Court Opinion

ID: 9929827
Source: CourtListenerOpinion
Date Created: 2024-02-05 15:00:49.450208+00
Date Added: 2024-06-11T10:55:59.693043
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeal of -                                   )
                                               )
 KUNJ Construction Corporation                 )     ASBCA No. 63240
                                               )
 Under Contract No. N40085-16-D-0302           )

 APPEARANCES FOR THE APPELLANT:                      Matthew T. Schoonover, Esq.
                                                     John M. Mattox II, Esq.
                                                     Timothy J. Laughlin, Esq.
                                                      Schoonover & Moriarty LLC
                                                      Olathe, KS

 APPEARANCES FOR THE GOVERNMENT:                     Craig D. Jensen, Esq.
                                                      Navy Chief Trial Attorney
                                                     Merideth Mendenhall, Esq.
                                                      Trial Attorney

            OPINION BY ADMINISTRATIVE JUDGE MCLISH ON
        THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

        This appeal involves a contract to replace a central base fire system at the
Philadelphia Naval Business Center in Philadelphia, Pennsylvania. The Navy moves
for summary judgment on the grounds that the undisputed facts establish that the
claims asserted by appellant KUNJ Construction Corporation (KUNJ) are barred by
the Navy’s affirmative defenses of accord and satisfaction and release, and also that
the claims lack merit. KUNJ cross-moves for summary judgment in its favor on the
government’s affirmative defenses and contests the Navy’s position that it is entitled to
summary judgment on the merits of the claims.

       We deny the motions.

       STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       In accordance with Board Rule 7(c)(1), the government included with its
motion a Statement of Undisputed Material Facts (NSUMF), with which KUNJ raises
no material dispute (app. resp. at 2). KUNJ’s opposition and cross-motion provided a
Statement of Further Undisputed Material Facts (KFUMF) (id. at 2-6). The
government objects to many of these as legal conclusions or irrelevant but does not
dispute their factual content (Navy resp. to KFUMF at 3-10). Below, we summarize
the facts that neither party disputes for purposes of these motions.
The Contract and Task Order

      1. On or about December 7, 2015, the Navy and KUNJ entered into Contract
No. N40085-16-D-0302, a firm-fixed price, multiple-award construction contract for
“New Construction, Renovation, Alteration and Repair Projects primarily in the state
of Pennsylvania” (Contract) (NSUMF ¶ 1; R4, tab 1 at GOV000001-77).

        2. On or about August 2, 2016, the Navy awarded KUNJ Task Order 0004
(Task Order 4), a firm fixed-price task order under the Contract, to “Replace the
Central Base Fire System @ [Philadelphia Naval Business Center] PNBC Phila. PA,”
in the total amount of $2,449,000 (NSUMF ¶ 5; compl. at ¶ 6; R4, tab 6
at GOV000089-105).

      3. Task Order 4 required KUNJ to “install a new base radio fire monitoring
system and install a fire alarm system in buildings 20 & 1029” (NSUMF ¶ 6; R4, tab 6
at GOV000091).

     4. The original contract completion date for Task Order 4 was August 1, 2018
(NSUMF ¶ 7; KFUMF ¶ 63; R4, tab 6 at GOV000098).

Modification No. P0001

        5. KUNJ and the Navy entered into bilateral Modification No. P0001
(Modification No. 1) to Task Order 4 with an effective date of August 20, 2018.
Modification No. 1 was a no-cost modification that extended the completion date to
June 14, 2019, and changed various technical aspects of Task Order 4, including
installation of transmitters, dialers, master boxes, strobe lights, roving photovoltaic
transmitters, and removal of existing transmitters, disconnect switches, and notification
devices (NSUMF ¶ 20; KFUMF ¶ 50; R4, tab 7 at GOV000393-94). Several of the
technical changes included work in Buildings 20 and 1029 (NSUMF ¶ 20; R4, tab 7 at
GOV000393).

     6. Modification No. 1 was executed by both parties as of August 22, 2018
(NSUMF ¶¶ 21-22; gov’t reply at 2; 1 R4, tab 7 at GOV000392).

1
    The Navy’s Reply in Support of its Motion for Summary Judgment and Response in
         Opposition to KUNJ’s Cross-Motion is unpaginated. We refer to the page
         numbers shown in the pdf file containing the document.
                                           2
      7. Modification No. 1 included the following language:

             Acceptance of this modification by the Contractor
             constitutes an accord and satisfaction and represents
             payment in full for both time and money and for any and
             all costs, impact effect, and for delays and disruptions
             arising out of, or incidental to, the work as herein revised.

(NSUMF ¶ 23; R4, tab 7 at GOV000393)

Modification No. P0002

        8. KUNJ and the Navy entered into bilateral Modification No. P0002
(Modification No. 2) to Task Order 4 with an effective date of June 14, 2019. This
modification extended the completion date by 399 days to July 17, 2020, increased the
total cost of Task Order 4 by $69,144.00 to $2,518,144.00, and incorporated a change
to the shift work schedule regarding work in Building 20. (NSUMF ¶ 24; R4, tab 8
at GOV000395-97; compl. ¶ 11)

     9. Modification No. 2 was executed by both parties as of March 27, 2020
(NSUMF ¶¶ 25-26; R4, tab 8 at GOV000395).

      10. Modification No. 2 included the following language:

             Acceptance of this modification by the contractor
             constitutes an accord and satisfaction and represents
             payment in full for both time and money for any and all
             costs, impact effect, and for delays and disruptions arising
             out of, or incidental to, the work as herein revised.

