Court Opinion

ID: 4703083
Source: CourtListenerOpinion
Date Created: 2021-07-13 14:00:29.361478+00
Date Added: 2024-06-11T08:06:29.105972
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeal of -                                     )
                                                    )
    Thomas J. Davis, Inc.                           )   ASBCA No. 62634
                                                    )
    Under Contract No. W912UM-12-C-0029             )

    APPEARANCE FOR THE APPELLANT:                       Yong Eui Song, Esq.
                                                         Central IP & Law
                                                         Seoul, Korea

    APPEARANCES FOR THE GOVERNMENT:                     Michael P. Goodman, Esq.
                                                         Engineer Chief Trial Attorney
                                                        Robert M. Sundberg, Esq.
                                                        SoCheung Lee, Esq.
                                                        Steven H. Finch, Esq.
                                                         Engineer Trial Attorneys
                                                         U.S. Army Engineer District, Far East
                                                         Seoul, Korea

                   OPINION BY ADMINISTRATIVE JUDGE PROUTY

       Appellant, Thomas J. Davis, Inc. (TJD), is challenging here a contracting officer’s
final decision (COFD) dated June 3, 2020, seeking $1,097,808.15 for its allegedly
defective design of an aircraft corrosion control facility on Osan Air Base (AB) in the
Republic of Korea, pursuant to the above-captioned contract (the contract). Today, we
address TJD’s motion for summary judgment, which argues that the government was
well aware of the qualities of the design which it now considers deficient as early as
2012, thus precluding the filing of the government’s claim in 2019, which would be
outside of the six-year statute of limitations imposed by the Contract Disputes Act
(CDA). As explained below, we deny TJD’s motion because we find there is a triable
dispute of fact regarding when the government’s claim accrued.

              STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 1

I. Relevant Contract Provisions

       The government awarded the contract to TJD on April 10, 2012 (R4, tab 2 at 1).
As alluded to above, the contract was for the provision of the design of a specified

1   We note from the outset that TJD’s motion for summary judgment (app. mot.) is not
        compliant with Board Rule 7(c)(2), requiring its factual assertions to be supported
corrosion control facility 2 on Osan AB, in accordance with the scope of work (SOW)
included in the contract and with pre-design meeting minutes from January 2012. For
these services, TJD was to be paid $858,940. (R4, tab 2 at 3)

      Among many other dictates, the SOW elaborated that the corrosion control facility
would be a:

              . . . two bay facility including Painting Bay, and Washing Bay
              and a separate room for the painting booth and plastic media
              blast system. No secure rooms will be needed. Air Force
              Corrosion Control Facility reference guide Nov 2010
              (PACAF LGFIPG 4.3) shall be used for the design of this
              project.

(R4, tab 2 at 5)

       The SOW included a schedule of when different iterations of the design would be
due from TJD. The iterations were: 10% submittal, which was the proposed floor and site
plans; the 30% submittal, which was the “early preliminary design”; the 90% submittal,
which was the “final” design; the 95% submittal, which was the corrected final design;
and the 100% submittal, which included contract documents. (R4, tab 2 at 6) The 10%,
30%, and 90% submittals were subject to On Board Review (OBR) meetings (R4, tab 2
at 8). Their due dates were contingent upon the notice to proceed and the completion of
the OBRs for prior phases (e.g., the 95% submittal was due 21 days after the OBR for the
90% submittal) (R4, tab 2 at 9).

      The contract incorporated by reference, the standard Federal Acquisition
Regulation (FAR) Disputes clause, 52-233-1 (R4, tab 2 at 53).

       by citation to the record or additional evidence. Many of the factual assertions in
       TJD’s motion are supported with no citation, whatsoever, or have only a vague
       reference to a document without explaining how that reference supports the
       allegations made. We strongly considered rejecting TJD’s motion on this basis
       alone. Nevertheless, in the interest of more expeditiously resolving this dispute,
       we decided it is best to address the issues raised by the motion and do the best we
       could to determine which assertions were supported by facts that we could find in
       the record. Needless to say, this is a suboptimal use of our time and if future
       filings from TJD follow the model of this one, it should anticipate their rejection
       by the Board.
2 A “corrosion control facility” in this context is basically a building to clean aircraft and

       to sand and re-paint them or their parts (see R4, tab 2 at 5).

