Plans” and answered questions. J X 5.1; accord Tr. 103 (Reitmeier). Thereafter, the “attendees walked . . . the proposed building site” and “toured ex isting Shop 241.” J X 5.1; accord Tr. 103 (Reitmeier). During the tour of Shop 241, the attendees were told that some of the equipment in that room would be relocated to the new building . Tr. 103, 140 (Reitmeier); see also J X 1.15 (reflecting that the ex isting g overnment-furnished equipment was located in Shop 241).

I n preparing

its proposal, plaintiff solicited quotations from other contractors to provide and install the HVAC sy stem. See, e.g ., J X 14; J X 510; see also Tr. 120 (Reitmeier) (noting that another company

would actually

desig n the HVAC sy stem). At least one contractor, W ard & Son, I nc., investig ated the g o vernment-furnished equipment that would be placed in the building
, the number and siz e of the rooms in the building , the location of the air handlers, and how the building would be insulated. J X 14.1-.2; Tr. 120 (Reitmeier); Tr. 504-05 (Tempel). During that investig ation, W ard & Son, I nc. “was told that the shop never operates but one test station at [ a] time and the duration is no long e r than four hours.” J X 14.9. B a sed on the information it
g athered, W ard & Son, I n c., calculated thermal loads, JX 14.3-.8, and then proposed an HVAC
sy stem with two heat pumps and two air handlers, J X 14.9. One heat pump and air handler unit would be used solely

for the hydraulic test lab, and the other heat pump and air handler unit

-6-would be used for the entire building and would “keep [ the] ‘hy draulic test room’ within the desig n specifications when test equipment [ was] not being used.” I d.; see also J X 15 (reflecting that W a rd & Son, I nc. proposed usinga 7.5-ton unit for the hy draulic test lab and a 10-ton unit for the entire building ). On September 16, 2003, W ard & Son, I n c. provided plaintiff with a quotation of $50,557 to install the proposed HVAC sy stem, J X 14.9, and plaintiff used that amount in preparing its cost estimate, J X 18.4; Tr. 118 (Reitmeier).

4. The Coast G uard’s Contract With P laintif f

Plaintiff responded to the solicitation and, on September 23, 2003, the Coast Guard placed an order under plaintiff’s F e d eral Supply Schedule contract for the solicited building . J t. Stip. ¶¶ 21-22. The initial value of the order was $513,520 and the initial completion date was J une 17, 2004. I d. ¶ 22. Ultimately , throug h bilateral contract modifications, the value of the order was increased to $551,155.35 and the completion date was ex tended to November 9, 2004. 5 See J X 3.1-.10. F rom plaintiff’s perspective, its contract with the Coast Guard was ty pical of its contracts with the federal g overnment, both in ty pe and amount. Tr. 1270, 1279 (Combs).

Plaintiff’s contract with the Coast Guard included and incorporated by reference a number of provisions relevant to the issues in this case. F or ex ample, the contract included F AR 52.211-12, L iquidated Damag e s - Construction (September 2000), which provided:

(a) I f the Contractor fails to complete the work within the time specified in the contract, the Contractor shall pay liquidated damag es to the Government in the amount of $551.00 for each calendar day of delay until the work is completed or accepted.

(b) I f the Government terminates the Contractor’s rig ht to proceed, liquidated damag e s will continue to accrue until the work is completed . These liquidated damag e s are in addition to ex cess costs of repurchase under the Termination clause.

J X 1.30. I n addition, the contract incorporated by reference four other relevant F A R provisions. One is F A R 52.233-1, Disputes (December 1998), which provided:

(a) This contract is subject to the Contract Disputes Act of 1978, as amended . . . .

5 Specifically , a J anuary

13, 2004 modification resulted in a contract price increase to $516,571.46, J X 3.1-.2; an April 15, 2004 modification resulted in a contract price increase to $549,602.46 and a time ex tension to October 21, 2004, J X 3.3-.4; an August 20, 2004 modification resulted in a time ex tension to October 26, 2004, J X 3.6-.7; a September 9, 2004 modification resulted in a contract price increase to $551,155.35, J X 3.7-.8; and a November 10, 2004 modification resulted in a time ex tension to November 9, 2004, J X 3.9-.10.

-7-(b) Ex cept as provided in the Act, all disputes arising under or relating

to this contract shall be resolved under this clause.

(c) “Claim,” as used in this clause, means a written demand or written assertion by

one of the contracting

parties seeking , as a matter of rig ht, the
pay ment of money

in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. . . .

(d)(1) A claim by

the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 y ears after accrual of the claim to the Contracting Officer for a written decision. A claim by the Government ag ainst the Contractor shall be subject to a written decision by the Contracting Officer.

F AR 52.233-1, cited in J X 1.37. The second is F AR 52.243-4, Chang es (August 1987), which provided:

(a) The Contracting Officer may , at any time, . . . by w ritten order desig nated or indicated to be a chang e order, make chang es in the work within the
g eneral scope of the contract . . . .

(b) Any other written or oral order (which, as used in this parag raph (b), includes direction, instruction, interpretation, or determination) from the Contracting Officer that causes a chang e shall be treated as a chang e order under this clause; Provided, that the Contractor g ives the ContractingOfficer written notice stating

–
(1) The date, circumstances, and source of the order; and

(2) That the Contractor reg ards the order as a chang e order.

. . . . (d) I f any chang e under this clause causes an increase or decrease in the Contractor’s cost of, or the time required for, the performance of any part of the work under this contract, whether or not chang e d by any such order, the Contracting Officer shall make an equitable adjustment and modify the contract in writing . However, ex cept for an adjustment based on defective specifications, no adjustment for any chang e under parag raph (b) of this clause shall be made for any costs incurred more than 20 days before the Contractor g ives written notice as required.

-8-F AR 52.243-4, cited in J X 1.38. The third is F A R 52.249-2, Termination for Convenience of the

Government (F ix ed Price) (September 1996), which provided:

The Government may

terminate performance of work under this contract in whole or, from time to time, in part if the Contracting Officer determines that a termination is in the Government’s interest. The Contracting Officer shall terminate by

deliveringto the Contractor a Notice of Termination specify ing the

ex tent of termination and the effective date.

F AR 52.249-2(a), cited in J X 1.38. And, the final relevant F AR provision incorporated into the contract by

reference is F AR 52.249-10, Default (F ix ed-Price Construction) (April 1984), which provided:

(a) I f the Contractor refuses or fails to prosecute the work or any separable part, with the dilig ence that will insure its completion within the time specified in this contract including any ex tension, or fails to complete the work within this time, the Government may , by written notice to the Contractor, terminate the rig ht to proceed with the work (or the separable part of the work) that has been delay ed. I n this event, the Government may take over the work and complete it by contract or otherwise . . . . The Contractor and its sureties shall be liable for any damag e to the Government resulting from the Contractor’s refusal or failure to complete the work within the specified time, whether or not the Contractor’s rig ht to proceed with the work is terminated. This liability includes any

increased costs incurred by the Government in completing the work.

(b) The Contractor’s rig

h t to proceed shall not be terminated nor the Contractor charg ed with damag es under this clause, if–

(1) The delay

in completing the work arises from unforeseeable causes bey

ond the control and without the fault or neg lig ence of the Contractor. Ex amples of such causes include [ acts of the Government in either its sovereig n or contractual capacity
, or unusually severe weather,] and

(2) The Contractor, within 10 day s from the beg inning of any delay (unless ex tended by

the Contracting Officer), notifies the Contracting Officer in writing of the causes of delay . The Contracting Officer shall ascertain the facts and the ex tent of delay . I f, in the judg ment of the ContractingOfficer, the finding s of fact warrant such action, the time for completing the work shall be ex tended. The finding s of the Contracting Officer shall be final and conclusive on the parties, but subject to appeal under the Disputes clause.

-9-(c) I f, after termination of the Contractor’s rig ht to proceed, it is determined that the Contractor was not in default, or that the delay was ex c usable, the rig hts and oblig ations of the parties will be the same as if the termination had been issued for the convenience of the Government.

(d) The rights and remedies of the Government in this clause are in addition to any

other rig hts and remedies provided by law or under this contract.

F AR 52.249-10, cited in J X 1.38.

Pursuant to other contract provisions, plaintiff was to commence work within fourteen day s of contract award; meet with the Coast Guard for a postaward kickoff meeting within fourteen to twenty -eig ht day s of contract award, but prior to the commencement of work; 6 submit a “practicable schedule” either within fifteen day s of the commencement of work or another time period desig n ated by the Coast Guard’s contracting officer; and complete work no more than 262 day s after contract award. J X 1.24, .74. I n addition, plaintiff was to submit the desig n to the Coast Guard in two phases–a “100% desig n” and a “final desig

n”; the Coast Guard would have twenty -one day s to provide comments on the 100% desig n and fourteen day s to provide comments on the final desig n . J t. Stip. ¶ 14; see also J X 1.80 (containingspecification section 01160, paragraph 2.2.3, which provided: “The Contracting Officer’s review team shall review each design submittal and provide comments reg arding the submitted documents.”). W ithin fourteen day s of receiving the Coast Guard’s comments, plaintiff was to confer with the Coast Guard via telephone to “resolve desig n review comments and desig n issues.” J X 1.79. Plaintiff was required to “acceptably address all comments on the design submittals and subsequently correct the submittals for review.” J X 1.80; accord id. (containing specification section 01160,
paragraph 2.2.4, which provided: “When a desig n submittal is considered unacceptable to the Contracting Officer’s review team, the Contractor shall be so advised and required to provide a resubmittal for that particular desig n phase.”).

I f plaintiff “determine[ d] that some portion of the drawing s, specifications, or other contract documents require[ d] clarification or interpretation,” it could submit a request for information (“RF I ” ) to the Coast Guard. J X 1.105. The Coast Guard was required to respond to the RF Iwithin ten day s unless it “determine[ d] that a long er period of time [ was] necessary to provide an adequate response”; in such circumstances, the Coast Guard was oblig ated, within ten day s of receiving the request, to “notify [ plaintiff] of the anticipated response time.” JX 1.106. I f the Coast Guard’s response constituted a chang e to the contract requirements, the Coast Guard would “issue either a no-cost field Adjustment or formal modification under the Chang es clause of the contract.” I d. I f the Coast Guard failed to take such action, and plain tiff believed that the response would “cause a chang e to the requirements of the contract documents,” plaintiff was

6 The requirements for the commencement of work and the postaward kickoff meeting cannot be reconciled; however, the discrepancy has no relevance to the remaining issues in this

case.

- 10-required to “g ive written notice to the Contracting Officer stating

that [ it] consider[ ed] the response to be a chang e order. F ailure to g ive such written notice immediately . . . waive[ d plaintiff’s] rig ht to seek additional time or cost under the Chang e s clause of the contract.” I d.

Plaintiff could not beg in construction until the final desig n was approved by the Coast Guard. J X 1.79.

B. Contract P erf orm ance

W o rk on the project did not beg in within the time anticipated in the contract; indeed, the postaward kickoff meeting was not held until December 4, 2003. J t. Stip. ¶ 23. Among the Coast Guard employ ees who attended the meeting were L t. Harry Mautte from the Coast Guard Support Center, Kent Goodwin from the AR& SC, and several individuals from the F DCC L ANT, including the contracting specialist, the construction project manag er/contracting officer’s technical representative, the desig n project manag e r, and a mechanical eng ineer. J X 35.1. Attending the meeting for plaintiff were plaintiff’s project manag er, Greg Herald, and representatives from two subcontractors. Id. None of plaintiff’s designers attended the meeting

. I d.; Tr. 2426 (Schmitt); see also Tr. 3107 (B roussard) (exp laining that contractors g enerally bring their desig ners to postaward kickoff meeting s).

During the meeting , Mr. Herald advised the Coast Guard of plaintiff’s intent to submit the 100% desig n on J anuary 10, 2004. J t. Stip. ¶ 23. I n addition, the Coast Guard informed plaintiff that it was willing to allow plaintiff to “fast track” the construction of the building “by accepting the foundation’s desig n ahead of the desig n for the rest of the building ” ; plaintiff responded that this was its preferred course of action. I d.; accord id. ¶ 29; see also Tr. 2429-35 (Schmitt) (ex plaining that construction could beg in once plaintiff had prepared an architectural floor plan, a structural desig n, a site plan, and a foundation plan), 2696 (ex plaining that the Coast Guard’s fast-tracking sug g e stion was made in response to plaintiff’s representation that it would be submitting a 100% desig n ). At the conclusion of the meeting , at least some of the attendees–including

the Coast Guard’s mechanical eng ineer, J o hn F edei–walked the building site. J X 35.1-.2; Tr. 2786 (F edei); see also Tr. 2799, 2816 (F edei) (indicating that he also walked throug h the ex isting building containing the g overnment-furnished equipment).

Mr. Herald provided the Coast Guard with a tentative project schedule on December 11, 2003. J X 38. Thereafter, on J anuary 6, 2004, Mr. Herald submitted an RF I to the Coast Guard concerning

a number of issues that needed to be addressed before plaintiff could finish desig ning the HVAC sy stem in the hy d raulic test lab. J t. Stip. ¶ 24; J X 42. I n particular, Mr. Herald requested specification sheets (also known as “cut sheets”) for each piece of equipment to be installed in the hy draulic test lab, as well as information reg ardingthe heat transference from the

- 11-equipment and the equipment’s normal operating parameters. 7 J t. Stip. ¶ 24; J X 42. The

contracting

officer’s technical representative responded the following day :

Specifications for the g overnment furnished and installed equipment should be obtained by

field investig ation by

K-CON and/or [ its] desig ners . . . . 8 Some information (including operatingparameters) may be obtained from AR& SC (Kent Goodwin) or [ Coast Guard Support Center] F acilities Staff (Lt. Harry Mautte). In any

case, K-CON is responsible for all necessary services to develop the desig n

.

J X 44.2 (footnote added). Mr. Herald replied, later that day , that he recog

niz ed plaintiff’s “responsibility

to investig ate[ ] and develop[ ] the desig n” and that he would try and contact the
sug g ested individuals for the information it needed. I d. Mr. Herald also received another response to its RF Ifrom the Coast Guard that day , this time from Michael Schmitt, the Coast Guard’s design project manag er. J X 43; J X 44.1. Mr. Schmitt wrote:

The RF P documents indicate what equipment is being g overnment furnished and installed. . . . Obviously , operatingtimes and durations must be obtained from the user (AR& SC).

Even thoug h K-CON had nothingto do with the desig n of the ex isting shop, at the pre-bid conference, we walked throug h the shop . . . and discussed and viewed the equipment to be moved to the new building . W e attempted to provide as much information in the RF P reg ardingex isting equipment as possible for bidding purposes, however, we anticipated that fieldwork on K-CON’s part would be required to complete the desig n.

J X 44.1; see also J X 5 (describing what occurred during

the Aug ust 28, 2003 prebid conference and indicating that a representative from plaintiff was in attendance).

7 The terms “heat transference” and “heat load” are used throug h out the trial record; both refer to the same concept–the amount of g e nerated heat.

8 There was conflicting

testimony

elicited duringtrial reg ardingwhether the heat transference information requested by plaintiff could be obtained during a site visit. Compare Tr. 242 (Ramsey

) (sug g esting that in the absence of documentation, the only way to ascertain how much heat the equipment g enerated was to measure the heat g eneration while the equipment was being operated), and Tr. 5661-62, 2718 (Schmitt) (remarking that heat information–such as the siz e of the motors on the g overnment-furnished equipment and how the equipment was being cooled–could be ascertained from a site visit), with Tr. 522 (Tempel) (asserting that heat loads could not be obtained from a site visit).

- 12-Mr. Herald provided the information he had obtained from the Coast Guard to the

subcontractor that plaintiff hired to desig n the HVAC sy stem, Epic Eng ineering , I nc. (“Epic”). 9 J X 47; see also Tr. 510 (Tempel) (reflecting that Mr. Herald’s RF Ihad orig inated from Epic). I n minutes from a J anuary

8, 2004 project conference, Mr. Herald noted that “all of Epic[ ’] s questions [ had] b e e n answered” and that the “[ d ] esig n should be ready by ” J anuary

25, 2004. J X 47.

Notwithstanding Mr. Herald’s understanding , Epic needed additional information to complete the HVAC sy stem desig n. J X 57; accord Tr. 606 (Tempel) (disag reeing that all of Epic’s questions had been answered). Thus, on J anuary 22, 2004, Mr. Herald sent a list of questions to the Coast Guard to obtain that information. J X 57.1-.2. Mr. Schmitt responded the following day , initially

noting that the “questions [ were] very similar in nature to those asked in [ the] RF I. . . .” J X 57.1. He indicated that many of the questions–those that concerned “specifications/cut sheets”–could be answered by either ex amining the ex isting equipment that would be relocated to the new building (in other words, by

performing

a field investig ation) or by requestingliterature and data from Mr. Goodwin, and that another question could be answered by reviewing sheet A102. I d.

Eventually , on F ebruary

3, 2004, one of Epic’s principals, Aaron C. Tempel, a mechanical eng ineer, Tr. 480 (Tempel), sent an electronic-mail messag e to Mr. Goodwin requesting“cut sheets/specifications” and other information reg ardingthe g overnment-furnished equipment, but not information reg arding the equipment’s operating times and durations. I d. at 845-46; J X 70. Mr. Goodwin responded, on F ebruary 20, 2004, with some of the requested information, but noted that “[ n] o cut sheets [ were] available to [ his] knowledg e.” J X 70.1. B a sed on this information, along with the information he had obtained from the contract specifications and Mr. Herald, Mr. Tempel made some assumptions and prepared a preliminary mechanical desig

n that provided for two units, a 10-ton unit and a 5- or 7.5-ton unit. Tr. 516-20 (Tempel); accord id. at 650-52 (affirming that the preliminary

mechanical drawing s did not reflect a 100% desig

n).

I n the meantime, on F e bruary 12, 2004, plaintiff provided the Coast Guard with a revised project schedule. J X 71. I n a F ebruary 23, 2004 letter, one of the three Coast Guard contracting officers involved with this contract, Marion E. Hundley
, 1 0 advised plaintiff that the schedule was

9 Plaintiff also eng ag ed Epic to desig n the building ’s electrical, plumbing , and fire alarm
sy stems. J X 47; J X 126.1; see also Tr. 483 (Tempel) (reflecting that Epic does “all” of plaintiff’s “mechanical, electrical, plumbing
, and fire alarm desig n for just about every

building [ it does] where there’s not already an eng ineer[ ] of record on board”). There is no evidence in the trial record indicating that Mr. Herald contacted Mr. Goodwin or L t. Mautte prior to providing Epic with the information he obtained from the Coast Guard.

1 0 The contracting

officer identified in the contract was Cathy B roussard. J X 1.26. I n December 2003, Ms. B roussard was promoted to be the chief of contracts at the F D CC L ANT.

- 13-“disapproved” for various reasons, including the fact that several items were missing . I d. Ms. Hundley further noted that plaintiff had not y et submitted its 100% desig n despite indicating in its orig inal schedule that it would do so by J anuary 13, 2004. I d. She requested that plaintiff submit another revised schedule by March 4, 2004. I d.

Plaintiff sent its first set of desig n documents–architectural, HVAC, plumbing , electrical, fire alarm, site, and structural drawing s–to the Coast Guard on F ebruary 23, 2004, for review and comment. J X 72; J X 701. On F ebruary 25, 2004, the Coast Guard’s project manag er, Steven Allen, discussed the submission–which the Coast Guard received the previous day –with plaintiff’s new project manag e r, L uther Ramsey
, 1 1 over the telephone. J X 75.1. L ater that day
, Mr. Allen followed up the telephone conversation with an electronic-mail messag e in which he provided Mr. Ramsey

with “a partial list of concerns about the desig n submittal.” J X 75. F or

ex ample, with respect to the HVAC drawing s, Mr. Allen noted that plaintiff did not include any calculations or supportingdata for the HVAC sy stem and that the HVAC floor plan was “unusual” and “vastly

incomplete.” J X 75.1; see also Tr. 529-30 (Tempel) (ex plaining that only preliminary

HVAC calculations could be performed in the absence of heat transference information and that the floor plan “was as complete as it could possibly be based on the very limited and inconclusive information that [ Mr. Tempel and plaintiff] had received”). Mr. Allen

ex p lained that the Coast Guard did not “feel that [ the] submittal met the intent of the RF P documents” and that as a result, it “consider[ ed the] submittal incomplete.” J X 75.1; see also J X 77 (containingMr. Schmitt’s statement that “the desig n was close to being finished”); Tr. 224 (Ramsey ) (acknowledg ing that the desig n submittal was incomplete). He sug g ested that plaintiff have its desig ners contact the relevant Coast Guard reviewers “to avoid [ the Coast Guard] having to reject another submittal.” J X 75.1; see also J X 79 (indicatingthat the Coast Guard reviewers had not been contacted by plaintiff’s desig n ers as of March 4, 2004); Tr. 843-44 (Tempel) (indicating that Mr. Tempel did not contact Mr. F e dei until J uly 2004), 2790-91 (F edei) (noting that Mr. F edei did not receive a telephone call in response to the Coast Guard’s sug g estion to plaintiff). F inally , Mr. Allen indicated that the Coast Guard was willing to assist plaintiff in avoiding “potential schedule slippag es” by allowing plaintiff to “submit the foundation/structural

Tr. 3088-89 (B r oussard). As a result of the promotion, Ms. B roussard became Ms. Hundley ’s supervisor. I d. at 3094. A third contracting officer, Victoria W . W orrell, filled the position vacated by

Ms. B roussard. I d. Ms. B roussard remained involved in the Coast Guard’s contract with plaintiff so that she could train the other contracting officers reg ardingF e deral Supply Schedule contracts. I d. at 3092-93.

1 1 Plaintiff fired its orig inal project manag er, Mr. Herald. J X 112.1; J X 113; Tr. 1385-86 (Combs). The evidence in the trial record reflects that Mr. Herald was responsible for some of the early delay s in the project. See, e.g ., J X 103 (“The orig inal [ project manag er] is who caused the start-up of this project to fall on its face. . . . They a re strug g ling under problems that their orig inal [ project manag er] caused.”); J X 112.1 (“K-CON’s first [ project manag er] mismanag ed the project and g ot it off on the wrongfoot. . . . K-CON’s orig inal [ project manag er]
, who was fired for lack of performance, clearly mismanag ed the project by [ its] own admission.”).

- 14-desig n in advance to allow that portion of the construction contract to proceed in advance of the

interior building desig n.” J X 75.2; accord J X 79 (reiterating , in a March 4, 2004 electronic-mail
messag e, the offer to allow plaintiff to “‘fast-track’ building foundation work”); J X 86.1 (reiterating , in a March 16, 2004 electronic-mail messag e, the offer to allow plaintiff to “‘fasttrack’ buildingfoundation work”).

Mr. Ramsey

prepared a new project schedule on F ebruary 29, 2004, and submitted it to the Coast Guard. J X 532; Tr. 213, 215, 223 (Ramsey ). Then, on March 3, 2004, Mr. Ramsey traveled to Eliz abeth City and viewed the equipment that the Coast Guard wanted installed in the new building . Tr. 187, 191-93, 198-200 (Ramsey ). He observed that “two of the units . . . were still connected,” but that “[ t] he rest were unconnected and pushed away in corners [ with] no evidence of how they

were installed.” I d. at 191. He further found that much of the equipment was “very old, very antiquated.” I d. at 187; accord id. at 192. He was advised by Mr. Goodwin, who took him to view the equipment, id. at 210, that the Coast Guard did not have “any catalog [ s] , cut sheets, or any kind of maintenance manuals” for the equipment, id. at 192; accord id. at 210, 235, 264; see also id. at 271 (indicating that Mr. Ramsey

did not recall whether he asked Mr. Goodwin for the equipment’s operating schedules). Mr. Ramsey forwarded the information that he g athered during his site visit to Epic. I d. at 210.

That same day , plaintiff sent a letter to the Coast Guard requesting an ex tension of the contract completion date by 105 day s–until September 30, 2004–ex plaining that its performance had been delay

ed for several reasons, including :

• The [ Coast Guard] contract[ ] requirements differ materially from the standard GSA g uidelines Desig n-B uild requirements. I n comply ing with y our eng ineeringpackag e we have discovered that full desig n is really what y ou are requiring . This requires more time. Ex ample: I n desig n build we can traditionally

start some site and foundation work at the same time that final building desig n calculations are being proofed. Currently

we have to hire
survey ors[ ] and soil eng ineers to do pre-desig n work before the construction desig n can be started, then desig ns cannot be completed until the building structur[ e] is desig n ed. I t is a case of having all the answers in hand before a task can be viewed completed.

