Court Opinion

ID: 9900131
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:00:57.509287+00
Date Added: 2024-06-11T09:21:00.298914
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeals of -                                 )
                                              )
 Sheffield Korte Joint Venture                )    ASBCA Nos. 62972, 62973
                                              )
 Under Contract No. W912QR-15-C-0027          )

 APPEARANCE FOR THE APPELLANT:                     Michael E. Wilson, Esq.
                                                    Greensfelder, Hemker & Gale, P.C.
                                                    St. Louis, MO

 APPEARANCES FOR THE GOVERNMENT:                   Michael P. Goodman, Esq.
                                                    Engineer Chief Trial Attorney
                                                   R. Lauren Horner, Esq.
                                                   James M. Inman, Esq.
                                                    Engineer Trial Attorneys
                                                    U.S. Army Engineer District, Louisville

   OPINION BY ADMINISTRATIVE JUDGE CATES-HARMAN ON THE
GOVERNMENT’S MOTION FOR SUMMARY JUDGMENT AND APPELLANT’S
       CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT

        These appeals involve a contract for design and construction of a new 600-
member Army Reserve Center near Waldorf, Charles County, Maryland. Sheffield
Korte Joint Venture (SKJV) seeks additional compensation from the United States
Army Corps of Engineers (USACE) to meet permitting requirements imposed on this
project. SKJV also appeals the contracting officer’s (CO) decision to rescind a series
of five unilateral modifications issued by USACE providing additional compensation
to SKJV for difficulties it encountered in obtaining sewer, water, and access permits
from Charles County and the Maryland State Highway Administration (MDSHA).

       USACE moves for summary judgment on the grounds that Federal Acquisition
Regulation (FAR) 52.236-7, PERMITS AND RESPONSIBILITIES (NOV 1991) and
other contract provisions required SKJV to obtain licenses and permits necessary for
project completion without additional expense to the government. USACE also seeks
summary judgment of its affirmative claim for recoupment of the amounts paid under
the unilateral modifications. SKJV moves for partial summary judgment on the
grounds that USACE constructively changed the contract by providing defective
specifications and by misrepresenting the project’s requirements. SKJV also
challenges the credit sought by the government in the amount of $418,406 arguing that
there was accord and satisfaction between SKJV and USACE regarding the five
unilateral modifications. USACE responds that there was no accord and satisfaction
regarding the five unilateral modifications as appellant contends. For the reasons
identified below, we grant USACE’s motion and deny SKJV’s motion.

      STATEMENT OF FACTS (SOF) FOR THE PURPOSE OF THE MOTIONS

   1. On August 28, 2015, USACE awarded Contract No. W912QR-15-C-0027 to
SKJV for “Design and Construction of a New 600-Member Bowie Army Reserve
Center Project located near Waldorf, Charles County, Maryland” (R4, tab 11A at 720,
722; 1 tab 11B at 733).

   2. The total contract price was $21,427,802, including base work and all exercised
options at time of award (R4, tab 11A at 720; tab 11B at 734).

   3. The as-awarded project also included design and construction of an
organizational maintenance shop, an unheated storage building, and military
equipment parking (R4, tab 11B at 739-41).

   4. The contract’s statement of work (SOW) included specification Part 1, entitled
“Design Objectives, and Functional and Area Requirements” (R4, tab 11C at 1017).
Section 1.1.2 of Part 1 provided: “This project shall consist of the design and
construction of an Army Reserve Center complete with required utilities, storm
drainage, communications, electric, HVAC, fire protection/alarm systems, IDS, force
protection measures, paving, walks, curbs, parking, access roads, exterior lighting, site
improvements, grading and landscaping on Government-owned land” (id.).

     5. Section 1.2.4 of Part 1, “Design Freedom,” provided:

               Requirements stated in this RFP are minimums.
               Innovative, creative, or cost-saving proposals, which meet
               or exceed these requirements are encouraged, and will be
               considered more favorably.

               ....

               1.2.4.2 The conceptual design Drawings, this Statement of
               Work, and the Outline Technical Specifications, along with
               the other information and requirements in this RFP, serve
               as requirements for Contractor building design and
               construction completion, along with other code, regulatory
               and professional practice requirements. The extent of

1
    The government R4 page numbers begin with “GovR4-000” and are omitted here.
                                            2
             development of these RFP documents in no way relieves
             the successful offeror from responsibility for completing
             the design, construction documentation, and construction
             of
             the facility in conformance with Applicable Criteria and
             codes.

             1.2.4.3 The conceptual design illustrates desired general
             arrangements, orientation, and adjacencies, and provides
             examples of exterior images which is acceptable to the
             Government – it is not intended to dictate the final layout
             and image for the project. The Contractor’s designers
             shall develop and refine the conceptual site and building
             design in their completion of the design and construction
             documents. Such development shall be consistent with the
             criteria and acceptable to the Government.

   (R4, tab 11C at 1018) (emphasis added)

   6. Section 1.3 of Part 1, “Contractor Responsibility,” provided: “The Contractor
shall provide all labor, materials, equipment, supplies, permits, fees, and consultant
services to design and construct this Training Center complex” (R4, tab 11C at 1020)
(emphasis added).

   7. Section 1.7 of Part 1, “Site,” provided, in part:

             Site work includes all design and construction of site
             features necessary to meet the intent of the RFP, including
             but not limited to, site planning, demolition, clearing,
             grading, erosion control, site drainage, utility systems,
             pavements, pedestrian and vehicular circulation systems,
             signage, site lighting, landscaping, physical security
             measures, fencing, permitting, and site furnishings.

