ARMED SERVICES BOARD OF CONTRACTAPPEALS

Appeal of--

Dyno Group, Inc.

Under ContractNo. W912P4-11-C-0016

APPEARANCE FORTHEAPPELLANT: ) ) ) ) )

APPEARANCES FORTHE GOVERNMENT: ASBCA No. 59074

EdwardEverett Vaill, Esq.

Malibu, CA

Thomas H. Gourlay, Jr., Esq.

Engineer ChiefTrial Attorney Lauren M. Turner, Esq.

Assistant District Counsel U.S. Army Engineer District, Buffalo

OPINION BYADMINISTRATIVE JUDGE MELNICK

The United States Corps ofEngineers withheld liquidated damages due to the late completion ofa contractbyDyno Group, Inc. (Dyno). Dyno challengedthat assessment in a claim submittedto the contracting officer, which was denied. Dynohas now appealed and elected to proceedunderthe Board's ExpeditedProcedure (Rule 12.2). 1 The appeal is denied.

FINDINGS OF FACT

1. On 22 September 2011, the United States Army Corps ofEngineers awarded ContractNo. W912P4-11-C-0016 to Dyno (R4, tab 5). The contract was for the removal and replacement ofstaircases inside the MountMorris Dam in Mount Morris, New York. The Scope ofWork contained a base bid itemthatrequired the removal and replacement oftwo sections ofthe south gallery staircase, and five additional optional items, designated A through E, for the removal and replacement ofadditional staircases and the replacement ofstair landings. (!d. at 279) The contract was signed for Dyno by Christopher Wan, its president (id. at 257).

2. Part 1.3 ofthe section ofthe contract addressing procedures required Dyno to "complete the entire workready for use not later than one-hundred eighty (180) calendar

1 The Contract Disputes Act, 41 U.S.C. §§ 7101-7109, implemented by Board Rule 12.2, provides that this decision will have no value as precedent, and in the absence offraud shall be final and conclusive and may notbe appealed or set aside.days from the date ofreceiptbythe Contractor ofthe Noticeto Proceed." Itadded that "[

t]or each Option awarded, the Contractorwill be given an additional one hundred fifty (150) days to complete that option." Itnotedthat "[o]ptions may be awarded at any time within one year oforiginal contract award and options may be awarded concurrently." (R4, tab 5 at 324)

3. The contract contained 13 contract line item numbers (CLINs). CLINs 1 through 3 were for the base work. The initial award also exercised Options C through E, reflected in CLINs 8 through 13. (R4, tab 5 at 259-64) The scheduledperiod of performance for CLINs 1through 3 was 180 days, and for CLINs 8 through 13 it was 329 days 

### (id. at 265-66). 2 The contract contained the FAR 52.211-12, LIQUIDATED DAMAGES-CONSTRUCTION (SEP 2000)clause. In the eventDyno failed to completethe workwithin the time specified in the contract, that clause required Dyno topay $450 in liquidated damages to the government for each calendar day ofdelay until the work was completed or accepted. 

### (!d. at 275) The contract also incorporated the FAR 52.236-2, DIFFERING SITE CONDITIONS (APR 1984)clause, and the FAR 52.236-3, SITE INVESTIGATION AND CONDITIONS AFFECTING THE WORK (APR 1984)clause 

### (id. at 268).

4. On 30 September2011, afterthe contractwas awarded, Mr. Wan sent an email
to Brian Steils, the contracting officerrepresentative (COR) (R4, tab 9; compl., tab 17, 

### ,-r 4). The email asked whether "the completiontimeframe for thisjob [was] 180 calendar days?" It noted the "[a]ward amount consists ofBasebid and Options C, D, andE" and asked "dothese options give more time for completion (ie does Dyno have 150 days x 3



### = 450 additional days), oris it still180 days?" (R4, tab 9) Mr. Steils's 3 October 2011 response referred Mr. Wan to an email from Mr. Walter Kamad from "Contracting." Mr. Kamad had advisedthe following:

Just looked overthe specs, basebid is 180 days. Since options C, D and E are awarded with base bid, the breakdown wouldbe 180 for basebid and an additional 150 days for the options. The NTP wouldread 180 days for basebid and to complete all options in 330 days[.]