• Requests for information on owner furnished equipment have been incomplete. W e are currently scheduling a trip back to obtain this information. This has caused mechanical and electrical desig n to be incomplete.

J X 78.1. The Coast Guard responded to this letter the nex t day via electronic mail, J X 79, and followed up with a letter on March 23, 2004, JX 91. I n that letter, the Coast Guard indicated that plaintiff’s request for additional time was not sufficiently justified. J X 91.1. The Coast Guard also reiterated that the 100% desig n that plaintiff submitted on F ebruary 23, 2004, was

- 15-incomplete, referring plaintiff to an enclosed list of comments, J X 91–the same comments that the Coast Guard sent to plaintiff on F ebruary 25, 2004, compare J X 75.1 (comments of F ebruary 25, 2004), with J X 91.2 (comments of March 23, 2004).

Throug hout March 2004, plaintiff and Epic continued to g ather information from the Coast Guard that they

needed to design the building ’s HVAC sy stem. See, e.g

. , J X 90; J X 92; J X 94. I n addition, on March 18, 2004, Mr. Tempel calculated thermal loads for the hy draulic test lab and determined that the room required a 7.5-ton unit. J X 89; Tr. 527 (Tempel); see also Tr. 807-08 (Tempel) (noting that the calculations were “improper” and “erroneous” because Mr. Tempel lacked the heat load information for the equipment to be placed in the hy draulic test lab). At the end of the month, plaintiff issued subcontracts to the contractors who had provided quotations and assisted in the desig n . J X 95. One of those contractors was W ard & Son, I nc., who had provided a quotation for the desig n and installation of the HVAC sy stem. J X 109.1. I n an April 1, 2004 letter, J ack W ard of W ard & Son, I nc. ex pressed concern reg ardingthe effects that the delay

in receiving

the subcontract and the increased scope of work described in the subcontract would have on W ard & Son, I nc.’s ability to perform at the price it quoted almost seven months earlier. J X 109.1-.3; see also J X 142 (indicating , in a May 25, 2004 revised quotation, that W ard & Son, I n c. could install the HVAC sy stem for $74,405). Of particular note, Mr. W ard advised:

Iwas told that y our mechanical eng ineer would redraw and check over my desig n and calculated loads. I w as surprised when I received no new drawing s and am being asked to sig n off on drawing [ s] and loads that I g ave you as part of y

our subcontract [ sic]

. Does this mean that what I g ave you is approved by y our [ mechanical eng ineer] ? Or am I g o ing to g et a surprise with radical chang e s in the future? . . . I n

F ebruary
, Ispoke with Aaron Tempel, y o ur project design [ mechanical eng ineer]
, and I g ot the feelingfrom him that because of the ex isting water chiller that I may

have over calculated the added cooling load when their test equipment is operating . At that time we talked about the fact that [ the HVAC
sy stem for the hydraulic test lab] did not need to be a heat pump and could be a cooling only

sy stem. W h atever became of these two subject[ s] of conversation?

J X 109.2; cf. J X 511 (reflecting that plaintiff cancelled its subcontract with W ard & Son, I nc. on J uly 27, 2005 due to the increased quotation).

Meanwhile, on March 31, 2004, plaintiff sent another letter to the Coast Guard to request

an ex tension of the contract completion date by 105 day s. J X 98. I t enumerated several reasons for the delay s it was encountering ; in addition to the reasons set forth in its March 3, 2 0 04 letter, plaintiff contended that the delay s were attributable to the following issues:

• Desig n required more site investig ation than orig inally estimated. I nitially K Con, I nc tried to implement the desig n process with utiliz ing owner provided information and/or throug h a series of RF Ity pe emails. This proved to be

- 16-unsatisfactory . Our desig n budg et was based on this approach and was value passed on to the owner in the bid price.

• Visiting and reviewing ex isting sy stems has not clarified, but to the contrary has shown there ex ists inoperable equipment, undersiz ed sy stems and in
g eneral “not standard installations” that we may have to mimic.

• There was additional equipment not known at bid time that had to be reviewed and questioned as to status.

J X 98.2. I n a memorandum dated April 1, 2004, Mr. Allen recommended to the contracting office that the contract completion date be ex tended by 105 day s: forty

- four day s for the delay in conducting the postaward kickoff meeting , thirty -five day s related to steel shortag es, and twenty

six day s to account for the additional time required to “coordinate/resolve [ the] connection of Government relocated equipment.” J X 102.

Also on March 31, 2004, Mr. Schmitt advised Mr. Allen via electronic mail that he noticed that plaintiff’s initial architectural and structural drawing s reflected a building that was smaller than specified in the drawing s included with the RF P; it was almost two feet shorter in both leng th and width. J X 101.2; see also J X 1.14 (containingthe relevant RF P drawing ). Mr. Allen forwarded Mr. Schmitt’s observations to Mr. Ramsey on April 1, 2004, who responded that plaintiff’s desig n conformed with the contract specifications setting forth the building dimensions and square footag e . J X 101.1-.2; see also J X 1.53 (containingthe relevant specification section). That same day, in an internal Coast Guard electronic-mail messag e, Mr. Schmitt wrote:

Our RF P drawing s clearly indicate a building that is 76'

- 11" x 61' -11" , with structural frame dimensions (centerlines) of 75' -0" x 60' -0" (which is what I intended by

the dimensions listed in the specifications). This is a clear discrepancy , but one that should have been broug ht to our attention. The Contractor’s desig n ers used our [ computer-aided desig n d] rawing s to develop their drawing s. I n order for them to develop their drawing s, they had to consciously

reduce the building

1' -11" in each direction. Since this was a conscious effort on their part, they should have broug ht it to our attention. They did not.

J X 101.1; accord Tr. 2714-18, 2772-75 (Schmitt).

On April 5, 2004, plaintiff sent a third letter to the Coast Guard requesting an ex tension of the contract completion date. JX 106. I n this letter, plaintiff requested an ex tension of 126 day s: forty -five day s for the delay in conducting the postaward kickoff meeting
, six ty day s related to steel shortag es, and twenty -one day s to accommodate redesig ning the building to add
approx imately

two feet to the building ’s leng th and width. I d .; Tr. 249, 252-53 (Ramsey )

- 17-(assertingthat plaintiff’s request did not relate to the HVAC sy stem or the hy d raulic test lab); see also Tr. 2722-24 (Schmitt) (acknowledg ing that chang ing the building s’ dimensions would require chang ing all of the drawing s and the redoing the structural calculations). F our day s later, Mr. Allen submitted to the contractingoffice a “request for proposal” to ex tend the contract completion date by

126 day s: forty -five day s for the delay in conducting the postaward kickoff meeting , thirty -five day s related to steel shortag es, twenty -five day s related to “[ c] o ordination issues in Dec-F e b timeframe,” and twenty -one day s to accommodate redesig ning the building to add approx imately two feet to the building ’s leng th and width. J X 530.4-.5. The parties ultimately

ex ecuted a bilateral contract modification, effective April 15, 2004, that ex tended the contract completion date by 126 day s to October 21, 2004, without indicating the reason or reasons for the ex tension. 1 2 J X 3.3-.4; accord Tr. 3176 (B roussard). B y ex ecuting the modification, plaintiff released the Coast Guard “from any and all liability

under [ the] contract for further equitable adjustments attributable to such facts or circumstances g iving rise to the proposal for adjustment, includingall claims for impacts, delay s, and disruptions.” J X 3.4.

W h ile plaintiff and the Coast Guard were neg otiating the contract modification, Mr. Tempel, on or around April 1, 2004, sent plaintiff preliminary mechanical drawing s and a document setting forth the information that he needed to finaliz e those drawing s. J X 100; J X 703. The drawing s reflected, as proposed previously, the use of a 10-ton unit to condition the entire building and a 7.5-ton unit to provide supplemental conditioningfor the hydraulic test lab. J X 703.13; Tr. 533 (Tempel); accord id. at 809 (ex plaining that the April 1, 2004 desig n was basically the same as the preliminary desig n, just more detailed). The requested information included “component nameplate data” and “[ c] o mponent connection requirements” for various pieces of g overnment-furnished equipment, including the equipment to be placed in the hy draulic test lab. J X 100.2. Mr. Tempel recog niz e d that the nameplate data and connection requirements would need to be obtained during a site visit. I d.

The Coast Guard received another 100% desig n submittal from plaintiff on April 5, 2004. J X 113; J X 115.1. F our day s later, before completing its review, the Coast Guard sent plaintiff via electronic mail some “initial comments that need[ ed] to be addressed sooner rather than later” because some of the drawing s did not conform to the contract specifications. JX 115.1. F or

ex ample, Mr. F edei questioned whether the hy draulic test lab was receiving “ex cess cooling ”
g iven the amount of heat being removed by

the chilled water sy stem. I d.; J X 119.53. I n addition, plaintiff did not provide any “HVAC calculations” with its submission. J X 115.1; see also Tr. 2794-95 (F edei) (indicating that there “was very

little chang e” between this mechanical desig n and the previously submitted desig n, and specifically noting that plaintiff had not made
any corrections or answered any of the Coast Guard’s concerns). And, the Coast Guard noted that the ceiling clearances in the hy draulic test lab would not accommodate the ducts proposed by plaintiff. J X 115.1; J X 119.53.

1 2 According

to Mr. Ramsey , who neg o tiated the contract modification on plaintiff’s behalf, the modification did not include an ex tension of time related to the HVAC sy stem desig n issues. Tr. 471 (Ramsey

).

- 18-Shortly thereafter, on April 13, 2004, the Coast Guard provided plaintiff with a complete set of marked-up drawing s. J X 119. The Coast Guard’s reviewers placed their names and telephone numbers on the drawing s that they reviewed. J X 119.21, .32, .39, .51. The mechanical drawing s, which were prepared by Epic, were marked up by Mr. F edei. J X 119.51-.55; Tr. 827 (Tempel), 2797-98 (F edei). I n the letter accompany

ing the marked-up drawing s, Ms. Hundley noted that the “comments [ did] not constitute a chang e to [ the] contract.” J X 119.1. She further requested that plaintiff submit a revised project schedule reflecting the newly

ex tended contract completion date. I d. That same date, Mr. Ramsey forwarded the Coast Guard’s initial comments to plaintiff’s desig n ers, including Mr. Tempel. J X 120.1. Then, on April 19, 2004, Mr. Ramsey provided Mr. Tempel with Mr. F edei’s contact information. J X 125.1. Mr. Tempel did not immediately

contact Mr. F edei. See Tr. 843-44 (Tempel) (indicating that Mr. Tempel did not contact Mr. F edei until J uly 2004), 2822 (F edei) (same).

After additional prompting , J X 133.1, plaintiff sent the Coast Guard a revised project schedule on May

5, 2004, J X 135; J X 136. The Coast Guard deemed the schedule to be incomplete, and relay

ed this fact to plaintiff during a May 6, 2004 telephone conference. J X 133.1; J X 139. After the conference call, another of the three contracting officers involved with this contract, Cathy

B roussard, sent plaintiff a letter warning that plaintiff’s “failure to submit a
proper progress schedule and failure to perform any work on site was endang eringthe performance of [ the] contract,” and that plaintiff had ten day s in which to cure the deficiencies. J X 139. Plaintiff responded to the cure letter on May 16, 2004, describingits prog ress in various aspects of the project. J X 141. I t ex plained that it was “refining [ its] construction schedule with suppliers and subcontractors” and would submit the schedule on May 20, 2004. J X 141.2; see also J X 751 (containing a project schedule prepared by plaintiff on May

19, 2004, that projected that the desig n would be complete by J une 23, 2004, and that all work would be complete by October 21, 2004). I

t further indicated that it had completed the lay out of the building and was “coordinating ” with the Coast Guard reg ardingthe “the location of ex isting utilities.” J X 141.2. I n addition, plaintiff asserted that it planned “to start site work and installation of the building pad” on May

18, 2004, and that, “[ o ]nce the [ f] oundation desig n [ was] revised and approved,” it was prepared to install the foundation. I d. B ut see J t. Stip. ¶ 36 (reflectingthat plaintiff did not install the building pad until Aug ust 19, 2004). F inally
, it stated that it was “inspectingthe

ex isting equipment to be relocated . . . and . . . holding on site discussions with the base personnel to evaluate the impact of the[ ] planned move[ ] .” J X 141.2.

On J une 2, 2004, Mr. Tempel sent an electronic-mail messag e to Mr. Ramsey and Mr. Schmitt requesting additional information to complete the HVAC sy stem desig n in lig ht of the Coast Guard’s April 9, 2004 initial comments. J X 144.1; see also Tr. 837-39 (Tempel) (ex plaining that he discussed the Coast Guard’s comments with plaintiff before sending the electronic-mail messag e). In particular, Mr. Tempel requested “detailed cut sheets” of the equipment that would be placed in the hy draulic test lab so that he could “determine the equipment’s temperature tolerances and the actual heat g ain to the space.” J X 144.1. He noted that once he obtained this information, he could “address the ductwork siz es and location[ s] ,” and in the absence of such information, he made certain assumptions reg ardingthe g overnment-

- 19-furnished equipment. I d. Among Mr. Tempel’s assumptions were that “[ o] nly one piece of equipment [ would] o p erate at one time,” that the 75-horsepower motor would produce a specified amount of heat, and that “[ t] he chilled water sy stem [ w ould] compensate for” some of the heat g enerated by

the equipment. I d. Mr. Schmitt responded to Mr. Tempel on J une 7, 2004, by forwarding

a copy of the electronic-mail messag e that had been sent to Mr. Herald in response to similar questions several months earlier. J X 147.1; see also J X 57 (containingthe forwarded electronic-mail messag e, which was dated J anuary 23, 2004); J X 70.1 (reflecting that Mr. Tempel had already

been advised, on F ebruary 20, 2004, that no cut sheets were available for the
g overnment-furnished equipment); Tr. 192 (Ramsey ) (reflecting

that Mr. Ramsey

had already been advised, on March 3, 2004, that no cut sheets were available for the g overnment-furnished equipment).

I n the meantime, on J une 3, 2004, Mr. Tempel sent revised drawing s to Mr. Ramsey , but noted that further revisions mig h t be necessary if his assumptions reg ardingthe hy draulic test lab equipment were incorrect. J X 145; J X 704; J X 705; see also Tr. 540-41 (Tempel) (indicating that there were no “sig

nificant chang es” between the revised mechanical drawing s and those Mr. Tempel prepared on April 1, 2004). The following day , plaintiff resubmitted its 100% desig n drawing s–including architectural, HVAC, plumbing , electrical, fire alarm, site, and structural drawing s–to the Coast Guard. J X 146. The Coast Guard received the drawing s on J une 7, 2004. I d.; J X 148.1. Mr. F edei reviewed the mechanical drawing s and ex pressed his concerns to Mr. Schmitt and Mr. Allen reg a rding (1) some of the assumptions made by Mr. Tempel and (2) the evidence sug g esting that a site visit to assess the ex isting equipment was not conducted. J X 150.1. I n particular, Mr. F e d ei indicated that Mr. Tempel incorrectly assumed that the 75- horsepower motor was operating at full capacity

and efficiency for long periods of time, and that the chilled water sy stem compensated for some of the heat g enerated by the motor. I d.; Tr. 3037- 38 (F edei).

As reflected in internal electronic-mail messag es sent on J une 9, 2004, the Coast Guard determined that plaintiff’s most recent 100% desig n submittal was deficient and, therefore, unreviewable. J X 151; J X 152. The drawing s were not easily readable, J X 148.1, plaintiff did not submit a foundation plan or foundation calculations, J X 151, and there were a number of issues with the HVAC sy stem desig n, J X 152.1. W ith respect to the latter problem, Mr. F edei noted:

F rom a mechanical standpoint it would appear that the HVAC treatment is deficient, as can be discerned from my e-mail of y esterday , but without calculations it is unsure of the ex tent. The calculations were apparently not officially required by

the spec[ ifications] . The area of g reatest concern is the Hy draulic test room, which, after looking at the eng ineer’s provided assumptions, Ifeel may be sig n ificantly mistreated. In addition, none of my previous comments were addressed at this submittal. W ith the ex ception of [ three items,] there was little, if any

thing , done to any

other mechanical sheets since the last submittal.

- 20-I d. The Coast Guard advised plaintiff via electronic mail that it needed “readable prints and a

correct foundation plan.” J X 151.

Plaintiff submitted another set of 100% desig n drawing s to the Coast Guard on J une 10, 2004, consisting of the previously omitted foundation plan and more leg ible copies of the other drawing s. J X 156. Mr. Schmitt instructed the Coast Guard reviewers to ascertain whether the drawing s were sufficiently complete to allow for a review and, if so, to review the drawing s for “‘compliance with’” the RF P. I d. Mr. Schmitt collected the reviewers’ comments and forwarded them to Mr. Allen. J X 157. He advised:

The mechanical desig

n has some sig n ificant comments that will require resolution and at least one may

be two more resubmittals will be required before the documents are useable for construction. Please recommend in y our letter of transmittal that K-CON’s mechanical eng ineers contact J o hn F edei via telephone before they

proceed to correct their desig n.

I d.

The Coast Guard forwarded its comments and a set of marked-up drawing s to plaintiff on J une 18, 2004. J X 158. W ith respect to the mechanical desig n, the comments mirrored those made by Mr. F edei in his internal communications–that some of the assumptions that formed the basis of the desig n

mig ht not be correct, that it appeared that the desig ners did not conduct the recommended site visit, that the HVAC treatment was deficient, and that the hy draulic test lab appeared to be mistreated. J X 158.4-.5. In the letter accompany ing the comments, Ms. Hundley heeded Mr. Schmitt’s recommendation and informed plaintiff: “The mechanical desig n has some sig nificant comments that will require resolution. Re-submittal of the mechanical desig n will be required before the documents are useable for construction. Please ensure y our mechanical eng ineer contacts [ Mr. F edei] before re-submitting the mechanical desig

n.” J X 158.1. Ms. Hundley also advised plaintiff that it could “proceed with the metal building and foundation construction” and then “[ i] ncorporat[ e] and correct[ ] the architectural, mechanical, and electrical drawing s . . . while foundation construction is occurring .” I d.; see also J X 164 (clarify ing , in a J une 23, 2004 electronic-mail messag e, the J une 18, 2004 letter to reflect that plaintiff could proceed with construction unless it took ex ception to the review comments and that the foundation drawing s were required to “be sealed and sig ned by the desig ner of record”); cf. Tr. 221-22 (Ramsey

) (ex plaining that “[ n] o ne of the items bey o nd the mechanical roug

h-in could be installed until [ plaintiff] had a mechanical desig n” and that the electrical, plumbing , and fire alarm sy stems could not be completed until the mechanical sy stem was desig ned), 489-92 (Tempel) (remarking

that the mechanical sy stem has to be desig ned before the electrical sy stem, and that the mechanical desig n could affect the architectural and structural desig ns). Plaintiff forwarded the Coast Guard’s letter and comments to Epic on J une 21, 2004. J X 159; see also J X 159.8-.13 (containingMr. Tempel’s notes reg ardingthe Coast Guard’s comments).

- 21-W o rk on the job site beg an on J une 29, 2004, when plaintiff’s site work subcontractor

laid out the building and beg an ex cavation. J X 4.36; J X 168.1; see also J X 169 (reflecting that the work had commenced before the submission of sig ned and sealed foundation drawing s and that therefore, the work was being done at plaintiff’s own risk). I n ty pical metal building construction projects, once ex cavation is completed, the foundation and slab are poured, the building ’s structural steel is erected, and the wall and roof panels are installed. J X 532; Tr. 967- 69 (Parker), 1274-75 (Combs), 2436-37 (Schmitt). Then, the windows and doors are installed (or the opening s covered) to make the building weather-tight. Tr. 223 (Ramsey ), 968-70 (Parker). At this point, contractors can beg in work on the interior of the building . Tr. 967-70 (Parker); accord J X 532; Tr. 223 (Ramsey ). Generally , the HVAC sy stem is installed first due to the larg e siz e of the equipment and the ductwork. Tr. 492 (Tempel), 968-69 (Parker). After the mechanical, electrical, plumbing , and fire alarm sy stems are rough ed in, the walls can be completed. J X 532; Tr. 1658-59 (Combs). The ceiling s are completed after the aforementioned
sy stems are fully installed. J X 532; accord Tr. 968-69 (Parker). F inally , when the interior is complete, the contractor demobiliz es. J X 532.

Plaintiff “submitted sealed structural foundation drawing s to the Coast Guard” on J uly 6, 2004. J t. Stip. ¶ 34. On J uly 12, 2004, the Coast Guard accepted those drawing s and allowed plaintiff to “proceed with construction.” J X 175.

One day later, plaintiff submitted an RF Ito the Coast Guard based on correspondence from Mr. Tempel. J X 179. Mr. Tempel had written:

Ihave spoken with the Coast Guard’s mechanical eng ineer J ohn F edei to discuss dealing with the heat loads g enerated from the hy draulic test equipment. B a sed on this conversation there are two options that are acceptable to the Coast Guard:

1. Ex haust the air utiliz ing hoods and fans to remove heat, and provide a conditioning unit to condition the make up air. This option could potentially

cost a considerable amount more to install and to operate. I t is also out of y our orig inal scope of work.

2. Provide an air conditioningsy stem that is approx imately 30% larg er than the one serving

the ex isting equipment lay out. This sy stem must also be siz ed to account for any differences in the new vers[ u] s ex isting building envelope. This will only partially condition the space, but will satisfy Mr. F edei.

During conversations while conducting the research it has been broug ht to
my attention that the hy draulic test equipment g enerates a considerable amount of mist within the room. This hy draulic mist may be both an environmental and an

ex p losive haz ard and may require special desig

n conditions for both the

- 22-mechanical and electrical sy stems. I t is imperative that this issue be resolved prior to completing the desig n of the mechanical sy stem, and may require revisions to the electrical sy stem as well.

J X 178.2; J X 179.3; see also Tr. 545-46 (Tempel) (noting that the first option was a different
sy stem that would require different equipment and that the second option was what had already been desig ned). In lig ht of Mr. Tempel’s comments, plaintiff requested, in its RF I , direction on how to deal with the potentially haz ardous conditions in its desig n. J X 179.2. F urther, in the electronic-mail messag e containingthe RF I , plaintiff noted that “[ t] he ex panding HVAC requirements [ were] impacting [ its] desig n and construction budg ets.” J X 179.1. I t therefore requested a contract modification once the Coast Guard “decided which issues it wishe[ d] to address and which to ignore.” I d

. Upon reviewing

the RF I , Mr. F edei took ex ception to Mr. Tempel’s letter, writing the following in a J uly

13, 2004 electronic-mail messag e to Mr. Allen:

F irst, [ the relevant contract specification] indicates that K-CON is to provide HVAC to the facilities, and while it indicates the ty pes of equipment that the user would like to see beingused, [ it] does not in any manner dictate how the spaces are to be treated. I

t states that HVAC is to be provided in accordance with [ specified] mechanical codes. [ Mr. Tempel’s telephone call] y e sterday was predicated on his requesting assistance in try

ing to resolve how to specifically treat the Hy

draulic Test room (since he did not do a site visit). W e discussed what knowledg e he had of the equipment, how he calculated his loads, and some of the possibilities of obtaining a reasonable treatment of the spaces since he had no real feel for any

heat output, etc. of the ex isting hy draulic equipment, etc. . . . At no time did I ever indicate that [ the two options in his letter] were the only options acceptable . . . . I

was try ing to help him resolve a situation which he was not prepared to handle, but was not directing how it was to be done. The [ relevant contract specification] clearly g ives him the latitude to do it [ w ith] other means, as long as it meets [ the specified industry ] standards.

J X 180. Ultimately , a conference call was scheduled for J uly 20, 2004, for plaintiff and the Coast Guard to discuss the RF I . J X 181.2; J X 183.

The conference call occurred as scheduled, after which plaintiff sent an electronic-mail
messag e to the Coast Guard containing its summary

of the participants’ discussion. J X 186. I t described the conversation reg a r ding the heat load of the hy draulic test equipment as follows:

During our phone conference we discussed the desig n of the HVAC
sy stem for room 106. I t is known our current and orig inally proposed and budg eted desig n will not work efficiently within this room. Additional calculations were conducted on room 106 due to the amount of heat generated by

- 23-the 75hp motor and 25hp motor. After conducting those calculations our mechanical eng ineeringg roup submitted two options that may be acceptable to the Coast Guard. As it was discussed both of those options are not inclusive of K-Con’s orig inal budg e ted desig n nor our proposal based on the RF P documents received by

the [ Coast Guard] . I t was discussed that K-Con needs an accurate operating schedule to correctly desig n the HVAC tonnag e for room 106. W e were told a more accurate schedule would be provided by Monday the 26th of nex t week. Once this information is received we will reevaluate the desig n and submit for final approval and/or a cost or no cost [ chang e order]

.