(R4, tab 11C at 1023) (emphasis added)

   8. Section 1.7.8 of Part 1, “Regulatory Compliance,” provided:

             The Contractor shall assure that the site development
             complies with all applicable local, State and Federal
             regulations. A list of known regulations is located in the
             Attachments to this Statement of Work. Timely acquisition
             of the necessary design and construction related permits

                                            3
             shall be the responsibility of the Contractor. The
             Contractor, upon notice to proceed, shall immediately
             begin working on the permits so as not to delay completion
             of the project. The Contractor shall prepare permits,
             associated drawings, public notices, and other related
             documentation as necessary to successfully meet permit
             approval status. The Contractor shall pay for associated
             permit fees.

(R4, tab 11C at 1026) (emphasis added)

   9. The SOW included specification Part 2, entitled “Applicable Criteria and
Coordination With Local Authorities” (R4, tab 11C at 1029). Section 2.2, “Local and
State Codes or Standards,” provided:

             The following specifications, codes, standards, bulletins
             and handbooks form a part of this RFP.

             2.2.1 State and Local

             Maryland State Highway Administration - Standard
             Specifications for Construction and Materials
             Maryland State Highway Administration – State Highway
             Access Manual Engineering Access Permits Division
             January 2004
             Maryland State Highway Administration – Highway
             Drainage Manual
             Maryland Department of the Environment - 2011
             Maryland Standards and Specifications for Soil Erosion
             and Sediment Control
             Maryland Department of the Environment – 2000
             Maryland Stormwater Design Manual
             Maryland Department of the Environment - Erosion and
             Sediment Control Guidelines
             Maryland Department of the Environment - Stormwater
             Management Guidelines for State and Federal Projects,
             April 15, 2010
             Maryland Forest Conservation Act
             Charles County Department of Planning and Growth
             Management – Water and Sewer Ordinance,
             September 2011 or current edition

                                          4
              Charles County Department of Planning and Growth
              Management – Plan Preparation Package, June 2012 or
              current edition

(Id. at 1030-31)

   10. Section 2.6 of Part 2, “Permits and Coordination With Local Authorities,”
provided:

              The Contractor is responsible for making all applications
              and obtaining required municipal, utility, and regulatory
              agency coordination, reviews, permits, inspections and
              approvals, and is responsible for payment of any
              associated fees or charges. If Government information,
              signatures, names or addresses are required for
              applications, approvals or permits, the Contractor is
              responsible for obtaining same. This is a Federal
              Government project; therefore, some reviews, permits,
              inspections and approvals are not required. The Contractor
              is responsible for identifying such requirements for a
              commercial project and verifying with the Government
              which of these will be waived. Permit requirements which
              have been identified are listed below. This list is not all-
              inclusive, and Contractor is responsible for verifying that
              information below remains accurate.

(Id. at 1037) (emphasis added)

   11. The contract incorporated FAR 52.236-7, PERMITS AND
RESPONSIBILITIES (NOV 1991) (the Permits and Responsibilities Clause), which
provided:

              The Contractor shall, without additional expense to the
              Government, be responsible for obtaining any necessary
              licenses and permits, and for complying with any Federal,
              State, and municipal laws, codes, and regulations
              applicable to the performance of the work. The Contractor
              shall also be responsible for all damages to persons or
              property that occur as a result of the Contractor's fault or
              negligence. The Contractor shall also be responsible for
              all materials delivered and work performed until
              completion and acceptance of the entire work, except for

                                           5
                any completed unit of work which may have been accepted
                under the contract.

(R4, tab 11B at 879) (emphasis added)

    12. The project was located in Charles County, Maryland (R4, tab 11B at 733),
at the corner of an access road called Fox Tail Place and a state highway called
Marshall Corner Road (R4, tab 11E at 2434; JSUMF 2 ¶6).

    13. MDE is the State of Maryland governmental authority that exercises
jurisdiction over stormwater management (JSUMF ¶ 7; see also gov’t mot. ¶¶ 3, 41).

    14. MDSHA is the State of Maryland government authority that exercises
jurisdiction over state highways (JSUMF ¶ 8; see also gov’t mot. ¶¶ 5, 41).

   15. Charles County is the State of Maryland authority that exercises jurisdiction
over sewer and water line access within Charles County (JSUMF ¶ 9; see also gov’t
mot. ¶¶ 4, 41).

    16. Michael Baker International (formerly known as Michael Baker, Jr., Inc.) is an
architectural and engineering firm retained by USACE that participated in developing
the project’s request for proposal (RFP), including the preparation of conceptual
drawings (R4, tab 6; Higgins dep. at 38-39; JSUMF ¶ 10).

   17. Frankford Short Bruza Associates, P.C. (FSB), the designer of record hired by
SKJV, was responsible for overall design of the project. Mott McDonald is a civil
engineering firm retained by FSB responsible for the civil engineering portion of the
project’s design. (JSUMF ¶ 11; see also app. mot. ¶ 2)

     18. USACE issued its notice to proceed on October 7, 2015 (R4, tab 12).

    19. Between June 27, 2016 and May 17, 2017, SKJV and its design subcontractors
engaged in several rounds of submission to the MDE involving changes and additions
to design drawings and review and comment by the MDE. MDE granted the early
mass grading, demolition, and foundation construction permit, effective August 1,
2016. (R4, tabs 13-15, 18-21, 24; JSUMF ¶ 20)

   20. SKJV sent a letter dated September 22, 2016 to USACE identified as a
“Request for Change on Behalf of FSB/Mott MacDonald” (R4, tab 16 at 2464).

2
    The parties provided a Joint Stipulation of Undisputed Material Facts (JSUMF) for
         the purposes of the motions.

