Court Opinion

ID: 4879406
Source: CourtListenerOpinion
Date Created: 2021-08-27 13:02:16.148184+00
Date Added: 2024-06-11T08:12:40.477123
License: Public Domain

In the United States Court of Federal Claims
                                    No. 16-1406C
                                Filed: April 23, 2021
              Redacted Version Issued for Publication: August 26, 20211

    * * * * * * * * * * *        * * *    *
    LCC-MZT TEAM IV,                      *
                                          *
               Plaintiff,                 *
       v.                                 *
                                          *
    UNITED STATES,                        *
                                          *
              Defendant.                  *
    * * * * * * * * * * * * * *           *

      Katherine M. Knudsen, Procopio, San Diego, California for plaintiff. With her was
Craig A. Ramseyer, Procopio, San Diego, California.

        Erin K. Murdock-Park, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, D.C., for defendant. With her
were Kelly Krystyniak, Margaret J. Jantzen, and Sonia Orfield, Trial Attorneys,
Commercial Litigation Branch, L. Misha Preheim, Assistant Director, Commercial
Litigation Branch, Martin F. Hockey, Jr., Acting Director, Commercial Litigation Branch,
and Brian Boynton, Acting Assistant Attorney General, Civil Division, Department of
Justice.

                                      OPINION

HORN, J.

        At issue in the above-captioned case are numerous disputes arising out of a
construction contract between LCC-MZT Team IV (LCC-MZT), also known as Larkor
Construction/Macro-Z-Technology Team IV Joint Venture, and the United States Naval
Facilities Engineering Command Northwest (NAVFAC). In the above-captioned case,
plaintiff LCC-MZT filed a complaint in the United States Court of Federal Claims on
October 26, 2016. Subsequently, plaintiff filed an amended complaint, followed by a
second amended complaint in which plaintiff identifies fifteen claims which were
submitted to the NAVFAC contracting officer for a final decision. Plaintiff’s second

1
  This Opinion was issued under seal on April 23, 2021. The parties were asked to
propose redactions prior to public release of the Opinion. This Opinion is issued with the
redactions that the parties proposed in response to the court’s request. Words which are
redacted are reflected with the notation: “[redacted].”
amended complaint seeks an amount “in excess of $4,130,905.12” in damages in this
court, “together with interest thereon pursuant to the Contract Disputes Act.” Thereafter,
defendant filed an answer to plaintiff’s second amended complaint. Following the second
amended complaint and answer, and, after extensive discovery, the court held a lengthy
trial, after which the parties filed post-trial briefs and the court held closing argument.

                                  FINDINGS OF FACT

         LCC-MZT was a joint venture consisting of Larkor Construction Company, Inc.
(LCC) and Macro-Z-Technology Company (MZT). The parties stipulated that MZT is a
general contractor specializing in facilities construction and civil construction. Bryan
Zatica testified at the trial in the above-captioned case that he incorporated MZT and that
he was the president and owner of MZT at the time of contract performance and the trial.
Bryan Zatica testified that MZT entered into the Small Business Administration’s (SBA’s)
section 8(a) program in 1999 or 2000, and that MZT graduated from the SBA’s 8(a)
program in 2008 or 2009. Bryan Zatica testified that he and LCC’s principal, Larry Landa,
“grew up together.” On June 8, 2011, LCC and MZT entered into a joint venture
agreement forming the LCC-MZT joint venture. The LCC-MZT joint venture was a joint
venture under SBA’s section 8(a) mentor-protégé joint venture program. LCC was a
section 8(a) contractor and a protégé, and MZT was a former section 8(a) contractor and
was the mentor in the LCC-MZT joint venture. According to Bryan Zatica’s testimony at
trial, the LCC-MZT joint venture was formed with the intention of submitting a bid in
response to a solicitation issued by NAVFAC related to a construction project at Naval
Base Kitsap Bangor in Silverdale, Washington. Mr. Zatica testified that, prior to LCC-
MZT’s work on the construction project, MZT had completed “five or six projects” on Naval
Base Kitsap Bangor since 2004, with a total revenue of approximately $35,000,000.00.
One of the projects at Naval Base Kitsap Bangor that MZT had worked on was a project
referred to as P-971, which Mr. Zatica testified commenced in 2004 and, similar to the
project at issue in the above-captioned case, also involved construction of a concrete
building.

The Contract and the Contract’s Specifications

       NAVFAC awarded Contract No. N4425-12-C-3007 (the Contract) to LCC-MZT,
which had had a value of $10,590,000.00 and had been set-aside for section 8(a)
contractors. The scope of work in the Contract involved the construction of the P-913
Explosive Handling Wharf Security Force Facility (P-913) at Naval Base Kitsap Bangor in
Silverdale, Washington. The parties have stipulated that the P-913 project “entailed the
construction of a building structure, which included a concrete foundation and floor slab,
concrete exterior walls, and a reinforced concrete roof. The building was constructed of
reinforced concrete.” Bryan Zatica testified at trial that LCC-MZT submitted the lowest
price bid in connection with the P-913 project at Naval Base Kitsap Bangor.2

2
 According to the parties’ joint stipulation of facts, about eight months after award of the
Contract, a California State court ordered that Kenneth Baker of Hill International be
appointed as receiver of the LCC-MZT joint venture. Bryan Zatica testified that “Mr. Baker
                                             2
       As issued on January 31, 2012, the Contract stated that LCC-MZT was to begin
performance of the P-913 project within fifteen days of award, and that work under the
Contract was required to be complete within 555 calendar days of award, which produced
an original contract completion date of August 8, 2013. The Contract also incorporated
clauses from the Federal Acquisition Regulation (FAR), including FAR clause 52.211-12,
titled “LIQUIDATED DAMAGES--CONSTRUCTION (SEP 2000).” (capitalization in
original). Pursuant to FAR clause 52.211-12, which was included in the Contract, LCC-
MZT was responsible for compensating the government $4,285.00 for each calendar day
of delay until the contract work was completed.

         The Contract’s Specifications was a 1600-plus page document, prepared by
design company, URS Corporation, which detailed the work to be completed on the P-
913 project, and the manner in which the work was to be completed. The Contract’s
Specifications required that a secure parking garage be included within the structure LCC-
MZT was to construct. The Contract’s Specifications stated that “[s]pecial construction
features include seismic reinforcement, a reinforced roof to support automatic weapons
mounts, a loading dock and environmental protection measures.” Additionally, the
Contract’s Specifications stated that the Explosive Handling Wharf “will remain in
operation during the entire construction period” of the P-913 project, and that “work under
this contract requires special attention to the scheduling and conduct of the work in
connection with existing operations.” The parties stipulated that the site for the P-913
facility LCC-MZT would be constructing was located within a “high security area” on Naval
Base Kitsap Bangor, and “[t]he days when the convoys moving [redacted] would impact
work were referred to as ‘Red Days.’” During the trial, NAVFAC construction manager for
the Contract, Justin Nodolf, testified that the “local user” of the P-913 building was the
United States Strategic Weapons Facility Pacific (SWFPAC). Mr. Nodolf stated that
SWFPAC was “in charge of, effectively, the assets located on the base in terms of
maintaining and delivering the product down to the boat. However, they actually report
directly to Strategic Systems Programs, SSP, who’s ultimately the end client on this
project.”

        Section 1.16 of the Contract required “LEVEL A PARTNERING,” which required
“[k]ey personnel” from LCC-MZT and NAVFAC to periodically meet in-person at an off-
site location with a facilitator “in an effort to achieve a quality project done right the first
time, within budget, on schedule, and without any safety mishaps.” (capitalization in
original). The parties have stipulated that Dorriah Rogers of Paradyne Consulting served
as the facilitator for the Level A Partnering meetings.

       Section 01 14 00 of the Contract’s Specifications was titled “WORK

was a court-appointed receiver for MZT and Larkor to ensure that when the Navy did pay
us that the money went appropriately to the vendors and suppliers and not to one
company or the other.” Mr. Zatica asserted that LCC “could not fund their portion of the
joint venture. They were having financial issues. And for that reason, the Navy wanted to
exclude them from the joint venture. And in doing so, this gave the Navy the avenue to
be able to pay the bills with a clear mind.”
                                               3
RESTRICTIONS.” (capitalization in original). Paragraph 1.3.2 in section 01 14 00 defined
the Contract’s “[r]egular core working hours” as an eight-and-a-half-hour period “between
7:00 a.m. and 5:00 p.m., Monday through Friday, excluding Government holidays.”
Pursuant to paragraph 1.3.3 in section 01 14 00, if LCC-MZT wished to work outside of
regular working hours, LCC-MZT needed to apply for approval from the contracting officer
fifteen days before such work. Paragraph 1.2.1 in section 01 14 00 states:

      (1) 10 work days a month will be impacted by convoys and operations at
      the Explosive Handling Wharf Area. The impacted work days may not be
      consecutive. A schedule reflecting open or available timeframes will be
      provided to the Contractor after award, and monthly during the project. An
      updated schedule will be provided five (5) days prior to the beginning of
      each month for the following month. Urgent operation requirements will
      require adjustments to the schedule. Changes resulting in less than 48
      hours notice [sic] will be considered a changed condition.

      (2) Notification, 10 days in advance of activities that will need to access the
      Waterfront Restricted Area (Explosive Handling Wharf Entry Control Point
      at [redacted]) will need to be coordinated with the Contracting Officer and
      SWFPAC Facilities.

      [Redacted]; the contractor shall stop all exterior work and move to their
      personnel out of visual range of [redacted] Road. There will be
      approximately 300 convoys during this project.

      During times of convoys past the construction site the contractor will be
      directed, by the Contracting Officer or designate, to a muster [sic] his forces
      so that they will not be in visual contact with the convoy. Contractor shall
      provide an area, or means to prevent observation of the convoy. Contractor
      shall submit a View Obstruction Plan for Contracting Officer approval.

      (3) [Redacted] Road will not be accessible during convoys or operations at
      EHW. No Equipment or material deliveries will be allowed. Contractor will
      be restricted to the Construction Enclave during convoys and Operations at
      EHW. Access to the project site will be through the [redacted] Road Trail
      from [redacted] Road, material and equipment must be staged in the
      Construction Enclave or be brought in through the [redacted] Road Trail.
      Contractor parking will be relocated to a site within 5 miles of the project
      site. Exact location will be provided by the Contracting Officer. Contractor
      will be responsible for shuttling workers from this parking area.

      a. All Zones:

             (1) Direct access must be maintained to all facilities, roads, and
             structures at all times. As a minimum, a least one road (no less than
             15’) shall be provided for vehicle access to facilities or roads.

                                            4
               Separate pedestrian access must be maintained.

(capitalization in original).

     Section 01 32 17.00 20 of the Contract’s Specifications was titled “NETWORK
ANALYSIS SCHEDULES (NAS),” and states:

       The schedule is a tool to manage the project, both for Contractor and
       Government activities. The Contractor shall use the Critical Path Method
       (CPM) and the Precedence Diagram Method (PDM) to satisfy time and cost
       applications. It will also be used to report progress and evaluate time
       extensions. It will provide the basis for progress payments.

(capitalization in original). Paragraph 1.3.1 in Section 01 32 17.00 20 of the Contract’s
Specifications states that “[s]ubmittal and acceptance of the Baseline Network Analysis
Schedule and accurate updated schedules accompanying the pay requests are both
conditions precedent to processing pay requests.” (capitalization in original). Paragraph
1.7.6 in section 01 32 17.00 20 states that “the submission of an error free, acceptable
updated schedule to the Government is a condition precedent to the processing of the
Contractor’s pay request.” (capitalization in original). The parties stipulated that Casey
Caughie worked as NAVFAC’s schedule analyst under the Contract.

       Paragraph 1.6.2.5 in section 01 32 17.00 20, titled “Anticipated Weather Delays,”
states that schedules were to be constructed to allow for “normal adverse weather
conditions,” and provides that a “schedule of monthly anticipated adverse weather delays
shall be represented by programming the Weather Calendar(s) to include non-work days
occurring within work weeks and are in addition to the non-work days associated with
Federal Holidays, and/or security delays.” (capitalization in original). Paragraph 1.6.2.5 in
section 01 32 17.00 20 provides a number of anticipated days to be impacted by adverse
weather for each month, based on whether the contractor is working a five-day work
week, a six-day work week, or a seven-day work week.

       Paragraph 1.6.2.6 in section 01 32 17.00 20 of the Contract’s Specifications, titled
“Anticipated Operation-Restricted Delays,” provides:

       The Contractor shall use the requirements listed in Specification Section 01
       14 00 “Work Restrictions” following schedule of anticipated monthly non-
       work days due to operations as the basis for establishing a [sic] “Operation-
       Restricted Delay Calendar” showing the number of anticipated non-
       workdays for each month due to operations, exercises and and [sic] are in
       addition to non-work days associated with weekends, Federal Holidays,
       and/or weather delays unless otherwise approved by the Contracting
       Officer.