(R4, tab 1 0) Mr. Steils commentedthat "[t]he contract states 330 days, howeverUSACE would expectDyno group to complete the project as soon as possible" 

### (id.). On 3 October 2011, the contracting officer issued a Noticeto Proceed to Dyno, which Dyno acknowledgedreceiving that day, stating Dyno could commenceperformance on 4 October and had until 1April2012 (180 days) to complete the work (R4, tab 6).

2 Itis not clearwhy the scheduledperiod for CLINs 8 through 13 was not 330 days, as Part 1.3 suggests it should have been.

2

### 5. On 10 February 2012, the contracting officer sentDyno a letter expressing

concern about whether Dyno could complete the project by 31 March 2012. The letter noted there were still outstanding submittal issues requiring resolution before work could start on the site. The letter sought an updated schedule showing anticipated completion ofdeliverables and construction by 17 February 2012. (R4, tab 17)

6. On 16 February 2012, Dyno requested a 150-day extension ofcontract completion to 29 August 2012. Among other things, Dyno argued that the 1April2012 completion date in the Notice to Proceed was inconsistent with the contract, suggesting thatthe 180 days allotted only accounted for thebase work, and added no time for the options. 

### It claimed to be entitledto at least an additional 150 days. (R4, tab 19) On 5 April2012, the contracting officer executed Modification No. P00001, effective 3 April 2012. The documentpurports to change the deadline for completion ofeach ofthe active CLINs to 2 July 2012. 3 

### This would add additional days to performthe base work contained in CLINs 1through 3, while reducing the days permitted for Options C through E in CLINs 8 through 13. This document is not executed by Dyno. (R4, tab 24) However, Dyno concedes in its submittal that "[a]n extension ofthe contract was granted

on April3, 2012," citing an unexecuted document purportingto make the same changes in the performance periods contained in Modification No. P00001 (compl. at 6, tab 14).

7. On 28 June 2012, Mr. Wan and the contracting officer executed a bilateral modification to the contract, effective 25 June 2012. The modification exercised Options A and B, designated as CLINs 4 through 7, which involved additional removal and replacement ofstairs. It

### designated the period for performing those CLINs to be from 26 June through 24 September 2012, which was 90 days. The modification also changed the deadline for completingthe base work and Options C through E, CLINs 1through 3 and 8 through 13, to 1August 2012. (R4, tab 29)

8. On 26 July 2012, Dyno requested a 31-day extension oftimeto complete the base work, and Options C through E, from 1Augustto 1 September 2012. Dyno provided two reasons for the request. First, Dyno statedthat it had encountered uneven concrete pitch in the north stairs, requiring adjustment and adding additional labor and fabrication time. However, Dyno did not indicate thatthis added work had delayed completion ofthejobbeyondthe current deadline. The only item requiring additional time was installation ofnew fiberglass railings due to fabrication delays. (R4, tab 30) There is no record the requestwas acted upon by the government.

9. On 22 August 2012, the contracting officer sent another letter to Dyno, expressing concern about Dyno's timely completion ofthe contract work. The letter observed that the governmenthad expected the base work to be completedby 1August

3 

### The first page ofthe modification purports to change each CLIN's deadline to 2 July, while the subsequent Summary Changes refer to 1July.