W e also discussed the amount of hy draulic fluid that is being improperly released from the ex isting equipment and creating a fine mist that is currently choking the ex isting HVAC sy stem. This information was provided to our mechanical eng ineer by

on site personnel/operators. K-Con is requesting that the

ex isting test equipment is repaired prior to the install of the new equipment or a letter is received from contracting releasing K-Con and the HVAC manufacturer from any warranty claims to the hy draulic mist within room 106.

I d.; see also J X 178.2 (containingMr. Tempel’s handwritten note that the Coast Guard advised plaintiff during the conference call that it would not be required to make any adjustments related to the hy draulic mist); J X 188 (containinganother participant’s notes reg ardingthe siz e of the HVAC sy stem). B ut see J X 44.1-.2 (reflecting that the Coast Guard advised plaintiff on J anuary 7, 2004, to contact the AR& SC to obtain the g overnment-furnished equipment’s normal operatingparameters). Plaintiff also noted in its electronic-mail messag e that it had sent its 100% desig n packag e to the Coast Guard earlier that day . J X 186; accord J X 191 (indicatingthat plaintiff sent the Coast Guard civil, architectural, structural, electrical, HVAC, plumbing , and fire alarm drawing s, alongwith a fire sprinkler lay out and plans for the prefabricated metal building ); see also Tr. 869-70, 872 (Tempel) (indicating that the mechanical desig n was essentially

the same as the prior mechanical desig ns), 872-75 (representing that at this point in time, Mr. Tempel did not believe that obtainingthe operating schedule of the equipment to be placed in the hy draulic test lab would affect the desig n because (1) the Coast Guard had ex pressed its willing ness to accept a heat pump and air handler unit that was 30% or 50% larg er than the

ex isting unit, and (2) every one “understood that the conditions in the RF P couldn’t be met”).

After the conference call, Mr. Schmitt g athered the information related to the operating schedule of the equipment in the hy draulic test lab from Mr. Goodwin at the AR& SC. J X 189; J X 202. Mr. Schmitt ex plained to Mr. Goodwin that plaintiff “[ had] been makingsome wrong assumptions and g athered some erroneous (we think) information regardingthe hy draulic test lab equipment operating

times.” J X 189.1. Mr. Goodwin provided the requested information two day s later. 1 3 J X 202.1-.2. In addition to noting the equipment’s operating frequency

and

1 3 Upon receiving the collected information, Mr. Schmitt remarked to Mr. Goodwin: “[ I ] t looks as thoug h we will be havinga problem try ing to cool this room with reasonably siz ed

- 24-duration, Mr. Goodwin indicated that “[ t] he HTS-25 [ sic] and the HPTS-1000 run at the same

time, about twice a month, @ a 2 hour duration.” JX 202.2.

The Coast Guard also reviewed plaintiff’s most recent 100% desig n packag e–received on J uly 14 and J uly

21, 2004–and prepared a list of comments. JX 205.2-.5. Relevant to the hy draulic test lab’s HVAC sy stem, it noted:

• “B asically

a repeat of the same concern that the HVAC coverag e of the Hy draulic test lab needs to be re-assessed to determine more accurate heat dissipation loads and means of efficiently treatingthe area of concern.”

• “Need a return line to AHU-2 from the hy draulic test room. Due to heat, and possibly some slig ht odor build up in the room, would also recommend that the test room be under a slight neg ative pressure to help maintain comfort odors in the surroundingareas.”

• “Any hy draulic misting occurring within the test room is a result of equipment problems (leaking

hose or fitting s, etc.) which is a maintenance problem that [ the AR& SC] needs to address. I t is not an item of concern for the desig ner as it is not a normal condition that should be occurring during the test operations.”

J X 205.3. The Coast Guard forwarded its comments to plaintiff on J uly 23, 2004. J X 205.1. I n the letter accompany

ing the comments, the third contracting officer involved with the contract, Victoria W . W orrell, noted that the Coast Guard had completed its review of plaintiff’s 100% desig n “with the ex ception of the HVAC sy stem.” I d. She further stated:

The HVAC sy stem has some outstanding issues related to the hy d r aulic test lab that require resolution, and re-submittal of the mechanical desig n will be required before the documents are useable for construction. W e feel that the resolution of these issues is ultimately K-CON’s responsibility , but we want to assist in every

way we can to resolve the “real” desig n requirements. Therefore, our mechanical reviewer, Mr. J ohn F edei, has contacted the building user to request information reg ardingthe operating parameters of the various pieces of test equipment. W e ex pect that a meeting at the site or, at the very

minimum, a conference call will be required to resolve these issues.

I d.; see also Tr. 2829 (F edei) (remarking , with respect to the importance of a site visit, that “[ i] t would have been beneficial for [ every one] to take a look at the equipment and discuss the

equipment.” J X 202.1. However, Mr. F edei disag reed, testify ing during trial that he could desig n an HVAC sy stem for the hydraulic test lab that used reasonable siz ed equipment. Tr. 3045-46 (F edei).

- 25-parameters . . . and work out [ the] differences or . . . come up with a consensus [ reg arding ] a

prag matic approach to the desi g n of this project” and that it “would have g iven [ Mr. Tempel] an opportunity

to see the equipment firsthand . . . so he could see why his assumption was incorrect”). Then, after emphasiz ing that the Coast Guard’s comments were not to be considered chang es to the contract, Ms. W orrell indicated that once plaintiff had incorporated the Coast Guard’s comments and submitted its final desig n, it could “proceed with all work other than that related to the HVAC sy stem,” and that once the desig n requirements of the HVAC sy stem were resolved, the mechanical drawing s could be incorporated into the final desig n. J X 205.1; accord Tr. 2738-40 (Schmitt) (indicatingthat plaintiff was permitted to do every thing but install the HVAC sy stem and that if there were any problems as a result allowing plaintiff to proceed in this manner, the Coast Guard would bear responsibility ); see also Tr. 1320 (Combs) (noting that “thing s related to the HVAC sy stem could be electrical, . . . architectural, [ or] structural even”).

On J uly 28, 2004, Mr. Schmitt forwarded the information that he received from Mr. Goodwin reg ardingthe operating schedule of the equipment in the hy draulic test lab to plaintiff’s new project manag e r , B utch Clay ton. 1 4 J X 212. The followingday , Mr. Clay ton forwarded the information to Mr. Tempel, J X 260.1, and plaintiff and the Coast Guard ag reed to conduct a conference call–to also include Mr. Tempel–on J u ly 30, 2004, to discuss the HVAC sy stem desig n, J X 212.1. The conference call was apparently rescheduled for Aug

ust 2, 2004, J X 217.3, but on that date, Mr. Allen advised plaintiff that the Coast Guard would “need to defer [ the] phone call . . . until another date, perhaps after the proposed mod[ ification] is forwarded,” J X 217.2. The proposed modification referenced by Mr. Allen related to the Coast Guard’s decision to “‘build-out’ as much of the undeveloped space in the new [ building ] as [ it could] within” its budg et. J X 153.1. I n deed, on Aug ust 3, 2004, the Coast Guard requested that plaintiff “[ p] rovide desig n

and construction documents to ex pand building first floor build-out, add on elevator and add rooms on second floor . . . .” J X 219.1; accord J X 220; see also Tr. 2632 (Schmitt) (characteriz ing the proposed modification as requiring “considerable interior work” that included “HVAC work”). Plaintiff submitted its proposal to the Coast Guard on September 8, 2004. J X 244.2. The Coast Guard decided not to accept it, J X 244; J X 245; J X 246, and so informed plaintiff by

telephone on September 9, 2004, J X 248. After the telephone call, plaintiff’s president, Patrick Kiernan, sent an electronic-mail messag e to the Coast Guard reflecting plaintiff’s ong oing frustration:

Imay add (as I have verbally

and in writing previously ), we have 50 or so projects
g oing nationwide. Most of our projects are running quite smoothly with a partnership mentality

among g overnment-customer, K-Con and sub/suppliers. W h en a customer in that scenario asks for an RF P, the desig n/builder (and/or sub/suppliers) doesn’t have to spend ex tra hours and day s making sure they cover

or ex c lude in writing all the ‘snares’. Unfortunately, our short relationship with [ the Coast Guard] involving [ projects in Eliz abeth City , St. Petersburg , F lorida, and Port Huron, Michig an] has proven to be not only painful, but a far cry

from

1 4 Mr. Clay

ton replaced Mr. Ramsey on J uly 21, 2004. Tr. 268, 272, 431 (Ramsey ).

- 26-profitable. Since we and our sub/suppliers are “for profit” org aniz ations in a free enterprise sy stem, this relationship has been less than “win-win”, therefore, a failure to date.

I d.; accord J X 93.1 (containing the following March 18, 2004 meeting ag enda note by

Mr. Allen: “Apparently
, level of desig n g r eater than KCon ‘used to’”); J X 315.1 (including the following complaint from Mr. Clay

ton in an October 13, 2004 electronic-mail messag e: “[ W ] e are try ing to work with y ou but the email below is an ex c ellent ex ample of a g overnment caused delay . I f [ the Coast Guard] would stop causing these ty p es of delay s and allow this project to be built as orig inally proposed ‘Design/B uild’ the process would be much smoother. You reference spec[ ification] sections within y o ur contract that are clearly pertainingto a bid/spec/build project and not a desig n

build project.”); Tr. 1271-72 (Combs) (stating that plaintiff’s ex perience with contracting

with the federal g overnment has been “g reatly successful,” that plaintiff has had “just
g reat relationships all over the country ,” and that plaintiff had only been assessed liquidated damag es on four projects–the three Coast Guard projects and a project for the United States Navy ); see also J X 369.1 (containinga November 30, 2004 remark from plaintiff that “[ t] his is
once ag ain evidence of the [ Coast Guard’s] unjust[ ] tactics to only enrich themselves at the cost of others”); J X 374 (containingan electronic-mail ex c hang e between plaintiff and the Coast Guard from November and December 2004 reflecting plaintiff’s displeasure with how it was being treated by

the Coast Guard and the Coast Guard’s dissatisfaction with plaintiff’s performance).

Meanwhile, plaintiff “installed the main floor concrete slab . . . on Aug ust 19, 2004,” J t. Stip. ¶ 36, and beg a

n to erect the building ’s steel structure on Aug ust 24, 2004, J X 4.92; J X 742. A bilateral contract modification, effective September 9, 2004, increased the contract price, for the final time, to $551,155.35. J X 3.7-.8.

As of September 10, 2004, the issues with the hy draulic test lab’s HVAC sy stem had not been resolved. 1 5 J X 253.1. As a result, Mr. Schmitt advised Mr. Allen that the Coast Guard

1 5 Most of the evidence in the trial record sug g e sts that the delay related to the proposed contract modification. F or ex ample, in a September 10, 2004 electronic-mail messag e , Mr. Schmitt speculated that plaintiff was “waiting to see what happened with the build-out mod[ ification] before [ it] attempted to finish the desig n.” J X 253.1. I n another electronic-mail
messag e on that same date, Mr. F edei noted that the proposed contract modification would include fundingfor a field visit by plaintiff’s mechanical eng ineer, and that “[ a ] pparently
every one [ had] been waitingto see what was g oing to transpire with that proposal.” I d. And, Eric Combs, plaintiff’s chief operating officer, testified that the proposed contract modification would have affected many of the drawing s and that it would not be a g ood idea to continue certain work when the customer “was asking y ou to price in another whole direction.” Tr. 1322- 23 (Combs). However, Mr. F edei testified that while the proposed contract modification mig ht have affected the drawing s, the HVAC sy stem for the hydraulic test lab “was a stand-alone
sy stem and could have been corrected or looked at further at this stag e without stopping the

- 27-needed to “arrang e a conference call” to consult with plaintiff reg arding the operating schedule of the hy draulic test equipment and how to best condition the hy draulic test lab because without this information, plaintiff could not “finaliz e” its desig n. I d. Subsequently , in a September 13, 2004 electronic-mail messag e reg ardingsetting up the conference call, Mr. Clay ton included a comment reg ardingthe HVAC sy stem: “The amount of tonnag e currently desig ned is based on the [ request for quotations] . Any additional tonnag e or chang e in desig n . . . may result in additional cost and time which will require [ a request for quotations] from contracting .” J X 259.1. L ater that same day , Mr. Clay ton sent an electronic-mail messag e to Mr. Tempel requestingthat Mr. Tempel review the equipment operating information previously

supplied by the Coast Guard on J uly 28, 2004, verify his desig n, and provide “confirming loads” by the end of the week. J X 260.1.

Also on September 13, 2004, plaintiff sent the Coast Guard another set of 100% desig n drawing s, J X 255, which the Coast Guard received on September 16, 2004, J X 268.1. Coast Guard personnel ex chang ed several electronic-mail messag es reg arding these drawing s. J X 268; J X 271. Mr. Schmitt noted that “from an HVAC standpoint, the documents [ did] not address[ ] previous concerns and comments.” J X 268.1; see also Tr. 883-84 (Tempel) (indicating that Mr. Tempel had not provided plaintiff with new drawing s for this submittal). And, Mr. F e dei wrote:

The Mechanical 100% submittal is REJ ECTED. I know that there are questions concerning

the HVAC loadingin the hy draulic room for which we are waiting the calculations . . . to help address our concerns, but none of the other issues that have been addressed in past reviews have been addressed on the 100% drawing s to date. I am not accepting

any of the mechanical[ ] drawingefforts at this point. There are potential code violations, and notes of none [ sic] responsibility , proper damper locations, etc. that need to be addressed.

J X 271.2.

Mr. Tempel responded to Mr. Clay ton’s request on September 20, 2004. J X 276. I n his letter, he described his previous conversation with Mr. F edei and the two options that were purportedly

acceptable to the Coast Guard: (1) “ex hausting the air utiliz ing hoods and fans” and (2) “[ p] rovid[ ing ] an air conditioningsy stem that [ was] approx imately 30% larg er than the one serving the ex isting equipment lay out.” J X 276.2. Mr. Tempel then wrote:

W e have been instructed to desig n utiliz ing the parameters defined by the scope of work, which require us to desig n around split sy stem heat pumps. The current design meets these parameters and complies with desig n option 2. The

desig n process.” I d . at 3048-49 (F edei); see also id. at 3131 (B roussard) (testify ing that an RF P “does not stop work . . . on the contract . . . because nobody at the time this RF P is issued knows whether or not we’re actually g oing to do something ”).

- 28-unit capacity we specified is actually

50% larg e r than the one serving the ex isting equipment lay out, which coincides with a commercially available unit siz e.

Ihave recalculated the air conditioning loads to incorporate the most
recent comments . . . .

. . . . There is still a question reg arding the operating schedule. Please verify that only one piece of equipment operates at a time, never two or more. 1 6

The worst-case desig

n heat load remains equipment HS-25 with the 75 horsepower electric motor. 1 7 I t does not appear that the space can be sub-cooled
enoug h to account for the heat g enerated by this piece of equipment. W e are aware that a 5-ton cooling capacity unit services the ex isting hy draulic test room, and there are no serious operational problems. However, the building occupant complained that duringoperation the area g ets hot. I nstalling a 7.5-ton unit will provide more conditioning to the new space than is presently installed in the

ex isting space, but will not satisfy the calculated heat load g enerated by the equipment. Our calculations indicate that a 20-ton unit would be needed to fully condition the space. However, as a practical matter we feel that a 7.5-ton unit will be acceptable since it provides 50% more cooling capacity than the ex isting facility has and since the buildingenvelope’s heat g a in is insig nificant. This 7.5- ton unit will not provide comfort conditioning when the equipment operates, but maintaining comfortable conditions in the space may not be the best practical solution.

J X 276.2-.3 (footnotes added); see also Tr. 554-55, 557-58 (Tempel) (ex plaining that the calculations supportingthe use of a 20-ton unit were based on (1) the worst-case scenario for the amount of heat that would be rejected into the room by the 75-horsepower motor and (2) the assumption that the chiller would not “compensate for any of the heat that was rejected”), 2839- 40 (F edei) (remarking

that providing a 7.5-ton unit where a 20-ton unit is needed to adequately condition the space would result in “sky hig h” temperatures and “a lot of heat stress on the

1 6 The basis for this request is unclear; in the information that Mr. Clay ton forwarded to Mr. Tempel, the Coast Guard indicated that two pieces of equipment–the HPTS-1000 and the HS-25–were operated simultaneously , twice per month for two hours at a time. J X 276.5; see also Tr. 887 (Tempel) (indicating that Mr. Tempel was unsure why he made this request after receiving the information).

1 7 The Coast Guard indicated that this piece of equipment was operated “5 hours a day
, two consecutive day s, twice a month.” J X 275.5.

- 29-personnel working in” the space), 3077 (stating that it was incorrect to use the tonnag e of the unit in the ex isting hy draulic test lab as a baseline because there was no way to know whether the

ex isting unit was properly siz ed when it was installed). Plaintiff forwarded Mr. Tempel’s calculations to the Coast Guard the following day

. J X 277.

Coast Guard personnel reviewed the information and calculations provided by Mr. Tempel to determine how to proceed with respect to the HVAC sy stem for the hydraulic test lab. J X 282.1; J X 289; J X 292. Mr. F e dei provided his recommendation to his colleag ues in an attachment to a September 27, 2004 electronic-mail messag e:

The recommendation . . . would be to install two 5-ton units with one unit to handle the initial loading and the second to come on as needed to supplement. I t is also recommended that, since this is still much less cooling than calculations show is needed and that the equipment is essentially cooled by

their own chilled water sy stem, the distribution of the air should be concentrated in the areas of operator needs (center of the test lab) and be dissipated via hig h velocity down throw or slot diffusers to provide, in effect, evaporative cooling for the operators. [ I n essence a spot cooling sy stem utiliz ing conditioned, in lieu of nonconditioned, air.] Return/ex haust should be from over the backside of the equipment. Pre-coolingcould still help most scenarios and can be determined by the users as to when best utiliz ed.

J X 289.3 (brackets in orig inal). I n response to Mr. F edei’s messag e , Mr. Schmitt asked whether making such a recommendation would constitute taking responsibility

for the desig n and whether the Coast Guard would be responsible for pay ing for the second unit. J X 289.1. He further commented: “I

would, as I

am sure you would, love for us to put this issue to rest, and may be the best way to do that is to ‘tell them’ what we will accept (want).” Id. Then, in a September 28, 2004 electronic-mail messag e, Mr. Schmitt sug g ested to Mr. F edei that the Coast Guard allow plaintiff the option to install a 7.5 ton unit. J X 292.

I n the meantime, on September 20, 2004, plaintiff sent an updated project schedule to the Coast Guard indicatinga completion date of December 8, 2004, forty -three day s bey ond the thencontract completion date of October 26, 2004. J X 272.1, .6. Ms. B roussard noted the discrepancy

in a September 22, 2004 letter, but stated that it was in the Coast Guard’s best interest to forbear from terminating the contract for default. J X 280. She further advised plaintiff that the Coast Guard intended to “assess[ ] liquidated damag e s in the amount of $551.00 per day , for every

day bey o nd October 26, 2004 until all work is complete and beneficial
occupancy

has occurred.” I d.

On September 30, 2004, the Coast Guard sent plaintiff its review comments on the 100% desig n submittal it received on September 16, 2004. J X 295. I n the letter accompany ing the comments, Ms. Hundley

wrote:

- 30-W e do not find the proposed mechanical system for the Test L ab

acceptable. Attached is a recommendation of how to provide proper space conditioning in the Hy draulic L ab. 1 8 I n addition, attached are our previous and new review comments, plus marked-up drawing s. Please return the review comments by noting action taken on the comments. Please resubmit a corrected desig n.

W e do not consider the review comments to constitute a chang e to our contract.

J X 295.3 (footnote added). I n the attached document, the Coast Guard noted that “[ a] fter many discussions and submittals concerningthe subject lab, its operations, and equipment heat loads, there [ was] still an impasse as to a reasonable, effective, energ y efficient way o f

treatingthe lab.” J X 295.4. I t therefore provided:

I n an effort to preclude any further delay s and to provide an effective, energ y conscious sy stem for the laboratory and its occupants[ , the Coast Guard] requests the following desig n efforts and installation be accomplished:

• Provide an ex haust sy stem routed from the top of the motor directly to the weather enshrouding the area above the motor as effectively as possible. I n addition, provide a matching unconditioned supply

sy stem routed directly from the weather to the vicinity of the bottom of the motor. Provide motoriz ed dampers to secure the ventilation systems when this piece of equipment is not being utiliz ed with a disconnect switch labeled and mounted near the controls of this equipment.

• Provide either two split sy stem heat pumps (initial estimate to be 5 ton units each) or a 7.5 ton split sy stem to condition the lab, allowing for approx imately 20% radiation and inefficiency in the ventilation sy stem around the motor. I f two units are used they

shall be stag ed so that the second heat pump comes on only when the first unit is unable to satisfy the loads.

1 8 Althoug h Ms. Hundley characteriz e d the contents of the attached document as a “recommendation,” J X 295.3, the Coast Guard, in the attached document, provided that it was “request[ ing ] ” that plaintiff “accomplish[ ] ” the specified “desig n efforts and installation,” J X 295.4. During trial, there was conflicting testimony

reg ardingwhether the Coast Guard presented plaintiff with a recommendation or a directive. Compare Tr. 3160, 3162 (B roussard) (indicating that the Coast Guard made a recommendation), with id. at 959 (Tempel) (indicating that Mr. Tempel considered the Coast Guard’s proposal to be a “requirement” or “direction” rather than a “recommendation”), and id. at 1329 (Combs) (“I t looks like they ’re lay

ing out some directives . . . for treating the hy draulic lab desig n. . . . [ T] hey were telling

us how to desig n the HVAC sy stem.”).

- 31-• Air distribution is to be provided in the middle core of the lab where the occupants are ex

pected to be working

during operations. The distribution shall be installed utiliz ing fairly hig h velocity

diffusers (such as slot diffusers
or reg isters) that will concentrate the throw down in the vicinity of the workers (not on the equipment per se) with the return ducts over the backside of the equipment so as to draw the warmer air away from the occupants and back to the coil(s).

• Controls shall allow pre-coolingof the space prior to equipment operation at the discretion of the occupants.

I d.; cf. Tr. 561-63, 565-66 (Tempel) (indicating that the Coast Guard’s sug g ested desig n did not comply with the requirements set forth in the contract specifications).

Mr. Clay ton forwarded the Coast Guard’s comments and recommendation to Mr. Tempel, and Mr. Tempel responded to Mr. Clay ton on October 5, 2004. J X 298. Mr. Tempel advised Mr. Clay ton that Epic would desig n the HVAC sy stem as plaintiff directed. J X 298.1. He further indicated, in response to the second bulleted point of the Coast Guard’s recommendation, that Epic’s preference was to use two five-ton units and that it had previously recommended such an approach, but was “instructed to desig n to scope of work.” JX 298.2. According to Mr. Tempel, adoptingthe Coast Guard’s recommended approach would take two to four weeks, Tr. 893-94, 959 (Tempel), and the proposed system would not be Underwriters L aboratoriesapproved, id. at 559, 856.

Plaintiff eventually

decided to desig n the HVAC sy stem recommended by the Coast Guard. J X 329. On October 18, 2004, Mr. Clay ton advised the Coast Guard that a new mechanical desig

n was “underway

” and would be delivered in four day s. J X 327.1. However, he did not request a new desig n from Mr. Tempel until the followingday . J X 329.1. Specifically , he requested that Mr. Tempel desig n an HVAC sy stem for the hydraulic test lab that used two units, “[ m] ost likely one beinga 7 1/2 ton and the other a 5 ton,” and stated that plaintiff would pass the increased cost on to the Coast Guard. I d.; see also J X 302 (indicating that Mr. Clay

ton advised the Coast Guard on October 6, 2004, that he would “submit the costs for the mechanical sy stem upg rades to [ the Coast Guard] by October 8, 2004”).

Plaintiff did not provide a new mechanical desig n to the Coast Guard within the four day s it promised. I n deed, on October 28, 2004, Mr. Tempel sent the following electronic-mail
messag e to Mr. Clay

ton:

W e are desig

ning the HVAC sy stem servingthe hy draulic test lab utiliz ing one 5 ton split sy stem heat pump[ ] and one 5 ton air conditioner. W e are proceeding

with the desig n

utiliz ing linear slot diffusers as directed by the
g overnment. This will direct the air downward toward the occupants, however,

- 32-air will also be directed over the equipment too. There is no way to avoid this. I t is imperative that the g o vernment be aware that the air within the hy draulic test lab will be ex tremely

drafty and may cause undesirable conditions. Please let me know if y ou have any

questions.