       Schedule activity duration(s) shall be formulated with allowance for required
       adverse operational restrictions. Any activity duration, which could be

                                             5
       impacted by prescribed operational restrictions (security drills, alerts,
       exercises or missile movements, etc.), due to the time period that the
       Contractor has scheduled the work, shall include an adjustment to include
       the anticipated operation-restricted delay. The number of anticipated
       adverse delays allocated to an activity will be reflected in the activity’s
       calendar.

       A lost workday due to security, convoy, and/or operational restriction delay,
       is defined as scheduled workday activity(s) in which the contractor’s
       workforce cannot work 50 percent or more of the day on the impacted
       activity(s). The contractor shall immediately notify the Contracting Officer
       when a lost workday due to restricted conditions has occurred and shall
       identify the activity(s) impacted; the operational-restricted condition
       encountered and the reason for resultant activity(s) impacted. The
       contractor shall record on Quality Control and Production Daily Reports the
       occurrence; the adverse restricted condition encountered, and reason for
       resultant activity(s) impacted.

(capitalization in original).

       Section 01 50 01 of the Contract’s Specifications, titled “PROCUREMENT AND
INSTALLATIONS OF FURNITURE, FIXTURES AND EQUIPMENT,” provides at
paragraph 1.1 that LCC-MZT “shall provide the procurement and installation of all
Furnishings, Fixtures, and Equipment (FF&E) exactly as designed and specified or
approved equal by the Government, URS, and it’s subcontractor 3B Designs during the
design phase of this project.” (capitalization in original). Paragraph 1.2.1 in section 01 50
01 of the Contract’s Specifications states that the FF&E package was to be a “planned
modification,” and that “[u]pon receipt of required funding, the Prime Contractor shall be
authorized by the Contracting Officer, as a planned modification to the construction
contract, to procure and install all Final FF&E using Federal Government price schedules
(NAVSUP BPAs and/or GSA).” (capitalization in original). Paragraph 1.2 states that the
FF&E package awarded was to include “shipping, freight, handling, installation, and the
contractor’s FF&E Handling and Administration Rate (HAR) percentage as applied to the
final FF&E total cost.” (capitalization in original). Regarding the Handling and
Administration Rate, paragraph 1.2.1 states:

       The HAR [Handling and Administration Rate] includes all of the Prime
       Contractor’s effort related to storage, coordination, handling, administration
       of subcontractors, and all other associated costs and profit for the
       procurement of FF&E. The Prime Contractor will propose in the contract
       solicitation the FF&E HAR. The prime Contractor’s proposed HAR may not
       exceed 5 percent of the total FF&E costs, as noted on the bid schedule.

(capitalization in original). Regarding “PROCUREMENT AND INSTALLATION” of the
FF&E package, paragraph 1.3 in Section 01 50 01 of the Contract’s Specifications states:

                                             6
       The Contractor shall coordinate the building completion date with the
       installation dealer(s) specified in the FF&E Package.

       The FF&E package provided to the Prime Contractor at the modification
       award shall reflect current pricing certified by the manufacturers and the
       Interior Designer of Record, NAVFAC NW. Pricing will be guaranteed, but
       the Prime Contractor shall be responsible for verifying the pricing prior to
       the award of the modification.

       The Prime Contractor shall anticipate possible manufacturer price
       increases if order placement is delayed. It is recommended to order the
       FF&E product once the planned modification is awarded and funds are
       received to avoid incurring additional costs. Delayed production and
       delivery dates can be noted at the time of order placement to coincide with
       building completion dates. Any costs incurred due to manufacturer price
       increases will be the burden of the Prime Contractor.

(capitalization in original).

Ordering of the FF&E Package

       On July 3, 2012, NAVFAC contracting officer Mona Carlson unilaterally issued
Modification No. A00002 (Modification 2) to the Contract. Modification 2 increased the
value of the Contract by $514,026.25 to compensate LCC-MZT for the costs, but not for
time, associated with providing and installing the FF&E package set forth in Modification
2, which included items such as beds, rifle cabinets, treadmills, squat racks, microwaves,
and televisions. Attached to Modification 2 is a document titled “FINAL COST ESTIMATE
SUMMARY - revised,” which included a line-item breakdown of the $514,026.25
awarded to LCC-MZT through Modification 2. (capitalization and emphasis in original).
The breakdown included the prices for all of the FF&E items to be purchased, including
a subtotal of $226,882.00 for items manufactured by Turnbull, and a subtotal of
$106,335.74 for all other items. An amount of $95,882.00 was added to the Turnbull items
for “Installation,” and an amount of $21,267.15 was added to the remaining items for
“Delivery and Installation.” (capitalization and emphasis in original). An amount of
$39,181.92 was added for “WA State Sales/Use Tax” at 8.7%, and an amount of
$24,477.44 was added for “Contractor’s HAR” at 5%. (capitalization in original). A
separate document attached to Modification 2 titled “STEEL BERTH AND LOCKER
QUOTE,” indicates that the prices for the items manufactured by Turnbull were taken from
a quote dated August 15, 2011, but Modification 2 does not indicate from what date the
remaining items in the FF&E package were quoted. (capitalization and emphasis in
original).

      According to Bryan Zatica’s testimony, NAVFAC issued Modification 2 when LCC-
MZT “roughly” was mobilizing to the project site. Bryan Zatica testified that “typically”

                                            7
         [y]ou want to do it [the FF&E] at the very end. You want to have them come
         in -- and unfortunately they don’t show up like a desk. They show up with
         pieces and parts, screws and nuts and all that stuff. So you want to make
         sure that the place is cleaned, ready, install the FF&E, wipe it down, walk
         out the door.

Jim Mortensen, one of LCC-MZT’s project manager during the Contract, testified that in
February 2013, he attempted to “request proposals for the FF&E package only to have
the suppliers tell me that we weren’t authorized to purchase.” Thereafter, LCC-MZT
requested authorization from NAVFAC to purchase from the sources in the FF&E
package. On February 21, 2013, Mona Carlson sent LCC-MZT a letter stating that LCC-
MZT was “hereby authorized to utilize General Services Administration (GSA) supply
sources for the purchase of furniture, fixtures, and equipment (FF&E) under the subject
contract.”

Pre-Work Delays
        As stated above, NAVFAC awarded the Contract to LCC-MZT on January 31,
2012, and performance under the Contract was required to begin within fifteen days of
Contract award. Also as stated above, work under the Contract was required to be
completed within 555 calendar days of award, resulting in an original contract completion
date of August 8, 2013. Award of the Contract to LCC-MZT, however, was protested at
the United States Government Accountability Office (GAO), which the parties stipulated
“delayed the commencement of the Project” by thirty-five days to March 7, 2012. On July
23, 2012, after LCC-MZT had mobilized to the site, Bryan Zatica and Mona Carlson
bilaterally executed Modification No. A00003 (Modification 3) to the Contract, which, as a
result of the protest at the GAO, extended the Contract’s completion date by thirty-five
days to September 12, 2013, at no cost to the government. Although the GAO protest
challenging the award of the Contract to LCC-MZT was filed in January 2012 and
complete by March 7, 2012, the parties did not bilaterally execute Modification 3
extending the completion date of the Contract by thirty-five days until July 23, 2012.

Undisclosed Electrical Duct Bank and Water Line

       At trial, Bryan Zatica testified that, under the Contract, LCC-MZT was to first “go in
and to clear several acres, heavily wooded area, and recut the slope and open it up so
that the building, itself, could have a larger footprint to sit in with parking and -- and the
building.” According to LCC-MZT’s Contractor Production Report No. 025, LCC-MZT
started clearing and logging the construction site on July 16, 2012. Bryan Zatica testified
that, after LCC-MZT had cleared the construction site, LCC-MZT “potholed,”3 during

3
    Mr. Zatica described the term “potholed” as:

         That’s just a term of where you take a backhoe or a vacuum truck, and you
         have a location of where the utility is, and then from there you carefully
         excavate to find out if it’s in that location. Sometimes they’re six feet off in
                                                8
which LCC-MZT discovered a duct bank and a water line. Scott Wakefield, the owner of
one of LCC-MZT’s subcontractors under the Contract, PSW Electric, Inc. (PSW Electric),
testified at trial that PSW Electric first began working as a subcontractor when LCC-MZT
was mobilizing to the construction site. Regarding the duct bank LCC-MZT discovered
when potholing, Mr. Wakefield stated that the issues with the duct bank included:

       [W]here to relocate it. How to relocate it. Is it an existing -- we -- we had no
       idea what was even in the duct bank. So was it something that was
       abandoned in place that could be, or was it something we had to reroute
       because it went through the building footprint and the elevation of it was
       different? Was it something that we could abandon in place or that we had
       to reroute or -- and what did they need rerouted?

       On August 1, 2012, LCC-MZT submitted a request for information (RFI) No. 28 to
NAVFAC. In RFI No. 28, LCC-MZT stated that when LCC-MZT was potholing, it
“discovered that the main 24” water line and electrical/communication duct bank (concrete
encased) running through the project site is inconsistent with the drawing for the project.”
LCC-MZT asserted that the water line and duct bank “will be exposed on western slope
of project due to excavation required to construct the new structure and exterior provided
by the contract,” and that the duct bank would interfere with the southwest corner of the
project’s foundation. In RFI No. 28, LCC-MZT also stated that LCC-MZT’s performance
already had been impacted by the undisclosed water line and duct bank and requested
that NAVFAC provide direction or information regarding how LCC-MZT should proceed.
On August 10, 2012, NAVFAC responded to LCC-MZT’s RFI No. 28, in which NAVFAC
instructed LCC-MZT to “relocate conflicting utilities as necessary to complete all” work
under the Contract.

        On August 14, 2012, LCC-MZT submitted RFI No. 32 to NAVFAC, in which LCC-
MZT requested drawings “with full specifications from your designer of record” regarding
relocation of the water line and duct bank. NAVFAC responded and provided the drawings
on August 20, 2012. According to Bryan Zatica’s testimony at trial, the drawings required
LCC-MZT to “add additional communication lines and duct bank lines into the new
rerouted area.” Regarding the relocation of the water line and duct bank, Mr. Zatica
testified:

       We had to purchase not only the pipe but the -- the additional excavation.
       We were geared up to do a building. All of a sudden we’re a utility contractor
       for major water lines. We had to import material. We had to export material.
       We had to use different personnel that understood the situation.

Mr. Zatica testified that LCC-MZT was not paid in advance for relocating the water line
and duct bank, and that LCC-MZT “finance[d] this work for the Navy.”

       one direction or the other, or, in this case, the duct bank and the water line
       were not in the elevation of what they were supposed to be.
                                              9
        Also on August 14, 2012, LCC-MZT’s project manager at the time, James
Thompson, sent a letter to NAVFAC contracting officer Mona Carlson requesting an
equitable adjustment due to differing site conditions. In the August 14, 2012 letter, James
Thompson stated that, on July 26, 2012, LCC-MZT was potholing the construction site
and discovered that an electrical duct bank would interfere with the building’s foundation.
Mr. Thompson stated that, “[a]lso, it was discovered that the waterline and electrical, fire
alarm and communication duct bank where [sic] at an elevation that they would be
exposed when the site was brought to grade as shown on the plans.” Mr. Thompson
indicated that LCC-MZT had informed NAVFAC of the site issues by telephone on July
24, 2012, and that LCC-MZT had sent a request for information to NAVFAC on July 27,
2012. According to Mr. Thompson’s August 14, 2012 letter, LCC-MZT had been delayed
in its performance and was going to incur additional costs. Mr. Thompson requested that
“a Change Order be set up to account” for LCC-MZT’s additional costs, as well as the
delay.

        That same day, August 14, 2012, NAVFAC contracting officer Mona Carlson sent
a letter to LCC-MZT responding to James Thompson’s August 14, 2012 letter. In Mona
Carlson’s August 14, 2012 letter, Ms. Carlson stated that, after reviewing Mr. Thompson’s
letter and LCC-MZT’s RFI No. 28, she found that there was a differing site condition
related to the “additional work to mitigate utility line interference,” and that LCC-MZT was
entitled to an equitable adjustment for impacted costs and time. Mona Carlson’s August
14, 2012 letter provided:

       Please submit your Request for Equitable Adjustment (REA) and schedule
       fragnet[4] for the impacts in a timely manner for final resolution. Ensure you
       include as a minimum:

       (1) An original cost estimate or basis for establishment of the original
       budgeted estimate for this activity. The estimate should be in sufficient detail
       to identify material, labor, equipment, subcontracts, and associated costs
       (overhead) for the original planned activity.