32012, which had not occurred, and the remaining option work was to be completed by 24 September 2012. The government was concernedthat Dyno's currentprogress was insufficient to enable it to comply with its deadline. The contracting officerwarned that "further delays will increase our ability to assess liquidated damages." (R4, tab 32)

10. On 10 September 2012, Dyno requested an extension ofthe contract's completion deadline to 24 November 2012. Dyno provided sixreasons for the extension. First, Dyno complained again about uneven concrete, indicating it had found more ofit. Second, Dyno claimed it could only perform a limited amount ofwork at any one time to

ensure that it was appropriately supervised and performed safely. Third, it claimed it was experiencing difficulty hiring qualified personnel. Fourth, it opined thatthe award of Options A and B entitled it to an additional 300 days. Fifth, it complained aboutthe government's handling ofits submittals. Sixth, it claimed to have encountered financial hardship. (R4, tab 34)

11. The project schedules Dyno submitted through 30 October 2012 showed completion by 19 or 20 November 2012 and closeoutbythe 23rd. They did not indicate the government was preventing completion. (R4, tabs 35, 36) On 19 November 2012, a government official commented in an email to Dyno that it appeared Dyno would not be complying with this schedule and sought an accurate submission. Dyno'sresponse on the same day forecasted completion by 1 7 December and closeout by the 19th. Dyno added two comments. First, it said its receipt ofmaterial for the production ofswing gates had been delayed because ofHurricane Sandy, but should arrive the first week of December for installation by the middle ofthe month. Second, Dyno claimed it was waiting for guidance on certain landings and approaches that it saidthe government wanted that were beyondthe contract's scope ofwork. Itemphasizedthat its new schedule was dependent onreceiving an answer "ASAP." (R4, tab 37) With respectto the landings, an email dated 17 September 2012 from the COR informed Dyno that he "plan[ned] on sending

...the RFP for the three top landings (modification) early this week" (compl., tab 11). Dyno submitted 55 quality control reports mentioning landings (compl. at 5; answer ,-r 16). Also, the first page ofa five page Dyno quality control report from 14 November 2012 states that Dyno is "[w]aiting for direction on landings/approaches/top plates for all Staircases." Itdoes not say thatDyno was prevented from performing any contract workuntil itreceived the direction. (Compl., tab 10)

12. In a letter dated 20 November 2012, the contracting officer once again expressed concern about Dyno's completion ofthe projectby its latest suggested completion date of 19 December 2012. The letter acknowledged Dyno's representation that factory production ofthe swing gate material had been delayed due to Hurricane Sandy. Itnotified Dyno that any extension request for thatpurpose would have to show when the order was placed and that it was supposedto be delivered timely, along with a letter from the manufacturer confirmingthe delay. The contracting officer's letter also

4

### referred to Dyno's inquiries about landing work outside the contract's scope. The contracting officer stated the government had not issued any requests for this work and Dyno shouldproceed without regard to those items. The contracting officer also informed Dyno thathe would deduct $23,934.75 from Dyno's latest payment "in anticipation ofassessing liquidated damages," observing that the contract's completion date was 24 September 2012. (R4, tab 38)

13. On 21 November 2012, Dyno formally requested an extension ofthe contract completion date to 19 December 2012. One ofDyno's cited reasons was the delay obtaining the swing gate material. It

### explained that it submitted its order for that material to the manufacturer in early Octoberwith the intent to receive it on site by the first week ofNovember for fabrication and installation by 23 November. Dyno enclosed a letter from the manufacturer confirming the storm delays and predicting delivery ofthe materials by 30 November. Dyno also contended that it had been waiting for guidance on the landings and approaches since 2 August, and that the delay hadprevented it from performing any work. Dyno also referred to the safety and financial hardship issues it had raised in its 10 September 2012 request for extension. (R4, tab 39) There is no evidence this request was acted upon.

14. On 13 February 2013, the contracting officer declared Dyno's work complete and accepted. The contracting officer considered the three-year warranty period to have commenced on 21 December 2012. (R4, tab 40) The governmentwithheld $39,600 in liquidated damages (R4, tab 41). The amountreflects 88 days worth ofdamages, from 24 September 2012 until21 December, at $450 a day.

15. On 3 April2013, Dyno submitted a "Letter-Relieffrom Liquidated Damages" to the contracting officer, challenging the government's retention ofliquidated damages (R4, tab 3). The contracting officer treated that letter as a claim. On 30 September 2013, he issued a final decision denying it. (R4, tab 2) Dyno filed a notice ofappeal from that decision on 13 December 2013. Its cover letter with the notice electedto proceed under the SMALL CLAIMS (EXPEDITED) procedure referred to in Board Rule 12.1(a) and explainedby Board Rule 12.2.