                                            6
Attached to this letter was another letter, dated September 20, 2016, from Mott
MacDonald with the subject, “Bowie ARC Stormwater Management Basis of Bid
Versus Design” (id. at 2465-68). This letter purported that the requirements imposed
by MDE differed from the RFP’s requirements for the project (id.).

    21. By letter dated October 13, 2016, USACE informed SKJV that it disagreed
with SKJV’s contention that the requirements imposed by MDE differed from those in
the RFP (R4, tab 17).

    22. On or before January 19, 2017, the Charles County Department of Planning
and Growth Management informed SKJV that a development services permit and a
separate stormwater permit from Charles County would also be required for the work
relating to the Fox Tail Place access road. The requirement to obtain these permits
was not listed in the permit matrix found in the contract documents. (JSUMF ¶ 31; see
also R4, tab 11C at 1631)

   23. The parties stipulate that Charles County and MDSHA required changes to
SKJV’s as-submitted design in furtherance of obtaining relevant permits (JSUMF ¶
30).

    24. On January 19, 2017, USACE issued and approved a Basic Change Document
for the Charles County and MDSHA required changes to SKJV’s as-submitted design,
identified as Mod Serial No. AA-1. This document authorized $20,000 to be paid to
SKJV for additional Charles County-required design work:

      1) Prepare and submit required design documents to Charles County for
      the VSS plans (VSS-160028) for the Access Road area not on
      Government Parcel.

      2) Prepare and submit required design documents to Charles County for
      the application of Development Services Permit for the Access Road
      Area not on Government Parcel.

      3) Complete a design that separates the access road storm features from
      the Government Parcel.

(App. mot., ex. A)

   25. In March 2017, USACE issued a Price Negotiation Memorandum denoted as
“Case AA-1 – Charles County Requirements.” This memorandum provided in part:

             1.     Necessity for Change: The Design-Build RFP
             requires the contractor to pay permit fees to Charles

                                          7
             County to obtain the necessary permits for conduct
             earthwork activities for Erosion and Sediment control.
             During the permitting process, the Department of Planning
             and Growth Management of Charles County, MD
             confirmed that in order to obtain the necessary erosion and
             sediment control permit, a design that separates the storm
             water features from the existing access road and the project
             site must be included in the permit application. Adding
             this design requirement in order to obtain the permit for
             Charles County will require a change to the contract.

             2.     [ ] The RFP does not include the requirement for
             providing an approved design with the permit application.

(App. mot., ex. B)

    26. By letter dated April 12, 2017, SKJV filed a request for equitable adjustment
seeking $1,800,000, as a result of alleged changed conditions associated with its
attempts to obtain state permits, increasing the cost of site design and construction
costs of the project. (R4, tab 21 at 2479-88).

   27. On April 18, 2017, USACE issued Unilateral Modification No. A00002 to the
contract for Change Case AA (Charles County requirements), identical to the scope
described in Basic Change Document AA-1 on January 19, 2017. This modification
authorized expenditures not to exceed $20,000, thereby increasing the contract’s price
by $20,000. Modification No. A00002 was designated Part 1 of Change Case AA and
granted no additional time. (R4, tab 22; app. mot., ex. B)

   28. By letter dated May 9, 2017, SKJV informed USACE that delays in the
permitting process were causing SKJV to incur a “rough order of magnitude of
construction costs” in the amount of $773,700, excluding “permit work” (R4, tab 23).

    29. By letter dated May 17, 2017, MDE advised USACE that it had approved the
final stormwater management and sediment control plans (R4, tab 24). By letter dated
June 2, 2017, MDE advised USACE that it had approved the sequence of construction
and the erosion and sediment controls (R4, tab 25).

   30. On or about September 22, 2017, USACE issued a Basic Change Document
identified as Mod Serial No. AA-2. This document authorized an additional $30,000

                                           8
to be paid to SKJV for additional Charles County-required design work involving the
same three categories as Mod Serial No. AA-1:

             1) Prepare and submit required design documents to
             Charles County for the VSS plans (VSS-160028) for the
             Access Road area not on Government Parcel.

             2) Prepare and submit required design documents to
             Charles County for the application of Development
             Services Permit for the Access Road Area not on
             Government Parcel.

             3) Complete a design that separates the access road storm
             features from the Government Parcel.

(App. mot., ex. F)

    31. On November 14, 2017, USACE issued Unilateral Modification No. A00005
to the contract supplementing the amounts previously added for Change Case AA
(Charles County requirements). The modification authorized expenditures not to
exceed $30,000, thereby providing a total maximum increase of $50,000 in amounts
obligated relating to Change Case AA. Modification No. A00005 was designated
Part 2 of Change Case AA and granted no additional time. (R4, tab 26)

   32. On November 14, 2017, Ms. Jane Kiefer, a USACE regional construction
project manager, and Mr. Hans Probst, a USACE administrative contracting officer,
signed a Price Negotiation Memorandum dated October 17, 2017. Part 1 of the
memorandum, “Necessity for Change,” stated:

      While the contractor’s designer continued with design requirements for
      Charles County permit, their cost has increased significantly. Therefore
      a supplement to the Part 1 NTP modification of the same title is
      necessary.

Part 3, “Price Negotiation Memorandum,” stated:

             It is anticipated that the final price agreement will be
             reached within 60 days of comment resolution from
             Charles County. The contractor has stated that the
             designer has already expended more than $30k for the
             design work and Charles County comments have increased
             design effort even more. Once a negotiated settlement has

                                          9
              been reached, a Part 2 Final modification will be executed
              with appropriate time extension.