       (2) The actual impact costs, including labor, material, equipment, and time
       associated with any additional work. The estimate should be in sufficient
       detail to identify material, labor, equipment, subcontracts, and associated
       costs (overhead) for the impacts related to the activity. As an equitable
       adjustment, only actual impacts will be reimbursed.

4
  Defendant’s expert during the trial, Stephen Weathers, testified that a fragnet was “a
mini set of schedule activities that would model the impact of a delay event,” and that
“[y]ou would take that subset of activities, put that into the schedule, run the schedule,
and see what the corresponding impact on this – on the project completion would be.”
Plaintiff’s expert, William Manginelli, explained that a fragnet was “a set of activities and
interconnected logic that would be then inserted into a schedule.”
                                             10
       (3) Proposed schedule fragnet, in accordance with Section 01 32 17.00 20,
       that identifies the new activity associated with this change and how it
       impacts the schedule. The fragnet should be based on the current,
       approved schedule.

       For tracking purposes, PC [Proposed Change] 0004 has been established.
       Please note that failure to provide a proposal and resolve this issue in a
       timely manner will not constitute a Government caused delay. Notify the
       undersigned if it is determined that there is no impact and the PC will be
       closed.

Mona Carlson’s August 14, 2012 letter also stated that, “[i]n accordance with FAR 52.233-
1 DISPUTES, pending final resolution of any request for relief, claim, appeal, or action
arising under the contract you are directed to proceed diligently with the performance of
the contract.” (capitalization in original).

         On August 27, 2012, NAVFAC contracting officer Mona Carlson sent the first of
four contract progress notices to LCC-MZT, in which NAVFAC asserted that LCC-MZT’s
Network Analysis Schedule update for July 2012 indicated a contract completion date
fifty-six calendar days beyond the current completion date of September 12, 2013.
Despite Ms. Carlson’s August 14, 2012 letter to LCC-MZT which acknowledged that LCC-
MZT was “entitled to an equitable adjustment” related to the undisclosed duct bank and
water line, the August 27, 2012 letter stated:

       Currently the Government is unaware of any contributing events
       (outstanding issues) or other contractual conditions causing a delay in
       completing the work from unforeseeable causes beyond the control and
       without the fault or negligence of the Contactor. If you feel that a contract
       time extension is justified for which you believe the Government is liable,
       Submit a Request for Equitable Adjustment (REA), as appropriate with the
       specific reference to the incident, basis for change, FAR clause under which
       you are seeking contractual relief, and contractual deficiencies and
       circumstances surrounding the situation for which you believe the
       Government is liable. The Contracting Officer can then review, determine
       merit of your claim, and provide contractual direction.

Mona Carlson instructed LCC-MZT in the August 27, 2012 letter to take “all actions
necessary, at no additional cost to the Government,” to complete the project by the
contract completion date of September 12, 2013.

       On September 6, 2012, LCC-MZT project manager James Thompson sent a letter
to Mona Carlson asserting that LCC-MZT could not provide the requested updated
schedule and that the “major contributing factor to continued process on the previously
scheduled critical path activities is the relocation of the existing utility lines which do not
allow MZT-LCC to progress in an efficient and safe manner.” James Thompson stated
that LCC-MZT would be meeting with its experts the following week to discuss costs and

                                              11
impacts associated with relocating the duct bank and water line, and that, thereafter, LCC-
MZT would schedule a meeting with NAVFAC.

       On September 10, 2012, Mona Carlson sent a second contract progress notice to
LCC-MZT asserting that LCC-MZT’s September 6, 2012 letter was “non-responsive and
in direct violation of the Contracting Officer’s direction.” Ms. Carlson’s second contract
progress notice stated:

      The Government’s findings were based on your Network Analysis Schedule
      (NAS) update for July 2012 which reflects a completion date 56-calendar
      days beyond the CCD [Contract Completion Date] of September 12, 2013.
      At that time, the schedule reflects no activities for which the Government is
      liable. It is the Government’s position that you are not progressing the work
      with due diligence. In your response, you claim that the delays are related
      to “utility line interferences” which was identified as an impact on, and
      responded to on the same day, August 14, 2012. There is insufficient data
      in your schedule and response to reflect how this activity impacted the
      schedule which reflects a late completion. Furthermore, the Contracting
      Officer acknowledged merit (Serial No. 0010 dated August 14, 2012) to your
      claim of this unforeseen condition, requested an REA, and directed you to
      proceed with the work in accordance with FAR 52.233-1 Disputes. You
      should have proceeded with the work immediately, and as stated in the
      Contracting Officer’s letter, updated the schedule to accurately record the
      impacts to the established schedule activities. While the repairs may be on­
      going, the schedule can be progressed properly to reflect this impact and
      an updated NAS provided as directed. Failure to accomplish this task or
      maintain the NAS is non-compliant with the terms and conditions set for [sic]
      in Section 01 32 17.00 and causes the Government concern regarding your
      scheduler’s qualifications.

(capitalization in original). Mona Carlson asserted that failure to provide an updated
Network Analysis Schedule would result in removal of LCC-MZT’s scheduler and, if
appropriate, LCC-MZT’s project manager. At trial, Bryan Zatica testified that LCC-MZT
completed relocation of the water line and duct bank in November 2012. LCC-MZT’s
January 18, 2013 request for equitable adjustment, which is discussed below, states that
LCC-MZT had finished relocating the water line and duct bank on November 9, 2012.

       On January 10, 2013, Mona Carlson sent LCC-MZT a third contract progress
notice, in which Ms. Carlson stated that LCC-MZT had failed to provide a proposal to
resolve PC 0004 concerning the differing site conditions, which Mona Carlson had
established in her August 14, 2012 letter to LCC-MZT. According to the January 10, 2013,
third contract progress notice, LCC-MZT also had “failed to submit monthly Network
Analysis Schedule (NAS) updates for October 2012 through December 2012,” and LCC-
MZT’s most recent monthly schedule update, which had been submitted for September
2012, indicated a completion date eighty-eight days beyond the then-established contract
completion date of September 12, 2013. Mona Carlson instructed LCC-MZT to submit an

                                            12
updated Network Analysis Schedule, as well as a schedule recovery plan, within fourteen
days of her January 10, 2013, third contract progress notice. Mona Carlson also sent a
copy of the third contract progress notice to Western Surety Company5 and stated in the
third contract progress notice that “[g]iven the Government’s ongoing concern regarding
your contract progress, your surety has been included on the distribution of this
notification.”

        On January 18, 2013, LCC-MZT sent a letter requesting an equitable adjustment
to NAVFAC, which requested an adjustment of $999,701.00 to the Contract and asserted
that the differing site conditions impacted the project’s critical path by 107 calendar days.
LCC-MZT’s January 18, 2013 letter stated that LCC-MZT’s request for $999,701.00 did
not include costs regarding the following seven categories of alleged impacts: (1)
“Impacts to base bid work;” (2) “Schedule recovery;” (3) “Inefficiencies to pour, strip and
backfill the wall of the Retaining Wall;” (4) “Inefficiencies to pour the building footing, walls
and roof;” (5) “Additional Erosion Control/Water Protection after November 9th [2012];”
(6) “Haul-off and Stockpile Excavated Material;” and (7) “Protection of Excavated
Material.” LCC-MZT’s January 18, 2013 letter also stated:

       This differing site condition precluded LCC-MZT Team IV from completing
       work that was extremely weather sensitive prior to the wet season as
       originally planned. This work includes but is not limited to site grading,
       excavation, backfill, forming and pouring the building footings. These
       additional costs will be submitted with the Recovery Schedule.

        Regarding NAVFAC’s response to LCC-MZT’s request for equitable adjustment
for the differing site conditions, Bryan Zatica and plaintiff’s counsel Craig Ramseyer had
the following colloquy:

5
  On cross-examination, plaintiff’s counsel Craig Ramseyer and NAVFAC contracting
officer Mona Carlson had the following colloquy regarding Western Surety Company:

       Mr. Ramseyer: Who is Western Surety?

       Ms. Carlson: They held the bond on this contract. . . .

       Mr. Ramseyer: When you say they held the bond, they were the
       performance bond surety for the joint venture; is that right?

       Ms. Carlson: I believe so, yes.

       Mr. Ramseyer: And those bonds are turned in to the government at the
       beginning of the project?

       Ms. Carlson: Yes.
                                               13
       Mr. Ramseyer: In response to this letter that’s identified almost a million
       dollars in costs but said that there are other impacts and other costs that
       are not included within the number, do you recall how NAVFAC responded
       to that?

       Mr. Zatica: Yeah. They responded back and said that they would not issue
       a change order with those items excluded that we were talking about.

       They come [sic] back to us and said that they wanted us to put together an
       all-inclusive change order for all of the impacts that we could foresee on the
       project, past and present.

       Mr. Ramseyer: Now, in this -- and at some point in time, then -- well, let me
       back up. As of the point of January [2013], did you even know all the costs
       of the impact?

       Mr. Zatica: No, we did not.

       Mr. Ramseyer: They were still accumulating?

       Mr. Zatica: Correct.

       Mr. Ramseyer: Meanwhile, were you still continuing to hear from NAVFAC
       with regard to the schedule?

       Mr. Zatica: Schedule and nonpayment. So we didn’t get paid for this work.

        On April 12, 2013, NAVFAC contracting officer Mona Carlson sent LCC-MZT a
fourth contract progress notice, in which NAVFAC stated that LCC-MZT had failed to
adequately address NAVFAC’s concerns regarding contract progress. NAVFAC asserted
that, “since our last notice additional delays have been incurred for which no evidence of
Government liability has been presented.” NAVFAC also asserted that LCC-MZT had
failed to provide a revised price proposal or time impact analysis related to PC 0004,
involving the differing site conditions. In the April 12, 2013 fourth contract progress notice,
NAVFAC contracting officer Mona Carlson stated:

       While PC 0004 remains in dispute, based on the information presented to
       date the Government is willing to assume liability anywhere from zero (0) to
       60 calendar days of the claimed time impact. Based on the Government’s
       current position, allowing for an adjustment of 60 calendar days, the
       adjusted CCD would be November 11, 2013. Based upon your 0213 NAS
       [Network Analysis Schedule] update, you would still need to recover
       approximately 115 calendar days.

(capitalization in original).

                                              14
       In the April 12, 2013 fourth contract progress notice, Mona Carlson further stated:

       ln accordance with FAR 52.236-15 SCHEDULES FOR CONSTRUCTION
       CONTRACTS, citing from paragraph (b), “If in the opinion of the Contracting
       Officer, the Contractor falls behind the approved schedule, the Contractor
       shall take steps necessary to improve its progress, including those that may
       be required by the Contracting Officer, without additional cost to the
       Government”. Accordingly, you are hereby directed as follows:

          •   Increase the number of crews. Based on Government’s observations
              there are insufficient crews on site to accomplish the required work.
              Multiple crews for welding, reinforcing steel, building forms, etc.
              Identify sufficient work force (crew members) for upcoming activities
              such as mechanical and electrical.

          •   Increase the number of shifts or alter work schedules to allow for
              longer production days.

          •   Establish a secondary production area as necessary to pre-fabricate
              forms, reinforced steel meshes/cages, etc. The Government has
              identified a site on base for your use.

          •   Increase work days to seven (7) calendar days per week.

       Provide a plan detailing implementation of these requirements no later than
       April 19, 2013. You will need to recover approximately 16-20 days per
       month to demonstrate satisfactory progress.

(capitalization and emphasis in original). NAVFAC asserted that failure to demonstrate
progress on the construction project could result in the removal of LCC-MZT’s project
manager and superintendent and could result in LCC-MZT being terminated for default.
A copy of the fourth contract progress notice also was sent to Western Surety Company.

         On April 17, 2013, LCC-MZT sent a request for equitable adjustment to Mona
Carlson related to PC 0004, which involved the differing site conditions regarding the
electrical duct bank and water line. In the April 17, 2013 request for equitable adjustment,
LCC-MZT requested costs of $4,831,573.00. John King, who, at the time of the P-913
project, was an employee of LCC-MZT’s subcontractor, Mirack Construction, and who,
the parties jointly stipulated, served as a scheduler, claims consultant, and interim project
manager during the Contract, testified that he assisted in preparing the request for
equitable adjustment related to PC 0004. John King further testified that the request for
equitable adjustment related to PC 0004 “was the additional pricing that NAVFAC
requested from us for PC 0004 to price all the forward impacts from the unforeseen
utilities.” John King also testified that NAVFAC had requested the additional information
in NAVFAC’s serial letters to LCC-MZT.