16. On 10 January 2014, the Board convened a conference call with counsel for the parties. During that call, the parties waived discovery and the governmentwaived a hearing. Dyno represented thatthe packet ofmaterials it submitted on 13 December 2013 was its substantive submission for the record. (Bd. mem. conf. call dtd. 15 January 2014) The government responded with an answer dated 23 January 2014. By letter dated 28 January 2014, Dyno notified the Board that it also waived a hearing. Dyno then filed

a substantive reply to the government's answer dated 4 February 2014.



### 5DECISION

Dyno'sprimary argument is that, as originally awarded, the contract granted it 330 days toperformthe base work and Options C through D. Itclaims that after Options A and B were exercised, it shouldhave received at least an additional 150 days, making the contract completion date 26 January 2013. (Compl. at 1) Itlater contends that it shouldhave received 150 days each for Options A and B, totaling 300 additional days 

### (id. at 6). Still later in its reply submission, Dyno contends that it originally received 330 days to performthe contract. Itwas then granted an additional 90 days bythe April modification and another 90 days by the June modification, totaling 510 days. (App. reply at 34) Itcontends its 21 December 2012 completion ofthe contract was early under any ofthese scenarios and therefore no liquidated damages should have been assessed.

The contract's original terms provide 180 days from receipt ofthe Noticeto Proceedto complete the base work, and grant 150 additional days for each option, which couldbe awarded concurrently (finding 2). On 3 October2011, Dyno received the Notice to Proceedwith its performance ofthe base work and Options C through E (finding 4). Thus, ithad until 31 March 2012 to complete CLINs 1through 3 relating to the base work. 5 Itthen haduntil28 August 2012 to complete CLINs 8 through 13, relating to Options C through E. Modification No. POOOOI, which was not executed by Dyno, purports to change all ofthose deadlines to 2 July 2012, granting more time for the base work while reducing the time for Options C through E (finding 6). The subsequent 28 June 2012 bilateral modification is executed byboth parties. Itexpressly provides that Dynohad until I August 2012 to complete both the base work and Options C through E. Itthen exercises Options A and B, designated as CLINs 4 through 7. However, instead ofgranting 150 days for Dyno to performthose CLINs, as originally permittedby the contract, it onlypermits Dyno 90 days, until24 September2012. 

### Mr. Wan signedthis modification and therefore agreed to its terms. (Finding 7) Dyno suggests that its agreementto this earlier deadline for Options A and B is invalid because it did not receive any consideration for the reduction (app. reply at 5). However, Dyno received an extension ofits deadline for performing the base work. Tothe extent considerationwas necessary to validate its acceptance ofthe reduced deadline for Options A and B, Dyno received it. Thus, afterthe 28 June 2012 modification was executed, Dyno had until 1Augustto complete the base work and Options C throughE, and until 24 Septemberto complete Options A and B. Dyno has not demonstrated that it completed any ofthe required workpriorto 21 December 2012.

Dynopresents several additional grounds for attacking the assessment of liquidated damages. First, it contends that unevenpitch in the concrete was not visible during its initial walkthrough and could notbe seen until the stairs were removed. It

4 The reply does not containpage numbers. 5 The Notice to Proceedpurports topermitDyno until 1April.

6therefore claims it encountered an unforeseen site conditionthat caused delay in fabrication and installation. (Compl. at 4, tab 17,**~** 7) Underthe contract's incorporated Differing Site Conditions clause, Dyno could be entitled to an equitable adjustmentto the
contract in the event it encountered "unknownphysical conditions atthe site, ofan unusual nature, which differ materially from those ordinarily encountered and generally recognized as inhering in work ofthe characterprovided for in the contract." FAR 52.236-2(a)(2). However, Dyno has done nothing more than assert that such conditions existed. Dynohas not shownthatthe unevenpitch could notbe discovered from a reasonable site investigation. 