Part 4, “Justification for Unpriced Notice to Proceed,” stated:

       On 7 February 2017, the contractor’s [project manager] notified USACE
       during the weekly telephone conference that an additional design
       stormwater design was required by Charles County, MD in order to
       obtain the required stormwater management permit.

(App. mot., ex. G)

  33. By letter dated December 15, 2017, USACE denied SKJV’s April 12, 2017
REA (R4, tab 27).

    34. By letter dated January 26, 2018, USACE addressed SKJV’s stated position
that it was entitled to additional compensation for difficulties meeting Charles
County’s permitting requirements. The letter denied six of SKJV’s eight grievances
but found merit with respect to the other two issues—design work due to a discrepancy
between MDE’s and Charles County’s requirements for the type of inlets for drain
storage and additional costs relating to polymer concrete to be used for transition
manholes. The amount of these additional costs was not stated. (R4, tab 28)

   35. On or about February 13, 2018, USACE issued a Basic Change Document
identified as Mod Serial No. AA-3. Seven items were added in the Basic Change
Document under “Necessity for Change”:

              1. Type K Inlets
              This is a Charles County storm water requirement. The
              design of the storm water on Charles County property was
              not included in the contract.

              2. Polymer Concrete Manhole
              Charles [C]ounty has made this request and the
              Government has agreed to provide. Charles [C]ounty
              storm water requirements were not in the contract.

              3. Fire Hydrants
              The contract was required to meet the Charles County
              requirements which is fire hydrants every 300 feet, but the
              RFP drawings show fire hydrants spaced every 400 feet.

              4. Entrance Road Turn Around

                                           10
             Charles County is requiring a turn around at the end of the
             entrance road that was not identified in the NTP.

             5. State Highway Authority – Increase Entrance Radius
             The State Highway Authority has requested that the radius
             of the entrance road be increased for safety reasons. This
             should have been coordinated with the SHA during
             preparation of the RFP.

             6. Wash Rack Enclosure
             Charles County is requiring the contractor to enclose the
             north side of the wash rack. This requirement was
             unknown at the time of RFP preparation.

             [7.] Additional Permit Fees
             The permit fees have increased since time of award.

(App. mot., ex. H)

    36. On February 15, 2018, USACE issued Unilateral Modification No. A00009 to
the contract supplementing the amounts previously added for Change Case AA
(Charles County requirements) not to exceed $75,000. This modification was
designated Part 3 of Change Case AA and granted no additional time. (R4, tab 29)

    37. By letter dated March 1, 2018, USACE requested that SKJV provide pricing
and justification for the seven items identified in Modification No. A00009. The letter
also reiterated that the not-to-exceed price of the modifications at that time was
$75,000. (R4, tab 30)

    38. SKJV responded by email dated May 2, 2018. This email included several
attachments, including information about the dollar amounts SKJV sought for each of
the seven items. SKJV requested $739,614.78 in total. The email also noted that
“Subcontractors/Vendors are going thru our contract for compensation from the
USACE. I do not believe this should be included in the above items but if you would
like us to include please let me know (should be roughly one month now to
accumulate these costs).” (App. mot., ex. I)

    39. On June 27, 2018, USACE issued a Price Negotiation Memorandum identified
as “Case No. AA-4 ‘Charles County Requirements’, Part 1, Supplement 3.” Part 1,
“Necessity for Change,” read:

             This is an in scope modification due to a design omission.
             Section 01 02 00.00 48 Paragraph 3.1.8 in the Design-

                                          11
                Build RFP required the DB contractor to pay fees to obtain
                the earthwork permit for Charles County. The DB RFP did
                not include a requirement to provide a design to Charles
                County during the permitting process that separates the
                storm water features of the existing access road from the
                project site. Without this design, Charles County will not
                issue permits required to start construction on the access
                road and site work. In order to include this design in the
                permit submission, a modification to the contract is
                required.

                Part 1 Supplement 3 – While the contractor’s designer
                continued with design requirements for Charles County
                permit, their cost has increased significantly. Charles
                County has identified additional requirements to meet their
                storm water ordnance. Therefore an additional supplement
                to the Part 1 NTP modification of the same title is
                necessary.

                This project is located in Charles County, MD. A storm
                water management fee was established in April 2012,
                affecting nine counties and the City of Baltimore in order
                to meet the requirements of the federal Clean Water
                Act as it concerns the Chesapeake Bay watershed. The law
                was passed in response to a decree by the Environmental
                Protection Agency and aggressively sought to reduce
                sediment loading to the Chesapeake
                Bay. The contract, as issued, failed to incorporate these
                stringent permitting requirements.

(App. mot., ex. J at 1) The memorandum continues:

                A not to exceed price in the amount of $20,000 was
                established in the Part 1 NTP; an additional $30,000 was
                established in Part 1, Supplement 1; an additional $75,000
                was established in Part 1, Supplement 2; and an additional
                $224,814.06 3 is being established by Part 1, Supplement 3.
                The Government has already recognized $418,406 of
                validated costs associated with this change.