(NSUMF ¶ 27; R4, tab 8 at GOV000396)

Modification No. P0003

        11. KUNJ and the Navy entered into bilateral Modification No. P0003
(Modification No. 3) to Task Order 4 with an effective date of July 17, 2020. This
modification extended the completion date by 392 days to August 13, 2021, increased
the total cost of Task Order 4 by $465,114.00 to $2,983,258.00, and incorporated PC
03 HVAC DETECTORS for all necessary labor and materials to integrate the HVAC
system with the Fire Alarm system as required by codes. The PC 03 HVAC detectors
work included work in Buildings 20 and 1029. (NSUMF ¶ 28; R4, tab 9
at GOV000398-400; compl. ¶ 12)

                                           3
    12. Modification No. 3 was executed by both parties as of May 6, 2021
(NSUMF ¶¶ 29-30; R4, tab 9 at GOV000398).

      13. Modification No. 3 included the following language:

             Acceptance of this modification by the contractor
             constitutes an accord and satisfaction and represents
             payment in full for both time and money for any and all
             costs, impact effect, and for delays and disruptions arising
             out of, or incidental to, the work as herein revised.

(NSUMF ¶ 31; R4, tab 9 at GOV000399)

Request for Equitable Adjustment and Claim

       14. KUNJ submitted a Request for Equitable Adjustment (REA) dated
January 7, 2021, seeking $1,395,093.00 for “delays and interruptions sustained during
the contract duration . . . .” (NSUMF ¶ 32; R4, tab 10 at GOV000401-38). The
Contracting Officer denied the REA by letter dated April 20, 2021 (NSUMF ¶ 38;
KFUMF ¶ 62; R4, tab 11 at GOV000439-41).

      15. KUNJ then submitted a claim to the contracting officer dated September 28,
2021 (KUNJ Claim), seeking “$1,204,902.10 in compensation for increased costs
generated by Navy-caused delays” (NSUMF ¶ 39; R4, tab 12 at GOV000442).

      16. The KUNJ Claim contended that the Navy delayed KUNJ’s work in
six ways. First, the Navy allegedly failed to grant KUNJ a facility clearance and
instead implemented an escort and “sanitization” system under which the Navy
provided attendants to accompany the contractor’s workers in secure buildings and
used coverings to conceal sensitive machinery and other elements from view.
KUNJ’s claim contended that it was delayed when, on many occasions, the Navy did
not supply sufficient escorts, or the escorts were late or failed to appear. KUNJ
further alleged that it was delayed when it was precluded from working because of the
Navy’s “sanitization” efforts. (R4, tab 12 at GOV000443-44)

      17. Second, the claim alleged that the Navy was responsible for delays caused
by other building access issues and other Navy activities that prevented KUNJ from
completing its work as scheduled (R4, tab 12 at GOV000445).

       18. Third, KUNJ’s claim contended that the Navy delayed providing necessary
authorization to the manufacturer of radio frequency transmitters to sell the units to
KUNJ’s subcontractor (R4, tab 12 at GOV000445).
                                           4
         19. Fourth, the claim alleged that the Navy delayed approving the use of a “PED
    camera,” causing KUNJ the loss of significant time (R4, tab 12 at GOV000446).

       20. Fifth, the claim alleged that the Navy caused delay by directing the
relocation of conduit the KUNJ had installed in a Navy-approved location (R4, tab 12
at GOV000446).

       21. Sixth, KUNJ’s claim alleged that the Navy delayed progress by not
allowing KUNJ to access Building 20. Eventually, in October 2018, the Navy agreed
in principle that KUNJ could work in Building 20 after hours, but then delayed
implementing the new arrangement because of funding issues. (R4, tab 12
at GOV000446)

      22. The claim sought $759,712.50 for “Supervisory Employees (employed by
KUNJ Construction and its subcontractor);” $156,991.12 for “Additional Subcontractor
Labor;” and $288,198.48 for “Other Costs” (R4, tab 12 at GOV000447-49, 000571). 2

    Contracting Officer’s Final Decision

        23. The Contracting Officer issued a final decision on KUNJ’s claim on
March 25, 2022. The final decision determined that KUNJ was due $5,265.09 for
increased costs generated by alleged Navy-caused delays and $26,699 for additional
work for portable roving units. The contracting officer denied KUNJ’s access delay
claims because “the contract documents specifically put the contractor on notice that
there may be delays in accessing the site.” (R4, tab 13a at GOV000603) The
contracting officer denied the remainder of KUNJ’s delay claims because “supervisory
personnel were required for the full duration of the contract, regardless of what
specific work was being performed” and because the Navy and KUNJ had executed
three bilateral modifications containing language “indicating full accord and
satisfaction” (Id.; NSUMF ¶ 44)

Appeal and Complaint

          24. KUNJ appealed to the Board.

           25. In its Complaint, KUNJ alleges the same six delay claims that it asserted in
    its Claim to the contracting officer and seeks a total of $1,202,834.87 (compl. ¶¶ 20-51,

2
    The claim also sought a contract modification and $26,699 to perform additional
         work on certain portable roving units specified by the Contract. The
         government advises that “[t]his amount for portable roving units is not disputed
         in this appeal” (gov’t mot. at 15 n.3).
                                              5
88). This total is broken down into three components. First, KUNJ alleges that,
between April 11, 2018 and November 5, 2020, it lost 1,699.5 productive hours waiting
for Navy escorts to arrive (id. ¶¶ 67-68). KUNJ seeks $156,991.12 for these alleged
delay costs (id. ¶ 71).