J X 342.2. Mr. Clay

ton forwarded this messag e to the Coast Guard, J X 342, and Mr. F edei provided the following r esponse:

The whole idea of “spot cooling ” is to put hig h velocity air in localities where the personnel are working
, and it would not be effective cooling if it did not appear drafty . Naturally

some of the air will disperse over the equipment, and that is acceptable. This e-mail does not address what the mechanical [ eng ineer] intends to do to remove the heat from the 75-HP motor, and without the removal of this heat by

separate venting , the 5 ton unit will not be effective in cooling the space or the occupants.

J X 342.1. Mr. Tempel completed the new mechanical drawing s on November 16, 2004. J X 707.14-.19. The desig n reflected in these drawing s was not sig n ificantly chang ed thereafter. Tr. 907 (Tempel).

W h ile continuing to work on the new HVAC sy stem desig n, plaintiff, on October 15, 2004, sent the Coast Guard an updated project schedule that indicated a revised contract completion date of December 20, 2004. J X 321; J X 324. Approx imately one month later, on November 17, 2004, plaintiff beg an to install the building ’s wall panels and insulation. J X 4.207; J X 742. However, plaintiff’s prog ress on the project continued to be hampered by a number of issues; in a November 18, 2004 letter to plaintiff, Ms. B roussard wrote:

You have . . . failed to submit the final desig n documents as required by [ the relevant contract specification] . You are reminded that any mechanical, electrical, and architectural work that is completed prior to an approved desig n will be at
y our own risk. Also y ou[ r] recent daily reports have shown little or no construction activity . L iquidated damag es of $511.00 [ sic] a day bey ond the current contract completion date of October 26, 2004 will continue to be [ assessed] until Government acceptance of the completed project.

J X 354; accord J X 373.1 (noting that plaintiff had not submitted the final desig n by November 30, 2004, and reiterating the consequences of proceeding with construction in the absence of a final desig n and of working bey ond the contract completion date). I n deed, that same day , the Coast Guard notified plaintiff that it had received plaintiff’s invoice for the period ending October 31, 2004, that it was authoriz ed to make a prog ress pay ment to plaintiff, and that it was

- 33-withholding liquidated damag es in the amount of $2555 from that pay ment for the five day s of work performed bey

ond the October 25, 2004 contract completion date. 1 9 J X 719.2, .4.

Ms. B roussard sent plaintiff another letter on December 1, 2004, in which she advised that plaintiff’s failure to submit its final desig n “[ mig ht] be considered a material [ breach] of the contract” and that the Coast Guard “[ mig ht] choose to Terminate for Default.” J X 377.2; see also J X 383.1 (indicating , in an internal electronic-mail messag e dated December 7, 2004, that the Coast Guard planned to discuss its options for terminating its contract with plaintiff for default). Ms. B roussard forwarded a copy of this letter to the contracting officer for plaintiff’s F ederal Supply

Schedule contract that same day . J X 377.1; J X 720; see also J X 720.1-.2 (reflecting that on J anuary 6, 2005, the GSA contracting officer referred Ms. B roussard to the then-current F AR subpart 8.4, F ederal Supply Schedules, for g uidance, and specifically

quoted F AR 8.406-4, Termination for Cause, and F AR 8.406-6, Disputes 2 0 ); J X 720.1 (indicatingthat

1 9 According

to handwritten notations on the invoice, the amount of withheld liquidated damag es was calculated by multiply ing five day s by

$511. J X 719.4. I t is unclear why the Coast Guard used a liquidated damag es rate of $511 per day when the contract provided for a liquidated damag es rate of $551 per day . See J X 1.30.

2 0 The GSA contracting

officer did not refer Ms. B roussard to the relevant portions of plaintiff’s F ederal Supply Schedule contract. See JX 720. Moreover, the version of F A R subpart 8.4 referenced by

the GSA contracting

officer was not in effect when plaintiff ex ecuted its F ederal Supply

Schedule contract in April 2001 or when the Coast Guard placed an order under plaintiff’s F ederal Supply Schedule contract in September 2003. I ndeed, at the time that plaintiff entered into the two contracts, F AR subpart 8.4 did not contain sections 8.406-4 or 8.406-6; those provisions were added when F AR subpart 8.4 was revised in J uly 2004. Rather, the relevant sections in effect when plaintiff contracted with the GSA and the Coast Guard were F AR 8.405-5, Termination for Default, and F AR 8.405-7, Disputes. The former section provided:

(1) An ordering office may

terminate any

one or more orders for default in accordance with Part 49, Termination of Contracts. The schedule contracting office shall be notified of all cases where an ordering office has declared a F ederal Supply

Schedule contractor in default or fraud is suspected.

(2) Should the contractor claim that the failure was ex c usable, the orderingoffice shall promptly refer the matter to the schedule contracting office. I n the absence of a decision by the schedule contracting

office (or by the head of the schedule contracting ag ency , on appeal) ex cusing the failure, the ordering office may

charg e the contractor with ex c ess costs resulting from repurchase.

F AR 8.405-5(a) (Mar. 4, 1999). And, the latter section provided–depending on which version was applicable–either that “[ t] he ordering office shall refer all unresolved disputes under orders

- 34-Ms. B roussard forwarded prior correspondence, and would forward future correspondence,

related to the Coast Guard’s issues with plaintiff to the GSA contracting officer).

The Coast Guard received another set of 100% desig n documents, including an updated mechanical desig

n, from plaintiff on December 2, 2004, J X 359; J X 387.5; J X 707; in plaintiff’s November 22, 2004 transmittal letter, Mr. Clay ton represented that the mechanical desig n was “not inclusive of [ plaintiff’s] proposal” and, if the desig n was accepted, plaintiff would provide the Coast Guard with its cost, J X 359. Mr. F edei reviewed the mechanical desig n and then forwarded his comments to Mr. Schmitt and Mr. Allen on December 8, 2004. J X 387. He indicated that most of his “major comments deal[ t] with the hood sy stems” and that his comments mig ht chang e if Mr. Allen determined during a site visit that the proposed desig n would work. J X 387.1. Mr. Schmitt also reviewed the mechanical desig n and provided comments. J X 391.1. He noted that he had discussed plaintiff’s request for “additional compensation for hoods and ex hausting of the lab equipment motors” with Mr. F edei, and that Mr. F edei opined that such compensation was not warranted because “[ b ] y removing the heat
g iven off by the motors, [ plaintiff was] able to reduce the HVAC equipment siz es,” makingit “a ‘wash’ or even a cost saving s.” I d. The Coast Guard’s “preliminary review comments” were forwarded to plaintiff via electronic mail on December 9, 2004. J X 388.1. These comments included some required chang es to the mechanical drawing s. J X 385.5-.7.

That same day , after a prog ress meeting , J X 389, Ms. B roussard sent plaintiff a show cause letter, 2 1 noting that plaintiff “failed to provide the final desig n documents within a time frame that would allow [ it] to complete . . . construction [ of the] Component Repair Shop . . . by the contract completion date” and “failed to provide adequate manpower to complete the construction by

the completion date . . . .” J X 390. Consequently , Ms. B roussard stated, the Coast Guard was considering terminating the contract for default. I d. She advised plaintiff that it had ten day s “to present, in writing , any facts bearing on” whether its “failure to perform arose out of causes bey

ond [ its] control and without fault or neg lig ence on [ its] part.” I d. Plaintiff received the show cause letter on December 15, 2004, and responded on December 22, 2004. J X 402.1. I t asserted, as it had in the past, that the Coast Guard contract requirements differed materially

from the standard GSA desig n-build requirements. I d. Specifically , it stated:

to the schedule contracting office for action under the Disputes clause of the contract,” F AR 8.405-7 (Mar. 4, 1999), or that “the ordering office contracting

officer” could issue final decisions on disputes or refer disputes to the “schedule contracting officer,” F AR 8.405-7(a) (J u ly 29, 2002).

2 1 A “show cause [ letter] is normally considered a little more severe than a cure letter.” Tr. 3135 (B roussard); accord id. (“Cure notices are used more frequently . . . to . . . g et the contractor’s attention whereas a show cause letter really is viewed as . . . severe, thing s are really not very g o od.”). I t “is ty

pically looked at as a step prior to actually ex ecuting a termination for default . . . .” I d.

- 35-Proposal Phase

This project was orig inally proposed using standard GSA Design/B uild
g uidelines and requirements. All information provided within our proposal was based on information obtained within the RF P . . . .

Desig n Phase

The [ Coast Guard] contract requirements differ materially from the standard GSA Design-B u ild requirements and g u idelines. I n comply ing with y o ur eng ineeringpackag e we discovered that full desig n is really what y ou were requiring . This required more time. . . . Desig n also required more site investig ation than orig inally estimated. I nitially K-Con, I nc tried to implement the desig n

process with utiliz ing owner provided information and / or throug h a series of RF Ity

pe emails. This proved to be unsatisfactory . Our desig n budg e t was based on this approach and was value passed on to the owner in the bid price. Visiting and reviewing

ex isting sy stems did not clarify our concern, but to the contrary showed there were ex isting inoperable equipment, undersiz ed sy stems and in g eneral “not standard installations” that we were and are asked to mimic. During our visits it was broug ht to our attention there was additional equipment not known at bid time that had to be reviewed and questioned as to status. Requests for this information on owner furnished equipment was incomplete. This caused mechanical and electrical desig ns to be delay ed in addition the

ex isting equipment is of the ty pe and ag e that has no documentation. This forced us to submit new [ RF I s and] create new desig ns which as a whole created confusion and frustration not only with [ the Coast Guard] but with K-Con as well.

Construction Phase

The delay s which have occurred within the construction phase are due to various reasons. Many

of those reasons are bey

ond the control of K-Con. Obviously

one of the reasons was due to desig n delay s and problems which resulted in construction delay s. W orking with [ the Coast Guard] we were able to overcome some issues but others were reoccurring due to lack of communication or just not being able to communicate and come to a mutual ag reement that would benefit every

one involved. . . . K-Con is completely aware of the delay

s which have occurred and it is our full intent to complete this project within an ag reed upon duration. I n

doing so it is critical that all parties involve[ d ] come to a mutual ag reement to discuss all issues openly with our end user in mind. As stated above K-Con has a g ood working relationship with the US Coast Guard and it is our g oal to maintain that relationship.

- 36-J X 402.1-.2. Plaintiff also represented that its subcontractors would resume work on J anuary 3, 2005. J X 402.2.

Plaintiff’s response to the show cause letter was not well received by the Coast Guard. F or ex ample, in internal electronic-mail messag es dated J anuary 3, 2005, Mr. Allen stated that plaintiff “still [ d id not] address when [ it] intend[ ed] to complete or provide [ the] desig n,” and the Coast Guard’s project ex ecution team leader wrote:

• All the delay s and problems with this contractor orig inated with [ its] failure to adhere to the contract requirements specifically as [ they ] relate[ ] to the Desig n-B uild process. K-Con has a distorted vision of the process which does not conform in any

way , shape, or form to the construction industry standards for desig n-build contracts.

. . . .

• K-Con would like all to believe (1) that there was miscommunication along the way (which caused the delay

s) and (2) that they

have a g ood working relationship with the Coast Guard. These two could not be any further from the truth.

J X 405.1. Thus, that same day , Mr. Allen advised plaintiff that the Coast Guard considered the response “inadequate” and requested “a reasonable schedule of project completion.” J X 406. Plaintiff responded “that it would provide a revised schedule by J anuary 6, 2005,” and that it was its “full intent to complete all remaining work as quickly as possible for the benefit of [ the] end user.” I d.; accord J t. Stip. ¶ 42.

Meanwhile, on December 23, 2004, the Coast Guard notified plaintiff that it had received plaintiff’s invoice for work performed throug h November 30, 2004, that it was authoriz ed to make a progress pay

ment to plaintiff, and that it was withholding liquidated damag e s in the amount of $7665 from that pay ment for the work performed bey ond the contract completion date. 2 2 J X 403.1, .3.

2 2 Althoug h the Coast Guard had not yet ex ecuted the contract modification that ex tended the contract completion date from October 26, 2004, to November 9, 2004, see J X 3.9-.10, it calculated the liquidated damag es to be withheld as if it had ex ecuted the modification, J X 403.3. According to handwritten notations on the invoice, the Coast Guard determined that plaintiff should be assessed liquidated damag es for twenty day s in November 2004 (although performance was actually

overdue for twenty

-one day s–November 10, 2004, through and including November 30, 2004), and then credited for the five day s of liquidated damag es that it had previously assessed for October 2004. I d. The Coast Guard therefore calculated the liquidated damag es to be withheld by

multiply ing fifteen day s by $511. I d. I t is unclear why the Coast Guard used a liquidated damag e s rate of $511 per day when the contract provided for a liquidated damag es rate

- 37-Plaintiff’s subcontractors resumed work in J a nuary 2005. J X 4.266-.272. On J anuary 2
, 2005, the Coast Guard ex ecuted a bilateral contract modification, effective November 10, 2004, that ex tended the contract compl etion date, for a final time, to November 9, 2004. J X 3.9-.10. Three day s later, plaintiff submitted a revised project schedule to the Coast Guard that reflected an anticipated completion date of April 26, 2005. J t. Stip. ¶ 43. Then, on J anuary 12, 2005, plaintiff and the Coast Guard held a prog ress meeting

. J X 417. Duringthe meeting , Mr. Clay ton represented that plaintiff would submit another set of drawing s to the Coast Guard by J anuary 21, 2005, and would endeavor to “closely monitor” the schedule. J X 417.4. That same day , the Coast Guard sent plaintiff another forbearance letter indicating that liquidated damag es would continue to be assessed at the rate of $551 per day “until all work [ was] complete and beneficial
occupancy

. . . occurred.” JX 415.1.

Plaintiff finished installing the wall panels and insulation on J anuary 12, 2005. J X 424.1. F ive day s later, it beg an preparations for installing the roof, J X 4.281, and started the electrical, mechanical, and plumbing roug h-ins, J X 424.2. However, despite Mr. Clay ton’s representation, plaintiff did not submit a revised set of drawing s to the Coast Guard by J anuary 21, 2005. J X 421; J X 422. I n a J anuary 24, 2005 electronic-mail messag e, Mr. Clay ton ex plained to Mr. Allen that the drawing s that plaintiff received from its architect were not complete, that it wanted to ensure that the drawing s the Coast Guard received were “‘perfect’ in comparison” to prior submissions, and that the Coast Guard “‘should’” receive the drawing s by J anuary 28, 2005. J X 421. B u t see J X 433.1 (indicating that the delay was caused by

three mechanical, electrical, and plumbing “items that were not addressed,” and chang ing the anticipated delivery date to F ebruary 10, 2005); J X 437.2-.4 (reflecting that plaintiff did not send the Coast Guard’s December 8, 2005 comments to Mr. Tempel to incorporate into the desig n until F ebruary

8, 2005). Despite this response, the Coast Guard sent a letter to plaintiff on J anuary 26, 2005, ex pressing its concern that the schedule was not being met, requestinga plan for g etting “the project back on schedule” and a revised schedule, and reminding plaintiff that liquidated damag es were being assessed. J X 422.

On F e bruary

10, 2005, the Coast Guard notified plaintiff that it was rejecting the invoice that it had received from plaintiff the previous day for work completed throug h J anuary 31, 2005, J X 438, ex plaining :

The Government beg an deductingliquidated damag es from the contract price in the amount of $511.00 a day starting November 10, 2004 and continuing throug h J anuary 31, 2005 (82 day s). 2 3 As a result, you have been assessed $41,902.00 as

of $551 per day . See J X 1.30.

2 3 The Coast Guard ag ain misstated the daily liquidated damag es rate; it was $551 and not $511. See J X 1.30. The Coast Guard also miscalculated the number of day s; there are eig hty -three day s from and includingNovember 10, 2004, to and including J anuary 31, 2005.

- 38-damag e s for the delay in completing our contract. The amount of liquidated damag e s withheld to date ex ceed[ s] the total amount due.

J X 438.1 (footnote added).

I n the meantime, on F e bruary 2, 2005, Ms. Hundley

issued a second show cause letter to plaintiff, remarking

that plaintiff had “failed to,” among other thing s, “provide the final design documents, complete the roof installation . . . in the timeframe noted on [ its] prog ress schedule,” and “provide adequate manpower to complete the work by the date shown on [ its] latest prog ress schedule,” J X 426, in other words, by April 26, 2005, J t. Stip. ¶ 43. Consequently , Ms. Hundley stated, the Coast Guard was considering terminating the contract for default. J X 426. She advised plaintiff that it had ten day s “to present, in writing
, any facts bearing

on” whether its “failure to perform arose out of causes bey ond [ its] control and without fault or neg lig ence on [ its] part.” I d.

Plaintiff responded to this show cause letter on F ebruary 7, 2005, J X 433, ex plaining why it had been unable to install the roof and averring that it would deliver “90%” desig n documents by F ebruary 10, 2005. J X 433.1; J X 435.1. The Coast Guard was dissatisfied with this response;
among its critiques were the following :

• Desig n: W e have accepted in practice allowing contractor to “fast-track” certain aspects of the desig n. The structural foundation and metal building drawing s are approved and we have cop[ ies] of sig n ed and sealed drawing s . . . . I f contractor were to submit sig n ed and sealed drawing s for civil work we would accept them also. To date we have received pre-final desig n submittals for the other disciplines including civil. W hat we don’t have are sig ned and sealed drawing s. Dates of submission of the desig n drawing s keep slipping . Ihave little confidence his 10 F eb date will be met.

• Our contract was a desig n-build contract from inception. [ The] requirement was that the final drawing s . . . be sig ned and sealed.

J X 443.4. The Coast Guard beg an “pursuing‘termination for default’ proceeding s ag a inst KCON.” J X 443.2-.3; accord J X 439.1, .6; J X 440.1-.2.

As the Coast Guard suspected, plaintiff missed its self-imposed F ebruary 10, 2005 deadline and did not deliver the desig n documents–which were treated by the Coast Guard as the “100%” design and not the final desig n–to the Coast Guard until F ebruary 18, 2005. 2 4 J X 445.1.

2 4 This delay appears to have been caused, in part, by plaintiff’s failure to promptly forward the Coast Guard’s December 8, 2005 comments to Mr. Tempel. W hen plaintiff finally did so, on F ebruary

8, 2005, it requested that Mr. Tempel revise the mechanical, electrical, and plumbing drawing s in accordance with the Coast Guard’s comments i n two day s, if possible. J X

- 39-That same day , Ms. Hundley sent a letter to Coast Guard headquarters requesting approval to terminate the Coast Guard’s contract with plaintiff for default. J X 444.1; see also J X 475 (containinga March 10, 2005 letter from Ms. B roussard to Coast Guard headquarters supplementing the request).

W h ile the request for contract termination was pending
, Ms. Hundley , on F ebruary 25, 2005, forwarded to plaintiff the Coast Guard’s comments on the most recent mechanical desig n submission. J X 450.1-.2. Three comments concerned the desig n of hy draulic test lab:

1. Room 106 (Hy draulic L ab): Contract requires the ceiling heig h t to be 10 feet above finished floor . . . . I t is unacceptable that the proposed HVAC ducting dimensions and related accessories such as insulation and duct hang ers will not fit above the ceiling

. . . .

2. W e also note that the 1500 lb rated hoist in room 106 is not noted or included in the drawingset. Structural details are required to ensure that this weig ht can be safely carried. Hoist supports will affect proposed routing of ducts noted in
paragraph 1.

. . . . 7. Note 2 on Drawing

M001, “Desig n Assumption” is not correct. You are responsible for integrity

of new piping , valves, installation and testing to ensure that the ex isting Government furnished equipment operates correctly

.

I d. Ms. Hundley

reiterated that the Coast Guard’s comments were not chang es to the contract. J X 450.2. She also ex plained that aside from the identified comments, the Coast Guard “[ took]

no ex ceptions to [ the] proposed desig n” and, thus, plaintiff could proceed with the work, provided that the comments were addressed and that sig ned and sealed drawing s were provided to the Coast Guard. I d.; see also Tr. 2627 (Schmitt) (ex plaining that this letter allowed plaintiff to proceed with all work upon the submission of sig ned and sealed drawing s). Plaintiff forwarded the Coast Guard’s comments to Mr. Tempel upon receipt. J X 450.3-.5.

That same day

–F ebruary

25, 2005–plaintiff sent the Coast Guard three letters seeking time ex tensions and a fourth letter seeking a contract price increase. See J X 451; J X 452; J X 454; J X 455. I n the first letter, plaintiff requested a noncompensable time ex tension of thirty

437.2. Mr. Tempel indicated that such a deadline was not possible due to Epic’s workload, and stated that the earliest it could beg in the work requested by plaintiff was F e bruary

15, 2005. J X 437.1. During trial, Mr. Tempel speculated that plaintiff may not have forwarded the Coast Guard’s comments to him upon receipt because the “comments [ were] pretty minimal” and could “be handled in a set of as-built drawing s, as is ty pically done in a desig n-build.” Tr. 912 (Tempel).

- 40-day s due to the Coast Guard’s alleg ed improper review of its desig n drawing s. J X 451.1. Specifically , Mr. Clay

ton wrote:

This letter serves as our request for time ex tension due to [ the Coast Guard] improperly

reviewing

desig n drawing s per [ specification section 01160, parag raph 2.2.3] . On (5) different occasions K-Con I nc. submitted drawing s for approval which were returned neither approved, disapproved or approved as noted. W e received desig

n comments that made “recommendations” not clearly stating approved, disapproved and why [
, ] or approved as noted. [ The Coast Guard] contracted K-Con I

nc. to develop the design

based on the specifications provided and submit for approval. I t was not our intent to submit our drawing s so that personnel at [ the Coast Guard] could make recommendations, not contract required approvals, disapprovals or approvals as noted. I t was only

when I directly asked Steve Allen to approve, approve as noted or disapprove with reason per spec[ ifications] did we finally g et a proper review approved as noted with
comments.

I d.; see also Tr. 2679 (Schmitt) (stating that the Coast Guard could respond to a desig n in three
way s: “One is total approval, the [ second] is approved as noted, and the [ third] is rejection.”), 3168-69 (B roussard) (ag

reeing that the Coast Guard would approve or reject plaintiff’s desig n dependingon whether the design met the contract requirements, and that the Coast Guard could approve plaintiff’s desig

n with comments). I n the second letter, plaintiff soug ht a noncompensable time ex tension of thirty day s to account for job site disturbances and its inability to contract with local trades, both purportedly caused by

comments made by

the Coast Guard’s inspector. J X 452. Then, in its third letter, plaintiff requested a noncompensable time ex tension of twenty -seven day s “due to rain, snow and/or temperatures below 40 deg rees,” contending

that the precipitation in particular was “above averag e for the area.” J

X 454. The fourth letter provided, in its entirety : “This letter serves as our request for cost modification in the amount of $50,325.00 for ex tended overhead due to delay s outlined in our request for time ex tension letters dated 25 F ebruary

2005.” J X 455.1. An ex hibit attached to that letter contained a table breaking out the components of the ex tended overhead that plaintiff was requesting for the eig hty -seven day s of alleg ed delay , as follows:

Item Unit

Type Quantity Unit

Cost Total

Project manag er desig n and site visit W eek 8 $2250.00 $18,000.00

Vehicle Month 2.5 $937.50 $2343.75

Gas Month 0.5 $487.50 $243.75

Per diem Day 10 $100.00 $1000.00

- 41-Site superintendent W eek 16 $1000.00 $16,000.00

Vehicle Month 2.5 $750.00 $1875.00

Gas Month 2.5 $390.00 $975.00

Per diem Day 87 $100.00 $8700.00

Contractor’s field office Month 2.5 $175.00 $437.50
Temporary toilet Month 2.5 $300.00 $750.00

Total $50,325.00

J X 455.2. Plaintiff did not submit any documentation to support the cost of each component. I d.