3
    A note below the paragraph clarified the strikethrough: “The amount of $224,814.06
         is hereby corrected to read ‘$224,814.00’” (app. mot., ex. J at 2).
                                            12
(Id. at 2)

    40. On June 28, 2018, USACE issued Unilateral Modification No. A00011 to the
contract increasing the total not-to-exceed price to a lump sum amount of $224,814.
The aggregate obligated amount under Change Case AA (Charles County
requirements) was increased to $349,814. The modification was issued “for the
purpose of making interim payment to the Contractor pending negotiation and
issuance of the final adjustment modification.” Modification No. A00011 was
designated Part 4 of Change Case AA and granted no time extension. (R4, tab 31;
JSUMF ¶ 46)

    41. On or about July 25, 2018, USACE executed a Price Negotiation
Memorandum identifying the “Change Request Number and Title” as “Change AA-4
– REA for Charles County Requirements” (R4, tab 31A). This memorandum listed
the same seven items previously identified in Mod Serial No. AA-3 and conceded
liability for them. According to the memorandum, price negotiations took place
between February 11, 2018 and July 16, 2018, but SKJV and USACE failed to agree
to a proposed price change. (Id. at 2572-74) By June 2018, USACE had determined
that SKJV had support for $293,496 relating to Change AA. The memorandum stated
that the balance that USACE determined was supported—$66,682—was included in
an offer to SKJV, but SKJV never responded to the offer. (Id. at 2574) The
memorandum concluded:

               Since no response has been received to date, it is believed
               that the Government and the Contractor are not in
               agreement that the balance of $66,682 from the offered
               amount of $293,496 with zero calendar days of contract
               time extension, is fair and reasonable. Therefore, it is
               recommended that a unilateral modification for this
               amount be executed.

(Id. at 2574-75)

    42. On August 8, 2018, USACE issued Unilateral Modification No. A00013 to the
contract for “Case AA-5: Charles County Requirements.” This modification increased
the final amount under Change AA (Charles County requirements) by $68,592. The
modification reads in part: “Full and final payment to provide labor, materials,
equipment and supervision to comply with Charles County requirements.” The
contract price was increased by $81,592, 4 for a total increase of $418,406 in obligated

4
    Modification No. A00013 included the sum of $13,000 under Case AK for an
       unrelated differing site condition. SKJV’s entitlement to the $13,000 is not in
                                            13
amounts relating to Case AA. Modification No. A00013 was designated Part 5 of
Change Case AA and granted no additional time. (R4, tab 32; JSUMF ¶ 47)

   43. SKJV never signed Modification No. A00013 (JSUMF ¶ 48).

   44. By letter dated January 3, 2020, SKJV submitted an uncertified request for a
contracting officer’s final decision (COFD), which incorporated SKJV’s April 12,
2017 REA by reference as its claim. A letter from Mott MacDonald dated January 3,
2023, was attached to SKJV’s claim. (R4, tab 1B)

    45. By letters dated February 27 and June 30, 2020, the CO informed SKJV that
its claim was missing the required certification under the Contract Disputes Act (R4,
tabs 34, 36).

    46. By letter dated November 10, 2020, SKJV resubmitted its claim with a proper
certification to the CO, incorporating by reference its April 12, 2017 and January 3,
2020 correspondences as comprising the claim (R4, tabs 1C, 37).

    47. On April 2, 2021, the CO denied SKJV’s claim (R4, tab 1D). Additionally, the
CO issued an affirmative claim to recoup the $418,406 paid to SKJV under
Modification Nos. A00002, A00005, A00009, A00011, and A00013 on the grounds
that the Permits and Responsibilities Clause precluded entitlement to additional
compensation and that there was no evidence of accord and satisfaction regarding the
unilateral modifications (id. at 110).

  48. By letter dated June 20, 2021, SKJV requested reconsideration, arguing that
USACE had erred in claiming the $418,406 credit (R4, tab 45).

   49. On June 28, 2021, SKJV timely appealed the COFD to the Board.

                                      DECISION

The Parties’ Contentions

        SKJV argues that USACE constructively changed the contract by breaching the
implied warranty that its provided drawings and specifications would be adequate for
the project (app. opp’n at 60-84, 91-97), and that USACE is liable for changes to the
contract due to its misrepresentation of the project (id. at 89-90). SKJV also maintains
that the parties reached an accord and satisfaction on the five unilateral modifications
awarding amounts totaling $418,406 (id. at 98-101). USACE contends it is entitled to

       dispute and is not included in the amount that the government seeks to recoup.
       (JSUMF ¶ 47, 49).
                                          14
summary judgment because any changes to the project were directed by third parties
(gov’t mot. at 37-42), that SKJV cannot demonstrate that the project’s specifications
were defective (id. at 42-44), that the contract unambiguously placed the responsibility
of meeting local permitting requirements on SKJV (id. at 44-47), and that there was no
accord and satisfaction regarding the unilateral modifications to the contract (id. at 51-
53).

Standard of Review

       Summary judgment is proper when there are no genuine issues of material fact
and the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986); Mingus Constructors, Inc. v. United States, 812 F.2d 1387,
1390 (Fed. Cir. 1987). A fact is material if it may affect the outcome of the decision.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The movant bears the
burden of establishing the absence of any genuine issue of material fact. Celotex, 477
U.S. at 323.