       26. Second, KUNJ alleges that Navy-caused delays to the contract completion
date to August 2021 required it to maintain its Project Manager for an additional
1,250 hours, maintain its Quality Control/Site Safety Health Officer on the Contract
for an additional 5,000 hours, and maintain a working superintendent at the project
site for 115 days longer than anticipated between August 1, 2018 and December 31,
2020 (compl. ¶¶ 76-79). KUNJ states it was “required to maintain its supervisory
personnel – i.e., its Project Manager, Quality Control/Site Safety Health Officer, and
working superintendent – on the Contract during the Contract’s entire performance
period” (id. ¶ 80). KUNJ alleges it incurred “$562,750 in additional salary costs for
its Project Manager, Quality Control/Site Safety Health Officer, and working
superintendent” and “is entitled to $196,962.50 (35% of $562,750), which accounts
for the insurance, taxes, and fringe benefits attributable to these personnel” for a total
of $759,712.50 (id. ¶¶ 85-86).

       27. Third, KUNJ seeks additional costs totaling $286,131.25, consisting of
field office overhead of $75,971.25; subcontractor overhead of $7,849.56; home
office overhead of $103,472.36; profit of $77,279.78; and bond premium costs of
$21,558.30 (compl. ¶¶ 87-87e).

Contract Clauses and Provisions Relevant to Claim

      28. The Contract incorporates by reference Federal Acquisition Regulation
(FAR) 52.236-6, SUPERINTENDENCE BY THE CONTRACTOR (APR 1984),
which requires the contractor to always have a competent superintendent on the
worksite (NSUMF ¶ 2; R4, tab 1 at GOV000056).

       29. The project specifications for Task Order 4 require the contractor to
provide a Safety and Health Officer (SSHO) and requires that the SSHO be at the
work site at all times, unless specified differently in the contract (NSUMF ¶ 17; R4,
tab 6c at GOV000226).

       30. The project specifications also require that the contractor establish and
maintain a quality control program, including a Quality Control Manager, whose
presence at the site is required before any construction work or testing could be
performed (NSUMF ¶ 18; R4, tab 6c at GOV000248).

                                            6
      31. The Contract and Task Order 4 incorporate by full text Naval Facilities
Acquisition Standards (NFAS) Clause 5252.236-9301, SPECIAL WORKING
CONDITIONS AND ENTRY TO WORK AREA (OCT 2004), providing:

              The Government under certain circumstances may require
              denial of entry to the work areas under this contract where
              the Contractor’s work or presence would constitute a
              safety or security hazard to ordance 3 [sic] storage or
              handling operations. Restrictions covering entry to and
              availability of the work areas are as follows:

              (a) Entry. Entry to work areas located within the special
              Security Limited areas, defined as those work areas located
              within the existing security fence, can be granted subject to
              special personnel requirements as specified herein and to
              other normal security and safety requirements. Complete
              denial of entry to the Limited Area may be required during
              brief periods of one to two hours (normally) and on rare
              occasions of two to four hours. For bidding purposes, the
              Contractor shall assume denial of entry to the work areas in
              the Limited Area of six 2-hour denials and one 4-hour
              denial per month.

              (b) Vehicle Delay. The Contractor shall also assume for
              bidding purposes that, in addition to site denial, each
              vehicle and/or unit of construction equipment will be
              delayed during each movement through the security gate,
              both entering and leaving the limited area. Delays will
              average        [2hrs] 4             .

              (b) [sic] Operational Considerations. To reduce delay time
              while preserving required security, the following points
              should be considered in operational planning:

              (1) Vehicle Search. Security regulations required that all
              vehicles, when authorized to enter the Limited Area be
              thoroughly searched by guard force personnel. Such a
              search will be required for all vehicle/ construction

3
  The government does not contend that there was ordnance in any of the buildings
        where KUNJ was working (KFUMF ¶ 60; Navy’s Response to KFUMF at 8).
4
  In the Contract, this space in the clause is blank. In Task Order 4, it is filled in with
        “2hrs” (R4, tab 1 at GOV000071-72; tab 6 at GOV000102-03).
                                             7
             equipment. Accordingly, once a vehicle or unit of
             construction equipment has been cleared, it may be left in
             the Limited Area after initial entry has been made. For the
             period of time authorized the vehicle/equipment left in the
             Limited Area will be assigned parking areas by the
             Contracting Officer. The vehicle/equipment must be
             secured as specified in paragraph entitled “SECURITY
             REQUIREMENTS.” The intent is to reduce the
             Contractor loss of time at the security gate. No private
             vehicles will be allowed to enter the Limited Area.

             (2) Delivery Vehicles. Guard force personnel will inspect
             vehicles delivering construction materials while the driver
             is being processed for entry into the Limited Area. A
             Security Escort will then escort the driver and vehicle in
             the Limited Area. To provide this service, delivery
             schedules should be promulgated in advance and vendors
             made aware that a reasonable delay can be expected if
             delivery is other than the time specified. Deliveries after
             1600 hours will not be allowed entry into the Limited Area
             without prior approval of the Physical Security Officer.

(NSUMF ¶¶ 4, 9; R4, tab 1 at GOV00071-72; tab 6 at GOV000102-03)

        32. The NFAS February 2016 edition prescribed the use of clause 5252.236-
9301, SPECIAL WORKING CONDITIONS AND ENTRY TO WORK AREA (OCT
2004) “in solicitations/contracts for construction work to be performed in and around
secured areas or ammunition depots and magazines” (NSUMF ¶ 10; gov’t mot., ex. 1
at 84).