On March 8, 2005, Ms. Hundley denied the three time ex tension requests. See J X 470; J X 472; J X 473. W ith respect to plaintiff’s request for a weather-related time ex tension, Ms. Hundley ex plained that plaintiff “failed to submit relevant Daily L og s showing how work in
prog r ess was impacted and how the identified controlling work was delay

ed by the unusually severe weather,” information that was required by the contract. J X 473.1; see also J X 1.41 (containingthe relevant contract specification, which provided: “The contractor may request an

ex c usable delay

caused by

unusually

severe weather conditions by providing the contracting officer written notice within 10 days of the delay . The notice shall: (1) identify , throug h relevant Daily L og s, the work in prog ress that controls the overall completion of the contract; (2) indicate how the identified controllingwork was delay ed by the unusually

severe weather; and, (3) provide the statistical weather data from the National W eather Service that indicates the weather

ex p erienced at the construction site was unusually severe.”). Nex t, reg arding plaintiff’s request for a time ex tension related to the actions of the Coast Guard inspector, Ms. Hundley stated that plaintiff failed to submit evidence substantiating its alleg ations. J X 472. F inally , with respect to the request concerning

the Coast Guard’s review of plaintiff’s desig n drawing s, Ms. Hundley

ex p lained:

As required by paragraph 2.2.3 Review Comments Resolution, section 01160 of the contract, the Government provided comments reg a rding the submitted documents. I n every case the Government responded within the allotted time durations indicated in parag raph 2.2.2.1 Duration of Reviews, section 01160. The Government is not oblig ated to note “approval or disapproval” until the “final desig n” is submitted. I n our reviews, we have the rig ht to make recommendations or sug g estions on the desig n. That same
paragraph oblig ated y o u

to respond within 14 calendar day s after receipt of comments on each design submittal to discuss by

telephone and resolve desig n review comments. You have continually failed to respond to our review comments in the required time, especially reg ardingour concerns or

- 42-recommendations on the mechanical desig n. Your failure to address these issues is not due to Government inaction.

Your prog ress schedule of J anuary 5, 2005 indicated that the final design would be submitted by

J a nuary 21, 2005 and was actually received on F ebruary 18, 2005, which was 28 day s late. The Government responded with our review comments on F ebruary

25, 2005. Your failure to submit the desig n by y our own scheduled milestones was not due to Government inaction.

J X 470.1. A Coast Guard contracting officer never responded to plaintiff’s request for a contract price adjustment.

Ms. Hundley sent plaintiff another letter the following day to ex p ress the Coast Guard’s concern that plaintiff was not meeting the deadlines set forth in its J anuary 5, 2005 project schedule. J X 474.1. She attached to her letter “a current discrepancy list of known problems that [ had to be] corrected prior to building acceptance by the Government.” I d . The list contained seven items: (1) construction of an incorrectly siz ed front entrance door opening , (2) inadequate roof insulation, (3) ex posing the interior of the unfinished building to the weather, (4) a missing silt fence, (5) improperly

tilted window sills, (6) lack of flashingfor the roof of the electrical room, and (7) a discrepancy with louver siz es. J X 474.2; see also Tr. 1309 (Combs) (stating that he did not consider any

of these problems to be “a major show stopper”).

Ultimately , on March 17, 2005, the Coast Guard sent a Notice of Termination for Default to plaintiff and a copy

of the notice to plaintiff’s surety
, F irst Sealord Surety , I n c. (“F irst Sealord”). J X 481.1-.4. In the notice, Ms. Hundley first described the various cure letters, forbearance letters, and show cause letters that the Coast Guard had sent to plaintiff, and then noted that as of the date of the notice, plaintiff had “failed to install the roofing and remove the rejected insulation.” J X 481.1-.2; see also Tr. 1658 (Combs) (noting that upon contract termination, two roof panels were not installed and the building was a “shell with no windows and no doors, [ with] some interior studs and some roug hed-in plumbing ”). She then wrote:

W e have determined that it is no long er in the best interest of the Government to forbear termination for default for y our failure to complete within the established completion date. . . . [ Y] our performance in the forbearance period continually fell well behind any

completion schedule you had submitted. Your continued failure to make prog

ress has made it clear that it is no long er in the best interest of the Government to forbear termination for default. I n accordance with contract clause F AR 52.249-10, Termination for Default (F ix e d-Price Construction) (APR 1984), y ou are hereby

notified that this contract is terminated for default for failure to make prog

ress and failure to prosecute the work with the dilig ence that will insure its completion within the time specified in the contract including any

ex tensions. Therefore, y

our rig ht to proceed with work under this contract is terminated AS OF THI S DATE. The Government may cause the contract to be

- 43-completed by others in accordance with the above clause and y ou will be held liable for any

increased costs occasioned thereby . These costs will include liquidated damag e s in the amount specified in the contract that will accrue from the current contract completion date to actual completion of work. The Government reserves all rig hts and remedies provided by law or under the contract in addition to charg ing ex cess costs occasioned by completion of the defaulted contract.

J X 481.3. I n closing , Ms. Hundley indicated that the notice was “a final decision of the Contracting Officer” and described plaintiff’s rig ht to appeal the default termination to a board of contract appeals or the United States Court of F ederal Claims (“Court of F ederal Claims”). I d.

Rather than immediately

appealing , plaintiff sent the Coast Guard a letter on March 18, 2005, challeng ing the propriety of the default termination and requesting that the Coast Guard rescind its notice. J X 484.3. I n particular, citing F AR 52.249-10(b), which precludes the termination of a contract for default if the contractor was not responsible for the delay in contract performance, plaintiff enumerated several areas of contract performance–including the desig n and construction of the HVAC sy stem for the hydraulic test lab–where it encountered delay s for which it was not responsible, referring the Coast Guard to its previous correspondence describing those delay s. I d. Of particular note, plaintiff wrote:

2. W e proposed this project as Desig n/B uild but [ the Coast Guard] forced K-Con I nc. into a performance B id/Spec B uild Contract. Please reference letters dated 03 March 2004, 31 March 2004, 05 April 2004, 22 December 2004, 07 F ebruary 2005 and 25 F ebruary

2005.

3. Additional HVAC eng ineering and work[ ] for Hydraulic Test room acknowledg e[ d] by [the Coast Guard] as additional to our scope of work. Please reference RF I# 6 dated 13 J u ly 2004 and email dated 20 J uly 2004 referencing our RF I# 6 phone conference.

I d. I n a March 21, 2005 letter, Ms. B roussard rejected plaintiff’s claims of ex cusable delay and denied plaintiff’s request for the rescission of the default termination. J X 487. Then, on March 29, 2005, the Coast Guard notified plaintiff that it was rejecting the invoice that it had received from plaintiff earlier in the month for work completed throug h F ebruary 28, 2005, J X 492,

ex p laining :

The Government beg an deductingliquidated damag es from the contract price in the amount of $511.00 [ sic] a day starting November 10, 2004 and continuing throug h F e b ruary

28, 2005 (111 day s). As a result, you have been assessed $56,721.00 as damag es for the delay in completing our contract. The amount of liquidated damag e s withheld to date ex ceed[ s] the total amount due.

- 44-J X 492.1. More specifically , according to handwritten notations on the invoice and its attachment, the Coast Guard determined that plaintiff was due $305,034.39 throug hF ebruary

28, 2005, that it had already

paid plaintiff $287,551.39, and that therefore the balance due to plaintiff was $17,483.00. J X 492.2-.3; accord J X 3.11; J X 493.16. However, because the assessed liquidated damag e s ex ceeded the amount due to plaintiff, the Coast Guard did not pay the $17,483 balance to plaintiff. J X 492.1-.2.

C. Work by F irst Sealord

Meanwhile, on March 18, 2005, F irst Sealord advised the Coast Guard that it was “considering taking over the project” and keeping plaintiff as its subcontractor. J X 485.1; accord J X 726.1. Subsequently , on March 24, 2005, the Coast Guard conducted a meeting with F irst Sealord’s project manag e r, J im Pay n e, and several representatives from plaintiff to discuss what work remained to be completed and what the Coast Guard required from F irst Sealord, such as a new project schedule and an action plan. J X 489; J X 490.1-.2; J X 491; see also J X 489.2-.5 (containingthe Coast Guard’s March 22, 2005 audit of the building ’s condition and what work remained to be completed).

The Coast Guard received a letter directly from plaintiff on March 29, 2005, containing an action plan and a two-week forecast. J X 495.1. F irst Sealord then sent the Coast Guard an action plan and a two-week forecast on April 22, 2005, which, g iven the file name, may

have been the same document prepared by plaintiff. J X 494.2. On April 28, 2005, Ms. B roussard sent a letter to F irst Sealord respondingto plaintiff’s submission and detailing the submission’s deficiencies. J X 495.1-.2. In concluding the letter, Ms. B roussard wrote:

The Government believes several of the proposed solutions and/or requests contained in K-Con’s plan continue to reflect K-Con’s inability to provide adequate quality

control over the project. Ex amples include a request for the Government to identify non compliant work, requests for additional money to complete requirements included in the orig inal contract, plans to proceed with work without adequate desig ns, etc. B ased on the information provided in KCon’s letter, we continue to be very concerned that this project can be successfully completed. W e see no proposed improvement and/or chang e in the quality control measures and manag ement practices of K-Con.

L a stly , y ou are reminded that liquidated damag e s are continuingto accrue from the 10 November 2004 [ sic] completion date at a rate of $551.00 per day

. . . . [ I ] t is in every o n e’s best interest to have this project completed as soon as possible. Once the Take-Over Ag reement has been ex ecuted, and the above items have been submitted work may beg in.

J X 495.1-.2; cf. J X 725 (indicating that Mr. Allen had an informal conversation with Mr. Pay ne on May 5, 2005, ex pressing concern that enoug h time had not been allotted to finish the project).

- 45-Plaintiff assig ned a new superintendent, Tom Parker, to the project, and he beg an work on the job site on May

23, 2005. J X 4.422-.423; accord Tr. 970 (Parker). On May 25, 2005, Ms. B r oussard sent another letter to F irst Sealord in which she noted that F irst Sealord’s “failure to start work” was “prohibiting the customer from movinginto a complete and useable facility .” J X 497. She “directed” F irst Sealord “to beg in on site construction activities” by the following day and stated that if F irst Sealord failed to do so, the Coast Guard would reprocure the contract. I d.

F irst Sealord did beg in work as directed, but work did not proceed smoothly . F or

ex ample, there were issues with F irst Sealord’s correction and submission of the final desig n documents. I n a J une 15, 2005 letter, 2 5 Ms. Hundley advised F irst Sealord that it could omit certain items associated with the hy draulic test lab from the mechanical and electrical drawings, including two supply

fans, two ex haust fans, and the chilled water line. 2 6 J X 729.1. She then noted that the Coast Guard “consider[ ed] the overall desig n incomplete” but was “willing to allow the work to continue with the understanding being that all such work [ was] at [ F irst Sealord’s] own risk and [ did] not imply acceptance of any deviance from the contract documents.” J X 729.1-.2.

That same day , but before receiving Ms. Hundley ’s letter, Mr. Pay ne sent Mr. Allen an electronic-mail messag e indicating his understanding that there would be chang es to the HVAC
sy stem, such as the elimination of two supply fans, two ex h aust fans, and the chilled water line, but noting that until F irst Sealord received formal notification of the chang es from the Coast Guard, its desig ners would proceed with revising the drawing s as if no chang e s were forthcoming . J X 731.2. He further noted that “[ t] he proposed chang es could also affect the overall HVAC design as the air quantities would chang e.” I d. The nex t day , Mr. Allen confirmed the chang e s, and Mr. Pay n e according ly

indicated that F irst Sealord’s desig ners would cease making

certain chang es to the desig n. J X 731.1. Mr. Pay ne reiterated that the Coast Guard’s chang es, particularly the omission of two supply and two ex h aust fans, would “have an impact [ on] other components of the previously desig ned HVAC sy stem.” I d . Mr. Allen forwarded Mr. Pay

n e’s messag e to Mr. Schmitt and Mr. F edei. J X 733. Mr. F edei responded

2 5 The letter was orig inally dated J une 9, 2005. J X 728.1. However, the relevant Coast Guard officials had not sig ned off on the letter until at least Jun e 14, 2005. J X 728.2.

2 6 The Coast Guard may

have directed these omissions to accommodate the placement of different equipment in the hy draulic test lab. See J X 727. I n a May 18, 2005 memorandum, Mr. Allen indicated that the AR& SC had ordered a new HTS test stand that was “dimensionally larg e r than the old test stand” and “require[ d] g reater heat dissipation and larg er electrical service.” J X 727.2; see also PX 260.1-.2 (reflecting that a Coast Guard employee had advised Mr. Pay ne at the end of May

2005 that there mig ht be “chang es in the equipment in the Hydraulic Test Room” and “that the two roof ex haust fans may be eliminated”). Consequently , he recommended that “the requirement that KCON hook-up any equipment in the [ hy draulic test lab] be deleted” and that “KCON [ be required] to terminate and valve-off chilled water piping from the [ hy draulic test lab] ac unit [ sic] after it enters the [ hy draulic test lab] .” J X 727.2.

- 46-that the HVAC sy stem should not be redesig ned, and ex pressed concern that the orig inal desig ner

of the HVAC sy stem–Epic–was “working on this ag ain.” I d.

The Coast Guard received a set of drawing s from F irst Sealord on J une 20, 2005. J X 499.1; see also J X 708 (containingelectrical, mechanical, fire alarm, and plumbing sy stem drawing s from Epic dated June 16, 2005). Upon reviewing the drawing s, the Coast Guard determined that they

were a reprint of a J

uly 2004 submission, and did not include subsequently approved chang es. J X 499.1. Mr. Allen forwarded his concerns to Mr. Pay ne, id., who indicated, in a J une 23, 2005 electronic-mail messag e, that the drawing s “were intended to be a complete set that incorporated comments from” Ms. Hundley ’s F ebruary 25, 2005 letter, J X 734.1. I n a J une 27, 2005 electronic-mail messag e, Mr. Allen advised Mr. Pay ne that F irst Sealord should not “be concerned with the equipment or loads g oing into the Hy draulic L ab,” that “[ t] he HVAC equipment and ducting is to be installed as drawn (for the F e b 2005 [ drawing s] , not J u ly

2004),” and that F irst Sealord must “‘finish’ the drawing s . . . .” I d . Mr. Allen also noted that the Coast Guard was concerned that the daily reports reflected that “little or no work [ was] b eing performed” on the job site. I d

. During a J uly

5, 2005 meeting , F irst Sealord and the Coast Guard ag reed to the following schedule for proceeding :

1. New drawing s (desig n ) would be submitted on or about F riday J uly 8, 2005

2. [ The Coast Guard] to review (approve) within 2 weeks

3. Construction schedule will be submitted after approval of desig n

4. Anticipate 60 to 90 day s after design submittal – construction completion

J X 500.1. However, F irst Sealord did not meet the deadline for submittingnew drawing s; rather, Mr. Clay ton sent revised mechanical drawing s to the Coast Guard on J uly 15, 2005, J X 738; see also J X 709 (containing electrical and mechanical sy stem drawing s from Epic dated July 14, 2005); J X 710 (containingelectrical sy stem drawing s from Epic dated J uly 15, 2005), and F irst Sealord sent a complete set of drawing s to the Coast Guard on J u ly 19, 2005, J X 739.1.

The ong oing desig n and construction issues soured the Coast Guard on F irst Sealord’s ability to complete the project. J X 500. I n a J uly 19, 2005 letter to F irst Sealord, Ms. Hundley
wrote:

During the initial takeover meeting . . . of March 24, 2005, we discussed several actions critical to completion of the project. They included completing the final desig n, . . . correction of outstanding deficiencies and implementinga takeover agreement.

- 47-You did not start any work of any

ty pe until May

25, 2005, almost eig h t weeks after the meeting . Your initial efforts . . . to partially install the passag eway between the new and ex isting building s [ suffered from defective workmanship]

. F urther you have failed to provide the final desig n documents as promised on several occasions . . . . W e have also noted during onsite inspections and review of daily log s that adequate manpower has not been put in place to successfully complete the building ’s construction or correct the many deficiencies previously noted in our construction audit. You have failed to provide a construction schedule for us to monitor yo ur prog ress. No take-over ag reement has been sig ned and agreed to as of this date.

. . . . As of the date of this letter, the complete final desig n has y et to be fully submitted . . . and what we have partially received does not include ag reed to chang es to the desig n. Our inspector has informed us that [ certain work is being done without approved final drawing s]

. These actions, taken in light of the continuing history of poor quality control on this project by K Con, y our take-over contractor, are ill advised and poorly planned. As a result the Government has lost confidence in your ability to properly manag e this project and successfully deliver a quality

facility in a reasonable time.

W e ag reed with your proposal to use K-Con as the takeover contractor. However, four months after the default (which should have been ample time to complete the work) little meaning ful prog ress has been made.

J X 500.1-.2; see also J X 498 (reflecting that the Coast Guard forwarded a sig n ed takeover
ag reement to F irst Sealord on J une 13, 2005, for plaintiff’s ex ecution). I n lig ht of these issues, Ms. Hundley

advised that she had “determined it [ was] no long er in the Government[ ’] s best interest to allow F irst Sealord Surety to continue work” and according ly “directed” F irst Sealord to “immediately

cease all work and direct all contractors, employ ees and material men to vacate the site.” J X 500.2. Ms. Hundleyfurther stated that it was the Coast Guard’s intent to “reprocure the remaining

work,” charg e “any

ex cess costs” to plaintiff and F irst Sealord, and continue to assess liquidated damag es “until the project [ was] substantially complete.” I d. At this point in time, F irst Sealord had not completed the roof, J X 4.509, and pursuant to the project schedule submitted by

plaintiff on J a

nuary 5, 2005, it would take an additional ninety -seven day s, until April 26, 2005, to complete the building once the roof was installed, J t. Stip. ¶ 43; J X 415.1, .3.

F irst Sealord responded to Ms. Hundley ’s letter on J uly 21, 2005. 2 7 J X 739.1. Ms. Hundley addressed F irst Sealord’s comments in an Aug ust 11, 2005 letter:

2 7 F irst Sealord’s letter is not a part of the trial record.

- 48-Your submission of the latest version of the final drawing s was late. Since

award of this contract in September 2003, we have received six separate “final” submissions. . . . I n each case, the drawing s did not comply with the contract terms. Critical details remained incomplete as of 5 J uly 2005, a full 21 months after contract award. [ W ] e ex pected the drawing s by F riday , J uly

8, 2005[ , but they ] were not shipped until J uly 19, 2005.

. . . .

HVAC: W e provided definitive direction on deleting the ex h aust fans. These deletions requested by the Government did not materially affect the overall mechanical desig

n or HVAC duct siz ing . W e maintain that y our mechanical desig n could have been sufficiently completed without awaitingissuance of the formal chang e . I t is noted that y o ur subcontractors started installation of circular duct work althoug h rectang ular ducts have consistently been shown on yo ur submissions and no review comments were ever made altering this choice. As
y ou should be aware, such substitutions have a potential adverse affect on the desig n and would have neg ated acceptance of y our mechanical desig

n . This would have resulted in further delay s and confusion at the job site had y ou continued and would have been indicative of the continuing quality control problems on this project. . . .

. . . .

W e questioned the proposed completion date of late September based on this rate of prog ress observed to date.

Construction occurring

without drawing s: This situation continued to

occur. . . .

W e had no confidence that a quality building could have been erected by September 2005 for the reasons addressed above.

Concerning the letter of ag reement reg ardingcompletion of this contract, we note that you never sig ned this letter. In lig h t of the repeated failures of this project to prog ress, the continued missed milestones, the lack of quality control, and the deg ree of rework constantly encountered, the Government had reasonable cause and rig

ht to terminate and re-procure.

J X 739.2-.3.

- 49-D. Reprocurem ent

After it directed F irst Sealord to stop work, the Coast Guard “solicited bids to complete the construction” of the component repair shop. J X 501. The specifications included with the solicitation “call[ ed] for the complete removal of the metal roofing , metal wall sheets and all associated insulation.” I d. I n a September 7, 2005 letter, plaintiff advised the Coast Guard that it was aware of the solicitation, and opined that the complete removal of the roof, walls, and insulation was not required. I d. Plaintiff then stated that if the Coast Guard intended to hold plaintiff and F irst Sealord liable for such work, it would like the o pportunity to inspect the condition of the building when the work was performed. Id. The Coast Guard rejected plaintiff’s request in a September 13, 2005 letter. J X 502.

As noted above, at the time of the default termination, the Coast Guard had paid $287,551.39 to plaintiff. J X 3.11. I n two contract modifications, ex ecuted by the Coast Guard on October 27, 2005, and October 28, 2005, the Coast Guard indicated its intent to use the unpaid balance of the contract–$263,603.96–to fund the reprocurement of the project, and reiterated that it reserved its rig ht to claim any costs incurred in ex cess of the unpaid balance from plaintiff. J X 3.11-.15. I t also reiterated that it reserved its rig ht to recover liquidated damag es, which would accrue until the building was substantially

complete. J X 3.11, .14.

Had the Coast Guard decided to hire a contractor only to complete the work left unfinished by

plaintiff, it would have been able to g et a contractor on site within thirty to forty

five day s, Tr. 3149 (B roussard), and the contractor would have been able to beg in work within fifteen to thirty

day s, id. at 3150. However, because the AR& SC’s requirements had chang ed, id. at 3147-48, the Coast Guard decided to increase the scope of work of the reprocurement contract, J t. Stip. ¶ 45; cf. Tr. 3147-49 (B roussard) (exp laining that because the new contractor would be performing

additional work, the Coast Guard decided not to charg e plaintiff for reprocurement costs), 3211-13 (indicating that the g overnment-furnished equipment identified in the reprocurement contract was the same as the g overnment-furnished equipment identified in plaintiff’s contract). This decision delay ed the award of the reprocurement contract. See
g enerally Tr. 3147-49 (B roussard) (imply ing that a reprocurement contract would have been awarded more quickly had the Coast Guard not increased the scope of work).

On November 7, 2005, the Coast Guard entered into an ag reement with Viteri Construction Manag ement Incorporated (“Viteri”) to complete the building

. J X 506. The initial contract price was $721,431, and the initial completion date was March 19, 2006. J X 506.2. Throug h bilateral contract modifications, the contract price was ultimately increased to $824,610. 2 8 J X 508. The Coast Guard determined that Viteri substantially completed the

2 8 The trial record lacks any evidence reg a rding whether the March 19, 2006 contract completion date was ex tended. However, evidence submitted with plaintiff’s motion for partial
summary judg ment on the issue of liquidated damag es reflects that the fourth bilateral contract modification ex ecuted by Viteri and the Coast Guard ex tended the contract completion date to

- 50-building as of September 20, 2006. J X 507.1. The hydraulic test lab in the completed building

differed from what plaintiff had been asked to desig n; it contained all new equipment and different ductwork. Tr. 1334-36 (Combs); see also J X 727.1-.2 (containing

an internal electronic-mail messag e dated May 18, 2005, in which the Coast Guard recommended a plan for “building completion taking into account the impact of the new test equipment,” which was “dimensionally larg er than the old test stand, [ and] require[ d ] g reater heat dissipation and larg er electrical service”).

II. P ROCEDURAL HISTORY

Plaintiff filed suit in this court on Aug u st 25, 2005, seekingto convert the default termination into a termination for the g overnment’s convenience and the remission of liquidated damag es. Defendant filed an answer, in which it asserted five affirmative defenses, and counterclaim. I

n its counterclaim, defendant alleg ed that the Coast Guard had withheld
approx imately

$10,220 from pay

ments to plaintiff as liquidated damag es, and soug ht the balance of liquidated damag es as measured from the contract completion date to the date that the building was completed, plus interest as provided by law. In its answer to the counterclaim, plaintiff asserted three affirmative defenses: breach of contract; failure to mitig ate damag es; and waiver, estoppel, and laches.

After plaintiff filed this suit, which was assig ned to the undersig ned, it filed three other suits in this court in which it alleg e d that the Coast Guard breached contracts for the desig n and construction of prefabricated metal building s. See K-Con B ldg . Sy s., I n c. v. United States, No. 05-981C (filed Sept. 12, 2005); K-Con B ldg . Sy s., I n c. v. United States, No. 05-1054C (filed Sept. 30, 2005); K-Con B ldg . Sy s., I nc. v. United States, No. 06-865C (filed Dec. 18, 2006). These other suits concerned building s in St. Petersburg , F lorida, Port Huron, Michig an, and Honolulu, Hawaii. The St. Petersburg and Port Huron cases were eventually reassig ned to the undersig ned. The Honolulu case remained with the orig inally assig ned judg e, and was settled by the parties in J uly

2007.