                                             15
       One day later, on April 18, 2013, LCC-MZT and NAVFAC engaged in a partnering
meeting moderated by Dorriah Rogers. Jodus Hortin, who the parties jointly stipulated
was a NAVFAC contract specialist, and who subsequently acted as a NAVFAC
contracting officer,6 also was present at the April 18, 2013 partnering meeting and testified
regarding LCC-MZT’s submission of the request for equitable adjustment related to PC
0004. At the trial, Mr. Hortin stated that, prior to the April 18, 2013 partnering meeting, he
had started to review a copy of the request for equitable adjustment related to PC 0004
“at his desk” with Justin Nodolf, NAVFAC’s construction manager for the Contract.
Although Mr. Hortin described the review as a “cursory review,” he testified that he “had
an opportunity to review the contents.” During his testimony,7 Mr. Nodolf approximated
that normally “[i]t would take us several months just to get through it to a point where we
could at least establish an initial government position to be able to enter negotiations.”
During the trial, NAVFAC contracting officer Mona Carlson testified that the purpose of
the April 18, 2013 partnering meeting was to discuss issues between NAVFAC and LCC-
MZT, “but a $4.8 million technical proposal would require an extensive review. We
couldn’t do it in a partnering meeting. That wasn’t the purpose of a partnering meeting.”
Bryan Zatica testified that it would “[n]ot necessarily” be unusual to discuss costs in a
request for equitable adjustment at a partnering meeting, and “that’s why we presented
it, so we could all sit down.” Justin Nodolf testified that he was involved with the
negotiation regarding PC 0004 at the April 18, 2013 partnering meeting and the
subsequently executed modification, which is discussed below. At the beginning of the
April 18, 2013 partnering meeting, LCC-MZT provided a hardcopy of its request for
equitable adjustment related to PC 0004 to NAVFAC. Regarding the submission of the
hardcopy at the April 18, 2013 partnering meeting, plaintiff’s counsel Mr. Ramseyer and
Mr. Nodolf had the following colloquy:

       Mr. Ramseyer: Okay. And what do you recall about receiving LCC-MZT’s
       binder of support for its claim?

       Mr. Nodolf: So what I recall was it was in pretty poor taste to -- to put this
       giant binders [sic] of all this information and then have a -- like, $4.8 million
       total there right at the very beginning of the partnering session. I mean, it
       was -- you know, we had no time to look at this thing. It was just all of a
       sudden here’s this -- this giant binder of all this material, and -- and here’s
       a huge number.

6
  Jodus Hortin graduated from the University of Utah in 2005 with a Bachelor of Science
degree in economics and graduated from the Naval Postgraduate School with a Master
of Science degree in contract management in 2016, after the P-913 project was complete.
In 2009, Mr. Hortin joined NAVFAC as an intern in what Mr. Hortin referred to as a “three-
year developmental program,” during which time Mr. Hortin was assigned to construction
projects from February 2010 to April 2011.
7
  Although on direct examination by the government, Justin Nodolf was responsive to
questions posed by government counsel, during cross-examination by plaintiff’s counsel,
Mr. Nodolf seemed on more than a few occasions not to remember the answers to
plaintiff’s counsel’s questions.
                                              16
      Mr. Ramseyer: And what -- about the size of the binder, was it like one of
      the binders in front of you or was it more than that?
      Mr. Nodolf: From what I recall, I -- it was a large binder. I don’t recall the full
      size or even if it was even multiple binders. But it was a -- it was a lot of
      information.

Mr. Nodolf stated that, after receiving the hardcopy, the NAVFAC representatives “got up
and left” because “[w]e had no time to review this.” According to John King, LCC-MZT’s
scheduler at the time of the April 18, 2013 partnering meeting, after providing NAFVAC
with a hardcopy of the request for equitable adjustment related to PC 0004, the NAVFAC
representatives became “upset” and “Ms. Carlson got up and left the room, and then the
facilitator [Dorriah Rogers] went after her and took the rest of the people and they
gathered in another room to conference.” Mr. Zatica also testified that LCC-MZT’s
delivering of the hardcopy of the request for equitable adjustment related to PC 0004
“upset” the NAVFAC representatives.

      Bryan Zatica stated that, after leaving the room in which the partnering meeting
was occurring, NAVFAC met in a separate room in the same building as the partnering
meeting. Mr. Zatica testified that, over the course of several hours, Dorriah Rogers went
back and forth between the room the LCC-MZT representatives were in and the room
with NAVFAC representatives. The following discussion between plaintiff’s counsel Craig
Ramseyer, and Mr. Zatica occurred:

      Mr. Ramseyer: So as I understand your testimony they never came back --
      NAVFAC never came back into your room. Is that right?

      Mr. Zatica: No, they did actually come back later in the day. They come [sic]
      back and made an offer for the differing site conditions and said, we’re going
      to give you a million five [$1,500,000.00]. You got 24 hours to take it or leave
      it.

      Mr. Ramseyer: And who made that statement?

      Mr. Zatica: Mona Carlson.

      Mr. Ramseyer: Did they tell you how they calculated a million five?

      Mr. Zatica: No.

      Mr. Ramseyer: And in saying take it or leave it, did Ms. Carlson advise you
      that she was -- she was leaving the country?

      Mr. Zatica: She’d mentioned that she was going to Naples, Italy, for 30 days
      and nothing would happen. If we did not accept it within 24 hours, we were
      out of luck.

                                              17
Mr. Ramseyer: So go back to that time frame, April 18th [2013], yourself.
Where were you financially?

Mr. Zatica: I was in trouble. I had almost maxed out my line of credit. I could
not max it out -- in essence it was maxed out because we’d get paid on a
receivable basis for our line of credit, and we have to pay back what we
borrow every 90 days. So we had to leave a buffer, which would be free to
the bank, so that we could continue to pay down and borrow back, and we
were maxed out at that point.

Mr. Ramseyer: So I understand it, you had a line of credit. There has to be
a certain amount left on that so the bank can come in and take their interest
payment off of that?

Mr. Zatica: That, and it shows that we’re being paid so that we can pay down
what we borrowed in the previous months.

Mr. Ramseyer: Okay. So you’ve got that situation. You told us before you’d
been paid in December with liquidated damages taken out, correct?

Mr. Zatica: Correct.

Mr. Ramseyer: And subsequent payments, you had not been paid on the
DSC [differing site conditions] obviously at all, correct?

Mr. Zatica: No, we had not.

Mr. Ramseyer: And so you were upside down on the project, correct?

Mr. Zatica: Huge. Yes, very much so.

Mr. Ramseyer: All right. So how badly did Macro-Z-Technology need cash
at the time?

Mr. Zatica: We needed it or we were going out of business, period.

Mr. Ramseyer: If you did not accept the offer, did you feel that you would
end up having to shut down the operations?

Mr. Zatica: Yeah, we would have to close. I mean, it was an inordinate
amount of stress in the fact that, you know, I’ve got a house that’s on the
line with the surety. The bank has my assets tied up. I have employees that
have been with me 25 years. I’ve got to tell them that we’re going out of
business. You know, I’ve got children. I mean, it’s not fun.

                                      18
      Mr. Ramseyer: What about -- and you had no working capital from Larkor,
      correct?

      Mr. Zatica: Nothing.

      Mr. Ramseyer: All right. So given the 24-hour dictate, what did you do?

      Mr. Zatica: Well, I was getting on a plane the next day, and it would have
      been past 24 hours, so the next day I accepted it.

        Mr. King of LCC-MZT also testified regarding NAVFAC’s April 18, 2013 offer,
stating that NAVFAC “didn’t ever offer to discuss it with us. They gave us 24 hours to sign
the change order.” Mr. King asserted that, as of April 2013, LCC-MZT may have had to
go out of business if LCC-MZT did not receive a “cash infusion.” Mr. King stated that he
considered NAVFAC’s offer to be a “take-it-or-leave-it offer” and that the “comment was
made that, you know, they would get us the written change order within a week, and it
had to be signed prior to her [Mona Carlson] leaving town” because “she was the only
one that could sign it.” According to the testimony of NAVFAC’s then construction
manager Justin Nodolf, however, two individuals, Mona Carlson and Lieutenant
Commander Wood, both of whom were present at the April 18, 2013 partnering meeting,
could have signed a modification with a value of $1,500,000.00. Justin Nodolf asserted
that “[b]oth Lieutenant Commander Wood and -- and Mona Carlson would have been
warranted to that level.” Jodus Hortin and plaintiff’s counsel Craig Ramseyer also
discussed Mona Carlson’s unavailability to sign a contract modification, as follows:

      Mr. Ramseyer: And do you recall statements being made that, “Hey, Mona
      Carlson is leaving. So if you don’t accept this by tomorrow, basically, it’s off
      the table and it’s going to take a lot longer to go through the process of
      trying to get this thing resolved”?

      Mr. Hortin: That was only emphasized with regard to someone else. Some
      other warrant contracting officer would be inheriting this issue to see it
      toward -- to -- to resolution and would be handling it differently. This was
      her offer, her ability to resolve it within the time frame that she had before
      she left the country.

       NAVFAC contracting officer Mona Carlson also testified that she made an offer of
$1,500,000.00 during the April 18, 2013 partnering meeting, although Ms. Carlson could
not recall whether she said the offer was “take-it-or-leave-it.” Ms. Carlson stated that it
was a “possibility” that she said LCC-MZT needed to decide whether to accept the
$1,500,000.00 offer within twenty-four hours. Ms. Carlson further testified that “[w]e
offered the contractor a settlement, and he accepted it. The negotiations were over.”
According to Ms. Carlson, her trip to Naples, Italy, was not thirty days long and she did
not “believe” that she left for Naples until May 1, 2013.

                                            19
       At trial, Justin Nodolf and Jodus Hortin testified about how the government
calculated its $1,500,000.00 offer to LCC-MZT. Mr. Nodolf stated:

       So we were working basically the original proposal they gave us back in
       January.[8] We’d gone through portions of it at that point. We had determined
       it was anywhere between 6– to 700,000 on direct costs. And so when Mona
       [Carlson] asked me, she said, how much -- how much should we offer
       them? And I said, well, it’s like 6– to 700,000 direct costs. So she said, great.
       Should we just double it and round up? And that’s where we came to the
       1.5.

(alteration added). According to NAVFAC contract specialist Jodus Hortin:

       [I]t [the $1,500,000.00 offer] was a combination of the total costs presented,
       the original REA and our review of it, and the technical review and
       understanding of remaining activities. . . .

       Our position was the culmination of the seven or eight months it took to get
       a complete REA, our handling of the project site, our receipt of QC [quality
       control] daily reports, schedules. We didn’t just review this issue and
       develop a position in the span of one business day. We were actively
       working towards it for months.

Mr. Hortin also testified:

       It’s [$1,500,000.00] a number that was derived at from a very high level, not
       into specific line items in a robust cost estimate with all kinds of data. We
       didn’t have the time to do that. We didn’t have the ability to do that. The 1.5
       number was derived with all those other considerations in mind.

Mr. Hortin testified that he “remember[ed] the consensus being that we couldn’t properly
substantiate entitlement for anything higher than” $1,500,00.00. Mr. Hortin further
asserted:

       If the 1.5 million wouldn’t have been accepted, we would have entertained
       a more thorough comprehensive cost analysis in relation to the other
       information we requested and not received, further pursued how much of
       the work was compensable and -- and how much of the time extension was
       owned by the government. The 1.5 offer was presented in lieu of the
       additional time needed to perform that more granular line item robust
       assessment, and there was no guarantee that the ultimate outcome of an

8
   As stated above, on January 18, 2013, LCC-MZT sent NAVFAC a request for an
equitable adjustment of $999,701.00 related to the differing site conditions of the water
line and electrical duct bank, which excluded the seven categories of costs from the
January 18, 2013 request for equitable adjustment.
                                              20
       REA would have been higher or lower. The 1.5 was the offer to settle the
       issue given the time constraints that we were in and the other
       circumstances.
       On April 19, 2013, Bryan Zatica sent an e-mail message to Dorriah Rogers, stating:

       I called and left a message on Mona’s office phone that MZT accepts the
       Navy’s offer 1.5 million dollars and the date of SCD [substantial completion
       date] of November 15, 2013. I also request that the REA for the incorrect
       electrical scale be processed. Note this REA has been in since March.
       Thanks again and we look forward to moving forward and completing the
       project on time.

During her testimony at trial, Mona Carlson asserted that she would not have “defaulted”
or “terminated” LCC-MZT if LCC-MZT had not accepted NAVFAC’s $1,500,000.00 offer.
Mr. Zatica also stated that he did not believe that LCC-MZT would have been terminated
if LCC-MZT had declined to accept NAVFAC’s offer of $1,500,000.00.

