Court Opinion

ID: 9927033
Source: CourtListenerOpinion
Date Created: 2024-01-25 23:00:39.299871+00
Date Added: 2024-06-11T09:23:37.348861
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
 Appeal of -                                  )
                                              )
 Derian, Inc.                                 )    ASBCA No. 62957
                                              )
 Under Contract No. W912EF-19-C-0006          )

 APPEARANCE FOR THE APPELLANT:                     Mr. Mark Jensen
                                                    President

 APPEARANCES FOR THE GOVERNMENT:                   Michael P. Goodman, Esq.
                                                    Engineer Chief Trial Attorney
                                                   Michaela M. Murdock, Esq.
                                                    Engineer Trial Attorney
                                                    U.S. Army Engineer District, Walla Walla

             OPINION BY ADMINISTRATIVE JUDGE TAYLOR
    ON THE GOVERNMENT’S MOTION FOR PARTIAL RECONSIDERATION

       The government moves for a partial reconsideration of the Board’s August 25,
2023, decision granting, in part, the appeal of Derian, Inc., ASBCA No. 62957,
23-1 BCA ¶ 38,425 (familiarity with that decision is presumed). The government
requested the Board reconsider two rulings. First, the government requests the Board
reconsider its inclusion of $13,156 for the foot valves in its calculation of the contract
price. Second, the government requests the Board reconsider its ruling denying the
government’s liquidated damages assessment. For the reasons stated below, we deny the
government’s motion.
                                        DECISION

I. Standard Of Review For Motions For Reconsideration

        In deciding a motion for reconsideration, the Board will determine “‘whether there
is newly discovered evidence or whether there were mistakes in the decision’s findings of
fact, or errors of law.’” CJW Contractors, Inc., ASBCA No. 63228, 23-1 BCA ¶ 38,402
at 186,602 (quoting ADT Constr. Grp., Inc., by Timothy S. Cory, ASBCA No. 55358,
14-1 BCA ¶ 35,508 at 174,041). A motion for reconsideration does not give the moving
party another opportunity to “present arguments previously made and rejected.” Assist
Consultants Inc., ASBCA Nos. 61525, 62090, 21-1 BCA ¶ 37,946 at 184,297. A motion
for reconsideration also does not give the moving party the opportunity to advance
arguments that “properly should have been presented in an earlier proceeding.” Dixon
v. Shinseki, 741 F.3d 1367, 1378 (Fed. Cir. 2014) (citing Bluebonnet Sav. Bank, F.S.B.
v. United States, 466 F.3d 1349, 1361 (Fed. Cir. 2006). Accordingly, the moving party
bears the burden to present “‘a compelling reason why the Board should modify its
decision.’” CJW Contractors, Inc. 23-1 BCA ¶ 38,402 at 186,602 (quoting Philips
Lighting N. Am. Corp., ASBCA No. 61769 et al., 21-1 BCA ¶ 37,821 at 183,647).

II. The Government’s Assertions Of Error

         A. The Board’s Inclusion of the Foot Valves in the Contract Price
            Calculation Is Correct

       In its motion for reconsideration, the government first asserts that the Board erred
in awarding Derian costs for the foot valves (gov’t mot. at 2-4). The government
misinterprets our decision. Our decision found the amount the government determined
Derian was entitled to for the foot valves in its final decision should be included in the
contract price. Derian, 23-1 BCA ¶ 38,425 at 186,760 (citing to finding 48 at 186,749).
Contrary to the government’s assertion, our decision did not award Derian an additional
monetary amount for the foot valves. In its response to the government’s motion for
reconsideration, Derian correctly notes that failing to include the foot valves in the
contract price would result in an underpayment to Derian (app. resp. at 3).

       Our decision established the final contract price resulting from the government’s
deductive change and Derian’s various equitable adjustment claims. Derian, 23-1 BCA
¶ 38,425 at 186,760. The contract price following the government’s issuance of
Modification No. A00004 on May 13, 2021, was $2,263,279.71. Id. at 186,749 (finding 46).
In our decision, we used $2,263,279.71 as the starting point for calculating the correct
contract price. This amount did not include the foot valves. The government added the foot
valves claim amount to the contract price via Modification No. A00005 on August 4, 2021
(gov’t mot. at ex. 1). 1 Hence, we correctly found that we must include the foot valve amount
in our contract price calculation. The government’s subsequent submittal of Modification
No. A00005 with its motion does not change that conclusion.

        The parties do not dispute that the total amount paid to Derian under the contract
was $2,044,870.41. Derian, 23-1 BCA ¶ 38,425 at 186,760. This amount included
payment for the foot valves (app. resp. at 2). As we determined in our decision, Derian is
entitled to receive an additional payment for the difference between the adjusted contract
price ($2,159,646.71) less the amount previously paid under the contract ($2,044,870.41)
or $114,776.30. Derian, 23-1 BCA ¶ 38,425 at 186,760. We see no basis to revisit our
decision on this issue.