      33. The Statement of Work and project specifications for Task Order 4 both
provided that “Contractor personnel will need a security clearance to work in
Building 20, 1029, 546 and 592” (NSUMF ¶¶ 12, 14; R4, tab 6 at GOV000093; tab
6c at GOV000183).

       34. Task Order 4 included a response to a request for information stating that
the expected lead time to acquire the security clearance required for personnel working
in Buildings #20, #546, #592, & #1029 was 18 months (NSUMF ¶ 8; R4, tab 6
at GOV000094-95).

                                           8
    35. Section 01 14 00, WORK RESTRICTIONS, 1.2 CONTRACTOR
ACCESS AND USE OF PREMISES, the project specifications provide:

      1.2.1 Activity Regulations

            Ensure that Contractor personnel employed on the Activity
            become familiar with and obey Activity regulations. Keep
            within the limits of the work and avenues of ingress and
            egress. Wear hard hats in designated areas. Do not enter
            any restricted areas unless required to do so and until
            cleared for such entry. The Contractor’s equipment shall
            be conspicuously marked for identification.
           ....

      1.2.1.3 Personnel Entry Approval

      Failure to obtain entry approval will not affect the contract price or time
      of completion.

(NSUMF ¶ 15; R4, tab 6c at GOV000186)

      36. Attachment E project Spec at Section 01 14 00, WORK RESTRICTIONS,

      1.3 SECURITY REQUIREMENTS provides:

      Contract Clause “FAR 52.204-2, Security Requirements and Alternate
      II,” and the following apply:

      1. The Government will monitor work being preformed [sic] in the
      Navy Yard - Propeller Division, buildings 20, 546, 592 and 1029.

      2. No work will be permitted within the Navy Yard – Propeller Division
      buildings while personnel not meeting the required security requirements
      are on site.

      3. No employee or representative of the Contractor will be admitted to
      the site of the work until the following items are submitted and
      approved:

          a. A company letter, on letterhead stationary [sic], listing the
          Contractor's and each subcontractor’s employees including the
          employee’s social security number, address and security clearness
          [sic].
                                           9
           b. A completed Personnel Security Questionnaire (DD form 2221)
           for every individual requiring access to the work site.

           c. No employee or representative of the Contractor will be admitted
           to the Navy Yard- Propeller Division building unless he/she has a
           security clearance. Identification issued to personnel employed by a
           Contractor is to facilitate admittance to and exit from Navy Yard -
           Propeller Division buildings. It shall be the Contractor’s
           responsibility to collect and account for all identification passes
           issued to his personnel at the expiration of the contract or when no
           longer required. The Contractor shall comply with all security
           regulation currently in force at the Navy Yard - Propeller Division
           buildings. Each of the Contractor's employees will be issued an
           approved pass which he shall have with him during work hours and
           shall wear in a conspicuous location on his/her outer clothing. The
           Contractor shall obtain all necessary security clearances before
           entering any of the Navy Yard - Propeller Division buildings.

       4. Private vehicles belonging to a contractor/subcontractor employee
       will not be granted access to the Navy Yard - Propeller Division building
       areas.

       5. Failure to obtain entry approval will not affect the contract price or
       time of completion.

       6. No photographs will be taken in or around the Navy Yard -Propeller
       Division buildings.

(NSUMF ¶ 16; R4, tab 6c at GOV000187-88)

       37. The project specifications require the contractor to provide a report for each
day that work is performed. Among the information required on the reports was
“directions received, problems encountered during construction, work progress and
delays, conflicts or errors in the drawings or specifications, field changes, safety
hazards encountered, instructions given and corrective actions taken, delays
encountered and a record of visitors to the work site, quality control problem areas,
deviations from the QC Plan, construction deficiencies encountered, meetings held.”
(NSUMF ¶ 19; R4, tab 6c at GOV000257-58)

                                           10
                                      DECISION

I.     Summary Judgment Standard

       We look to Rule 56 of the Federal Rules of Civil Procedure for guidance in
deciding summary judgment motions. Board Rule 7(c)(2); Fluor Intercontinental,
Inc., ASBCA Nos. 62550, 62672, 22-1 BCA ¶ 38,105 at 185,099. Summary judgment
is appropriate when the moving party demonstrates that there is no genuine issue as to
any material fact and that it is entitled to a judgment as a matter of law. Crown
Operations Int’l, Ltd. v. Solutia Inc., 289 F.3d 1367, 1375 (Fed. Cir. 2002). The
applicable substantive law identifies which facts are material and might affect the
outcome of the appeal. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

        Once the moving party has satisfied its initial burden, the opposing party “‘must
set forth specific facts showing that there is a genuine issue for trial.’” Id. 477 U.S.
at 248 (1986) (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288
(1968)). Our task at this stage is not “to weigh the evidence and determine the truth of
the matter, but rather to ascertain whether material facts are disputed and whether there
exists any genuine issue for trial.” Holmes & Narver Constructors, Inc., ASBCA
Nos. 52429, 52551, 02-1 BCA ¶ 31,849 at 157,393 (quoting Liberty Lobby, 477 U.S.
at 249). A dispute is genuine only if, on the entirety of the record, a reasonable
factfinder could resolve a factual matter in favor of the nonmovant. Liberty Lobby,
477 U.S. at 248. The evidence must be viewed in the light most favorable to the party
opposing the motion. Crown Operations, 289 F.3d at 1375.