Regardless of the type of claim being raised, the applicable substantive law determines
which facts are material and thus preclude an entry of summary judgment. Liberty
 Lobby, 477 U.S. at 248. Such facts must be viewed in the light most favorable to the
non-moving party. Id. at 255; C. Sanchez and Son, Inc. v. United States, 6 F.3d 1539,
1541 (Fed. Cir. 1993). However, the non-movant must set forth specific facts
demonstrating the existence of a genuine issue of material fact; mere conclusory
statements and bare assertions are inadequate. Mingus, 812 F.2d at 1390-91; Liberty
Lobby, 477 U.S. at 252 (“The mere existence of a scintilla of evidence in support of
the [non-movant]’s position will be insufficient . . . .”). Our responsibility 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). “Contract interpretation
is a question of law generally amenable to summary judgment.” Varilease Tech. Grp.,
Inc. v. United States, 289 F.3d 795, 798 (Fed. Cir. 2002) (citing Textron Def. Sys. v.
Widnall, 143 F.3d 1465, 1468 (Fed. Cir. 1998)); see also NVT Technologies, Inc. 370
F.3d 1153, 1159 (Fed. Cir. 2004). However, if the Board determines that it cannot
resolve the dispute without reviewing extrinsic evidence, it should not grant summary
judgment and instead allow the parties to conduct discovery. See Korte-Fusco Joint
Venture, ASBCA No. 59767, 15-1 BCA ¶ 36,158 at 176,456. When deciding cross-
motions for summary judgment, the Board “‘evaluate[s] each motion on its own
merits, taking care in each instance to view the evidence in favor of the non-moving
party.’” ‘Martin Aeronautics Co., ASBCA No. 62209, 22-1 BCA ¶38,112 at 185,120
(quoting Almanza v. United States, 935 F.3d 1332, 1337 (Fed. Cir. 2019). Thus, with
respect to each motion, the non-movant “‘receiv[es] the benefit of favorable

                                           15
inferences.’” Id. (quoting Chevron U.S.A., Inc. v. Mobil Producing Tex. & N.M., 281
F.3d 1249, 1253 (Fed. Cir. 2002)).

SKJV is Not Entitled to an Increase in Contract Price as a Matter of Law

        SKJV claims that USACE constructively changed the contract by requiring it to
perform additional design services and construction work beyond that which was
specified in the project’s conceptual documents and other contract documents in order
to comply with MDE, Charles County, and MDSHA permitting requirements (app.
opp’n at 60-84). To demonstrate a constructive change to the contract, SKJV must
show that (1) it performed work beyond the contract’s requirements, and (2) that the
government, expressly or impliedly, ordered the additional work. Bell/Heery v. United
States, 739 F.3d 1324, 1335 (Fed. Cir. 2014) (citing The Redland Co. v. United States,
97 Fed. Cl. 736, 755-56 (2011)). SKJV fails to meet either of these requirements.
First, the contract unambiguously placed all responsibility and risk of obtaining
permits necessary for completion of the project on SKJV. The Permits and
Responsibilities Clause provides:

             The Contractor shall, without additional expense to the
             Government, be responsible for obtaining any necessary
             licenses and permits, and for complying with any Federal,
             State, and municipal laws, codes, and regulations
             applicable to the performance of the work. The Contractor
             shall also be responsible for all damages to persons or
             property that occur as a result of the Contractor's fault or
             negligence. The Contractor shall also be responsible for
             all materials delivered and work performed until
             completion and acceptance of the entire work, except for
             any completed unit of work which may have been accepted
             under the contract.

(SOF ¶ 11) This obligation is reiterated in several of the SOW’s provisions (see SOF
¶¶ 4-10). The Permits and Responsibilities clause unambiguously imposes upon the
contractor the responsibility to determine and comply with both State and local
permitting requirements without further cost to the government. See Bell/Heery, 739
F.3d at 1335; ACC Constr. Co., ASBCA Nos. 62265, 62937, 22-1 BCA ¶ 38,194;
AMEC Environment & Infrastructure, Inc., ASBCA No. 58948, 15-1 BCA ¶ 35,924
at 175,593. The numerous other provisions within the contract merely reinforce what
is already made clear in the Permits and Responsibilities clause. SKJV fails to provide
any basis for ignoring its contractual responsibility to obtain permits or to perform
work on the project necessary to obtain those permits. See ACC Constr. Co., 22-1
BCA ¶ 38,194 at 185,478 (“The contract could not have been clearer that [appellant]
was solely responsible for ascertaining and complying with the state’s requirements

                                          16
and for obtaining all necessary state and local permits for the project, whatever they
might be.”).

        SKJV asserts that USACE is nevertheless responsible for the alleged changes to
the contract under the Spearin doctrine (app. opp’n at 60-71, 91-97; app. reply at 14-
25). Specifically, SKJV alleges that the conceptual drawings and other contract
documents USACE provided for the project were defective because they did not
comply with all of the relevant permitting requirements (app. opp’n at 60-61). The
Spearin doctrine provides that “if the contractor is bound to build according to plans
and specifications prepared by the owner, the contractor will not be responsible for the
consequences of defects in the plans and specifications.” United States v. Spearin, 248
U.S. 132, 136 (1918). The government’s detailed design specifications contain an
implied warranty that if they are followed, a satisfactory result will be produced. Id
at 136-37; Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed. Cir.
1987). Accordingly, when a contractor’s adherence to the government’s detailed
specifications results in unsatisfactory performance, the design is considered defective,
the government is deemed to have breached this implied warranty, and “the contractor
is entitled to recover all of the costs proximately flowing from the breach.” Essex
Electro Eng’rs, Inc. v. Danzig, 224 F.3d 1283, 1289 (Fed. Cir. 2000) (citations
omitted); see Spearin, 248 U.S. at 138. In such cases, the government is liable for
“any damages incurred by a contractor as a result of defects in such plans and
specifications” and “all delay caused by defective or inadequate specifications is per se
unreasonable and hence compensable.” Turner Constr. Co., ASBCA No. 25447 et al.,
90-2 BCA ¶ 22,649 at 113,806 (citing Chaney and James Constr. Co., Inc., v. United
States, 421 F.2d 728, 731-32 (Ct. Cl. 1970); see also Essex, 224 F.3d at 1289 (“The
compensable costs include those attributable to any period of delay that results from
the defective specifications.”).