Upon the close of discovery in this case, plaintiff moved for partial summary judg ment on the issue of liquidated damag es, arg uing first that the rate of liquidated damag es specified in its contract with the Coast Guard constituted an unenforceable penalty , and second, in the alternative, that it was entitled to the remission of liquidated damag es due to ex cusable delay

. The court denied plaintiff’s motion in a J anuary 24, 2011 Opinion and Order, concluding that the liquidated damag e s rate was not an unenforceable penalty , and that plaintiff had not established

an ex cusable delay that would lead to the remission of some or all of the assessed liquidated damag es. See K-Con B ldg . Sy s., I nc., 97 F ed. Cl. at 41. Thus, in December 2011, the court held a two-week trial. During its case-in-chief, plaintiff presented the testimony of Mr. Reitmeier,

Aug ust 26, 2006. See App. to Pl.’s Mot. for Partial Summ. J . 196, cited in K-Con B ldg . Sy s, I nc. v. United States, 97 F ed. Cl. 4, 48 (2011). Viteri and the Coast Guard ex e cuted five bilateral contract modifications. J X 508.

- 51-Mr. Ramsey , Mr. Tempel, Mr. Parker, Eric Combs (its chief operating officer), and two ex

pert witnesses–Stanley

Yeskowski, an insulation ex pert, and Eric Ung er, a scheduling ex p ert. 2 9 Defendant, during

its case-in-chief, presented the testimony of Richard Anderson (the contracting officer’s representative), Henry Ames (the F D CC L ANT’s director of construction in 2004), Mr. Schmitt, Mr. F edei, Ms. B roussard, and two expert witnesses–J effrey Peters, an insulation ex pert, and J ohn McGrath, a scheduling ex pert. 3 0 Plaintiff presented the testimony of one rebuttal witness–Mr. Kiernan.

On the six th day

of trial, counsel for defendant discovered that the Coast Guard possessed three box es of documents relevant to the case that had not been identified or produced to plaintiff during discovery . Then, before plaintiff had an opportunity to review most of the documents, one of defendant’s witnesses–Mr. Anderson–caused the documents to be destroy ed. After trial, plaintiff moved to sanction defendant for this conduct. I n an August 30, 2012 Opinion and Order, the court g

ranted plaintiff’s motion and imposed three sanctions: (1) defendant was precluded from using

the undisclosed documents as evidence, (2) the trial testimony of Mr. Anderson was stricken from the record, and (3) defendant was required to reimburse plaintiff for the costs that plaintiff incurred in pursuing sanctions. K-Con B ldg . Sy s., Inc. v. United States, 106 F ed. Cl. 652, 668 (2012).

Meanwhile, the court issued a summary judg ment ruling in the Port Huron case in Aug ust 2011, K-Con B ldg . Sy s., I nc. v. United States, 100 F ed. Cl. 8 (2011), and a summary judg ment ruling in the St. Petersburg case in November 2012, K-Con B ldg . Sy s., I nc. v. United States, 107 F ed. Cl. 571 (2012). After the court issued the latter decision, the parties eng ag ed in settlement discussions in all three cases throughthe court’s alternative dispute resolution prog ram. Those discussions revealed several issues that required resolution prior to any settlement, leadingthe parties to file the relevant motions in each case. I n this case, plaintiff filed a motion to dismiss and a motion for leave to amend its complaint. The court ruled on those motions in a F ebruary 26, 2014 Opinion and Order. 3 1 See K-Con B ldg . Sy s., I nc., 114 F ed. Cl. at 722.

2 9 The court qualified Mr. Yeskowski and Mr. Ung er as ex perts. Tr. 1005, 1814.

3 0 The court qualified Mr. Peters and Mr. McGrath as ex perts. Tr. 2327, 3235.

3 1 I n the St. Petersburg case, the parties filed cross-motions for summary judg ment. The court denied both motions in an April 7, 2014 Opinion and Order. K-Con B ldg . Sy s., I nc. v. United States, 115 F ed. Cl. 558 (2014). The parties ultimately filed a joint stipulation of dismissal. I n the Port Huron case, defendant filed a motion to dismiss and a motion for summary judg ment. The court g ranted those motions in a J anuary 28, 2014 Opinion and Order and entered judg ment ag ainst plaintiff on its claims. K-Con B ldg . Sy s., Inc. v. United States, 114 F ed. Cl. 595 (2014), aff’d, 778 F

. 3d 1000 (F ed. Cir. 2015). Plaintiff appealed that ruling to the United States Court of Appeals for the F ederal Circuit (“F ederal Circuit”), which affirmed this court’s judg ment. K-Con B ldg . Sy s., I n c

. , 778 F .3d at 1000.

- 52-I n its motion to dismiss, which the court recharacteriz ed as a motion for summary

judg ment, plaintiff soug ht to invalidate the Coast Guard’s termination of its contract for default,
arguing that under the terms of the F ederal Supply Schedule contract, the Coast Guard could not terminate the contract without first referring plaintiff’s alleg ations of ex cusable dely to the GSA. I d. at 728-29. Defendant ag r eed that the Coast Guard was required to refer alleg ations of

ex c usable delay

to the GSA, but contended that plaintiff made no such alleg ations. I d. at 730-32. The court found that plaintiff’s letters dated December 22, 2004, and F ebruary 7, 2005, sent in response to the Coast Guard’s show cause letters, as well as the three letters that plaintiff sent to the Coast Guard on F ebruary 25, 2005, requestingtime ex tensions, contained alleg ations of

ex c usable delay . I d. at 730-31. According ly , the court declared the Coast Guard’s default termination invalid and concluded that it lacked jurisdiction to entertain any claims premised solely on the default termination. I d . at 732. The court further held that it possessed jurisdiction to entertain plaintiff’s claim for the remission of liquidated damag es to the ex tent that the claim was premised on the ex cusable delay s alleg ed in the three F ebruary 25, 2005 letters, as well as defendant’s counterclaim for unpaid liquidated damag es. I d. at 732-33. Therefore, the court
g ranted in part and denied in part plaintiff’s motion. I d. at 733, 735-36.

I n its motion for leave to amend its complaint, plaintiff soug ht to alleg e a claim based on its F ebruary

25, 2005 letter to the Coast Guard requesting a $50,325 price increase for ex tended overhead resulting from the ex cusable delay s it alleg ed in its other F ebruary 25, 2005 letters. I d. at 734. The court initially noted that an amendment was not necessary for it to rule on an unpleaded issue if the issue was tried by the consent of the parties. I d. I t then concluded that defendant’s consent to try the issue of plaintiff’s entitlement to ex tended overhead should be implied. I d. at 734-35. The court therefore g ranted plaintiff’s motion. I d . at 736.

After the court issued its decision on plaintiff’s combined motion, the parties filed amended pleading s. Plaintiff added a claim for $50,325 in ex tended overhead to its complaint; defendant amended its counterclaim to alleg e that the total amount of accrued liquidated damag es was $374,680 (representing 680 day s at $551 per day ), that the Coast Guard had withheld $17,483 from pay

ments to plaintiff for liquidated damag e s, and that plaintiff owed the Coast Guard the balance–$357,197–plus interest, costs, and fees to the ex tent permitted by

law; and plaintiff added a larg e number of affirmative defenses in response to defendant’s amended counterclaim, including

the defense of ex cusable delay . The parties then eng ag ed in posttrial briefing , filing opening posttrial briefs on J une 26, 2015, and posttrial response briefs on Aug ust 6, 2015.

On the same day

that the parties filed their posttrial response briefs, plaintiff (1) submitted a certified claim to the GSA contracting officer requesting

a “decision terminating

the contract for convenience and directing that K-Con proceed to recover any costs under the termination for convenience clause,” 3 2 Reply Ex . 1-2, and (2) filed a motion to stay a ruling in

3 2 Given the relief soug

ht by plaintiff, it is unclear why it submitted its claim to the GSA contracting

officer and not the Coast Guard contracting officer; its F ederal Supply Schedule

- 53-this case pendinga decision on the certified claim. Defendant opposed plaintiff’s motion.

Ultimately , the motion became moot when plaintiff, on October 8, 2015, moved for leave to amend its complaint for a second time to assert claims premised on its Aug ust 6, 2015 certified claim, which the GSA contracting officer had not ruled on within the six ty day s provided by statute. Defendant opposes this motion.

All remaining issues in this case are now fully briefed. The court deems closing
argument unnecessary

.

III. P LAINTIF F ’S MOTION F OR LEAVE TO AMEND ITS COMP LAINT

The court first addresses plaintiff’s motion for leave to amend its complaint to alleg e claims that (1) its contract with the Coast Guard should be terminated for the convenience of the
g overnment and (2) it is entitled to costs associated with the termination for convenience. 3 3 Specifically , plaintiff contends:

[ T] he primary

issue at trial was whether the termination for default by the Coast Guard was improper and the termination should be converted to a termination for convenience. At that time, the Court lacked jurisdiction because there was no valid final decision. Now, the Court has jurisdiction over the matter because there is a valid claim that the task order should be terminated for convenience, and the claim was deemed denied. I n the interest of justice, both parties should now be allowed to present their claims and defenses on whether the task order should be terminated for convenience.

Mot. to Amend 1-2; see also Reply Ex . 1-2 (containingplaintiff’s request for termination for convenience costs).

Under RCF C 15(b), the court may permit the posttrial amendment of pleading s in two circumstances:

(1) B ased on an Objection at Trial. I f, at trial, a party objects that evidence is not within the issues raised in the pleading s, the court may permit the pleading s to be amended. . . .

(2) F or I ssues Tried by

Consent. W hen an issue not raised by the pleading s is

contract does not contain any provision preventingan ordering ag ency , such as the Coast Guard, from terminatinga task order for the g overnment’s convenience.

3 3 Althoug h plaintiff did not attach to its motion its proposed amended complaint, the court was able to ascertain plaintiff’s proposed claims from the contents of plaintiff’s motion and certified claim.

- 54-tried by the parties’ ex p ress or implied consent, it must be treated in all respects as if raised in the pleading s.

On its face, RCF C 15(b) is concerned with allowing the parties to amend their pleading s to conform with what occurred during trial. However, the events that form the basis of plaintiff’s motion–the court’s F ebruary 26, 2014 Opinion and Order, plaintiff’s Aug ust 6, 2015 certified claim, and the GSA contracting officer’s subsequent failure to rule on plaintiff’s claim–occurred after trial. According ly , RCF C 15(b) is inapplicable here.

Rather, the proper basis for plaintiff’s motion is RCF C 15(d). See Prasco, L L C v. Medicis Pharm. Corp., 537 F .3d 1329, 1337 (F ed. Cir. 2008). That rule provides: “On motion and reasonable notice, the court may , on just terms, permit a party to serve a supplemental pleading setting out any

transaction, occurrence, or event that happened after the date of the pleading to be supplemented.” RCF C 15(d). I t “plainly permits supplemental amendments to cover events happening

after suit . . . . Such amendments are well within the basic aim of the rules to make pleading s a means to achieve an orderly and fair administration of justice.” Griffin v. Cty . Sch. B d., 377 U.S. 218, 227 (1964). Courts have “broad discretion” to allow a supplemental pleading

. F ed. R. Civ. P. 15(d) advisory committee’s note to 1963 amendment; accord United States exrel. Gadbois v. PharMerica Corp., 809 F

. 3d 1, 7 (1st Cir. 2015) (remarking

on the “breadth of the discretion inherent in Rule 15(d)” that results from the fact that the rule “contains no standards at all to g uide the district court’s analy sis”). I n ex ercisingthis discretion, “courts customarily have treated requests to supplement under Rule 15(d) liberally .” Gadbois, 809 F .3d at 7; accord New Amsterdam Cas. Co. v. W aller, 323 F .2d 20, 28-29 (4th Cir. 1963). Nevertheless, motions to supplement a pleading are not g ranted “automatically ”:

F or one thing , it is implicit in the log ic of Rule 15(d) that a motion to supplement
may be denied where the referenced events occurred before the filing of the orig inal complaint. F o r

another thing
, leave to supplement may be withheld when the request would “unduly delay resolution of the case.” I n the last analy sis, a district court faced with a Rule 15(d) motion must weig h the totality

of the circumstances, just as it would under Rule 15(a). I d iosy ncratic factors–say
, the futility of supplementation, prejudice to the opposing party , and unreasonable delay in attempting to supplement–may suffice to g round a denial of a Rule 15(d) motion. Every

thing depends on contex t.

Gadbois, 809 F .3d at 7 (footnote and citations omitted) (quoting Hall v. CI A, 437 F .3d 94, 101 (D.C. Cir. 2006)); accord Quaratino v. Tiffany & Co., 71 F .3d 58, 66 (2d Cir. 1995) (“Absent undue delay , bad faith, dilatory tactics, undue prejudice to the party to be served with the proposed pleading
, or futility , [ a Rule 15(d)] motion should be freely g ranted.” (citing F oman v. Davis, 371 U.S. 178, 182 (1962)).

- 55-Defendant arg ues that supplementation is improper for two reasons: supplementation would be futile, and it would be prejudiced by plaintiff’s undue delay

in asserting its new claim. 3 4

A claim is futile if it could not survive a motion to dismiss. See, e.g ., B EG I nvs., L L C v. Alberti, 85 F . Supp. 3d 13, 24 (D.D.C. 2015) (“As is the case when a plaintiff seeks leave to amend a complaint, . . . a court may deny a motion to file a supplemental complaint as futile ‘if the proposed claim[ s] would not survive a motion to dismiss.’” (quoting Hetting a v. United States, 677 F .3d 471, 480 (D.C. Cir. 2012))); see also Marchena v. United States, 128 F ed. Cl. 326, 330 (2016) (“A proposed amendment is futile if it would not survive a motion to dismiss.”). According to defendant, supplementation would be futile in two respects: (1) plaintiff’s Aug ust 6, 2015 certified claim was untimely , and (2) there is no factual basis for plaintiff to request that its contract with the Coast Guard be terminated for the convenience of the g o vernment. I

n response, plaintiff focuses on the former arg ument, contending that its certified claim was timely

.

B o th plaintiff’s F ederal Supply Schedule contract and the Coast Guard’s order under that contract were g overned by the Contract Disputes Act of 1978 (“CDA”), 41 U.S.C. § 601-613 (2000). 3 5 See F AR 52.233-1, cited in J X 1.37; J X 2.9. Under the CDA, contractors are required to present monetary claims to the contracting officer for a decision. 41 U.S.C. § 605(a); F AR 52.233-1, cited in J X 1.37. B ecause plaintiff intends to seek termination for convenience costs in its supplemental complaint, it was required to submit a claim for such costs to the contracting officer. See Armour of Am. v. United States, 69 F ed. Cl. 587, 592 (2006) (“There is no evidence before the Court to show that Plaintiff requested monetary damag e s of a sum certain, and there was no final decision by

the contracting

officer on a claim for convenience termination monetary damag es. I n the absence of a final decision by the contracting

officer on monetary

damag es, this Court lacks jurisdiction of this aspect of the claim.”); see also Deponte I n v s., I nc. v. United States, 54 F ed. Cl. 112, 116 (2002) (“[ A] decision to terminate a contract for default is separate and distinct from a decision on any claims by

a contractor for termination costs or damag es.”). F urthermore, plaintiff was required to submit its claim to the contracting officer “within 6 y

ears after the accrual of the claim.” 41 U.S.C. § 605(a); accord F AR 52.233-1(d)(1), cited in J X 1.37. Under the F AR:

3 4 Defendant actually

argues that the filing of a second amended complaint would be futile. However, because plaintiff’s motion for leave to amend its complaint should have been broug ht under RCF C 15(d), the court characteriz es defendant’s arg ument as an arg

ument ag ainst supplementation.

3 5 All citations to the CDA are to the version of the statute in effect on the date that the Coast Guard placed its order with plaintiff under plaintiff’s F e deral Supply Schedule contract. Cong r ess has since recodified title forty -one of the United States Code, revising and renumbering the provisions of the CDA. See Pub. L . No. 111-350, §§ 7101-7109, 124 Stat. 3677, 3816-26 (2011).

- 56-“Accrual of a claim” means the date when all events, that fix the alleg ed liability of either the Government or the contractor and permit assertion of the claim, were known or should have been known. F or liability to be fix ed, some injury must have occurred. However, monetary damag es need not have been incurred.

F AR 33.201.

The Coast Guard improperly terminated plaintiff’s contract for default on March 17, 2005, by failing to refer plaintiff’s claims of ex c usable delay to the GSA contracting

officer in accordance with the ex

press terms of plaintiff’s F ederal Supply Schedule contract. After the improper default termination, plaintiff’s surety , F irst Sealord, took over contract performance, with plaintiff as its subcontractor. The Coast Guard directed F irst Sealord and plaintiff to cease contract performance on J u ly 19, 2005. On or before September 7, 2005, plaintiff became aware of a solicitation to reprocure the project, and, on October 27, 2005, and October 28, 2005, the Coast Guard ex ecuted two contract modifications indicating that it would use the unpaid balance of its contract with plaintiff to fund the project’s reprocurement. These facts reflect that as of October 28, 2005, plaintiff knew that it was no long er performing work under the contract, that another contractor would complete the project, and that it would not be paid the contract balance. I n other words, plaintiff’s termination for convenience claim accrued by October 28, 2005, because as of that date, all events fix ing the Coast Guard’s alleg e d liability for improper termination had occurred, plaintiff knew that these events had occurred, and plaintiff had suffered a monetary

injury . However, plaintiff did not submit its certified claim to the GSA contracting

officer until Aug

ust 6, 2015, almost ten y ears later. According ly
, pursuant to both contracts and the CDA, plaintiff’s certified claim was untimely

. B ecause the submission of a valid claim–one that satisfies all relevant procedural and substantive requirements–is a prerequisite to this court’s ex ercise of jurisdiction, K-Con B ldg . Sy s., I nc., 114 F ed. Cl. at 602, it would be futile for plaintiff to file its proposed supplemental complaint.

Plaintiff’s contention that its termination for convenience claim accrued no earlier than 2013 is unavailing

. 3 6 Plaintiff first argues that because the court invalidated the Coast Guard’s

3 6 Plaintiff does not argue that the limitations period for presenting a claim to the contracting

officer should be equitably tolled in its case. See Arctic Slope Native Ass’n v. Sebelius, 583 F .3d 785, 798 (F ed. Cir. 2009) (holding that the six -y ear limitations period in 41 U.S.C. § 605(a) can be equitably tolled). Had plaintiff advanced that arg ument, the court would have rejected it. “Generally , a litig ant seekingequitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rig hts dilig ently , and (2) that some ex traordinary circumstance stood in his way

. ” Pace v. DiGug lielmo, 544 U.S. 408, 418 (2005), quoted in Holland v. F lorida, 560 U.S. 631, 649 (2010). “[ T] he dilig e nce prong . . . covers those affairs within the litig ant’s control; the ex traordinary -circumstances prong , by contrast, is meant to cover matters outside its control.” Menominee I ndian Tribe v. United States, 136 S. Ct. 750, 756 (2016). In

this case, plaintiff alleg es that it could not have filed a claim with a contracting officer until 2013, when it discovered that the Coast Guard contracting officer lacked the authority to

- 57-default termination of its contract with plaintiff, that contract remains in force and can be ended

only if (1) plaintiff’s contract work is “completed and accepted,” (2) the contract is terminated pursuant to the Default clause, or (3) the contract is terminated pursuant to the Termination for Convenience of the Government clause. B ecause none of those events has occurred, plaintiff contends, it could not have submitted a claim to a contracting officer under the Disputes clause. 3 7 However, plaintiff knew or should have known, in 2005, that it would not be completing the contract work and that the Coast Guard had not complied with the applicable contract provisions. Moreover, the decision that plaintiff cites in support of its contention that its contract with the Coast Guard remains in force–B earing Point–is disting uishable. I n B earing Point, as in this case, the contracting

ag ency was required to refer default termination decisions to the GSA contracting officer if the contractor alleg ed ex cusable delay . 77 F ed. Cl. at 190, 194-95. Nevertheless, the contracting

ag ency terminated its contracts (a blanket purchase ag reement and a task order) with the contractor for default in September and October 2005 despite the contractor’s alleg ation of

ex c usable delay . I d. at 191. The contractor filed a claim with the contracting officer in J uly 2006, and a complaint in the Court of F ederal Claims in September 2006. I d. Seven months later, in April 2007, the court “conclude[ d] that the default terminations were ‘jurisdictionally invalid,’ and [ should] be treated as leg al nullities.” I d. at 195. I t therefore held: “[ T] here are no terminations properly

before the Court, and the Court is without jurisdiction to review the merits of this case. The [ blanket purchase ag reement] and [ the task order] therefore still ex ist and remain in effect.” I d. However, there was no evidence, as there is in this case, that the contracting

ag ency had retained another contractor to complete the work covered by the blanket purchase ag

reement and the task order, or that such work had been completed. I ndeed, the time between the default terminations and the court’s decision invalidating the default terminations–less than two y ears–is sig nificantly less than the time that elapsed in this case–almost nine years.

terminate its contract with plaintiff for default. However, the F e deral Supply Schedule contract under which the Coast Guard placed its order incorporated a provision indicating that if plaintiff alleg ed ex c usable delay , only the GSA contracting

officer could terminate the task order for default. See Pl.’s App. SJ 0014. Plaintiff’s knowledg e of this provision was not outside of its control, and therefore cannot constitute an ex traordinary

circumstance justify

ing equitable tolling . F ailure to satisfy the ex traordinary

-circumstances prong is fatal to an equitable tolling
argument. See Menominee I ndian Tribe, 136 S. Ct. at 756 (remarking that a litig ant needs to satisfy both the dilig ence prong

and the ex traordinary -circumstances prong ); accord id. at 757 n.5 (“B ecause we hold that there were no ex traordinary circumstances, we need not decide whether the [ plaintiff] was dilig ently pursuing its rig hts.”); cf. I r w in v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990) (“F e deral courts have ty pically ex tended equitable relief only sparing ly .”).

3 7 Althoug h plaintiff does not specify the Disputes clause to which it refers, the court notes that plaintiff’s F ederal Supply Schedule and Coast Guard contracts both incorporate by reference F AR 52.233-1, Disputes. See J X 1.37; J X 2.9.

- 58-Plaintiff nex t arg ues that because neither party was aware of the jurisdictional issue caused by the improper default termination until 2013, all of the events necessary to fix the Coast Guard’s liability

did not occur, and plaintiff’s claim for termination for convenience did not accrue, until that time. Plaintiff is mistaken. As the court held above, plaintiff’s claim for termination for convenience accrued by October 28, 2005, because by that date, all events fix ing the Coast Guard’s alleg ed liability for improper termination had occurred, plaintiff knew that these events had occurred, and plaintiff had suffered a monetary injury . The fact that neither party realiz ed that plaintiff’s F ederal Supply Schedule contract required the Coast Guard to refer the default termination decision to the GSA contracting officer due to plaintiff’s alleg ations of

ex c usable delay

is of no moment. “B oth parties to a contract are charg ed with knowledg e of its terms. Neither the contractor nor the g overnment can avoid its leg a l responsibilities by asserting ig norance.” Max ima Corp. v. United States, 847 F .2d 1549, 1556 (F ed. Cir. 1988); accord Upton v. Tribilcock, 91 U.S. 45, 50 (1875) (“I t will not do for a man to enter into a contract, and, when called upon to respond to its oblig ations, to say that he did not read it when he signed it, or did not know what it contained. I f this were permitted, contracts would not be worth the paper on which they

are written. B ut such is not the law. A contractor must stand by the words of his contract; and, if he will not read what he sig ns, he alone is responsible for his omission.”). Plaintiff should have known in 2005, when the Coast Guard terminated the contract for default, that the Coast Guard’s action was contrary to the terms of its F e deral Supply Schedule contract.

F inally , plaintiff arg

ues that its claim for termination for convenience did not accrue until the GSA and the Coast Guard complied, or refused to comply
, with the Default clause incorporated in plaintiff’s F ederal Supply Schedule contract. As noted above, that clause provided:

Any orderingoffice may , with respect to any one or more orders placed by it under the contract, ex e rcise the same rig ht of termination . . . , ex cept that when failure to deliver articles or services is alleg ed by the Contractor to be ex cusable, the determination of whether the failure is ex cusable shall be made only by the Contracting Officer of the General Services Administration, to whom such alleg ation shall be referred by the ordering

office and from whose determination appeal may

be taken as provided in the clause of this contract entitled “Disputes.”

Pl.’s App. SJ 0014 (incorporating by reference F ederal Supply Schedule contract clause I -F SS249-B , Default (May

2000)). In support of its contention that its claim did not accrue until the contracting

ag encies properly

rendered a decision on its claims of ex cusable delay , plaintiff relies on B rig hton Villag e Associates v. United States, 52 F .3d 1056 (F e d. Cir. 1995), and Nag er Electric Co. v. United States, 368 F .2d 847 (Ct. Cl. 1966). However, the issue addressed by the F ederal Circuit in B rig hton Villag e Associates and the United States Court of Claims (“Court of Claims”) in Nag er Electric Co. is different from the issue presented in this case.