       On May 1, 2013, John King sent an e-mail message to Dorriah Rogers requesting
that changes be made to the draft modification involving LCC-MZT’s acceptance of
NAVFAC’s $1,500,000.00 offer. Mr. King’s proposed changes to the modification are
indicated below in the portions struck and in italics:

       The following items are applicable to this modification:

       (1) The subject contract is hereby modified to compensate the Contractor
       for all additional labor, material, equipment, and associated costs regarding
       a differing site condition resulting from utility line interferences as further
       defined in the Contractor’s Request for Equitable Adjustment (REA) (Serial
       Letter No. 0005) dated August 14, 2012, the Government’s response (Serial
       Letter No. 0010) dated August 14, 2012, the Contractor’s amended REA
       (Serial Letter No. 0024) dated April 17, 2013, and the settlement reached
       April 19, 2013, summarized as follows. These documents are hereby
       incorporated by reference. This settlement accounts for all associated
       impacts including re-sequencing, acceleration, seasonal impacts, changes
       to means and methods, et cetera, necessary to provide for substantial
       completion, as further defined in paragraph (2) below. Neither party’s rights
       for contractual relief for future impacts/situations are waived by this
       settlement. Contractual relief for impacts/situations outside the scope for
       relocating the existing utilities defined by PCO 0004 are not waived by either
       party by this settlement.

       PC 0004 ~ REA – Utility Line Interference              Increase: $1,500,000

(alterations and emphasis in original).

                                             21
       On May 2, 2013, Mona Carlson signed Modification No. A00009 (Modification 9)
to the Contract. Modification 9 also was signed by Kenneth Baker of Hill International,
who, as discussed above, was the court-appointed receiver of the LCC-MZT joint venture.
Modification 9 was entered into under the “AUTHORITY” of the Changes Clause, FAR
clause 52.243-4. (capitalization in original). Modification 9 states:

       The subject contract is hereby modified to compensate the Contractor for
       all additional labor, material, equipment, and associated costs regarding a
       differing site condition resulting from utility line interferences as further
       defined in the Contractor’s Request for Equitable Adjustment (REA) (Serial
       Letter No. 0005) dated August 14, 2012, the Government’s response (Serial
       Letter No. 0010) dated August 14, 2012, the Contractor’s amended REA
       (Serial Letter No 0024) dated April 17, 2013, and the settlement reached
       April 19, 2013, summarized as follows. These documents are hereby
       incorporated by reference. This settlement accounts for all associated
       impacts including re-sequencing, acceleration, seasonal impacts, changes
       to means and methods, et cetera, necessary to provide for substantial
       completion as further defined in paragraph 2 below. Neither party’s rights
       for contractual relief for future impacts/situations are waived by this
       settlement.

       PC 0004 ~ REA – Utility Line Interference              Increase: $1,500,000

(capitalization and emphasis in original). The language in Modification 9 did not
incorporate the changes proposed by John King. Regarding an extension of time,
Modification 9 states:

       (2) Extension of time is required by reason of this modification. As per the
       agreement for PC 0004 (REA Utility Line Interference), the contract is
       modified as follows:

       (a) Substantial Completion Date (SCD) of NOVEMBER 15, 2013, as further
       defined in 5252.211-9301 ~ Phased Construction Schedule, is hereby
       established. Liquidated damages, as further defined in 52.211-12, have
       been adjusted accordingly to provide for completion as agreed.

       (b) The Contract Completion Date (CCD), as further defined in 5252.211-
       9301 ~ Phased Construction Schedule, is hereby extended by 125 calendar
       days to JANUARY 15, 2014. Liquidated damages, as further defined in
       52.211-12, have been adjusted accordingly to provide for completion as
       agreed.

(emphasis and capitalization in original). Modification 9 further states:

       (3) Acceptance of this modification by the contractor constitutes an accord
       and satisfaction and represents payment in full (for both time and money)

                                             22
      and for any and all costs, impact effect, and for delays and disruptions
      arising out of or incidental to the work as herein revised.

       Modification 9 also amended the application of certain FAR clauses in the
Contract. The application of FAR clause 52.211-12 in the Contract was amended as
follows:

Modification 9 also inserted clause 5252.211-9301 of the Navy Facilities Acquisitions
Standards (NFAS),9 titled “PHASED CONSTRUCTION SCHEDULE (SEP 1996),” into
the Contract. (capitalization in original). Clause 5252.211-9301 in Modification 9 states,
“[w]ithin the overall project schedule, commence and complete the work in phases.
Complete each phase of the work within the number of calendar days stated in the
following schedule.” The schedule in clause 5252.211-9301 provides:

9
  Clause 1.101 of the NFAS states that the purpose of the NFAS is to “provide general
guidance to field Contracting Officers in the execution of their delegated authority,” and
that the NFAS “implements or supplements the Federal Acquisition Regulation (FAR),
Defense Federal Acquisition Regulation Supplement (DFARS) and the Navy Marine
Corps Acquisition Regulations Supplement (NMCARS). It is not a stand-alone document,
but must be read together with the FAR, DFARS, and NMCARS.” See NAVAL
FACILITIES ACQUISITION STANDARDS (NFAS) 2018 EDITION, available at
https://www.navfac.navy.mil/content/dam/navfac/Small%20Business/PDFs/Contracting_
with_NAVFAC/sb_navfac_naval_facilities_acq_standard_oct_2018_change1_aug2019.
pdf. (last visited Apr. 23, 2021).
                                           23
(capitalization in original).

Concrete Pours

       Following the execution of Modification 9, LCC-MZT continued its work on the P-
913 project. In order to place the concrete roof of the building LCC-MZT was constructing,
LCC-MZT intended to perform two concrete pours. Ultimately, the first pour occurred on
August 28, 2013, and the second pour occurred on September 4, 2013. On August 27,
2013, representatives from LCC-MZT, including Robert Berger and Jeremy Wastweet,
met with representatives from NAVFAC, including Dan Van Natta and Justin Nodolf, to
discuss the concrete pour scheduled to occur on August 28, 2013. In the parties’ joint
stipulation of facts, the parties stipulate that Mr. Berger was LCC-MZT’s quality control
manager from “the beginning of the Project until approximately September 19, 2013,”10
that Mr. Wastweet “was LCC-MZT’s Superintendent from the beginning of the Project until
approximately September 19, 2013,” and that, thereafter, Mr. Wastweet was LCC-MZT’s
foreman. The parties also stipulate that Dan Van Natta was NAVFAC’s engineering
technician for the work on the P-913 project.

         According to a Contractor Quality Control Report dated August 27, 2013, during
the August 27, 2013 meeting, Dan Van Natta indicated that he believed that LCC-MZT’s
proposed plan of spacing the concrete trucks out by approximately ten minutes could
result in concrete trucks timing out. Mr. Van Natta also asked LCC-MZT about cleaning
out the beam pockets before pouring concrete, to which LCC-MZT representatives
indicated it “has had crew cleaning forms for the past week and are going over deck
again.” Regarding LCC-MZT’s cleaning of the beam pockets, Jeremy Wastweet testified
at trial that, to clean the beam pockets, “[t]here were multiple techniques where we were
using compressed air, vacuum cleaners, magnets, grab sticks if you will, multiple things

10
   Although Robert Berger was an employee of LCC-MZT, Mr. Berger testified that “my
job is to make sure the done -- the work is done per the plans, per the specs, and per the
drawings. I’m essentially a third-party-type employee.”

                                           24
we were using in an attempt to get all that material out of there.” According to a Contractor
Production Report dated August 26, 2013, LCC-MZT expended forty billable hours on
“clean[ing] up tie wire, sun flower seeds and debris caused by the rebar operation on the
roof.”11 Dan Van Natta also testified at trial that LCC-MZT “had some people actively
working to clean” the beam pockets.

        Robert Berger and Dan Van Natta both were on site during the first concrete roof
pour on August 28, 2013. Mr. Berger testified that, originally, LCC-MZT had planned on
having two pump trucks on site for the August 28, 2013 roof pour. Mr. Berger asserted
that it was not necessary to have two pump trucks for the August 28, 2013 concrete pour,
but that having two pump trucks on site would have allowed LCC-MZT to “get the pour
done quicker.” According to Mr. Berger, one of the two pump trucks canceled on the
morning of the August 28, 2013 roof pour. Robert Berger also stated that “I didn’t have
any concern about having one pump truck” and that “I felt that we were still in a good spot
to place the roof, so I allowed him to place.” Mr. Berger asserted that “[o]ne pump truck
allowed for continuous pour of the concrete.”

       The single pump truck that was to “place” the concrete, however, was delayed at
a gate when the pump truck was attempting to access the Naval Base Kitsap Banger on
the morning of August 28, 2013. Regarding the cause of the pump truck’s delay at the
gate, Robert Berger testified:

       I believe it was because nobody informed the -- and I’m -- nobody informed
       the security people that we needed to come through early. There was a -- if
       I remember correctly, there was a -- they only open the commercial gate at
       a certain time. We made arrangements with Dan Van Natta, I believe, to
       ensure that that truck would get through early when -- when it arrived.
       Security wouldn’t let it through.

The pump truck subsequently proceeded through the security gate, although Mr. Berger
testified that the delay “caused our concrete trucks to get backed up and out of sequence.”
Mr. Berger also testified about his role in the August 28, 2013 roof pour, stating: “I was
moving between both areas, where the concrete trucks were being tested and up above
to monitor and make sure all the inspectors were doing what needed to be done and
monitoring the entire project.” The “inspectors” referenced in Mr. Berger’s testimony
include a company referred to as MTC, which was a third-party inspector brought in to
test the concrete that was being placed on August 28, 2013.

       In his testimony, Mr. Van Natta stated that the August 28, 2013 roof pour was

11
  Subsequently, according to a Contractor Production Report dated September 3, 2013,
LCC-MZT expended 50 billable hours to “[f]inish cleaning up tie wire, sun flower seeds
and debris caused by the rebar operation on the roof in preparation to place concrete
tomorrow.” The September 3, 2013 cleaning occurred after the first roof pour on August
28, 2013, but before the second roof pour on September 4, 2013.
                                             25
       outside of only one truck showing up, initially uneventful. They -- the
       contractor had the workers ready up on the roof. The pump truck arrived
       on-site and -- and had set up. They started placing concrete. And instead
       of filling the beam pockets -- excuse me -- they were putting some material
       in beam pockets and then moving in kind of like from the south to the north
       and then coming back to the area where they had first started.

Mr. Van Natta further testified:

       [T]the concern on this day especially was that the concrete that they had
       placed initially in the southern part of the building had started to set up
       already. So that when they went to the north and came back and tried to
       deposit new concrete or additional concrete on top of that first layer, that
       layer had set up to the point where we weren’t going to get consolidation of
       the first and second layers of concrete.

During cross-examination of Mr. Van Natta, the following discussion between plaintiff’s
attorney Craig Ramseyer and Mr. Van Natta occurred:

       Mr. Ramseyer: When placing concrete, it’s typically placed in what would
       be called a lift, correct?

       Mr. Van Natta: Yes.

       Mr. Ramseyer: So just as an example, if we’re pouring 36 inches or three-
       feet deep slab or some other pavement or something, that’s not all poured
       at the same time 36 inches. They do it in smaller lifts, correct?

       Mr. Van Natta: Correct.

       Mr. Ramseyer: For instance, that lift may be 12 inches, and they may do
       three lifts to meet the standard of the 36 inches?

       Mr. Van Natta: Whatever was called out in the specs or with ACI [American
       Concrete Institute].

       Mr. Ramseyer: All right. And so what happened here that you referred to
       was that the hose man had the hose over his shoulder. He’s filling up that
       beam pocket to the approximate size of that first lift called for in the specs,
       true?

       Mr. Van Natta: I think that was their intent, yes.

                                             26
         Mr. Ramseyer: All right. And then they would come back with a second lift.
         Hose man coming back through -- after they vibrated[12] that first lift, the
         hose man’s coming back through with the concrete for a second lift, correct?

         Mr. Van Natta: What I remember on that day was that they had put a first
         lift in a couple of the beam pockets, and then they started moving to the
         north. By the time they got back to put that second lift in is where the
         problems began.

         Mr. Ramseyer: All right. That’s what you perceive to be the problems,
         correct?

         Mr. Van Natta: Yes.

       In his testimony, Dan Van Natta asserted that “[m]y concern was that there was
going to be a cold joint[13] there because there was no way to tie the two layers together.”
After observing what Mr. Van Natta believed to be a cold joint, Mr. Van Natta spoke with
Robert Berger about the alleged cold joint. According to Robert Berger’s testimony:

         He [Mr. Van Natta] called me up. I was working -- to me it was more
         important to get to my concrete back on -- on -- in sync because of the pump
         truck problems and that so we had -- we could continue and everything. He
         called me up and he said, “You need to stop this placement. You’re going
         to have a cold joint.” Which anybody -- it flabbergasted me because, if I did
         stop the pour, there would be a cold joint. He was concerned about a cold
         joint, but he wanted me to stop the placement. I told him that if he wanted
         me to stop the placement, give it to me in writing. He did not.