### See Huntington Constr., Inc., ASBCANo. 33526, 89-3 BCA**~** 22,150 at 111,479. Norhas it shownthatthe conditionwouldbe unexpected to a reasonably prudent contractor. 

### Consolidated Constr., Inc., ASBCANo. 46498, 99-1 BCA**~** 30,148 at 149,157, 

### aff'd, 230 F.3d 1378 (Fed. Cir. 2000) (table). Finally, assuming unevenpitch constituted an unforeseen condition, Dynohas presented no evidence showingthe number ofdays, ifany, that condition delayed its completion ofthe work.

Dyno's second ground for attacking liquidated damages is thatHurricane Sandy's impactupon its swing gate material supplier during the week of28 October2012 constitutes an excusable delay. An excusable delay is "dueto causes that are unforeseeable, beyondthe contractor's control, and notresulting from its fault or negligence." 

### ECC, International, ASBCANo. 55781, 13 BCA**~** 35,207 at 172,744. "The delay mustbe to overall contract completion." !d. Dynohas demonstrated that its supplierwas delayed due to Hurricane Sandy, butithas not shownthat is the reason Dyno failed to complywith its 1August and 24 September2012 CLINs' deadlines. Indeed, Dyno's evidence shows that it did not orderthe materials from its supplieruntil early October2012, after its contract deadlines had already expired (finding 13). Had Dynotimelyperformed, it would have ordered the materials andreceivedthembefore Hurricane Sandy occurred. Accordingly, Dynohas failed to show that its supplier's Hurricane Sandy delays constitute an excusable delay.

Dyno also suggests that it encountered excusable delays because it had originally intendedto use two work crews on each set ofstairs. One would demolish the old stairs while a secondwould install the new stairs. It says it only discovered during performance that using two crews in the confined, inclined spaces containingthe stairs

was inefficient and unsafe because one crew would have to work above the other. Given that the contract's entirepurpose was to work in these spaces, Dyno has not demonstrated why those safety and efficiency issues were unforeseeable.

Dyno also argues its delay is excused because the CORtold it that additional work would be ordered by the government for the landings. Dyno says it could not perform until it received final guidance on that issue. Itsays it waited 110 days for that information, from 2 August 2012 until the contracting officer's 20 November letter stating no requests for additional workhad been made. Assuming Dyno is correct, its

7

### argument does not explain its failure to meet its 1August 2012 deadline for the base work and Options C through E. Additionally, the CORis not authorized to make any commitments or changes affecting delivery or any other term or condition ofthe contract. ECC, International, 13 BCA**~** 

### 35,207 at 172,738 (quoting Winter v. Cath-dr!BaltiJoint Venture, 497 F.3d 1339, 1344-45 (Fed. Cir. 2007)). Dyno bore the risk ofits reliance upon any such representations. Furthermore, the evidence fails to support the contention that Dyno's performance was delayed for this reason. Dyno's 10 September 2012 request for a 61-day extension to 24 November 2012 fails to mention the matter (finding 10). Dyno'sproject schedules submitted through 30 October 2012 state that it would complete its work by 20 November, with no mention that the government was preventing completion (finding 11). Only on 19 November 2012, when it became clear that Dyno would not meet its self-imposed 23 November deadline, did it raise the landing issue as a possible excuse for its failure to timely perform (finding 11).6 

### Dyno received the clarification it sought from the government the next day. Accordingly, Dyno has not demonstrated the landing issue excused its failure to timely complete the contract work.

Dyno also argues that the assessment ofliquidated damages is invalid because the government suffered no real loss due to its late completion ofthe project. It

### also claims the contracting officer acted in bad faith, invoking the liquidated damages clause after the CORorally informed Dyno that its request for more time would be granted and thatthe contracting officerhadto assess liquidated damages on the date they started accruing.