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        The SOW explicitly stated that the review of documents by the contracting officer
(CO) or his or her representative did not relieve TJD of its responsibility to check for
errors or to correct them if discovered at a later date (R4, tab 2 at 29). The contract also
incorporated by reference FAR 52.236-23, RESPONSIBILITY OF THE
ARCHITECT-ENGINEER CONTRACTOR (APR 1984) and FAR 52.236-24, WORK
OVERSIGHT IN ARCHITECT-ENGINEER CONTRACTS (APR 1984) (R4, tab 2
at 54). The first of these, FAR 52.236-23, specified that the contractor bore responsibility
for the “professional quality [and] technical accuracy” of the design and that the
government’s review and acceptance of designs did not constitute a waiver of the
government’s rights under the contract. The second, FAR 52.236-24, stated that the work
performed by the contractor was subject to the “general oversight, supervision, direction,
control, and approval of the Contracting Officer.”

II. Contract Performance

         A. TJD’s 30% Submittal Designed the Restoration Bay to be Suitable For
            Painting

       TJD asserts in its motion that its 30% design submittal included “sanding/grinding
and painting of aircraft” (app. mot. at 2). Indeed, our review of that design, submitted on
June 5, 2012, finds that the floor plan for Sector “A” (also referred to as the “Restoration
Bay”) includes a paint booth, a paint mixing room, and a paint/solvent storage room in
design sheet AE104 (see app. mot., encl. A at 2). 3 Similar depictions may be found in the
30% design sheet for the Sector A Heating, Ventilation and Air Conditioning (HVAC)
plan, MH401 (see id. at 1).

         B. TJD (Maybe?) Decides it Doesn’t Need to Provide for Painting

        According to TJD’s motion, shortly after it submitted its 30% design, unspecified
government personnel “instructed” it to “modify the subsequent designs which did not
include painting of aircrafts in the Restoration Bay” (app. mot. at 2). In the context of its
motion and its appeal, we take this sentence to mean that TJD was instructed to modify
its design to remove the ability to paint aircraft in the Restoration Bay (that is not exactly
what TJD wrote, but a literal reading of that sentence would not make sense in the
context of this motion). But TJD provides no evidence for this striking claim. None,
besides the assertions of counsel which, of course, are not evidence.

       To the contrary, the government has provided evidence both directly and indirectly
refuting it. With respect to direct evidence, the government submitted the affidavits of
Mr. Victor Diaz, who was involved in 2012 meetings with TJD representing the Air Force

3   TJD attached multiple “enclosures” (which are, for all intents and purposes, evidentiary
        exhibits) to its motions. We refer to them as “app. mot. encl.__.”

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(see gov’t opp’n, ex. B), and Mr. Kwang Kyu Choe, an Army Corps of Engineers
employee who was the CO’s representative (COR) for the contract (see gov’t opp’n,
ex. A). Both gentlemen were adamant that the government never withdrew the
requirement that the Restoration Bay be set up to allow for painting (see gov’t opp’n, ex.
A, ex. B).

        Additional evidence refuting TJD’s allegation that the government waived the
painting requirement is found in multiple places in the record. One compellingly direct
location is in the November 6, 2012 minutes of the November 1, 2012 ORB meeting held
after the 90% design submittal was submitted (see app. mot., encl. D). Paragraph 3.d on
page 4 of those minutes references the type of painting that will be performed in the
Restoration Bay and states that “[c]onventional type (airless system) of painting the
aircraft will be used and not the electrostatic system” (id. at 4). Other strong, but indirect,
evidence that the government never directed TJD to eschew the painting requirements in
the Restoration Bay is seen in the fact that the 100% design submittals plainly included
the painting booth, a room for paints and solvents, and an area for paint mixing and other
painting accoutrement (see R4, tab 3 at 110). The standards for summary judgment, as
will be discussed below, favor the non-movant (the government) in factual disputes.
Thus, we have no compunction, whatsoever, against finding (for purposes of this motion)
that the government did not direct TJD to remove painting abilities from the Restoration
Bay. 4

        Yet, as described in more detail below, TJD did change the air filtration system
between the 30% and 90% submittals to a system that the government alleged in its claim
(see R4, tab 1 at 1) and TJD agrees for the purposes of this motion, containing air filters
whose limitations “meant that no painting of an aircraft [could] be conducted in the
Restoration Bay” (app. mot. at 3). Indeed, in an August 7, 2012 email to Mr. Diaz, TJD
expressly informed him that it was changing to dust collectors from the previously-planned
three step exhaust filter system (app. mot., encl. C at 1). Assuming, as the parties appear to
allege, that this change precluded painting in the Restoration Bay, we cannot determine on
the record before us (and we need not decide today) whether this change was because TJD
intentionally decided that the design should not be set up for painting, or because it made a
mistake in its air handling design decisions.