12
  According to the testimony of Robert Berger a “vibrator is a -- it’s got a long tube. It’s
got a vibrator in it and it’s got a head on it that vibrates, and you put that down into the
concrete so that it consolidates the concrete around the rebar and gets the air out and all
that.”
13
     According to the testimony of Bryan Zatica:

         [A] cold joint is considered when the concrete becomes more of a solid than
         it is plastic. And so when the concrete’s coming out of the hose, it’s
         considered plastic. It’s not like water, but it’s -- it's somewhat of a fluid for
         the lack of a better word. And when you vibrate it and it’s plastic, it all
         meshes as one.

         If you get a cold joint where you have a break in trucks or something
         happens -- I don’t know -- then the concrete that you’ve placed will tend to
         become more solid. And when you put plastic against it, they too won’t
         mesh. It kind of gets what they call a -- a cold joint between the two.
                                                27
Mr. Van Natta, however, recounted the August 28, 2013 pour differently, testifying in an
exchange with defendant’s counsel Erin Murdock-Park, as follows:

       Ms. Murdock-Park: What did you express to Mr. Berger with respect to your
       concerns?

       Mr. Van Natta: I said -- I -- I told him, “Hey, your guys cannot” -- “We’re
       going to have cold joint here because they can’t -- with the vibrator, they
       can’t tie these two layers together because the first layer had set up.” And
       he just -- he kind of looked at me, and I said, “See.” And I picked up my
       heel, and I kind of showed him. I dug it in. And it was -- wasn’t even moving.
       It had started to set up.

       Ms. Murdock-Park: And what do you recall about his response?

       Mr. Van Natta: Honestly, I -- I don’t recall him having a lot of feedback. I
       think he was -- I think he was just as shocked as anybody that that was
       happening.

       Ms. Murdock-Park: Did you tell him to stop the roof pour?

       Mr. Van Natta: I don’t recall telling him that, no.

       Ms. Murdock-Park: Would that be something that you think that you would
       have done?

       Mr. Van Natta: I don’t have the authority to -- to stop a concrete placement
       like that unless there was a safety issue so egregious that somebody was
       going to get hurt or -- or worse, yes, then I would have -- then I would have
       stopped whatever activity there was.

Justin Nodolf also testified that he believed there was a cold joint forming during the
August 28, 2013 roof pour and that the “the concrete itself was flashing early, and so it
was stiffening. It was hardening up too quick.”

       On August 30, 2013, NAVFAC issued Non-Compliance Notice No. 0003 to LCC-
MZT. In Non-Compliance Notice No. 0003, NAVFAC stated that, “[o]n 28 August 2013,
NAVFAC NW [Northwest] representative was onsite to inspect the concrete placement of
the structural roof slab and observed fresh concrete being placed over hardened non-
plastic concrete.” NAVFAC in Non-Compliance No. 0003 instructed that any non-
compliant work was to be repaired to the satisfaction of NAVFAC.

       In defendant’s post-trial brief, defendant states that “[t]he second roof pour, which
occurred on September 4, 2013, notably did not experience these same problems.” Bryan
Zatica testified that there was “not really” any issues with the September 4, 2013 roof
pour and that the September 4, 2013 roof pour “I know went fairly smoothly.” In plaintiff’s

                                              28
post-trial brief, plaintiff asserts that “[i]t was only after the forms began to be removed from
the underside of the deck and beams that issues arose,” which plaintiff in its post-trial
brief contends “engendered unwarranted hysteria from NAVFAC.”

       On September 16, 2013, LCC-MZT began removing forms from the concrete on
the P-913 building. Dan Van Natta stated:

       I remember looking up and seeing some dark areas in the south bay where
       you could see that that was the -- the grinding, the slag material.[14] I had a
       stick, and I reached up and I poked up at the ceiling with the stick, and all
       of this debris came down on top of me.

In plaintiff’s post-trial brief, plaintiff contends that “Mr. Van Natta’s testimony that after the
formwork was removed, he stuck something into the bottom of the roof deck and material
fell on him,” was a “gross exaggeration. There is no documentary or photographic
evidence of the same.” Mr. Van Natta asserted that he also saw “bug holes” and “huge
rock pockets and exposed bar in some areas.” NAVFAC’s then supervisory civil engineer,
Mark Aguilar, testified that he was on the P-913 site when the forms were removed from
the concrete and that “[w]e saw some rock pockets, some exposed rebar, some cold
joints.”
         A number of photographs of the concrete after the forms had been removed were
shown during trial, including the following photographs:

14
   Mr. Van Natta defined slag as “a by-product of welding operations when the welder
removes the electrode from -- or strikes the electrode and then removes it, you get a piece
that kind of glows ember red for a few seconds and then falls on the ground.”
                                               29
30
The above pictures are illustrative of some of the larger voids and rock pockets on the
building’s roof and beams. As indicated in the chart in Exponent Failure Analysis
Associates’ (Exponent) November 8, 2013 report, discussed in more detail below, the
entirety of the roof and beams did not have such issues. Rather, there appear to have
been only certain areas of the roof which experienced issues with voids and rock pockets.
       At the trial, plaintiff’s attorney Craig Ramseyer and Robert Berger had the following
discussion regarding how concrete is poured into beams:

       Mr. Ramseyer: Now, do you have a recollection of how deep the concrete
       was being poured on the roof?

       Mr. Berger: The roof, itself, was, I believe, eight inches. I’m guessing. The
       beams, there were beams that ran in there, and they were, I want to say
       foot and a half, 18 inches, 24 inches by probably 18 inches wide.

       Mr. Ramseyer: They’re pretty deep?

       Mr. Berger: Yes.

       Mr. Ramseyer: Are you able to see the consolidation at the bottom of the
       form in those -- what did you just call them, the columns or the --

       Mr. Berger: No.

       Mr. Ramseyer: Okay. And nobody would be able to. Is that a fair statement?

                                            31
      Mr. Berger: No.

      Mr. Ramseyer: So in watching the consolidation, what is it that you are
      observing to ensure the best possible consolidation?

      Mr. Berger: The guy that does the vibrating is probably one of the most
      important on the team because if you vibrate too much, then it forces all the
      rock to the bottom of the forms. If you don’t vibrate enough, you can get air
      pockets or it might not get the concrete down into the beam or to the bottom
      of the beam.

      And it happens. Almost any concrete pour you will find a rock pocket -- for
      different sizes. Could be cosmetic. Beams are very hard. On this project it
      was very difficult because the aggregate size was not really conducive to
      the mass of rebar that was in there, so it was difficult to get the stinger,
      which we call the vibrator down into it. We -- if I remember correctly, we
      requested that we be allowed to change the mix design to allow this
      concrete to better consolidate around the beams, and that was turned down.

Dan Van Natta, NAVFAC’s engineering technician, also indicated in his testimony that “it
would be very tough” to pour the concrete mix into certain areas of the rebar.

      Additionally, Mr. Ramseyer asked NAVFAC supervisory engineer Mark Aguilar
about pouring concrete into the beams, as follows:

      Mr. Ramseyer: Sir, was the concrete in the beam pockets placed in lifts?

      Mr. Aguilar: Yes.

      Mr. Ramseyer: And so is there a way, as that hose man is filling up those
      beam pockets and the guy with the vibrator is vibrating it, to kind of see
      through the concrete that’s been placed in that first lift and ensure to
      yourself that it’s getting all the way through the rebar right smack dab up
      against the forms?

      Mr. Aguilar: You’re asking me if I can see through concrete?

      Mr. Ramseyer: That’s exactly what I’m asking you.

      Mr. Aguilar: So the answer to that question is no.

                                           32
      Mr. Ramseyer: Okay. So since you can’t see through the concrete, is it fair
      to assume that neither Mr. Poor[15] nor Mr. Berger could see through
      concrete?

      Mr. Aguilar: Correct.

        On September 17, 2013, LCC-MZT’s project manager at the time, Jim Mortensen,
sent an e-mail message to John King and Bryan Zatica, in which Mr. Mortensen stated
that “[t]hey started removing the forms yesterday and it appears we have some issues
regarding rock pockets, concrete not forming around the beams, open rebar at the bottom
of the beams, etc.” Also, Mr. Mortensen stated that “[t]his may require us to put together
a structural repair plan which may require a structural engineer – just thinking ahead.”
During the trial, Bryan Zatica, after having been shown one of the above photographs on
cross-examination, was asked whether the concrete in the photograph was “sufficient to
withstand and meet the specifications that were set forth in the contract?” to which Mr.
Zatica replied, “[a]fter you chip it out and dry pack it, yes.” Robert Berger, who, as
indicated above, was LCC-MZT’s quality control manager until approximately September
19, 2013, also testified that the concrete as originally poured would have to be repaired
in order to meet contract specifications by utilizing a “common” technique “in concrete
construction” called “sack and patch.” NAVFAC’s supervisory civil engineer Mark Aguilar
also indicated that he believed the concrete could have been repaired. NAVFAC’s then
construction manager Justin Nodolf, however, testified that an individual named “Mr.
Starkel,” who “led the structural department of our NAVFAC Northwest,” believed that the
concrete could not be repaired to meet contract specifications and that the entire P-913
building needed to be torn down. Mr. Nodolf also testified that Lt. Commander Garret,
who, by September 16, 2013, had replaced Lt. Commander Wood on the P-913 project,
“was afraid to even go in the building.” Mr. Nodolf testified that he was not afraid to go
into the building and that “[w]e started shoring up, so I assumed it was supported with the
shoring.”

       On September 19, 2013, NAFVAC contracting officer Mona Carlson issued a Stop
Work Order to LCC-MZT, in which Ms. Carlson stated that, during a site inspection
following the removal of the forms from the concrete, the government found “[v]isual
deficiencies including air pockets, exposed rebar, cold joints, and delaminating concrete.”
Ms. Carlson contended that the deficiencies rendered LCC-MZT’s work on the concrete
roof non-compliant with the specifications in the Contract. Ms. Carlson further stated:

      The Government finds that the structural integrity of the facility may have
      been compromised. ln accordance with FAR 52.246-12 INSPECTION OF
      CONSTRUCTION, you are hereby directed to stop all work pertaining to
      structural concrete as further defined by Specification Sections 03 30 00
      and 03 37 13 pending resolution of all the quality performance issues.

15
  Bryan Zatica testified that Patrick Poor was an assistant quality control manager for
LCC-MZT on the P-913 project.
                                            33
(capitalization in original). Ms. Carlson directed that LCC-MZT “provide an independent
third party,” which was required to be a government-approved, licensed, structural
engineer, “to facilitate additional inspection and analysis of the structural roof slab,”
including a “report attesting to the structural capability of the roof slab.” Additionally, Ms.
Carlson instructed LCC-MZT to remove its superintendent, Jeremy Wastweet, and quality
control manager, Robert Berger, from the project. In the Stop Work Order, Ms. Carlson
stated, “[p]ending receipt of this direction, satisfactory corrective actions, and lifting of this
stop work order, minor concrete work will be approved on a case-by-case basis with a
detailed work plan for Government review and approval.”

        That same day, on September 19, 2013, LCC-MZT submitted a letter in response
to NAVFAC’s Stop Work Order, in which LCC-MZT stated that it “is also concerned and
will take all necessary steps required to repair as required.” LCC-MZT stated that it
“agrees with the Government that measures to fully-determine the extent of damage and
identify corrective actions are warranted. LCC-MZT will provide an independent third party
to facilitate additional inspection and analysis of the Roof Slab Structural Concrete
Placement #1.” (capitalization in original). LCC-MZT, however, stated that it “takes
exceptions to the Government’s directions to stop all work pertaining to placement of
structural concrete, the Government’s findings and subsequent request to remove key
personnel from the project.”16

       At the trial, John King testified that “[w]e had a pour scheduled for two days after
we got this letter, and they stopped us.” During the period in which the Stop Work Order
was in effect, however, John King testified that NAVFAC did approve and permit some
concrete work to take place, including “shotcrete work,”17 as well as “some cast-in-place
concrete work too.” On September 27, 2013, NAVFAC issued a letter permitting LCC-
MZT “to proceed with shotcrete activities pertaining to the loading dock walls, sally ports,
and transformer walls.”