       We are not required to rule for one side or the other merely because both parties
have moved for summary judgment, each asserting that there are no material issues of
fact. Northrop Grumman Corporation, ASBCA No. 62165, 23-1 BCA ¶ 38,394
at 186,557. Rather, “[e]ach cross-motion is evaluated separately on its merits, and all
reasonable inferences are drawn in favor of the defending party; the Board is not
bound to ‘grant judgment as a matter of law for one side or the other.’” Osborne
Constr. Co., ASBCA No. 55030, 09-1 BCA ¶ 34,083 at 168,513 (quoting Mingus
Constructors, 812 F.2d 1387, 1391 (Fed. Cir. 1987)).

                                           11
II.    The Cross-Motions for Summary Judgment on the Defenses of Accord and
       Satisfaction and Release

       The government first seeks summary judgment upon its affirmative defenses of
accord and satisfaction and release. It contends that KUNJ’s claims are barred by the
three bilateral modification clauses stating that “[a]cceptance of this modification by
the Contractor constitutes an accord and satisfaction and represents payment in full for
both time and money [and] 5 for any and all costs, impact effect, and for delays and
disruptions arising out of, or incidental to, the work as herein revised” (NSUMF ¶¶ 23,
27, 31). 6 KUNJ cross-moves for summary judgment in its favor on the government’s
defenses, contending that the undisputed facts demonstrate that the release language
does not bar its claims.

        Release and accord and satisfaction are separate affirmative defenses. Holland
v. United States, 621 F.3d 1366, 1377 (Fed. Cir. 2010). A document such as a bilateral
contractual modification, however, may be both a release and an accord and
satisfaction. Id.

      An accord and satisfaction occurs when “some performance other than that
which was claimed to be due is accepted as full satisfaction of the claim.” Holland,

5
 Modification No. 1 includes this “and”, while Modifications Nos. 2-3 do not.
6
 The government asserts in passing that this release language is “the standard
      contractor release that NAVFAC includes in all of its contract modifications,”
      but cites no support for this (gov’t mot. at 25). As discussed below, the same or
      similar language has been the subject of numerous decisions by this Board and
      the Court of Federal Claims.
The provenance of the language and the reasons for its use instead of other potential
      clauses, such as the one set forth in Federal Acquisition Regulation
      43.204(c)(2), are not evident from the present record. FAR 43.204(c)(2)
      provides that, when entering into a supplemental agreement making an
      equitable adjustment as the result of a change order, the government’s
      contracting officer should include a release similar to:

              Contractor’s Statement of Release

              In consideration of the modification(s) agree to herein as complete
              equitable adjustments for the Contractor’s ______ (describe)
              _____ ‘proposal(s) for adjustment,’ the Contractor hereby releases
              the Government from any and all liability under this contract for
              further equitable adjustments attributable to such facts or
              circumstances giving rise to the ‘proposal(s) for adjustment’
              (except for ________).
                                          12
621 F.3d at 1377. The government bears the burden to prove the elements of the
defense, which are “‘(1) proper subject; (2) competent parties; (3) a meeting of the
minds of the parties; and (4) consideration.”’ Id.at 1382; Bell BCI, 570 F.3d 1337,
1341 (Fed. Cir. 2009); Pyrotechnic Specialties, Inc., ASBCA No. 57890 et al.,
17-1 BCA ¶ 36,696 at 178,703. “To reach an accord and satisfaction there must be
mutual agreement between the parties with the intention clearly stated and known to
the contractor.” Coastal Government Services, Inc., ASBCA No. 50283, 99-1 BCA
¶ 30,348 at 150,088.

        A release is a contract whereby a party abandons a claim or relinquishes a right
that could be asserted against another. Holland, 621 F.3d at 1377; Pratt & Whitney,
22-1 BCA ¶ 38,104 at 185,085. In interpreting a release, general principles of contract
interpretation apply. Optex Systems, Inc., ASBCA No. 58220, 14-1 BCA ¶ 35,801
at 175,097. Releases are liberally construed and “the circumstances surrounding the
signing of the release” will be reviewed to “effect the true intent of the parties.”
Sedona Contracting, Inc., ASBCA No. 52093, 99-2 BCA ¶30,466 at 150,513. “[T]he
inquiry regarding releases should focus on the intent of the parties at the time the
release is executed, and this intent should be sought from the whole and every part of
the instrument . . . .” Optex, 14-1 BCA ¶ 35,801 at 175,097 (quoting Futuronics
Corp., ASBCA No. 29324, 85-2 BCA ¶ 18,137 at 91,045). “Even where a release is
complete on its face and unqualified, as is the case here, we will review the
circumstances surrounding its execution in order to effect the true intention of the
parties.” Sedona Contracting, Inc., 99-2 BCA ¶ 30,466 at 150,513. “[A] cold reading
of the document is not the end of the matter.” Hunt Bldg. Corp., ASBCA No. 50083,
97-1 BCA ¶ 28,807 at 143,700 (quoting Able Prods. Co., ASBCA No. 24221,
80-2 BCA ¶ 14,733 at 72,692).

       In order to sustain its burden under either defense, the government “must show
that both parties intended [the bilateral modifications] to release and/or discharge the
claim[s] that [are] the subject of this appeal.” Optex, 14-1 BCA ¶ 35,801 at 175,097.

          a. The Parties’ Contentions

       The parties disagree as to the scope of the release language. The government
advances multiple interpretations. At times it argues that the language constitutes
“general releases” that bar all claims on Task Order 4 that arose prior to the bilateral
modifications in which they appear (gov’t. reply at 5-7). It also advances the narrower
argument that the release language bars KUNJ’s claims because the claims concern the
same time periods and subject matters that were addressed by the parties in
Modifications Nos. 1-3 (gov’t mot. at 19-21).