B r ig hton Villag e Associates concerned a Housing Assistance Pay

ments contract between the plaintiff and the United States Department of Housing and Urban Development (“HUD”) that

- 59-required HUD to adjust contract rents on an annual basis. 52 F .3d at 1058. HUD did not make

rent adjustments for a number of y ears, includingfrom 1981 to 1984. I d. B eg inning in 1989, the plaintiff presented claims to HUD for retroactive rent adjustments, but HUD rejected those claims. I d . I n 1991, the plaintiff filed suit in the Court of F ederal Claims alleg ing that HUD had breached the Housing

Assistance Pay

ments contract by

failing to make annual rent adjustments. I d. The court dismissed the plaintiff’s claims for 1981 to 1984 as time-barred. I d. On appeal, the plaintiff contended that its “repeated administrative challeng es to HUD’s policies . . . postpone[ d ] accrual of its claims.” I d. at 1060. I n rejecting this contention, the F ederal Circuit disting uished between claims that arise under a contract provision and pure breach-of-contract claims:

A claim that “arises under” a contract receives different treatment under the statute of limitations than does a claim that alleg es a “pure breach.” A “pure breach” claim accrues when a plaintiff has done all he must do to establish his entitlement to pay

ment and the defendant does not pay

. A claim “arising under” a mandatory

dispute resolution provision of a contract, however, does not accrue “until the duly -invoked decision of the administrative or arbitral board or tribunal.”

I d. (citation omitted) (quoting Nag er Elec. Co., 368 F .2d at 854). Plaintiff’s claims for retroactive rent adjustments, the F ederal Circuit held, were pure breach-of-contract claims that accrued upon HUD’s failure to make the adjustments. I d.

Nag er Electric Co., in turn, concerned a contract to construct a facility for the Atomic Energ y Commission (“Commission”). 368 F .2d at 850. The Commission terminated several items of work in J uly

and August 1958 under the contract’s default termination provision, and the remainingwork was completed and accepted in October 1958. I d. The plaintiffs submitted a number of claims under the contract’s disputes clause, including a claim challeng ing the default terminations. I d. The Commission’s hearing officer declined to address the default termination claim, noting that the plaintiffs had characteriz ed the claim as one for breach of contract, a ty pe of claim that was bey

ond its jurisdiction. I d. The Commission resolved the remainingclaims in April 1964. I d. The plaintiffs filed suit in the Court of Claims in October 1964 alleg ing , among other thing s, that the default terminations were improper. I d. The g overnment arg ued that this claim was untimely , contending that

in Government contract cases the claim arises, and the limitations period starts, no later than the completion of the work[ ,] reg ardless of the pendency of administrative proceeding s under the Disputes clause and reg ardless of whether the claim in suit is for a “breach” or arises “under” the contract within the
coverag e of the Disputes clause.

I d. at 851 (footnote omitted). The court ultimately rejected the g overnment’s position, remarking :

- 60-I n the case of an item required by the contract to be submitted to a[ n] administrative tribunal, . . . the contractor has no rig ht to demand an[ y ] money on this “claim” until the administrative procedure is finished . . . , and there can be no judicially cog niz [ a] ble injury , no violation of the contract, no claim for court relief, until the [ administrative tribunal] has acted or had a chance to act.

I d. at 858-59 (citations omitted). I t therefore held that the plaintiffs’ default-termination claim was not time-barred. I d. at 865-66.

I mportantly , the issue addressed by the F ederal Circuit in B rig h ton Villag e Associates and the Court of Claims in Nag er Electric Co. was the accrual of a claim for purposes of filing suit in the Court of F ederal Claims. 52 F .3d at 1060; 368 F .2d at 854. The courts were not concerned with the accrual of a claim for purposes of seeking an administrative decision, which is the issue in this case. According ly , plaintiff’s reliance on their decisions is unwarranted. Accord 41 U.S.C. § 605(a) (“Each claim by a contractor ag ainst the g overnment relating to a contract . . . shall be submitted [ to the contracting officer] within 6 y ears after the accrual of the claim.”).

I n sum, because it would be futile for plaintiff to pursue a claim for termination for convenience in this court, the court denies plaintiff’s motion for leave to amend its complaint. 3 8

IV. ENTITLEMENT TO LIQUIDATED AND DELAY DAMAG ES

Having disposed of the threshold procedural issue, the court must address the three substantive disputes that remain after the court’s resolution of plaintiff’s posttrial motion to dismiss: (1) whether plaintiff is entitled to the remission of liquidated damag es due to ex cusable delay , (2) whether plaintiff is entitled to delay damag es related to the drawing review process, and (3) the amount of liquidated damag e s to which defendant is entitled.

Pursuant to the L iquidated Damag es clause in plaintiff’s contract with the Coast Guard, if plaintiff did not complete performance by the contract completion date, it was required to pay the Coast Guard liquidated damag es of $551 per day until work was completed or accepted, even if its contract was terminated. The Coast Guard beg an to assess liquidated damag e s on November 10, 2004–the day

after the contract completion date. B ecause the Coast Guard did not accept the building from Viteri as substantially complete until September 20, 2006, defendant asserted in its amended counterclaim that plaintiff was liable for 680 day s of liquidated damag es. Duringtrial, however, defendant revised its claim for liquidated damages to account for the fact that Viteri’s reprocurement contract included work that was not part of plaintiff’s contract. I t now contends that plaintiff should be assessed 394 day s of liquidated damag es, broken down as follows: (1)

3 8 The court’s conclusion that allowing plaintiff to file a supplemental complaint would be futile constitutes sufficient g r ounds to deny plaintiff’s motion. Therefore, the court need not address defendant’s alternative g round for opposingplaintiff’s motion–that it would be prejudiced by

plaintiff’s undue delay

in asserting its new claim.

- 61-252 day s for the time between the contract completion date, November 9, 2004, and the date that

the Coast Guard directed F irst Sealord to cease work, J uly 19, 2005; (2) forty

- f

ive day s for the time between the date that the Coast Guard directed F irst Sealord to cease work, J uly 19, 2005, and the date that a reprocurement contractor could g et on site and beg in work; and (3) ninety

seven day s for the time that it would have taken a reprocurement contractor to complete the building after the installation of the roof had the scope of work of the reprocurement contract not been increased.

Plaintiff, in turn, seeks the remission of liquidated damag es on two g rounds. F irst, it affirmatively

contends that it was not responsible for at least some of the delay that prevented it from finishing the project by the contract completion date. Second, in defense to defendant’s counterclaim for liquidated damag es, it argues that it should not be held liable for liquidated damag es that accrued after March 17, 2005, the date that the Coast Guard improperly terminated the contract for default. Plaintiff further seeks delay damag es for the ex tended overhead costs it incurred due to the purported Coast Guard-caused delay s.

B e cause plaintiff’s entitlement to the remission of liquidated damag es and the pay ment of delay damag e s depends upon whether it can establish that the Coast Guard was responsible for delay ing the completion of the project, the court beg ins its analy sis by ex amining plaintiff’s claims of ex cusable delay

.
A. Excusable Delay Standard

Under the ex press terms of its contract with plaintiff, the Coast Guard could not assess damag es ag ainst plaintiff for failing to timely complete work under the contract if “[ t] he delay in completing the work [ arose] from unforeseeable causes,” such as “acts of the Government” or “unusually

severe weather,” that were “bey ond the control and without the fault or neg lig ence of” plaintiff. F AR 52.249-10(b)(1), cited in J X 1.38. Plaintiff was required to provide the contracting

officer, “within 10 day s from the beg inning of any delay ,” written notice of the cause of the delay . F AR 52.249-10(b)(2), cited in J X 1.38. Moreover, to result in an ex cusable delay
, “the unforeseeable cause must delay the overall contract completion; i.e., it must affect the critical path of performance.” Sauer I nc. v. Danz ig , 224 F .3d 1340, 1345 (F ed. Cir. 2000). Plaintiff, as the party

seekingthe remission of liquidated damag es on account of ex cusable delay
, bears the burden of proving both that the unforeseeable cause delay ed the critical path of performance, id., and “the ex tent of the ex cusable delay to which it is entitled,” id. at 1347.

B. The Coast G uard Waived the Contractual Notice Requirem ent

Plaintiff presented its claims of ex cusable delay to the Coast Guard in three F ebruary 25, 2005 letters. Defendant contends, as a preliminary matter, that the contents of these letters
sug g est that plaintiff did not comply with the contractual requirement to provide the Coast Guard with written notice of the cause of the delay s within ten day s of the commencement of the delay s. Specifically , with respect to plaintiff’s claim reg ardingthe Coast Guard’s review of its desig n

- 62-drawing s, defendant notes that plaintiff “appears to complain about events predating F ebruary 15, 2005,” when it requested, in its F ebruary 25, 2005 letter, a time ex tension for the Coast Guard’s alleg ed improper review of its desig n drawing s. Def.’s Posttrial B r. 7. And, with respect to all three claims, defendant avers that plaintiff has never identified the particular day s in which it

ex p erienced delay

and that the specified delays appear to overlap.

Althoug h defendant accurately recites the contractual requirement that plaintiff provide the Coast Guard contracting officer with notice of an alleg ed delay within ten day s of incurring the delay
, 3 9 the court declines to apply the requirement as strictly as defendant implies is
necessary . I n deed, binding precedent sug g ests that courts should apply a contract’s notice clauses with a certain measure of flex ibility . See, e.g ., Hoel-Steffen Constr. Co. v. United States, 456 F .2d 760, 767-68 (Ct. Cl. 1972) (“To adopt [ a] severe and narrow application of the notice requirements, . . . would be out of tune with the lang uag e and purpose of the notice provisions, as well as with this court’s wholesome concern that notice provisions in contract-adjustment clauses not be applied too technically and illiberally

where the Government is quite aware of the operative facts.”); Copco Steel & Eng ’g Co. v. United States, 341 F

. 2d 590, 598 (Ct. Cl. 1965) (“L ack of strict compliance with many kinds of contract requirements concerning writing s and notifications have frequently been held to be of no consequence where the conduct of the parties have made it clear that formal adherence would serve no useful purpose or that the parties have in fact waived it.”); Thompson v. United States, 91 Ct. Cl. 166, 179 (1940) (“Under the terms of the contract, the plaintiffs had 10 days in which to assert a claim . . . . They did not assert such a claim within the time limit but after some months had elapsed they filed with the contracting officer a letter asking

for additional compensation. This request would have been barred and out of time had not the contracting officer entertained it, passed upon it, denied it, and informed plaintiffs that they

could appeal to the Secretary of the Interior.”); cf. Nag er Elec. Co., 368 F

. 2d at 864 (“[ T] he various substantive contractual clauses which lead to equitable adjustments or comparable relief under the contract . . . usually have built-in time limits, and where no specific period is established in the contract the contractor cannot delay unreasonably . Neither this court nor the administrative tribunals have had any g reat difficulty

in handling belated claims by contractors under the various contract-adjustment articles.” (footnote and citation omitted)). I n this case, the contracting

officer–Ms. Hundley

–did not reject plaintiff’s requests for time

ex tensions due to a failure to submit the requests within the ten day s prescribed by the contract. See J X 470; J X 472; J X 473. Rather, she denied the requests based on their merits. I d. B y addressingthe merits of plaintiff’s requests, Ms. Hundley effectively

waived the ten-day

notice requirement. Accord Copco Steel & Eng ’g
, 341 F .2d at 598; Thompson, 91 Ct. Cl. at 179. According ly , plaintiff was permitted to challeng e the rejection of all three claims in this court.

3 9 Plaintiff mistakenly

sug g ests that the relevant contract clause is the ex cusable delay s provision in its F ederal Supply Schedule contract. However, plaintiff’s contract with the Coast Guard clearly

indicates that if plaintiff ex periences a delay , it should advise the Coast Guard contracting

officer of the delay

within ten day s.

- 63-C. P laintif f Abandoned Its Request f or a Tim e Extension Related to the Actions of the Coast G uard Inspector

Notwithstanding its ability to do so, plaintiff did not pursue its time ex tension request related to the actions of the Coast Guard inspector during or after trial. Althoug

h the trial record contains documentary

evidence reg ardingthis claim, see, e.g ., J X 439; J X 440; J X 452, plaintiff’s schedulingex p ert did not opine on the effect of the Coast Guard inspector’s actions on plaintiff’s ability

to complete the project, see J X 515; J X 515A; Tr. 1805-920 (Ung er), and plaintiff did not address the claim in its pretrial memorandum, its opening posttrial brief, or its responsive posttrial brief. I n other words, plaintiff abandoned the claim. See RCF C App. A ¶ 14(a)(2) (requiring a pretrial memorandum to include “a statement of the issues of fact and law to be resolved by

the court,” and providing that “[ t] he issues should be set forth in sufficient detail to enable the court to resolve the case in its entirety by addressingeach of the issues listed”); Thermalon I

ndus., L td. v. United States, 51 F ed. Cl. 464, 470 n.3 (2002) (“Plaintiff has abandoned its claim for consequential damag es, . . . making no mention of them in its post-trial brief.”); see also Rosco, I nc. v. Mirror L ite Co., 304 F

. 3d 1373, 1382 (F e d. Cir. 2002) (ag reeing that a claim that was addressed in a posttrial brief had not been abandoned). Therefore, the court need not address it.

D. P laintif

f Has Not Established the Existence of a Delay That Was Beyond Its Control

I n the other two time ex tension requests that it presented to the contracting officer, plaintiff soug ht credit for thirty day s of ex cusable delay

related to the Coast Guard’s purported improper review of its drawing s, 4 0 a nd twenty -seven day s of ex cusable delay related to unusually

4 0 I n its opening posttrial brief, plaintiff sug g ests that it is entitled to 217 day s of

ex c usable delay

(from J uly

23, 2004, to F ebruary

25, 2005) related to the Coast Guard’s purported improper review of plaintiff’s drawing s. As a g eneral rule, the Court of F ederal Claims possesses jurisdiction to entertain contractor claims pursuant to the CDA if the claims “arise from the same operative facts, claim essentially the same relief, and merely assert differing leg al theories for that recovery .” Scott Timber Co. v. United States, 333 F .3d 1358, 1365 (F e d. Cir. 2003). Althoug h defendant does not arg u e that the 217 day s of ex cusable delay described by plaintiff constitutes relief that is different from the thirty day s of ex cusable delay

that plaintiff requested from the Coast Guard’s contracting officer, the court is oblig ated to ensure that it possesses jurisdiction to entertain the claims before it. See PI N/NI P, I n c . v. Platte Chem. Co., 304 F .3d 1235, 1241 (F ed. Cir. 2002) (“J urisdiction is a threshold issue, and a court must satisfy itself that it has jurisdiction to hear and decide a case before proceeding to the merits.” (citations omitted)); View Eng ’ g , I nc. v. Robotic Vision Sy s., I nc., 115 F

. 3d 962, 963 (F ed. Cir. 1997) (“[ C] ourts must alway s look to their jurisdiction, whether the parties raise the issue or not.”). Nevertheless, the court need not decide whether it possesses jurisdiction to entertain a request for more than thirty

day s of ex cusable delay

because, as ex

p lained below, plaintiff has not established that the Coast Guard improperly reviewed its design

or that the alleg ed desig n review issues that purportedly

caused the delay

affected the critical path of performance.

- 64-severe weather. As noted above, for plaintiff to recover on its claims of ex c usable delay , it must establish (1) that any

delay was the result of an unforeseen cause bey ond its control and without its fault, (2) that the delay affected work on the critical path of performance, and (3) the ex tent of the delay . I n its opening posttrial brief, plaintiff indicated that the evidence elicited at trial established that the alleg ed weather-related delay s did not affect the critical path of performance under its conception of the project’s critical path. According ly , it discontinued its pursuit of a separate weather-related time ex tension and focused solely on its request for a time ex tension related to the Coast Guard’s purported improper review of its drawing s.

Plaintiff contends in its posttrial briefing that the Coast Guard’s review of its drawing s was improper because (1) the Coast Guard’s comments on the submitted drawing s were couched as recommendations and did not reflect whether the drawing s were approved, disapproved, or approved as noted; (2) the Coast Guard did not provide comments on some of its drawing s within the time specified in the contract; (3) the Coast Guard did not approve plaintiff’s drawing s even thoug h its desig n was in full compliance with the RF P; (4) the Coast Guard should have issued a chang e order related to the alleg edly chang e d requirements for the HVAC sy stem in the hy draulic test lab; (5) the Coast Guard failed to provide plaintiff with the information that it needed to complete the HVAC sy stem desig n; and (6) the Coast Guard should have known that repeatedly

providing comments on the drawing s would delay plaintiff’s ability

to beg in construction. Problematically , plaintiff did not raise the latter five contentions in the F ebruary 25, 2005 letter setting forth its improper desig n review claim.

Under the CDA, the Court of F ederal Claims only possesses jurisdiction over a claim if the contractor has previously presented the same claim to the contracting officer. Scott Timber Co., 333 F .3d at 1365; see also id. (notingthat claims are the same if they “arise from the same operative facts, claim essentially the same relief, and merely a ssert differing leg al theories for that recovery

”). Consequently , if the contractor ex pands the scope of an ex isting claim in the Court of F ederal Claims, the court cannot entertain it. See Simulation Tech., L L C v. United States, 103 F ed. Cl. 105, 108 (2012) (“[ I ] f the complaint sets forth a new claim or a claim whose scope differs from what was previously presented to the contracting officer, this Court will not have jurisdiction over it.”); accord Santa F e Eng ’ rs, I nc. v. United States, 818 F .2d 856, 858 (F ed. Cir. 1987) (“On appeal to the [ board of contract appeals] or in a direct access action in the Claims Court, a contractor may increase the amount of his claim, but may not raise any

new claims not presented and certified to the contracting officer.”); see also id. at 858-60 (holding that where the claim presented to the contracting officer involved the effects of three chang e orders, the contractor could not assert a claim before the board of contract appeals based on “the collective nature of all chang es or the multiplicity of chang e orders or design difficulties unrelated to those three particular chang e orders on which its orig inal claim was g rounded” because such a claim “was entirely new and had never been presented to the contracting officer”); Contract Cleaning Maint., I nc. v. United States, 811 F .2d 586, 592 (F ed. Cir. 1987) (holding that a contractor must g ive the contracting officer “a clear and unequivocal statement” that provides “adequate notice of the basis and amount of the claim”).

- 65-Althoug h plaintiff presented its claim for a thirty -day ex cusable delay

to the contracting officer, the sole basis of that claim was the Coast Guard’s failure to approve, reject, or approve as noted the 100% desig n drawing s. Plaintiff did not advise the contracting officer that its request for a thirty -day

ex cusable delay

was based on the timingof the Coast Guard’s review comments, a contention that its 100% desig n complied with contractual requirements, the Coast Guard’s failure to issue a chang e order, 4 1 the Coast Guard’s failure to provide plaintiff information
necessary to complete the desig n, or the Coast Guard’s knowledg e that providing review comments would delay

construction. In other words, the contracting officer did not have any notice that plaintiff’s claim was based on these contentions. Consequently, in raising these contentions for the first time in this court, plaintiff has impermissibly broadened the scope of its claim. The court therefore lacks the authority to address them.

W ith respect to plaintiff’s remaining contention–that the Coast Guard’s comments on the submitted drawing s were couched as recommendations and did not reflect whether the drawing s were approved, disapproved, or approved as noted–the court ag rees with defendant that the Coast Guard’s review of plaintiff’s drawing s was in full compliance with contractual requirements. Pursuant to the provisions of the contract pertaining to the desig n submission, review, and approval process, the Coast Guard, after reviewing a desig n submittal, was required to provide plaintiff with “comments” on the submittal and to advise plaintiff if it considered the submittal to be “unacceptable.” J

X 1.79-.80. Then, plaintiff was required to “resolve” or “acceptably address” the comments and provide a corrected submittal to the Coast Guard for review. I d. The Coast Guard interpreted the contract to allow it to approve a desig n, reject a desig

n, or approve a desig n with comments. 4 2

4 1 There is a separate basis for the court to conclude that it lacks jurisdiction to entertain plaintiff’s claim that the Coast Guard should have issued a chang e order related to the alleg edly chang ed requirements for the HVAC system in the hy draulic test lab: plaintiff did not present this claim to the Coast Guard’s contracting officer as required by

the contract’s Chang es clause. See F AR 52.243-4 (requiring a contractor to provide written notice to the contracting officer that it considered a request to be a chang e order), cited in J X 1.38; see also K-Con B ldg . Sy s., I nc., 778 F .3d at 1010 (“Timely w ritten notice differentiates requests the contractor views as outside the contract from those it deems contemplated by the contract. And it g ives the g overnment timely notice of what amounts it mig ht be on the hook for, so that it will not be surprised by
money claims later, as well as an opportunity to address demands for more money when it mig ht
y et avoid them.” (citation omitted)).

4 2 The Coast Guard’s interpretation is consistent with the provisions of the contract pertainingto desig n review. B ecause plaintiff was contractually required to resolve or address all of the Coast Guard’s comments and then resubmit its desig n to reflect the chang es it made, any comments made by

the Coast Guard necessarily must have constituted either a rejection of the desig n or an approval of the desig n as noted.

- 66-As summariz ed in the table below, the Coast Guard satisfied the contractual requirements

reg ardingthe content of its comments: it (1) rejected plaintiff’s F ebruary 24, 2004 desig n as incomplete; (2) rejected at least some of plaintiff’s April 5, 2004 desig n as noncompliant with the contract specifications; (3) rejected plaintiff’s J une 7, 2004 desig n as incomplete; (4) rejected the portion of plaintiff’s J une 10, 2004 desig n that concerned the HVAC system for the hydraulic test lab and approved, with comments, the portion of plaintiff’s J une 10, 2004 desig n that concerned the foundation and the erection of the metal building ; (5) rejected the portion of plaintiff’s J uly 2004 desig n that concerned the HVAC system and approved, with comments, the remainder of plaintiff’s J uly 2004 desig n ; (6) rejected plaintiff’s September 16, 2004 HVAC sy stem desig n; (7) implicitly

rejected plaintiff’s December 2, 2004 mechanical desig n; and (8) approved, with comments, plaintiff’s F ebruary 18, 2005 desig n. B y

characteriz ing the Coast Guard’s comments as “recommendations,” plaintiff g losses over two important points. F irst, plaintiff fails to
recogniz e that some of the Coast Guard’s comments hig hlig hted plaintiff’s noncompliance with contractual requirements; thus, rather than just being recommendations, they

constituted rejections of plaintiff’s desig n. Second, plaintiff does not account for the contractual requirements that it resolve or address all comments and resubmit corrected drawing s; such requirements indicate that the Coast Guard would not approve a drawing until all of the comments were resolved. I n short, plaintiff cannot establish that the Coast Guard caused a delay –of any leng th–by

improperly

reviewing

its drawing s.

Sum m ary of

Design Subm ittals and Responses

P laintif f ’s Subm ittals Coast G uard’s Responses

Date D escription Date Description

2/24/2004 Architectural,

HVAC, plumbing
, electrical, fire alarm, site, and structural drawing s 2/25/2004 Electronic-mail messag e indicating that the submittal was incomplete

3/23/2004 L etter containing the same comments that were provided on 2/25/2004

4/5/2004 100% desig n 4/9/2004 Electronic-mail messag e containing initial comments reg ardingissues that needed to be addressed promptly due to nonconformance with the contract specifications

4/13/2004 Complete set of marked-up

drawing s

- 67-6/7/2004 Architectural, HVAC, plumbing
, electrical, fire alarm, site, and structural drawing s No later

than 6/9/2004 Electronic-mail messag e indicating

that the submittal was incomplete

6/10/2004 Architectural,

HVAC, plumbing
, electrical, fire alarm, site, structural, and foundation drawing s 6/18/2004 Complete set of marked-up drawing s; letter (1) containing comments, (2) indicatingthat the HVAC sy stem desig n

for the hy draulic test lab was deficient and would require resubmission, and (3) permitting plaintiff to proceed with “metal building and foundation construction” and then “incorporat[ e] and correct[ ] the architectural, mechanical, and electrical drawing s . . . while foundation construction is occurring ”

6/23/2004 Electronic-mail messag e clarify ing that plaintiff could beg in construction so long as it did not take any ex ceptions to the review comments and submitted sig ned and sealed foundation drawing s

7/14/2004 and 7/21/2004 100% desig n 7/23/2004 L etter (1) containing comments (including comments on the HVAC
sy stem desig n); (2) indicatingthat the Coast Guard had completed its review of plaintiff’s submittal

ex cept for the HVAC sy stem desig n, which would need to be resubmitted; and (3) statingthat once plaintiff incorporated the comments and submitted a final desig n, it could proceed with all work ex cept for the work related to the HVAC sy stem

- 68-9/16/2004 100% desig n that did not include an updated HVAC
sy stem desig n 9/30/2004 Marked-up drawing s; letter (1) containing comments, (2) stating that the HVAC sy stem desig n for the hy draulic test lab was unacceptable, and (3) including a recommendation for an acceptable HVAC sy stem desig n

12/2/2004 100% desig n

that included an updated HVAC
sy stem desig n 12/9/2004 Electronic-mail messag e containing preliminary comments that included some required chang es to the mechanical drawing s

2/18/2005 100% desig n 2/25/2005 L etter containing comments and indicating that if plaintiff did not take ex ception to the comments, it could proceed with construction so long as sig ned and sealed drawing s were submitted

E. P laintif

f Has Not Established That any Delay Af f e cted Work on the Critical P ath of P erf orm ance
Althoug h plaintiff’s failure to establish that the Coast Guard delay ed its performance of the contract by

improperly

reviewing

its drawing s is fatal to its claims arising from that contention (in other words, its claims for the remission of liquidated damag es and the pay ment of delay damag e s), the court notes that plaintiff’s claims would fail for a second reason: its inability to establish that the purported Coast Guard-caused delay s affected the critical path of performance. 4 3 The Court of Claims ex plained the critical path concept in the following manner:

[ T] he critical path method is an efficient way of org a niz ing 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 underly ing electrical and telephone

4 3 B ecause the court concludes that plaintiff has not established that the Coast Guard caused a delay o r that the delay alleg edly caused by

the Coast Guard affected the critical path of performance, it need not address whether plaintiff has established the ex tent of the alleg ed delay

. See Sauer I

nc., 224 F .3d at 1345, 1347 (indicatingthat plaintiff must prove the ex istence of a delay from an unforeseeable cause, that the delay was on the critical path of performance, and the

ex tent of the delay

).