       Steven Jirsa, who testified at the trial that he was licensed as a professional
engineer in the State of California and that he has a Master of Science in structural
engineering from the University of California, Berkley, testified that LCC-MZT retained the
firm he was working for at the time, Exponent, in connection with the P-913 project at
Naval Base Kitsap Bangor. Mr. Jirsa stated that Exponent’s “scope of the retention was
essentially to identify any conditions related to the concrete roof structure.” On October
9, 2013, Exponent provided a recommended plan to test the concrete roof, determine the
extent of the defects, and develop a repair plan. Exponent’s recommended plan stated:

16
  Robert Berger was removed from the project on approximately September 19, 2013.
Jeremy Wastweet’s position was changed from superintendent to foreman on
approximately September 18, 2013.
17
   At the trial, Mr. Zatica described shotcrete as “a method of placing concrete where
basically you have a very high-pressure compressor that combines air with the concrete.
So they merge together in a valve system, and then the air blows the concrete into the
form and around the rebar.”
                                               34
      [W]e recommend a combination of destructive and nondestructive testing
      to determine if voids extend into the concrete beyond what are visible from
      surface defects. Nondestructive testing (NDT) techniques will be used to
      evaluate subsurface concrete in the region of the surface defects.
      Afterward, selected coring[18] or chipping will be used to evaluate the
      accuracy of the NDT.

(capitalization in original). On October 10, 2013, Exponent sent a letter to Bryan Zatica,
which was forwarded to NAVFAC. In the October 10, 2013 letter, Exponent stated that,
“[b]ased on our initial surface observations, made October 2 through 4, 2013, the
observed areas of poorly consolidated concrete of the roof structure can be removed and
repaired to meet the intended structural design and capacity requirements of the facility,
without requiring the overall removal/replacement of the roof structure.”

        In defendant’s post-trial brief, defendant asserts that “[b]y November 8, 2013,
Exponent had completed its investigation, although LCC-MZT did not provide a report to
NAVFAC until November 21, 2013.” In its report, dated November 8, 2013, which was
titled “Roof Deck Cast-In-Place Concrete Evaluation,” Exponent stated that it had
performed destructive testing, as well as non-destructive testing, on the concrete roof.
Exponent further stated in the November 8, 2013 report:

      Based on our investigation, repair of the roof structure can be performed
      that will restore the full structural capacity of the P-913 concrete roof deck
      allowing the roof to meet its intended purpose and comply with all code
      requirements or other regulations laws and ordinances pertaining to this
      Facility. This repair can be performed from the underside of the roof deck
      to allow continuation of work on top of the roof. Exponent is working with
      repair material suppliers to develop appropriate repair details and
      procedures to meet the above objectives.

Exponent included a chart in its November 8, 2013 report which indicated the
“[a]pproximate locations of poorly-consolidated concrete,” including “cavit[ies],”
“honeycombing,” “rock pockets,” and “debris/slag.” In a letter dated November 20, 2013,
Exponent provided its repair plan for structural and non-structural repairs. Thereafter,
NAFVAC received Exponent’s report, and the parties have jointly stipulated that NAFVAC
lifted the restrictions in the September 19, 2013 Stop Work Order on November 26, 2013.

       According to Exponent’s final report, which is dated August 18, 2014, repairs to
the concrete roof were complete in March 2014. On December 9, 2013, LCC-MZT’s
subcontractor, Contech Services (Contech), mobilized to the site and began making
repairs to the concrete roof. According to a memorandum for record attached to a July 3,
2014 e-mail message sent by LCC-MZT project manager Jim Mortensen to John King,

18
   At the trial, NAVFAC contracting officer Mona Carlson described coring as “[a]ctually
taking a round cylin- -- removal of some to determine where the rebar is and the strength
of the contract -- concrete.”
                                           35
Bryan Zatica, and one other unidentified individual in January 2014, Steve Jirsa of
Exponent tested Contech’s repair work. Mr. Jirsa determined that Contech’s repair work
“all had to be removed” and replaced because “pumped grout patch material was found
to have bubbled at the bonding between the substrate at the beam repairs.” The
memorandum for record states that Steve Jirsa held an on-site meeting on February 13,
2014, during which Mr. Jirsa requested that all repairs be made “by hand patch.” The
memorandum for record states that Contech completed all of the repairs by “hand patch”
on March 13, 2014. According to the memorandum of record, “[i]t is therefore the
conclusion of MZT that the product performed and the failure was a result of installation
procedures by Contech.”

       Thereafter, Exponent produced a report that was dated May 8, 2014. In response
to Exponent’s May 8, 2014 report, NAVFAC provided comments to the May 8, 2014
report, to which Steve Jirsa of Exponent testified he remembered he had responded.
Subsequently, Exponent produced another version of its report dated July 18, 2014. On
July 28, 2014, Jim Mortensen of LCC-MZT sent an e-mail message to Steve Jirsa stating:

       Bryan and I reviewed the report and are concerned that if we turn it in as
       writing [sic] it will not support the actual conditions and repairs made at the
       site. As you are aware we worked with the insurance company to try and
       get this as a claim which did not have positive results. This would have had
       no impact to the government, but was not successful. We now have to
       recover the costs for testing based on the Stop Work notice to get the Navy
       to pay for the required testing: nothing outside of the visible damaged was
       found by either nondestructive or destructive testing. The stop work and the
       FAR clauses clearly indicate that if testing does not disclose any failure or
       defective work, then the government is required to pay for testing and the
       time extension

       The remaining issues are based on specific terms used in the reports that
       may lead someone to an inaccurate conclusion. Both your firms [sic]
       observations and MTC reports are fully documented to show field work was
       monitored. When you put “To the best of our knowledge” could lead to a
       conclusion that not all areas were monitored. Also there are some terms
       that would lead someone to believe damage was more than what it was and
       should be removed. Lastly, the issue was poorly consolidated concrete not
       poor concrete as eluded to in the report.

(capitalization in original).

      In an attachment to his July 28, 2014 e-mail message to Steve Jirsa, Jim
Mortensen requested the following changes:

                                             36
(alterations in original). Steve Jirsa responded in a July 29, 2014 e-mail message to Jim
Mortensen, stating that he would look at the edits and get back to Mr. Mortensen.
        At trial, Steve Jirsa was asked whether he agreed with Mr. Mortensen’s proposed
changes, to which Steve Jirsa responded: “I think in general, yes.” Steve Jirsa testified
that he could not remember whether Exponent made the changes proposed by Jim
Mortensen. Mr. Jirsa, however, indicated that one “could tell which changes were made
by comparing your August 2014 report to the July 2014 report.” In Exponent’s August 18,
2014 final report, the clause in the above-quoted text stating: “and these conditions
typically did not extend beyond areas of visible surface manifestation,” is removed, the
words “poor quality” are changed to “poorly-consolidated,” and the word “extensive” is
removed. The sentence: “To the best of our knowledge, the structural repairs of the P-
913 roof deck are now complete and have been implemented in accordance with our
recommendations,” was removed and reworded as: “All of the work observed by
Exponent was implemented in accordance with our recommendations; all reports to
Exponent by personnel responsible for daily monitoring indicate that the structural repairs

                                            37
of the P-913 roof deck are now complete and have been implemented in accordance with
our recommendations.”

Grounding and Energization of the P-913 Building

        Plaintiff contends that NAVFAC caused LCC-MZT to experience issues in
connection with getting the P-913 building grounded and energized which delayed LCC-
MZT’s completion of the project. Concerning grounding, LCC-MZT employee Jeremy
Wastweet testified that LCC-MZT was unable to “drive the ground rods into the ground to
the specified depth.” Mr. Wastweet stated that a grounding rod was “a five-eighths
diameter copper-coated round steel rod” that is inserted into the ground with “either a
hammer or a small roto hammer.” Although Mr. Wastweet stated that “[w]e used the
standard methods and then also explored multiple other techniques to try to get them
driven into the ground,” Mr. Wastweet testified that the LCC-MZT team was unable to get
the grounding rods to the specified depth because “[t]he ground was really hard.” After
discussing the grounding rod issues with NAVFAC, Mr. Wastweet stated that the
grounding rod depth “never did actually meet the requirements of the specification, but
the last fix that we applied were ground wells, drilled in ground wells.” According to Mr.
Wastweet, a ground well is “essentially instead of physically driving the ground rod into
ground, you drill a hole in it to give it a path to go into new ground.” Mr. Wastweet indicated
that the ground rod was then inserted into the ground well, and that the ground well was
filled with a material called “Vermiculite.”

        During the trial, Scott Wakefield, the owner and founder of PSW Electric, testified
that PSW Electric worked as an electrical subcontractor “do[ing] the entire scope for the
project” under the Contract involving the P-913 project. Mr. Wakefield testified that there
were “grounding issues” with “several grounding systems on the project,” including the
“lightning protection system, the fence system, and then there were requirements for
separate ground rod resistances and separate bonding resistances.” Regarding the
lightning protection system, Mr. Wakefield asserted that the “issue was that the design of
the lightning protection system was not recognized by UL [Underwriters Laboratories], so
they could not certify it.” According to Mr. Wakefield:

       It was an issue with the level of the resistance to meet the specified
       resistance. So when we tested the ground system, the specification would
       specify whether it had to be five ohms[19] or 25 ohms, and they consistently
       came out 30, 75, 90 -- way higher than what was specified.

Mr. Wakefield further testified:

       The -- there were several RFIs [Requests for Information] regarding the
       design of the lightning protection system simply because it was a unique
       system. Most -- most lightning protection systems have air terminals on the

19
  Jeremy Wastweet testified that an ohm is a “unit of measure resistance” of “electrical
charges.”
                                              38
       roof to attract the lightning and safely bring it to ground. This particular
       system, which I have never encountered and obviously neither has UL, did
       not have those in place, and this particular design used what they call a
       Faraday cage, which is designed to carry the voltage around the building
       envelope.

       We had several concerns on the design of it, so we wrote RFIs regarding
       those.

       And there were several questions because the specifications were vague
       regarding how to properly ground this system.

Mr. Wakefield testified that “[m]y understanding of a Faraday cage is that it is a system
that is designed to essentially build a cage around a structure or a person. And it safely
takes the electrical voltage and current around rather than a direct hit within the envelope.”

       Mr. Wakefield further testified that the ohm requirement of twenty-five ohms in
LCC-MZT’s Contract was not achievable. Mr. Wakefield stated that he had achieved
twenty-five ohms on other projects, but he was unable to achieve the twenty-five ohms
specifications on the P-913 project because “[t]he best I could guess is soil conditions of
the site.” According to the testimony of Mr. Wakefield, NAFVAC issued a variance and
changed the twenty-five ohms requirement to thirty ohms, which PSW Electric was able
to satisfy. Jeremy Wastweet also testified that NAVFAC changed the twenty-five ohms
requirement in LCC-MZT’s Contract to thirty ohms. Mr. Wakefield asserted that it took
“close to a year” from the time PSW Electric began its grounding efforts to when PSW
Electric was permitted to energize the building.

        During his testimony, when asked whether PSW Electric could energize the
building prior to completion of grounding, Scott Wakefield responded “[a]bsolutely not”
because the “specifications required that the grounding resistances be met before the
building could be energized.” Mr. Wakefield indicated that the grounding needed to be
complete before energization because “too high of a resistance could result in an
electrical shock to the personnel within the building.” During his testimony, Scott
Wakefield and plaintiff’s attorney Katherine Knudsen, had the following discussion:

       Ms. Knudsen: Between -- we know the time frame, about a year I believe
       you testified, for getting the grounding done to the energization. Did that
       delay the completion of your work based on what you originally scheduled?

       Mr. Wakefield: Through all the grounding systems, it delayed it a little, yes.

       Ms. Knudsen: Okay. Did the inability to energize the building earlier -- did
       that impact any other work that you had to do?

       Mr. Wakefield: It did.

                                             39
      Ms. Knudsen: What work?

      Mr. Wakefield: Final energizing of the secondary distribution system panels
      and transformers and lighting and all of the subsystems to be able to test
      them and -- and for final testing of the systems.

      During cross-examination of Scott Wakefield, Department of Justice attorney Kelly
Krystyniak questioned Mr. Wakefield about grounding and energization:

      Ms. Krystyniak: So you also testified that specifications of the contract
      required the building be grounded before it’s energized. Do you recall that
      testimony?

      Mr. Wakefield: I do.

      Ms. Krystyniak: Okay. But it’s not the case that you can’t work on the
      grounding system of the building and the energization at the same time,
      correct?

      Mr. Wakefield: Define “work on.”

      Ms. Krystyniak: Sure. Did you complete everything that you needed to do in
      order to energize the building -- just had to turn on the switch -- before you
      started working on the grounding system?

      Mr. Wakefield: No.

      Ms. Krystyniak: No. Those two paths are going on at the same time,
      correct?

      Mr. Wakefield: Correct.