       KUNJ argues that the phrase “work as herein revised” limits the scope of each
clause such that it bars only claims arising from the particular subject matter addressed

                                           13
by the modification. Because its current claims do not relate to the specific subject
matters addressed by the modifications, KUNJ contends, they are not barred. (App.
resp. at 7-18) In support, KUNJ relies on decisions in which the Board rejected accord
and satisfaction defenses where the government did not show, either from the face of
the bilateral modification or other evidence, that the parties intended the modification
to bar the claims the contractor sought to assert. See, e.g., Collazo Contractors, Inc.,
ASBCA No. 53925, 05-2 BCA ¶ 33035 at 163,747 (rejecting accord and satisfaction
defense based on release language because the government did not prove “there was a
clearly stated intention and a meeting of the minds between the parties that ‘the work
as herein revised’ included the delay claimed by appellant, or any part of it.”); Bay
West, Inc., ASBCA No. 54166, 07-1 BCA ¶ 33,569 at 166,304 (rejecting accord and
satisfaction defense where testimony from the parties indicated there was no mutual
agreement that the bilateral modification provision would bar the contractor’s claim.)

          b. The Release Language is Not a General Release of KUNJ’s Claims

        We begin with the text of the release language to assess the government’s
argument that the clause operates as a general release of all pre-modification claims
arising under the task order. By its plain terms, the language does not purport to be a
general release. It does not contain the term “release” at all, instead employing the
less straightforward and more legalistic term “accord and satisfaction.” Further, it
does not plainly state that it bars all claims arising out of Task Order 4 prior to the
modification. Rather, the language refers to matters “arising out of, or incidental to,
the work as herein revised.”

       The phrase “the work as herein revised” does not clearly and unambiguously
embrace all pre-modification claims. This is evident from prior decisions addressing
the same or similar language as used in this matter. For example, the government’s
general release theory cannot be squared with Collazo Contractors, Inc., which
involved a NAVFAC contract and a bilateral modification containing the
aforementioned release language. In that case, as here, the modification containing the
clause did not reference the specific claims at issue in the appeal. The Board held that,
to prevail, the government must show a meeting of the minds between the parties that
the phrase “the work as herein revised” in the release language included the
unreferenced claims. Collazo, 05-2 BCA ¶ 33,035 at 163,747. Because the
government did not adequately prove such a meeting of the minds, the claims were not
barred by the release language. Id. If the language was a general release of all
pre-modification claims, as the government contends here, no further proof as to the
scope of the release would have been necessary in Collazo. Similarly, in
Conquistador Dorado Joint Venture, ASBCA No. 60042 et al., 20-1 BCA ¶ 37,628
at 182,679, we denied the government’s motion for summary judgment where further
record development was necessary to determine whether the claim at issue fell within
the scope of a modification containing the release language.

                                           14
        The government points to Coastal Envtl. Grp., Inc., ASBCA No. 60410,
18-1 BCA ¶ 37,102, which also addressed a provision essentially identical to the
release language in this appeal (although, unlike here, the clause there was labeled a
“Contractor’s release”). Id. at 180,590. We held there that the phrase “work as herein
revised” in the release referred to all of the contract work, and thus effectively was a
general release that “wiped the slate clean” and barred all pre-modification causes of
government-caused delay. Id. at 180,591. But that holding was based upon the
particular terms of the modification in which the clause appeared. Specifically, the
Board concluded that the modification as a whole made clear the parties’ intent that
“work” as stated in the release meant the same thing as the “work specified in the
subject contract” referenced elsewhere in the modification. Id. The Coastal decision,
therefore, does not support the proposition that the release language is a general
release. Rather, that case involved an instance where examination of the modification
as a whole was sufficient to establish the intent of the parties that the release would bar
all pre-modification claims.

       These and other decisions, together with the text of the clause, compel the
conclusion that the release language is not a general release on the facts of this case.
Instead, determining the scope of the claims barred by that clause requires a
determination of the parties’ intent through examination of the bilateral modification
as a whole in the context of the claim at issue and, if necessary, extrinsic evidence. 7

7
    E.g., COSTAR III, LLC, ASBCA No. 56479, 11-2 BCA ¶ 34,830 at 171,370 (Navy
          Release Clause in bilateral modifications adjusting pricing based on wage
          increases claims for further price adjustments for wage increases during the
          same period); Whiting-Turner Contracting Co., ASBCA No. 56319, 10-1 BCA
          ¶ 34,436 at 169,951 (claims barred because they were “related to the work
          described” in bilateral modifications containing the release); Fox Constr. Inc.,
          ASBCA No. 55265 et al., 08-1 BCA ¶ 33,810 at 167,380-81 (claims barred
          because they were based on the same changes to the work made by bilateral
          modifications containing the Navy Release Clause); R.J. Lanthier Co., ASBCA
          No. 51636, 04-1 BCA ¶ 32,481 at 160,668 and n.2 (claims that were the subject
          of bilateral modifications addressing same subject matters were barred by Navy
          Release Clause; claim not specifically referenced in modification not barred).
          See also LCC-MZT Team IV v. United States, 155 Fed. Cl. 387, 456 (2021)
          (claim barred where bilateral modification containing provision similar to Navy
          Release Clause specifically referenced the subject matter of the claim); Metric
          Constr. Co., v. United States, 81 Fed. Cl. 804, 822-24 (2008) (the phrase “work
          as herein revised” in release was patently ambiguous where the modification
          provided a no-cost extension of time “due to batch plant fire, weather, etc.”;
          extrinsic evidence showed that parties did not intend to bar claim at issue); R.P.
          Richards Constr. Co. v. United States, 51 Fed. Cl. 116, 122-23 (2001) (bilateral
          modification containing release language was ambiguous as to the scope of the
                                              15
          c. The Undisputed Facts Do Not Demonstrate Whether the Parties
             Intended the Accord and Satisfaction Provisions to Bar KUNJ’s Current
             Claims