        Specifications fall into two categories—design specifications and performance
specifications. “Design specifications explicitly state how the contract is to be
performed and permit no deviations.” Stuyvesant, 834 F.2d at 1582. Conversely,
performance specifications specify the results to be obtained, but leave it to the
contractor’s discretion as to how to achieve those results. Id. (citing J.L. Simmons Co.
v. United States, 412 F.2d 1360, 1362 (Ct. Cl. 1969)); see also P.R. Burke Corp. v.
United States, 277 F.3d 1346, 1356 (Fed. Cir. 2002) (explaining Federal Circuit
precedent “[p]erformance specifications ‘set forth an objective or standard to be
achieved, and the successful bidder is expected to exercise his ingenuity in achieving
that objective or standard of performance, selecting the means and assuming a
corresponding responsibility for that selection.’”) (quoting Blake Constr. Co. v. United
States, 987 F.2d 743, 745 (Fed. Cir. 1993) (emphasis in original). The implied
warranty that the government’s specifications are free from design defects attaches
only to design specifications—it “does not accompany performance specifications that

                                           17
merely set forth an objective without specifying the method of obtaining the
objective.” White v. Edsall Constr. Co., 296 F.3d 1081, 1084 (Fed. Cir. 2002).

       These specifications did not specify how the project was to be designed, but
merely obligated SKJV to meet USACE’s objectives for the project while also
complying with requirements and guidelines of both the State of Maryland and Charles
County to obtain permits, paying both the applicable fees and costs necessary to meet
the requirements. The contract’s provisions repeatedly emphasized that this
responsibility rested solely with SKJV. (SOF ¶¶ 4-11) Section 1.2.4 of Part 1 of the
SOW, “Design Freedom,” provided:

             Requirements stated in this RFP are minimums.
             Innovative, creative, or cost-saving proposals, which meet
             or exceed these requirements are encouraged, and will be
             considered more favorably.

                    ...

             1.2.4.2 The conceptual design Drawings, this Statement of
             Work, and the Outline Technical Specifications, along with
             the other information and requirements in this RFP, serve
             as requirements for Contractor building design and
             construction completion, along with other code, regulatory
             and professional practice requirements. The extent of
             development of these RFP documents in no way relieves
             the successful offeror from responsibility for completing
             the design, construction documentation, and construction
             of
             the facility in conformance with Applicable Criteria and
             codes.

             1.2.4.3 The conceptual design illustrates desired general
             arrangements, orientation, and adjacencies, and provides
             examples of exterior images which is acceptable to the
             Government – it is not intended to dictate the final layout
             and image for the project. The Contractor’s designers
             shall develop and refine the conceptual site and building
             design in their completion of the design and construction
             documents. Such development shall be consistent with the
             criteria and acceptable to the Government.

(SOF ¶ 5) Since these specifications left discretion for the project’s overall
design to SKJV, we find that they were performance specifications. Stuyvesant,

                                         18
834 F.2d at 1582. Consequently, the Spearin doctrine is inapplicable here.
Edsall, 296 F.3d at 1084.

        Likewise, SKJV cannot shift the unexpected increase in costs to the
government under a constructive change theory as it cannot meet the essential
element that there was additional work ordered, expressly or impliedly, by the
government. Bell/Heery, 739 F.3d at 1335. It is undisputed that the alleged
changes to the contract were directed by MDE, Charles County, and MDSHA,
not USACE (SOF ¶¶ 19, 22-23). The government cannot be held responsible
for determinations made by another sovereign government. ACC Constr. Co.,
22-1 BCA ¶ 38,194 at 185,478 (citing Kellogg Brown & Root Servs., 20-1 BCA
¶ 37,656 at 182,826); see also Zafer Taahhut Insaat ve Ticaret A.S. v. United
States, 833 F.3d 1356, 1364 (Fed. Cir. 2016) (holding the government is not
responsible for the sovereign acts of a foreign nation). “[T]he doctrine of
constructive change cannot be invoked against the [g]overnment because it did
not itself effect an alteration in the work to be performed, much less an
alteration ‘so drastic that it effectively’ resulted in a cardinal change
‘requir[ing] the contractor to perform duties materially different from those
originally bargained for.’” Bell/Heery, 739 F.3d at 1335 (quoting Krygoski
Constr. Co. v. United States, 94 F.3d 1537, 1543 (Fed. Cir. 1996)). Under these
facts, SKJV cannot recover for a constructive change.

SKJV’s Misrepresentation Claim

        Additionally, SKJV argues that USACE is liable for changes to the
contract due to its alleged misrepresentation of the project (app. opp’n at 89-
90). To prevail, SKJV must demonstrate that USACE “made an erroneous
representation of material fact that [SKJV] honestly and reasonably relied on to
[its] detriment.” T. Brown Constructors, Inc. v. Pena, 132 F.3d 724, 728-29
(Fed. Cir. 1997). SKJV fails to identify any specific facts supporting its
misrepresentation claim. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (A
pleading that merely offers conclusions or a “‘formulaic recitation of the
elements of a cause of action’” without identifying any specific facts is
inadequate to support a claim. (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007))). Moreover, as discussed above, the contract made clear
that SKJV would be responsible for obtaining any permits necessary for the
project (SOF ¶¶ 4-11). In fact, while § 2.6 of Part 2 of the SOW listed various
permits that would be required for the project, it also stipulated that “[t]his list
is not all-inclusive, and Contractor is responsible for verifying that information
below remains accurate” (SOF ¶ 10). Accordingly, SKJV either knew or
should have known of the possibility that permits additional to those
enumerated in the contract may have been necessary and was responsible for

                                            19
researching these requirements. There are simply no facts presented by
appellant that could support a finding of misrepresentation.