4   Typically, in a motion for summary judgment, we would merely conclude that there
         were disputed material facts on this matter, but in this case there is no dispute
         because TJD’s motion presents no factual basis for its attorney’s allegation and the
         government presents evidence directly to the contrary.

                                               4
       C. The Government Fails to Recognize That the Air Filtration System in TJD’s
          Plans and Specifications Is Noncompliant

        To provide slightly more detail about the revised plans, according to TJD, the change
in air filtration systems involved moving from a system where two roof-mounted heating and
ventilations units (HVUs) pumped a total of 78,000 cubic feet per minute (CFM) into the bay
and was ducted through a three-stage filtration system for the exhaust air to a system where
four (presumably smaller) roof-mounted HVUs pumped the same 78,000 total CFM of air,
but the exhaust was routed through four floor-mounted dust collectors (app. mot. at 3). They
are different and appear to be so in the drawings. That said, the mechanical drawing for
HVAC for Sector A (MH401) does not, to the untrained eye, reflect whether painting is
precluded by the items reflected therein (see R4, tab 3 at 231), but also does not appear
significantly different (except for the far greater detail) than the 30% drawing of the same
which TJD states in its motion was intended to include painting in the bay (compare R4,
tab 3 at 231 to app. mot., encl. A at 1).

       TJD argues that, factually, the information it provided about the filtration system it
was providing should have alerted the government that it was not suitable for painting
(app. mot. at 3-4). As a matter of interpreting the evidence before us and drawing
reasonable inferences in favor of the non-moving party (the government), we find that we
cannot come to this conclusion at this point in the litigation. The August 2012
correspondence did include brochures about the filters that TJD was proposing, and those
brochures extolled their suitability for dust collection and “a wide range of applications,”
but they were silent as to painting – neither stating that they were useful in circumstances
where there would be painting nor stating that they would be problematic (see app. mot.,
encl. C at 16-21). Likewise, nothing about the ventilation diagram attached to the same
correspondence screams out (to this reader’s untrained eye) whether it was suitable for
painting or not (see id. at 6-15). TJD has offered no evidence that the government should
have recognized that the plans were inconsistent with painting.

        For its part, the government has produced evidence that it did not recognize that
this change in air filtration meant that painting was no longer practicable in the
Restoration Bay. Mr. Choe, the COR, testified in his declaration that he was not an
expert in hazardous materials filtration systems or the standards of such systems for
painting aircraft. He further stated that when he received correspondence from TJD on
August 7, 2012 stating the type of filters that TJD was planning on using, he accepted
that they must be appropriate since TJD was the expert on the design. Though he does
not directly state the government was unaware of the alleged deficiencies in TJD’s design
at this time, his declaration implies that it was unaware of it until around the time of the
deficiency notice in 2017. (See gov’t opp’n, ex. A)

                                             5
        Mr. Diaz’s declaration states that, at some point in 2012, TJD submitted a single
filter design and he was adamant that it be corrected to a triple filter, 5 but he does not
state whether it was so corrected, nor do we know whether the filter design that the
government now says is deficient was the type that Mr. Diaz was alerted to and
supposedly rejected. Mr. Diaz is also clear in his declaration that he never agreed to
design changes that would remove painting from the project. (See gov’t opp’n, ex. B)
Thus, the declaration from Mr. Diaz neither supports the government’s allegation that it
was unaware that the type of filter to be used by TJD was inconsistent with painting nor
does it refute it.

       D. The Government Identifies Problems With TJD’s Plans and Issues a
          Government Claim

        The 90% design was dated August 29, 2012 (app. supp. R4, tab 10, at 1), and the
100% design was submitted in late February 2013 (see R4, tab 12). Construction of the
corrosion control facility did not begin immediately after submission of the 100% plans
by TJD (see R4, tab 13). On April 28, 2016, the government issued contract modification
No. P00002 to the contract, requiring TJD add the design of air showers and a new door
to the design it had already submitted for the facility (R4, tab 8).

