Opinion ID: 815367
Heading Depth: 2
Heading Rank: 1

Heading: The Cost Overrun Claim

Text: A contractor who seeks compensation for costs allegedly caused by government-imposed delays “has the burden of proving the fundamental facts of liability and damages.” Wilner v. United States, 24 F.3d 1397, 1401 (Fed. Cir. 1994). Here, the Board found “no persuasive and particularized evidence . . . establishing the nature and extent of specific interferences or inefficiencies and how they materially increased [M.E.S.’s] cost,” and concluded that “[M.E.S.] ha[d] failed to prove that the [cost overruns] w[ere] caused by . . . compensable government delays.” J.A. 8, 11. On appeal, M.E.S. points to testimony by its president and owner, George Makhoul, recounting the delays it experienced and tying them to a few specific cost escalators such as material and labor cost inflation and difficulty working in cold weather. M.E.S. has not attempted to quantify the specific additional costs directly attributable 6 M.E.S., INC. v. ARMY to any particular item, and instead has asserted that all its overruns on the thirteen activities, measured relative to the cost estimates developed for its bid, were caused by the delays. Substantial evidence therefore supports the Board’s conclusion.
Constructive acceleration occurs “when the government requires the contractor to adhere to the original performance deadline set forth in the contract even though . . . excusable delay[s] . . . entitle the contractor to a longer performance period.” Fraser Constr. Co. v. United States, 384 F.3d 1354, 1361 (Fed. Cir. 2004). To prove such a claim, the contractor must prove “that the government insisted on completion of the contract within a period shorter than the period to which the contractor would be entitled.” Id. Here, the Board found that M.E.S. “has not proven that it was entitled to any extension of the contract performance time beyond [October 14, 2004].” J.A. 10. The contractor’s theory was that it was entitled to additional delay days and that the government compelled it to complete by October 14, 2004, thus leading to an acceleration claim. The evidence cited by M.E.S. on appeal to demonstrate that it was legally entitled to a later completion date, beyond October 14, 2004, consists of two letters, from August and September 2004, in which the contractor stated, in a conclusory manner, that the completion date was January 2005 or later. See J.A. 207, 1115. The Board found the contractor’s evidence insufficient to “prove[] that it was entitled to any extension of the contract performance time beyond [October 14, 2004].” J.A. 10. Substantial evidence supports the Board’s finding that M.E.S. “has failed to prove that the [cost overruns] w[ere] caused by government-directed acceleration.” J.A. 11. M.E.S., INC. v. ARMY 7