As a Matter of Law, USACE is Entitled to Recoup the $418,406 That it Paid as
a Result for Mistakenly Issuing Unilateral Modification Nos. A00002, A00005,
A00009, A00011, and A00013

        SKJV asserts that USACE’s affirmative claim for $418,406 associated
with Modification Nos. A00002, A00005, A00009, A00011, and A00013 was
improper because USACE constructively changed the contract, alleging that
Charles County and MDSHA permitting requirements were beyond the scope
of the contract documents (app. opp’n at 91-97). As discussed above, the
Permits and Responsibilities Clause and several of the SOW’s provisions
placed the obligations to acquire any permits necessary for the project and to
perform work necessary to obtain such permits solely on SKJV (SOF ¶¶ 4-11).
SKJV once again relies on Spearin in its attempt to circumvent this
responsibility (app. opp’n at 91-97). However, as discussed above, Spearin is
inapplicable to these circumstances. The contract’s specifications did not
specify how the project was to be designed, but merely stipulated that SKJV
meet USACE’s demands for the project while complying with state and local
permitting requirements and left discretion for the project’s overall design to
SKJV (see SOF ¶¶ 4-11). Accordingly, they were performance specifications,
and SKJV’s reliance on Spearin is misplaced. Stuyvesant, 834 F.2d at 1582.

        SKJV challenges USACE attempts to recover the $418,406 arguing that the
parties reached an accord and satisfaction as it relates to the five unilateral
modifications. (App. opp’n at 98-101). “To reach an accord and satisfaction, there
must be mutual agreement between the parties with the intention clearly stated and
known” to the parties. Coastal Gov’t Servs., Inc., ASBCA No. 50283, 99-1 BCA ¶
30,348 at 150,088 (citing Metric Constructors, Inc., ASBCA No. 46279, 94-1 BCA ¶
26,532 at 132,058). “To prove accord and satisfaction, [SKJV] must demonstrate ‘(1)
proper subject matter; (2) competent parties; (3) a meeting of the minds [between
SKJV and USACE]; and (4) consideration.’” Whiting-Turner Contracting Co.,
ASBCA No. 56319, 10-1 BCA ¶ 34,436 at 169,951 (quoting Bell BCI Co. v. United
States, 570 F.3d 1337, 1341 (Fed. Cir. 2009)).

        The unilateral modifications germane to this appeal were essentially settlement
offers that SKJV was free to accept or decline. See Zinger Constr. Co., ASBCA
Nos. 28788, 32424, 87-3 BCA ¶ 20,196 at 102,284. The undisputed facts show that
SKJV never accepted the terms of any of these offers—there was no “meeting of the
minds.” Numerous communications between the parties and documents issued by
USACE indicate that SKJV did not accept nor agree to the five unilateral
modifications (see SOF ¶¶ 27, 31, 36, 40-42). SKJV repeatedly sought amounts

                                          20
  exceeding those awarded via the unilateral modifications (see SOF ¶¶ 38, 41).
  Furthermore, SKJV never signed Modification No. A00013—the fifth and final
  modification (SOF ¶ 43). Accordingly, we find that there was no “mutual agreement” 5
  between USACE and SKJV regarding the unilateral modifications, and therefore no
  accord and satisfaction. Coastal Gov’t Servs., 99-1 BCA ¶ 30,348 at 150,088.

         The Contracting Officer’s final decision seeks to recover the amounts paid to
  SKJV under the five modifications it contends were erroneously issued (Mod. Nos.
  A00002 - $20,000; A00005 - $30,000; A00009 - $75,000; A00011 - $224,814;
  A00013 - $68,592 6) for a total sum of $418,406. (SOF ¶¶ 27, 31, 36-37, 40, 42-43,
  47). We have jurisdiction to consider the government’s affirmative claim of
  recoupment. Nova Group, Inc., ASBCA No. 55408, 10-2 BCA ¶ 34,533 at 170,331.
  Having found that the additional work performed by SKJV to meet Charles County
  and MDSHA permitting requirements, was work required by the contract, there was no
  constructive change and no basis for the government’s paying increased costs to
  SKJV. As such, we find that the five unilateral modifications were, as the CO
  contended, mistakenly issued and that the government thus incorrectly paid $418,406
  for costs associated with the Charles County and MDSHA requirements for water,
  sewer, and access permits. As we established above, SKJV cannot rely upon the
  defense of accord and satisfaction. SKJV’s challenge to the government’s affirmative
  claim for the repayment of $418,406 is rejected. The USACE is entitled to recoup the
  funds incorrectly paid to the contractor and is entitled to judgment in the amount of
  $418,406.

                                      CONCLUSION

        For the foregoing reasons, we grant USACE’s motion for summary judgment
  and deny SKJV’s motion for partial summary judgment. The appeals are denied.

         Dated: August 11, 2023

                                                  STEPHANIE CATES-HARMAN
                                                  Administrative Judge
                                                  Armed Services Board
(Signatures continued)                            of Contract Appeals

  5
    Indeed, what SKJV is asking us to do is to enforce this agreement against the
         government, but be free of any obligation to comply with it, itself. That is not
         how contracts work.
  6
    The sum of $13,000 paid under Modification No. A00013 for an unrelated differing
         site condition remains unaffected.
                                             21
 I concur                                         I concur

 RICHARD SHACKLEFORD                              J. REID PROUTY
 Administrative Judge                             Administrative Judge
 Acting Chairman                                  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 Nos. 62972, 62973, Appeals of
Sheffield-Korte Joint Venture, rendered in conformance with the Board’s Charter.

      Dated: August 11, 2023

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

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