1
    Neither party included this document in the record.
                                              2
II. The Board’s Denial of the Government’s Liquidated Damages Assessment Is
Correct

       The government further contends the Board’s decision denying its assessment of
liquidated damages was incorrect (gov’t mot. at 4). The government asserts the Board’s
decision “that a new contract completion date must be established after a deductive
modification is in error and lacks support” (id.). The government mischaracterizes our
decision.

       The contract required Derian to complete “all on-site installation . . . of the
headcover pumps for Main Units 1-6 between June 2019 and December 2019” and
system commissioning by January 19, 2020, 30-days following the final installation date.
Derian, 23-1 BCA ¶ 38,425 at 186,744 (finding 3). The parties agreed the original
contract completion date was January 19, 2020 (id.). Following Derian’s installation of
the new head cover pump on Unit 4, the government determined a design defect
prevented the pump from keeping up with the water inflow. Derian, 23-1 BCA ¶ 38,425
at 186,746 (finding 24). The government notified Derian that it should limit its activities
on the contract until the government could develop a solution to the water leakage
problem. Id. at 186,747 (finding 26). Derian informed the government that this
development would impact the approved schedule (id.). On November 26, 2019, the
parties signed Modification No. A00002 requiring Derian to install Variable Frequency
Drives (VFDs) to address the leakage issue. Id. (finding 27). The modification indicated
Derian would be entitled to additional time related to this modification, and the time
impact would be negotiated and settled through a future modification (id.). The Board
determined the original contract completion date became inapplicable when the
government discovered the design defect and added the VFDs to the contract. 2 Derian,
23-1 BCA ¶ 38,425 at 186,759. The government admits it never established a new
completion date (gov’t mot. at 4).

        Moreover, on January 17, 2020, two-days before the original scheduled contract
completion date, the government terminated certain contract work including Derian’s
installation of the VFDs, the installation of the headcover pumps and piping in two units,
and the completion of the commissioning for all six units. Derian, 23-1 BCA ¶ 38,425
at 186,748 (finding 35). The Board found the deletion of the work that formed the basis
for the contract completion date also made that date inapplicable. Id. at 186,760.

      The government argues that our ruling conflicts with Federal Acquisition
Regulation (FAR) 52.211-13, Time Extensions (gov’t mot. at 4 (citing R4, tab 3 at 30)).

2
    The government admitted Derian was unable to complete the installation of some of the
         unit pumps due to the excessive water leakage and the units would not be available
         again until after the contract completion date. Derian, 23-1 BCA ¶ 38,425
         at 186,747 (finding 30).
                                              3
3
   That clause addresses change orders granting time extensions. It does not address
situations wherein the government eliminates the work forming the basis for the contract
completion date. The clause specifically states “. . . the remaining contract completion
dates for all other portions of the work will not be altered. The change order also may
provide an equitable readjustment of liquidated damages under the new completion
schedule.” FAR 52.211-13, TIME EXTENSIONS (SEP 2000). Here, the government
eliminated the contract completion date for all the work when it terminated the work
forming the basis for that date and failed to establish a new contract completion schedule
for the remaining work. FAR 52.211-13 is simply not applicable to this case.

         The government also contends Derian failed to prove it was entitled to an
excusable delay in failing to meet the contract completion date (gov’t mot. at 5-6). As
discussed in our decision, the government bears the initial burden of proving a contractor
failed to meet the contract completion date. Derian, 23-1 BCA ¶ 38,425 at 186,759. The
burden then shifts to the contractor to establish an excusable delay only after the
government has met that initial burden. Id. Here, we found the government did not meet
its initial burden by showing Derian failed to meet an established contract completion
date. Id. at 186,760. Hence, Derian had no requirement to prove an excusable delay.

        Finally, the government contends our decision conflicts with prior Board decisions
finding the government did not waive contract construction completion dates (gov’t mot.
at 6-9). The government argues our decision contains no analysis of the government’s
waiver of the completion date despite finding the government waived that date (gov’t
mot. at 8-9). The government is once again mistaken. Our decision did not find the
government waived the contract completion date. Rather, our decision found the original
contract completion date no longer applied after the government modified the contract
due to the design defect and terminated the work forming the basis for that date. Derian,
23-1 BCA ¶ 38,425 at 186,759-60. The Board’s previous waiver cases are not applicable
to this appeal.

3
    We note the government did not make this argument during the original proceeding.
                                             4
                                    CONCLUSION

       For the reasons stated above, the government’s motion for partial reconsideration
is denied.

      Dated: January 11, 2024

                                                  ARTHUR M. TAYLOR
                                                  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. 62957, Appeal of Derian, Inc.,
rendered in conformance with the Board’s Charter.

      Dated: January 11, 2024

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

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