The contract's liquidated damages clause will be enforced unless the amount specified is "so extravagant, or disproportionate to the amount ofproperty loss, as to show that compensation was not the object aimed at or as to imply fraud, mistake, circumvention or oppression." DJMfg. Corp. v. UnitedStates, 86 F.3d 1130, 1133 (Fed. Cir. 1996) (quoting Wise v. UnitedStates, 249 U.S. 361, 365 (1919)). The test is objective. A liquidated damages clause is valid as long as the stipulated amount is reasonable as ofthetime the agreement is made. !d. 

### at 1137. Dyno bears the burden of proving the liquidated damages clause is unenforceable. !d. 

### at 1134. In the absence of such proof, liquidated damages agreed to by competentpersons freely, fairly, and understandingly will be enforced. !d. 

### at 1133-34.

Dyno suggests that its late completion ofthe contract work caused no harm to the government. It

### claims the stairs are seldom used. To the extent they are used for tours there was no disruption, and the dam staffwas not inconvenienced because an elevator

was available to take them to the dam's various levels. However, the entire reason for the

6 

### Although Dyno submitted 55 quality control reports mentioning landings, only the first page ofa five-page report from 14 November 2012 is included in the record. That page says Dyno is "[w]aiting for direction on landings/approaches/top plates for all Staircases." It

### does not say that Dyno was prevented from performing any contract work until it received the direction. (Finding 11)

8clause is to agree upon a fixed rate in the event ofa breach to relieve the government of proving it suffered damages. 86 F.3d at 1134-35. Permitting Dyno to escape the clause's application by showing no damages were suffered in this particular instance would undermine thatpurpose. 

### DowningElectric, Inc., ASBCANo. 37851, 90-3 BCA

### ,-r 23,001
at 115,504 ("Thatno actual damages might have been suffered is notproofthatthe
amountwas unreasonable."). Additionally, Dyno's opinion as to the universe ofpotential
costs the governmentmighthave suffered does notprovethatthe rate was unreasonable. An important component for determining liquidated damages rates in construction
contracts is the additional costto the government ofinspection and supervision. FAR 11.502(b). Dyno has not shownthat the $450 daily rate upon which it agreedhas

no relation tothat cost. Moreover, Dyno's suggestion thatthe staffs access to an elevatorproves they did not need stairs seems meritless on its face. Access to stairs is typically necessary for safety purposes, and that would seemto especially be the case inside a dam. Atbottom, there is nothing inherently unreasonable aboutthe $450 daily liquidated damages rate provided inthis contract, andDyno has failed topresent any evidence proving it is. Accordingly, Dyno's attemptto invalidate the liquidated damages clause is rejected.

Dynohas also failed to prove its final point that the contracting officer acted in bad faith. Itpurports to supportthis contention by claimingthe CORtold itthat its 10 September2012 extension request would be granted, andthat liquidated damages had
tobe assessed onthe date they began accruing. Government officials are presumedto act in good faith and Dyno must overcomethatpresumptionwith clear and convincing evidencethatthe contracting officer did not act in good faith. 

### Croman Corp. v. 

### United States, 724 F.3d 1357, 1364 (Fed. Cir. 2013). As previously observed, the CORis not authorized to make any commitments or changes affecting any terms or conditions ofthe
contract. 

### ECC, International, 13 BCA

### ,-r 35,207 at 172,738. Thus, the COR's alleged representation that Dyno's extension request would be granted is not attributable tothe contracting officer. Norhas Dyno cited any authority holdingthatthe contracting officer waives the government's right to assess liquidated damages unless he does so onthe date they begin accruing. Dynohas failed to show there was anything improper about the contracting officer's behaviorhere, andtherefore its bad faith claim is rejected.

9

### CONCLUSION

Forthe reasons stated, the appeal is denied.

Dated: 11 April 2014

# ~<1-~ A. MELNICK Administrative Judge Armed Services Board ofContractAppeals

I certify that the foregoing is a true copy ofthe Opinion and Decision ofthe Armed Services Board ofContractAppeals in ASBCANo. 59074, Appeal ofDyno Group, Inc., rendered in conformance with the Board's Charter.

Dated:

10 JEFFREYD. GARDIN Recorder, Armed Services Board ofContract Appeals