       The earliest document in the record indicating that the government recognized a
problem in TJD’s design of the air filtration system is a November 7, 2017 email
forwarding a presentation by the local Air Force Civil Engineering Squadron that noted
deficiencies in the Restoration Bay’s ventilation system (R4, tabs 16 (cover email),
17 (slide presentation)). Though not noted by either party in the briefing before us, the
presentation attached to that email indicates that “Bio-Environmental” rejected the
Restoration Bay’s ventilation system on September 28, 2017 (R4, tab 17 at 25).

         As a consequence of the ventilation issues, on November 20, 2019, the CO issued a
claim against TJD, seeking the reimbursement of $1,330,783.40 in costs allegedly
incurred as a consequence of TJD’s defective design (R4, tab 29). The claim identifies the
air filtration system in the Restoration Bay as a defect and also asserts that the location of
certain electronic control panels within the paint booth is a design flaw (id. at 1-2). The
claim also asserts that the ventilation problems were recognized when air flow tests
conducted on September 28, 2017 and October 10, 2017 showed that the systems were
inadequate for conducting painting operations (id. at 5).6 According to the government’s
claim, it first notified TJD of the alleged flaws on December 5, 2017 (id. at 5-6).

5 This would be consistent with the August 7, 2012 email from TJD to Mr. Diaz
       referenced earlier (see app. mot., encl. C at 1).
6 Generally, we would not consider the claim to constitute evidence of anything except

       that the CO made the assertions therein. We include this information here
       because, if the government admitted earlier knowledge of the alleged design flaws,

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                                       DECISION

I. The Standard of Review for a Motion for Summary Judgment

       The standards for summary judgment are well established. Summary judgment
should be granted if it has been shown that there are no genuine issues of material fact and
the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). A non-movant seeking to defeat summary judgment by
suggesting conflicting facts “must set forth specific facts showing that there is a genuine
issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First
Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968)). Nevertheless, “[t]he
moving party bears the burden of establishing the absence of any genuine issue of material
fact and all significant doubt over factual issues must be resolved in favor of the party
opposing summary judgment.” Mingus Constructors v. United States, 812 F.2d 1387,
1390 (Fed. Cir. 1987) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

II. TJD is Entitled to Summary Judgment if it can Demonstrate that the Government
    Knew or Should Have Known More Than Six Years Prior to its Claim That TJD’s
    Design was Flawed

       The CDA’s statute of limitations requires the submission of a claim within six
years of its accrual. See 41 U.S.C § 7103(a)(4)(A); Sikorsky Aircraft Corp. v. United
States, 773 F.3d 1315, 1320 (Fed. Cir. 2014); Abozar Afzali Constr. Co., ASBCA
No. 61561, 20-1 BCA ¶ 37,674 at 182,891. This rule applies equally to government
claims, which are considered to be submitted when the CO “renders a final decision to
the contractor.” Sikorsky, 773 F.3d at 1320 (citations omitted).

        For purposes of the CDA’s statute of limitations, “[p]recedent elaborates that whether
and when a CDA claim accrued is determined in accordance with the FAR, the conditions of
the contract, and the facts of the particular case.” Kellogg Brown & Root Servs., Inc. v.
Murphy, 823 F.3d 622, 626 (Fed. Cir. 2016) (citations omitted). Thus, we turn to the
relevant portion of the FAR, which provides that a claim accrues when “all events that fix
the alleged liability of . . . the contractor and permit assertion of the claim, were known or
could have been known.” FAR 33.201; see also Kellogg Brown & Root, 823 F.3d at 626;
Electric Boat Corp. v. Sec’y of the Navy, 958 F.3d 1372, 1375 (Fed. Cir. 2020).

        The government submitted its claim on November 20, 2019, which means that if
all the events that fixed TJD’s liability were known or should have been known by the

       that would constitute evidence in TJD’s favor as an admission by an opposing
       party.

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government on or before November 19, 2013, the government’s claim would be
precluded by the statute of limitations.

III. There is a Factual Dispute Regarding When the Government Knew or Should Have
     Known that TJD’s Plans Were Defective

         Thus, the question before us is when the government knew or should have known
that it was getting plans from TJD that precluded the use of the Restoration Bay for
painting and whether it should have recognized as much before November 19, 2013.
TJD’s approach to this question changed between its opening brief and its reply brief. In
its opening brief, TJD initially argued that the government knew all along that it was not
going to have a design consistent with painting because the government had instructed it
as much sometime between the 30% and 90% submittals in 2012 (app. mot. at 2). TJD
also argued in its opening brief that the change in filtration system that precluded painting
in the facility should have been obvious to anybody reviewing it, and that the government
must have known as much in August 2012 when TJD submitted plans that had HVU
filters which were incompatible with painting (id. at 3-4). In its reply brief, TJD makes
little argument that the government had directed it to forego making the Restoration Bay
usable for painting, but instead argues that the government should have known what TJD
was doing when it proposed dust collectors, rather than filters more suitable for painting
(app. reply passim). The government, meanwhile, argues that the evidence directly
disputes TJD’s allegations that it removed the ability to paint in the Restoration Bay at
the government direction and also presents the evidence from Mr. Choe’s declaration to
support its contention that it did not recognize the problem with the filters until 2017 (see
gov’t opp’n at 7-8). 7