        Alternatively, the government contends that it should prevail under the
narrower reading of the release language because KUNJ’s current claims are
sufficiently related to the work changed by the modifications that they are covered by
the clause (gov’t mot. at 19-27). The government relies on the undisputed facts that
(1) the modifications’ extensions to the contract completion date cover the time period
for which KUNJ now seeks compensation for Navy-caused delay; and (2) the
modifications addressed work in the secure areas to which KUNJ now claims it was
not given timely access (id. at 20-21). KUNJ disagrees, relying on the undisputed fact
that the modifications do not specifically reference KUNJ’s current delay claims and
contending that its claims fall outside the specific subject matters of the three
modifications and therefore are not barred by the release language (app. resp. at 7).

       We conclude that the three modifications at issue here do not, on their face,
demonstrate that the parties intended them to cover the subject matter of KUNJ’s
current delay claims, and are thus ambiguous as to that issue. See Metric, 81 Fed. Cl.
at 822-24 (Release language ambiguous in circumstances presented); R.P. Richards,
51 Fed. Cl. at 122-23 (same). The modifications do not identify the reasons for the
extensions to the completion date, and neither party attempts at this stage to
demonstrate those reasons with extrinsic evidence. Cf. Metric, 81 Fed. Cl. at 823
(scope of Navy Release Clause unclear where no-cost extension was “markedly
ambiguous in reciting the causes for the extension”). Those reasons could bear on
whether or not the release language should be interpreted as resolving all claims for
delay arising during the same time period. 8

       Similarly, the fact that the modifications addressed work in the secure areas
does not establish that the parties intended the modifications to resolve all claims
relating in any way to the secure areas. Modification No. 1 made changes to certain
technical requirements, including for work in the secure areas. Modification No. 2

       claims covered; extrinsic evidence considered in determining that the
       modification covered the same subject matter as contractor’s claim).
8
  On at least one occasion, the release language apparently was modified to make
       explicit that it barred claims arising from not only “the work as herein revised,”
       but also the time extension provided for in the modification. See Safeco Credit
       v. United States, 44 Fed. Cl. 406, 419 (1999) (clause stated: “Acceptance of this
       modification by the contractor constitutes an accord and satisfaction and
       represents payment in full (for both time and money) for any and all costs,
       impact effect, and/or delays arising out of, or incidental to, the work as herein
       revised and the extension of the contract completion time”) (emphasis added).
                                           16
shifted the work schedule in Building 20. Modification No. 3 added PC 03 HVAC
DETECTORS, including for the secure areas. It is unclear from the terms of the
modifications alone whether there is sufficient overlap between the facts and
circumstances giving rise to these modifications and those giving rise to the claims
that the releases should be read to bar the claims. Cf. Metric, 81 Fed. Cl. at 823
(“work as herein revised” ambiguous “because the contract modification covered a
substantial number of additions and deletions to the project as well as the no-cost time
extension”).

       On summary judgment, we must make all reasonable inferences in favor of the
nonmovant. The government has not demonstrated that it is entitled to summary
judgment on its accord and satisfaction and release defenses because the reasons for
the modifications’ time extensions are unknown, the connections between the work in
the secure areas addressed by the modifications and the claims are not clear, and the
releases drafted and inserted by the Navy do not indisputably reveal the parties’
intentions. The undisputed facts do not establish the requisite “proper subject matter”
and “meeting of the minds” for the accord and satisfaction defense and the
modifications are not so unambiguous that the government is entitled to summary
judgment on its release defense. Nor can we grant KUNJ’s cross-motion for summary
judgment where the undisputed facts do not preclude the possibility that the parties
intended to resolve all claims for delay during the extension periods provided by, or
the changed work in the secure areas addressed by, the modifications. 9

       Consistent with our prior decisions addressing the same or similar clauses, we
conclude that, in the circumstances presented here, determining the scope of the
releases requires further development of the record to determine the parties’ intent and
whether there was a meeting of the minds as to what claims would be barred. See,
e.g., Collazo, 05-2 BCA ¶ 33,035 at 163,747; Conquistador Dorado, 20-1 BCA
¶ 37,628 at 182,679 (denying summary judgment based on release language where
further record development necessary to determine whether the claim falls within the
scope of the modification containing the clause); Speegle Constr., Inc., ASBCA
No. 60089, 16-1 BCA ¶ 36,371 at 177,292 (denying summary judgment on release and
accord and satisfaction defenses where there was doubt whether the scope of the
release encompassed the contractor’s claim); Korte-Fusco Joint Venture, ASBCA
No. 59767, 15-1 BCA ¶ 36,158 at 176,455-56 (same).

9
    KUNJ makes the additional argument that its claim cannot be barred by the releases
       because its claim “was asserted prior to Modification Nos. 1-3, but the claim is
       not referenced in [the] releases” (app. resp. at 9-10). The undisputed facts
       indicate that, when KUNJ submitted its request for equitable adjustment on
       January 7, 2021, Modification Nos.1-2 had been executed, but Modification
       No. 3 had not. These facts are insufficient to establish that KUNJ is entitled to
       summary judgment on the government’s defenses.
                                            17
        Because the undisputed facts do not demonstrate that either party is entitled to
judgment in its favor as a matter of law, the cross-motions for summary judgment on
this issue are denied.