- 69-conduits are installed.) The data is then analy zed, usually

by computer, to determine the most efficient schedule for the entire project. Many subprojects
may be performed at any

time within a g iven period without any effect on the completion of the entire project. However, some items of work are g iven no leeway and must be performed on schedule; otherwise, the entire project will be delay ed. These latter items of work are on the “critical path.” A delay , or acceleration, of work along the critical path will affect the entire project.

Haney v. United States, 676 F .2d 584, 595 (Ct. Cl. 1982); accord W ilner v. United States, 24 F .3d 1397, 1399 n.5 (F ed. Cir. 1994) (en banc) (“A ‘critical path’ is a way of g rouping interrelated activities in a construction project. A delay to an activity that is on the ‘critical path’ usually results in a corresponding delay to the completion of the project.”); Tr. 1811 (Ung er) (“[ T] he critical path . . . is the long e st path of activities throug hthe project.”), 3243 (McGrath) (“[ T] he critical path is the long e st chain of interrelated events that determined the project’s completion . . . .”). I f

the contractor and the g overnment cause concurrent delay s that affect the critical path of performance, neither party can recover delay

- related damag es unless the delay s can be apportioned between the parties. See B linderman Constr. Co. v. United States, 695 F .2d 552, 559 (F ed. Cir. 1982) (noting , in circumstances where a contractor is seeking damag es for the
g overnment’s delay , that “courts will deny recovery where the delay s are ‘concurrent or intertwined’ and the contractor has not met its burden of separating its delay s from those charg eable to the Government”); Coath & Goss, I nc. v. United States, 101 Ct. Cl. 702, 715 (1944) (holdingthat in the event of concurrent delay
, neither the contractor nor the g overnment “can recover damag e, unless there is in the proof a clear apportionment of the delay and the

ex p ense attributable to each party ” ); see also Tr. 1824 (Ung er) (“[ C] oncurrent critical delay . . . is two events occurring

at the same time that affect the critical path.”), 3558 (McGrath) (“A concurrent delay . . . is when y ou have two or more independent delay s that are both [ c ausing a] critical milestone to be delay ed at the same time.”). During trial, the parties presented competing visions of what events fell on the critical path of performance, and supported their positions with the reports and testimony of schedulingex perts.

1. P laintif

f ’s P osition

According

to plaintiff, the contract specifications defined the critical path of performance. DX 515A at 5; Tr. 1823 (Ung e r). In particular, plaintiff’s scheduling ex pert, Mr. Ung er,

ex p lained that based on the contract, the critical path of performance started with the contract award and continued throug h the postaward kickoff meeting , the desig n of the building , the approval of the desig

n, and the building ’s construction. DX 515A at 5; Tr. 1823 (Ung er). Mr. Ung er conducted a “critical path windows analy sis” to determine what activities affected the critical path of performance. 4 4 DX 515A at 5-7. He divided the project into three windows: (1)

4 4 According

to Mr. Ung er, “[ a] windows approach takes the baseline schedule and . . . takes certain updates after that and prog resses that [ schedule] at various points in time. You compare the two windows to see what the impact . . . was.” Tr. 1842 (Ung e r); accord id. at 1824

- 70-from the award of the contract to the postaward kickoff meeting , (2) from the postaward kickoff

meeting to the start of construction, and (3) from the start of construction to the default termination. I d. Mr. Ung er concluded that “[ a] t the start of construction, the critical path [ ran] throug h the conclusion of the HVAC Desig n,” id. at 6, and that at the time of the default termination, “[ t] he critical path . . . continue[ d] to run throug h the completion of HVAC and final desig n,” id. at 7. See g enerally Tr. 1850-53, 1919 (Ung er) (opining that the critical path of performance ran throug

h the HVAC sy stem desig n ) . He further concluded that the delay s in constructing the building were concurrent with the delay s related to the HVAC sy stem desig n, but that the construction delay s did not delay the overall completion of the project; in other words, they

did not affect the critical path of performance. I d. at 1850-51.

2. Def endant’s P osition

Defendant, in contrast, asserts that the critical path of performance in this case should be ascertained by

ex amining what actually occurred on the project. I d . at 3238-40, 3589-90 (McGrath); DX 513.5; see also Tr. 3574-76 (McGrath) (criticiz ing the prospective model used by Mr. Ung er, which reflected “that desig n is critical . . . looking forward,” but did not indicate “what was critical from [ a certain] point backwards” or “what actually happened and why

”). B a sed on “actual data on the prosecution of work from both the as-built schedule and all available contemporaneous records including correspondence, periodic schedule updates, and daily reports,” DX 513.5, defendant’s scheduling ex pert, Mr. McGrath, concluded that the critical path of performance started with the contract award and continued throug h plaintiff’s submission of the first complete 100% desig n, work on the foundation, erection of the structural steel, and wall panel installation, DX 513.8-.14; Tr. 3437, 3456-57, 3465, 3468-69, 3483, 3491, 3511, 3538 (McGrath). I

n reaching

his conclusion, Mr. McGrath analy z ed the project using

windows “delineated by

actual milestones or sig nificant events/activities in the as-built schedule . . . .” DX 513.5. The five windows he utiliz ed were: (1) from the award of the contract to the submission of the first complete 100% desig n, (2) from the submission of the first complete 100% desig n to the beg inning of work on the foundation, (3) from the beg inning of work on the foundation to beg inning of structural steel erection, (4) from the beg inning of structural steel

(“[ Y] o u have a baseline schedule . . . and y ou look at the prog ress schedule after that and y ou compare the critical path throug h prog ressions of time or windows to that baseline schedule.”). Defendant’s scheduling

ex pert, Mr. McGrath, defined a windows analy sis in the following

manner:
The actual project is broken up into key critical periods of time, windows. And each window allows y

ou to evaluate the causes for delay s during that period of time, so y ou’re . . . , number one, [ not] double-countingthose delay s in a later period of time, and number two, seg reg ating the actual root causes of the delay s to the critical events that they ’re impacting

.

I d. at 3244 (McGrath).

- 71-erection to the beg inning of wall panel installation, and (5) from the beg inning of wall panel

installation to the termination for default. 4 5 DX 513.8-.14; Tr. 3410-538 (McGrath).

According

to Mr. McGrath, the design of the HVAC sy stem was not on the critical path of performance because the HVAC sy stem could not be installed until the building was enclosed, and when the Coast Guard terminated the contract for default, plaintiff had not completed the installation of the building ’ s walls and roof. See Tr. 3516-17 (McGrath) (ex plaining that mechanical equipment is installed after the building is enclosed), 3538 (explaining that the failure to complete the roof and wall panel installation prevented plaintiff from “performing all of the follow-on work that would have been required to finish the building ”), 3549-50 (ex plaining that so long as enoug h of the desig n is complete for construction to be occurring , the desig n does not affect the critical path); see also id. at 3560-61 (noting that even thoug h plaintiff needed to finish both roof installation and HVAC sy stem desig n prior to beg inning work inside the building , delay s to those activities were “[ n] ot necessarily ” concurrent: “J

ust because they ’re both necessary

predecessors for the succeeding activity does not make them both critical. The critical delay

is the one that’s causing

the milestone to be moved back . . . .”). I ndeed, Mr. McGrath testified that had the Coast Guard approved plaintiff’s HVAC sy stem desig n prior to terminating the contract for default, the anticipated completion date of the building would not have been affected because plaintiff was not prepared, at the time of the default termination, to commence the installation of the HVAC sy stem. See id. at 3449 (ex plaining that “if y o u hy pothetically

moved a critical milestone, the project’s duration will also move with it,” but “[ i] f
y ou hy pothetically

move a noncritical milestone or adjust a noncritical delay , the project duration doesn’t move”), 3597-98 (“Had mechanical drawing s been approved earlier, K-Con would have been able to put in place some of that work sooner than they did. That would not have . . . had
any impact on the actual critical path of the job prior to termination.”), 3636 (“I f y o u can mag ically make the HVAC design complete on September 30[ , 2004] , the project condition at termination would be ex actly the same.”).

3. Analysis

The parties present diametrically opposed descriptions of the critical path ofperformance–plaintiff submits that the critical path of performance should be based on an asplanned, forward-looking schedule, and defendant contends that the critical path of performance should be based on an as-built, backward-looking schedule. The court ag

rees with defendant that the proper way

to determine what activities were on the critical path of performance in this case is to ex amine what actually occurred during

contract performance. There are two reasons for this conclusion. F irst, a critical path schedule that relies solely on the schedule set forth in the contract specifications does not account for any subsequent chang es to the schedule authoriz ed by the contracting

ag ency . I n

this case, the Coast Guard authoriz ed plaintiff to proceed with construction before it completed the desig n. Second, the use of a contractually based critical path

4 5 I n his ex p ert report, Mr. McGrath combined the third and fourth windows into a single window. See DX 513.11-.13.

- 72-schedule does not reflect that plaintiff did not actually perform in accordance with the schedule set forth in the contract specifications. Rather, plaintiff accepted the Coast Guard’s fast-tracking offer and beg an construction before completing the desig n. I n short, the approach advanced by plaintiff and its ex pert, Mr. Ung er, does not fully reflect the reality

of what occurred on the project.

Defendant’s approach, on the other hand, fully reflects that reality . Plaintiff was still working on parts of the desig n when the Coast Guard authoriz ed it to beg in construction pursuant to the “sealed structural foundation drawing s.” J t. Stip. ¶ 34. As construction prog ressed, plaintiff continued to work on the design. I ndeed, plaintiff never reached a point, prior to being terminated for default, where it could not proceed with construction due to the lack of a desig n. Consequently , it was construction, and not the desig n, that was controlling work on the project at the time that plaintiff submitted its claim for ex cusable delay . Thus, if the Coast Guard had caused a delay b y

improperly

reviewing

plaintiff’s drawing s, the delay is noncompensable because it did not affect the critical path of performance.

F . Def endant Has Established a P r im a F acie Case f or Liquidated Dam ages

B e cause plaintiff has not established that the Coast Guard should remit any liquidated damag es due to ex cusable delay , the court turns to defendant’s counterclaim for unrecouped liquidated damag e s. As noted above, plaintiff was contractually required to pay

the Coast Guard liquidated damag e s of $551 per day until work was “completed or accepted” and remained liable for liquidated damag es even if the Coast Guard “terminate[ d its] rig h t to proceed.” J X 1.30. I n its amended counterclaim, defendant asserted that plaintiff was liable for 680 day s of liquidated damag es–from the day

after the contract completion date to the day that the Coast Guard accepted the building

from Viteri. However, during trial, defendant revised its claim for liquidated damag e s to account for the fact that Viteri’s reprocurement contract included work that was not part of plaintiff’s contract. Thus, defendant now seeks 394 day s of liquidated damag es, which it breaks down into three periods.

F irst, defendant requests liquidated damag e s for the 252 day s between the contract completion date, November 9, 2004, and the date that the Coast Guard directed F irst Sealord to cease work, J

uly 19, 2005. There is no dispute that the building was not completed or that the Coast Guard had not accepted the building as of J uly

19, 2005. Defendant has therefore established its entitlement to liquidated damag es for this time period.

Second, defendant requests liquidated damag es for the forty-five day s between the date that the Coast Guard directed F irst Sealord to cease work, J uly 19, 2005, and the date that a reprocurement contractor could g et on site and beg in work. Defendant elicited the testimony of Ms. B roussard at trial to establish that it would take thirty to forty -five day s to g e t a contractor on site to complete the work left unfinished by plaintiff and another fifteen to thirty day s for that contractor to beg in work once on site. Plaintiff did not dispute this testimony . Moreover, there can be no question that the building would not have been completed or accepted while the Coast

- 73-Guard was in the process of retaining a reprocurement contractor. According ly , defendant has established its entitlement to an additional forty -five day s of liquidated damag e s.

F inally , defendant requests liquidated damag es for the ninety -seven day s that it would have taken a reprocurement contractor to complete the building after installation of the roof had the scope of work of the reprocurement contract not been increased. Defendant bases this request on plaintiff’s own time estimates; in its J anuary 5, 2005 project schedule, plaintiff projected that it would finish the roof on J anuary 19, 2005, and complete the buildingon April 26, 2005–a period of ninety -seven day s. Plaintiff did not present any evidence disputingthat it planned to complete the building , once the roof was installed, in ninety -seven day s. According ly , defendant has established its entitlement to an additional ninety

- seven day s of liquidated damag e s.

I n sum, defendant has established a prima facie case to recover 394 day s of liquidated damag es from plaintiff. Thus, in the absence of any valid affirmative defenses, plaintiff is liable for $217,094 in liquidated damag e s, minus the $17,483 in liquidated damag es previously withheld by

the Coast Guard.

G . P laintif

f Does Not Have any Valid Def enses to the Coast G uard’s Assessm ent of Liquidated Dam ages Af t er the Def

ault Term ination

Plaintiff’s final contention is that it is entitled to the remission of liquidated damag es that were assessed after the Coast Guard improperly terminated the contract for default. 4 6 Specifically , plaintiff arg

ues that it has several common law defenses to the Coast Guard’s assessment of these liquidated damag es: 4 7

The Coast Guard interfered with and prevented K-Con from completing the work. B y chang ing the desig n

after the termination, the Coast Guard waived and is estopped from assessing

future liquidated damag es. The delay s caused by the Coast Guard’s chang es to the desig n cannot be segreg ated from the work K-Con would have completed. F urther, the Coast Guard’s prior breach of the ag reement by the improper termination precludes the recovery of liquidated damag es.

4 6 There were 128 day

s between the contract completion date and the imp roper default termination (in other words, from and including November 10, 2004, to and including March 17, 2005). Thus, plaintiff seeks the remission of 266 day s (out of the 394 day s established by defendant) of liquidated damag es.

4 7 Althoug h plaintiff set forth a larg e number of affirmative defenses in its answer to defendant’s amended counterclaim, it only addresses a subset of those defenses in its posttrial briefing . Plaintiff has therefore abandoned the remaining defenses. See Rosco, I nc., 304 F .3d at 1382; Thermalon Indus., L td., 51 F ed. Cl. at 470 n.3.

- 74-Pl.’s Posttrial B r. 38. As plaintiff correctly notes, a contractor may

assert a common law defense to a g overnment CDA claim (such as a claim for liquidated damag es) without first presenting the defense to the contracting officer so long as the defense could not be characteriz ed as request for contract modification. 4 8 See M. Maropakis Carpentry , I nc. v. United States, 609 F .3d 1323, 1331 (F ed. Cir. 2010) (“[ A] contractor seeking an adjustment of contract terms must meet the jurisdictional requirements and procedural prerequisites of the CDA, whether asserting the claim
ag ainst the g o vernment as an affirmative claim or as a defense to a g overnment action.”); see also L ag una Constr. Co. v. Carter, 828 F .3d 1364, 1368 (F ed. Cir. 2016) (“[ T ] he g overnment’s defense [ of fraud] plainly does not seek the pay ment of money

or the adjustment or interpretation of contract terms.”); Securiforce I n t’l Am., L L C v. United States, 125 F ed. Cl. 749, 776 (2016) (“To defend ag ainst an ag ency ’s termination for cause decision, a contractor may assert that the
g overnment committed a material breach of contract prior to the termination. . . . [A] contractor can appeal a contracting

officer’s termination for cause decision in this court and assert breach of contract as a defense to that termination without first submitting a breach of contract claim to a contracting

officer and receiving

a final decision.”); PalafoxStreet Assocs., L .P. v. United States, 122 F ed. Cl. 18, 32 (2015) (holding that the “plaintiff’s estoppel, waiver, laches, and statute of limitations ‘claims’ [ w ere] more accurately characteriz ed as affirmative defenses”); Total Eng ’g
, I nc. v. United States, 120 F ed. Cl. 10, 15-16 (2015) (concluding that the contractor, in asserting a defense of defective specifications, was not seeking the modification of contract because “a favorable resolution of [ the contractor’s] defense would not result in any separate contract adjustment or monetary

relief to [ the contractor] ” ); TPL , I nc. v. United States, 118 F ed. Cl. 434, 441-45 (2014) (holdingthat the plaintiff’s affirmative defenses of breach of contract, impossibility

/impracticability

of performance, mutual mistake of fact, and unconscionability amounted to claims for contract modification that should have been presented to the contracting officer); Sikorsky

Aircraft Corp. v. United States, 102 F ed. Cl. 38, 48 n.14 (2011) (contrasting

4 8 I n its opening posttrial brief, plaintiff appears to sug g est that it is entitled to assert a defense of ex cusable delay to the Coast Guard’s post-default-termination assessment of liquidated damag e s because (1) its claim for ex cusable delay would fall under its F ederal Supply Schedule contract’s ex cusable delay s provision, (2) its F ederal Supply Schedule contract’s

ex c usable delay s provision does not require the contracting officer to ex tend the contract completion date upon a finding of ex cusable delay
, and (3) because no time ex tension is required under its F ederal Supply Schedule contract’s ex c usable delay s provision, it was not required to present a claim for ex c usable delay to the contracting officer before asserting

an ex cusable delay defense in this court. Plaintiff is mistaken. Any claim that the Coast Guard was causing a delay in plaintiff’s performance of the contract was required to be presented to the Coast Guard’s contracting

officer in the first instance, see F AR 52.249-10, cited in J X 1.38; the GSA contracting

officer would only

consider such a claim if the Coast Guard soug ht to terminate its contract with plaintiff for default notwithstanding the claim, see Pl.’s App. SJ 0014. I ndeed, plaintiff’s F ederal Supply Schedule contract lacks any provision allowing the GSA contracting officer to consider a claim of ordering ag ency -caused delay

in the first instance. See g enerally id. at SJ 0001-90. I n short, plaintiff’s contract with the Coast Guard is the controlling contract for the purposes of evaluating the propriety

of plaintiff’s ex cusable-delay defense.

- 75-“counterclaim defenses that seek contract modification” and “affirmative defenses [ that] are traditional common law defenses that are independent of the means by which a party seeks equitable adjustment to a g overnment contract”); id. at 47-48 (holding that it could ex ercise jurisdiction over the contractor’s affirmative defenses of accord and satisfaction, waiver, laches, and statute of limitations). However, the affirmative defenses asserted by plaintiff either fall bey o nd the court’s jurisdiction or lack merit.

Plaintiff’s first defense–that “the Coast Guard interfered with and prevented [ it] from completing the work”–amounts to a claim of ex cusable delay

. Pursuant to binding precedent, even if a contractor is merely seekingthe remission of liquidated damag es, it may not assert a defense of ex cusable delay in this court if it did not first present the ex cusable delay claim to the contracting

officer. M. Maropakis Carpentry, I n c., 609 F

. 3d at 1331-32. As noted above, the court has rejected the only claim of ex cusable delay that plaintiff presented to the contracting officer. To the ex tent that plaintiff is asserting an additional claim of ex c usable delay , the court lacks the authority

to entertain it.

Plaintiff’s second and third defenses–that “[ b] y chang ing the desig n after the termination, the Coast Guard waived and is estopped from assessing future liquidated damag es” and that “delay s caused by

the Coast Guard’s chang es to the desig n cannot be segreg ated from the work K-Con would have completed”–are moot in lig h t of defendant’s revised demand for liquidated damag es. I n its opening posttrial brief, defendant ex pressly limits the amount of liquidated damag es it is seeking from plaintiff to account for the fact that Viteri’s reprocurement contract included work that was not part of plaintiff’s contract. To eliminate the effect of the chang ed desig n, defendant determined the number of day s that it would have taken plaintiff to complete the building based on plaintiff’s own project schedule, and then substituted that amount of time for the number of day s that it actually took Viteri to complete the building . I n other words, defendant has seg

reg ated any

delay s that mig ht have resulted from the Coast Guard’s desig n chang es from the time it would have taken plaintiff to complete the project. Consequently , any liquidated damag e s that the court awards to defendant would ex clude liquidated damag e s attributable to the Coast Guard’s desig n chang es.

Plaintiff’s fourth and final defense–that “the Coast Guard’s prior breach of the ag reement by the improper termination precludes the recovery of liquidated damag es”–is without merit. Under the doctrine of prior material breach, “when a party to a contract is sued for breach, it may defend on the ground that there ex isted a leg al ex cuse for its nonperformance at the time of the alleg ed breach.” B arron B ancshares, I nc. v. United States, 366 F .3d 1360, 1380 (F ed. Cir. 2004); accord Coll. Point B oat Corp. v. United States, 267 U.S. 12, 15 (1925) (“A party to a contract who is sued for its breach may ordinarily

defend on the ground that there ex isted, at the time, a leg al ex cuse for nonperformance by him, althoug h he was then ig norant of the fact.”). The doctrine

is based on the principle that where performances are to be ex chang e d under an

ex c hang e of promises, each party is entitled to the assurance that he will not be

- 76-called upon to perform his remaining duties of performance with respect to the

ex p ected ex chang e if there has already been an uncured material failure of performance by

the other party

. Restatement (Second) of Contracts § 237 cmt. b (Am. L aw Inst. 1981), quoted in B arron B a ncshares, I

nc., 366 F .3d at 1380-81. The Coast Guard’s failure to refer plaintiff’s alleg ations of ex cusable delay

to the GSA contracting

officer prior to terminating the contract for default constituted a breach of contract. However, under the ex press terms of the L iquidated Damag es clause, so longas the building was not completed or accepted, plaintiff was liable for liquidated damag es reg ardless of whether its contract had been terminated. I n other words, the Coast Guard’s erroneous default termination had no effect on plaintiff’s liability for liquidated damag es. Thus, to the ex tent that the doctrine of prior material breach applies to the circumstances of this case, plaintiff has not established that the Coast Guard’s improper default termination precludes its assessment of liquidated damag e s. 4 9

Due to the absence of any valid affirmative defenses, plaintiff must pay the liquidated damag es established by

defendant.

V. CONCLUSION

F or the reasons set forth above, the court DENIES plaintiff’s motion for leave to amend its complaint and concludes that plaintiff is not entitled to the remission of liquidated damag es or the pay ment of delay

damag es arisingfrom the Coast Guard’s review of its desig n drawing s. The court therefore DISMISSES plaintiff’s amended complaint WITH P REJUDICE . I n addition, the court concludes that defendant has established its entitlement to liquidated damag es under its amended counterclaim. According ly , plaintiff shall pay defendant liquidated damag es in the amount of $199,611 (total assessed liquidated damag es of $217,094 less liquidated damag es previously

withheld by

the Coast Guard of $17,483). Each party shall bear its own costs. The clerk shall enter judgment according ly

.

IT IS SO ORDERED.

s/ Marg aret M. Sweeney MARGARET M. SW EENEY J udg e

4 9 I t also bears notingthat plaintiff, not defendant, was the first party to breach the contract by

failing to complete the building by the contract completion date. I t was this breach that trig g ered the Coast Guard’s invocation of the Liquidated Damag es clause.

- 77-