         Applying the proper standard of review, we conclude that disputed material facts
prevent us from finding that the government knew or should have known before
November 19, 2013 that TJD had submitted a deficient set of plans and specifications.
First, it is relatively easy for us to dispatch TJD’s factual assertion that the government
had instructed it to design the Restoration Bay without the ability to conduct painting in
it. As detailed in the facts section, above, TJD provides no factual support for this
assertion (it does not even deign to identify who in the government allegedly made this
direction), and there is both direct and circumstantial evidence disproving it. As we
explained above, under the circumstances, it is too generous to call this assertion a
material fact in dispute when the allegation is both unsupported and directly contradicted.

7   The government also posits that its 2016 contract modification could be seen as a date
         that started the running of the statute of limitations (see gov’t opp’n at 6-7) but we
         do not see any basis for this argument: the plans were submitted in 2012 and early
         2013 and if they should have been recognized as defective then, a decision to
         make a later additional change to the plans would not retroactively change that.

                                                8
        The closer issue is whether the shortcomings in TJD’s plans were so obvious that
the government should have been aware of them when they were submitted. The
problem for TJD is that, except for the specifications themselves, it has provided almost
no evidence to support its assertion that they were. Instead, it argues that a number of
people from the government saw the plans in 2012 and that too many government
employees would have seen them not to realize what was going on (see, e.g., app. reply
at 9). As we found, factually, above, the plans do not so obviously preclude painting that
we can hold (for purposes of this motion) that they placed the government on notice of
that fact. Moreover, as discussed above, the government provided a declaration from
Mr. Choe asserting that the government had not recognized what TJD had done and that
it counted on TJD, as the specialist designer, to select the appropriate HVAC system. 8
This is consistent with the terms of the contract, which provided that TJD bore sole
responsibility for the “professional quality [and] technical accuracy” of the specifications.

       In addition to Mr. Choe’s declaration, which would be sufficient in today’s
circumstances, to support our finding that there are disputed facts preventing us from
holding that the government should have recognized the flaw in the plans, we have
another reason to reject that finding: concluding as we do (for this motion) that the
government did not direct TJD to provide an HVAC system unable to support painting in
the Restoration Bay, we are left with the question of why TJD did so. A plausible
reading of the evidence before us now is that it was a simple mistake on TJD’s part. If
TJD could make the mistake, then perhaps it was not such a glaringly obvious error that
the government should have been expected to recognize it at first blush. In any event,
since “all significant doubt over factual issues must be resolved in favor of the party
opposing summary judgment,” see Mingus, 812 F.2d at 1390, we have ample cause to
conclude that TJD is not entitled to summary judgment in its favor.

8   We harbor some concern about Mr. Diaz’s declaration, provided by the government,
        because it does appear to imply that he knew that a single dust filter, like the type
        proposed by TJD in August 2012, would be insufficient to permit painting. As
        discussed in the facts section, we view this declaration as neither helping nor
        hurting the government since it also seems to imply that he had received some sort
        of assurance that the correct filter was to be used and that the Restoration Bay
        design would allow for painting. At trial, when more evidence is provided and a
        different standard of proof is applied, we may well come to a very different
        conclusion about what Mr. Diaz knew or should have known. But, for now, the
        evidence presented regarding Mr. Diaz is too inconclusive to hold against the
        government.

                                               9
                                   CONCLUSION

      TJD’s motion for summary judgment is denied.

      Dated: July 1, 2021

                                                J. REID PROUTY
                                                Administrative Judge
                                                Armed Services Board
                                                of Contract Appeals

 I concur                                       I concur

 RICHARD SHACKLEFORD                            MARK A. MELNICK
 Administrative Judge                           Administrative Judge
 Acting 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. 62634, Appeal of Thomas J.
Davis, Inc., rendered in conformance with the Board’s Charter.

      Dated: July 1, 2021

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

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