III.   The Government’s Motion for Summary Judgment on the Merits

        The government also seeks summary judgment in its favor on the ground that,
even if KUNJ’s claims are not barred by accord and satisfaction or release, the
undisputed facts demonstrate that they fail on the merits. The government contends
that the terms of the Contract and Task Order 4 put KUNJ on notice of work
restrictions and security requirements in secure areas that could lead to delays and
instructed KUNJ to account for them in its bid. Specifically, it relies upon NFAS
5152.236-9301, SPECIAL WORKING CONDITIONS AND ENTRY TO WORK
AREA (OCT 2004) (which appears in both the Contract and Task Order 4), as well as
provisions requiring contractor personnel to have security clearances to access the
secure buildings, stating that the government will monitor the work in those areas, and
instructing that “[f]ailure to obtain entry approval will not affect the contract price or
time of completion” (see SOF ¶¶ 35, 36). The government also relies upon the
provision addressing daily reports, which it contends required KUNJ to document all
delays in the remarks section.

       The government has not demonstrated that KUNJ’s claims are barred by the
contractual provisions it relies upon. To begin with, the government does not explain
how those provisions could bar KUNJ’s claims that do not appear to arise from
security restrictions, such as its claims that the Navy delayed authorizing the
manufacturer of certain radio frequency transmitters to KUNJ (compl. ¶¶ 34-38);
delayed authorizing the use of a PED camera (id. ¶¶ 39-41); caused delay by
mismanaging a requirement that KUNJ relocate conduit above the overhead crane (id.
¶¶ 42-46); and delayed facilitating KUNJ’s access to Building 20 for reasons not
having to do with security (id. ¶¶ 47-51). The government’s argument thus appears to
extend only to KUNJ’s claims that it was delayed by the Navy’s failure to properly
implement its escort and sanitization approach in the secure areas and by other
“general access delays” (id. ¶¶ 20-33).

        Those claims are not clearly barred by the contractual provisions the
government cites. The government contends that NFAS 5152.236-9301 informed
KUNJ of special working conditions in and around the secure work areas, that access
delays were to be expected, and to assume a certain amount of delay when preparing
its bid (gov’t mot. at 28). KUNJ argues that NFAS 5152.236-9301 does not apply here
because it is limited to situations involving “a safety or security hazard to ordnance
storage or handling operations,” and it is undisputed that none of the work areas
at issue here included any ordnance. The government’s briefs do not set forth a
contrary interpretation, other than to simply assert that NFAS 5152.236-9301 “applies

                                            18
to construction work in and around secured areas” (id. at 29). Although not stated, it
appears the government relies upon NFAS 36.5100, which specifies that NFAS
5152.236-9301 is to be included in “solicitations/contracts for construction work to be
performed in and around secured areas or ammunition depots and magazines” (see
SOF ¶ 32). That is insufficient to refute KUNJ’s interpretation, which is based on the
specific language of the provision. Therefore, we consider NFAS 5152.236-9301
inapplicable for purposes of deciding these motions.

        Even if NFAS 5152.236-9301 applied here, the government has not established
that any of its terms bar KUNJ’s claims. Instead, the government contends that all of
the contract language concerning safety and security should be read together and
interpreted to mean that “KUNJ is not entitled to additional time or compensation for
the failure to gain entry to the work area” (gov’t reply at 8). The only provisions the
government cites that might be read as imposing such a prohibition are the two that
state “[f]ailure to obtain entry approval will not affect the contract price or time of
completion” (SOF ¶¶ 35, 36). KUNJ argues that its claims are not based on failure to
obtain “entry approval,” but rather on the Navy’s failures to meet its obligations to
facilitate KUNJ’s access to the secure work areas after it had already obtained “entry
approval” (app. reply at 6-7). The government has not attempted to demonstrate to the
contrary. Accordingly, the government has not met its burden to point to undisputed
facts establishing that KUNJ’s claims are precluded by the contract.

        We also decline the government’s request for a ruling that KUNJ’s potential
recovery is limited to those delays that it documented in the daily reports, which the
government contends was contractually required. The undisputed facts do not
establish that KUNJ failed to document any of its alleged delays or, if it did, what the
circumstances were and how or whether the government was prejudiced. See Goodloe
Marine, ASBCA No. 61960, 23-2 BCA ¶ 38,387 at 186,521 (“Lack of strict
compliance with many kinds of contract requirements concerning writings 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.”) (quoting Copco Steel & Eng’g Co. v. United
States, 341 F.2d 590, 598 (Ct. Cl. 1965)). Accordingly, the government has failed to
carry its burden to demonstrate that it is entitled to summary judgment on this issue as
a matter of law.

                                           19
                                      CONCLUSION

          We have considered all of the parties’ arguments and are not persuaded that
  either party is entitled to the summary judgment rulings they request. Accordingly, the
  motions are denied.

            Dated: January 25, 2024

                                                  THOMAS P. MCLISH
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                           I concur

 OWEN C. WILSON                                     MICHAEL N. O’CONNELL
 Administrative Judge                               Administrative Judge
 Acting Chairman                                    Acting Vice Chairman
 Armed Services Board                               Armed Services Board
 of Contract Appeals                                of Contract Appeals

      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 63240, Appeal of KUNJ
Construction Corporation, rendered in conformance with the Board’s Charter.

      Dated: January 25, 2024

                                                 PAULLA K. GATES-LEWIS
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

                                            20