      Ms. Krystyniak: Okay. And so, in fact, you might be able to energize the
      building before grounding is completed, but you also might not be able to,
      right?

      Mr. Wakefield: You absolutely cannot.

      Ms. Krystyniak: Both have to be done at the same time, right?

      Mr. Wakefield: Both have to be complete before you can energize.

      Ms. Krystyniak: Okay. Complete and done I understand are kind of terms of
      art. So the work has to be complete before you are able to energize, but the
      work to prepare for energization is going on at the same time as the work
      to prepare for grounding?

                                           40
       Mr. Wakefield: Correct.

       On August 17, 2016, after the Contract was completed and the August 1, 2016
contracting officer’s final decision, then-contracting officer Dana Bolte unilaterally issued
Modification No. A00024 (Modification 24) to the Contract regarding the grounding issues
LCC-MZT had experienced during construction. Modification 24 states that it incorporates
Chief of the NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016 final decision,
and provided:

       (2) An extension of time is required by reason of this modification. The
       contract is modified as follows:

              a. The Substantial Completion Date (SCD), as further defined
              in 5252.211-9301 ~ Phased Construction Schedule, is hereby
              extended by one-hundred-thirty-five (135) calendar days to
              April 30, 2014. Liquidated damages, as further defined in
              52.211-12, remain unchanged.

              b. The Contract Completion Date (CCD), as further defined in
              5252.211-9301 ~ Phased Construction Schedule, is hereby
              extended by one-hundred-thirty-five (135) calendar days to
              July 1, 2014. Liquidated damages, as further defined in
              52.211-12, remain unchanged.

Modification 24 continued:

       (3) The Government and contractor were unable to reach a final agreement
       in regard to cost and time associated with PC 0056 above. Accordingly, a
       unilateral definitized modification is hereby issued to provide an equitable
       adjustment based on the Chief Contracting Officer’s Final Decision
       regarding reasonable costs.
       (4) Requests for additional compensation for this changed work shall be in
       accordance with FAR 52.233-1 DISPUTES (JUL 2002).

(capitalization in original). Modification 24 also increased the value of the Contract by
$48,533.74.20 As discussed below, there is a dispute between the parties, including their
experts, as to whether the ground issues and energization issues addressed above were
on the P-913 project’s critical path.

20
  NAVFAC determined that LCC-MZT had substantially completed the work on June 11,
2014 and had completed the Contract on March 5, 2015.
                                             41
Red Days and Weather

        The Contract’s Specifications state that “10 work days a month will be impacted by
convoys and operations at the Explosive Handling Wharf Area,” and that “[redacted] Road
will not be accessible during convoys or operations at EHW.” NAVFAC Contract specialist
Jodus Hortin testified at trial that “Red days refer to days in which naval operations and
convoy movements could be anticipated. They refer to various work restrictions that
impact our construction activities at Naval Base Kitsap Bangor.” While looking at a map
of the area around the P-913 project site, NAVFAC construction manager Justin Nodolf
testified:

      So during a red day itself, we have to secure [redacted] Road and do
      [redacted]; there’s nothing that would be of concern. And at that point, there
      are [redacted] that would be deployed along -- I believe this is -- I can’t
      remember what the name is. Basically coming up from the Marginal Wharf
      there, there’s a road that kind of runs an east-to-west location. There you
      go. [Redacted]. That’s right. That’s [redacted] Road that joins [redacted]
      Road to [redacted] Road. . . .

      And approximately in the middle of this is where the first set of bollards are
      deployed and a sentry is placed. And then if you go ahead and back out
      from there. So in addition to that, so that secures [redacted] Road. The
      residual of [redacted] heading in this direction’s already been secured.
      There’s another set of pop-up barriers that are deployed closer to the OA
      gate to make sure there’s no through access. The OA gate is located
      approximately at B2 where there’s kind of a purple-looking mark. It might
      even say “Operation Area Access.” The text is kind of hard to -- OA Gate,
      correct. So there’s another [redacted] there to make sure that nobody can
      go down the road. And back out.

      So at that point, access onto [redacted] Road is then completely secured.
      And then -- then at that point they can do convoy movements down
      [redacted] Road. They would enter through [redacted] gate, which is located
      immediately adjacent to the P-913 location, which is -- I believe there’s a
      call-out that shows the P-913 construction site, which is located adjacent to
      the Explosive Handling Wharf. Kind of where the yellow road and the red
      road meet is approximately where that site is located at. . . .

      [S]o it [redacted] will come down [redacted] Road. It will -- will transit all the
      way down [redacted] Road. They’ll enter in the waterfront restricted area, of
      which that is a [redacted] zone. [Redacted]. And they also have special
      operating procedures when they have boats “in the barn,” is what we like to
      call it when we have a submarine sitting within the wharf itself. And that’s, I
      think, commonly referred as [redacted] Road, which is sitting down there
      along the waterfront. At that point then the convoy will then enter in the
      Explosive Handling Wharf and do whatever operation they need to do.

                                             42
      Robert Berger, who worked as LCC-MZT’s quality control manager until
September 2013, testified that he was familiar with Red Days and that Red Days were
“when we got sequestered in the trailer and couldn’t work, and sometimes got left there
and forgot about.” Jeremy Wastweet, who was LCC-MZT’s superintendent until
approximately September 19, 2013, and, subsequently, foreman, also testified about
being sequestered on Red Days. Mr. Wastweet and plaintiff’s counsel Craig Ramseyer
had the following discussion at the trial about being sequestered on Red Days:

      Mr. Ramseyer: So before the building had a roof on it, walls on it, basically
      dried in, how was your -- how were the workers on the site sequestered?

      Mr. Wastweet: We were sequestered into our job trailer that had the
      windows blacked out and there was a guard that watched to make sure that
      we didn’t look out the windows or exit the building.

      Mr. Ramseyer: Were the guards armed?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: And was there a standard period of time for which you were
      sequestered?

      Mr. Wastweet: No.

      Mr. Ramseyer: Could you ever plan on how long you were going to be
      sequestered when you got notice of a red day?

      Mr. Wastweet: No.

      Mr. Ramseyer: And were these guards military guards or rent-a-cops or
      both or what?

      Mr. Wastweet: It was a combination of both.

      Mr. Ramseyer: So sometimes there’d be Marines there?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: Other times private security?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: So when you were sequestered, did you ever get forgotten?

      Mr. Wastweet: A few times.

                                           43
      Mr. Ramseyer: Give me an example of what would occur under those
      circumstances.

      Mr. Wastweet: We would -- since we couldn’t leave our job trailer, it’s hard
      to know exactly what was going on. So the first few times we just stayed in
      there until they decided or remembered about us and decided to let us out.
      Once we identified that there was an issue, then we would call Dan Van
      Natta and let him know that we were in there for an abnormally long amount
      of time.

      Mr. Ramseyer: When you talk about abnormally long, how long would you
      be in there in these instances when you were forgotten?

      Mr. Wastweet: Five to six hours.

      Mr. Ramseyer: Were you able to accomplish any work?

      Mr. Wastweet: No, not when you’re sitting in a job trailer.

      Mr. Ramseyer: And then once -- once the building progressed and -- well,
      let me back up.

      Before that building progressed, you had a tent over the site, correct?

      Mr. Wastweet: Yes.

        Bryan Zatica testified that LCC-MZT also experienced inclement weather during
the fall of 2012. In order to proceed with work during inclement weather, Mr. Zatica stated
that LCC-MZT “suggested putting in basically, for the lack of right terms, a circus tent of
24,000 square feet” to cover the entire building envelope. During the trial, plaintiff’s
attorney Craig Ramseyer and Mr. Zatica had the following colloquy about the suggestion:

      Mr. Ramseyer: And to whom did you make this suggestion?

      Mr. Zatica: We made it to NAVFAC.

      Mr. Ramseyer: And do you recall who in particular?

      Mr. Zatica: Actually, I think the whole group because I think we suggested
      it in a partnering meeting.

      Mr. Ramseyer: And then what was the immediate response to that?

      Mr. Zatica: Laughter.

                                            44
       Mr. Ramseyer: From NAVFAC?

       Mr. Zatica: Yes.

       Mr. Ramseyer: Eventually did you continue to push this idea?

       Mr. Zatica: Well, we were continually being tasked with thinking outside the
       box so that we can pick up time: How are we going to do it? You know, they
       kept saying it was our issue. So in our mind we felt that was the best way
       to conceal yourself from the weather. And at the time we thought it would
       also help us in regard to the asset moves. But they did actually -- we
       submitted it, and they actually did approve it.

(capitalization in original). Prior to NAVFAC’s approval of the tent, Mr. Zatica stated that
LCC-MZT was required to provide NAVFAC with “the makeup of the tent and an
engineering calculation.” In its post-trial brief, plaintiff asserts that while the tent was
“important in allowing the foundations to be built with minimal weather interference,” “the
tight proximity of workers within the tent, and the need to carefully work so as not to
damage the tent with heavy equipment such as excavators, led to a loss of productivity.”
Jeremy Wastweet testified that, even when the tent was in place, workers were required
to be sequestered in trailers during Red Day movements. Mr. Wastweet further testified
on direct examination from Mr. Ramseyer:

       Mr. Ramseyer: Now, when the building had the tent over the site, were you
       allowed to sequester somewhere within the tent?

       Mr. Wastweet: No. I believe we were in the trailer.

       Mr. Ramseyer: You got sent back to the -- to the trailer out of the tent?

       Mr. Wastweet: Yes.

       Mr. Ramseyer: And so at what point in time -- well, strike that.
       Was there ever a point in time when you were allowed to sequester
       somewhere other than this construction trailer?

       Mr. Wastweet: We -- once the building vertical walls were complete, we
       were able to sequester inside the building.

       Mr. Ramseyer: All right. And by the way, sir, when you -- when you would
       be asked to sequester in the trailer, talking about two or three guys or you
       talking about more workers?

       Mr. Wastweet: More than that.

       Mr. Ramseyer: What was the maximum that you can recall being in there?

                                            45
      Mr. Wastweet: 12.

      Mr. Ramseyer: Okay. And so once the walls were up on the building, was
      there a location where you would be put under guard again?

      Mr. Wastweet: Yes. We had to be in visual sight. Everyone had to be in
      visual sight of the guard.

      Mr. Ramseyer: So they were all gathered in one, let’s say, corner or interior
      room?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: Was that people who were -- include people who were
      working on the exterior of the building at the time?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: Did it also include people who were working on the interior
      of the building?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: So project came to a stop when you were sequestered even
      when the walls were up; is that right?

      Mr. Wastweet: Yes.

LCC-MZT project manager Jim Mortensen also described being sequestered as being “in
a room with a bunch of construction workers” and stated that “it’s pretty tough put -- at
one time we had 20 guys in a small job trailer.”

       During his testimony, Justin Nodolf stated that LCC-MZT was permitted to work
during anticipated Red Days, but not during movements, provided LCC-MZT had a
NAVFAC approved view obstruction plan. In a June 19, 2012 e-mail message to Daniel
Braden of SWFPAC, Mr. Nodolf stated that he had attached a “draft view obstruction plan
for P-913,” to which Mr. Braden responded that he “need[ed] more information.” In a
November 16, 2012 e-mail message, Mr. Braden approved LCC-MZT’s view obstruction
plan and “authorized” LCC-MZT to work on anticipated Red Days. Mr. Nodolf testified that
he did not recall any other view obstruction plans submitted by LCC-MZT between June
2012 and November 2012. Prior to approval of a view obstruction plan, according to Justin
Nodolf, LCC-MZT “couldn’t work on red days at all. They didn’t have a view obstruction
plan. So -- so on those days they would just stop work and -- and not work on those --
those days.”

                                           46
        According to Jeremy Wastweet, the anticipated Red Day calendars that NAVFAC
provided to LCC-MZT were not accurate, nor a “valuable planning tool” because “[t]hey
changed on a -- on a regular basis and typically short notice as well.” Mr. Wastweet
asserted that, on average, changes to the anticipated Red Day calendar were made
within twenty-four to forty-eight hours. Jim Mortensen described Red Days as a “moving
target.” Regarding the impact of the changes in anticipated Red Days, Jeremy Wastweet
and plaintiff’s attorney Craig Ramseyer engaged in the following discussion:

      Mr. Ramseyer: [W]hen you would receive notice, let’s say 24 hours, what
      did you do if you had deliveries scheduled for that next day that you were
      getting 24 hours’ notice of a red day?

      Mr. Wastweet: You had to make calls immediately and get them
      rescheduled for the -- the next time that they were available.

      Mr. Ramseyer: You ever have instances where you couldn’t get ahold of
      suppliers?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: What would happen then?

      Mr. Wastweet: They would attempt to deliver it and be turned away.

      Mr. Ramseyer: And so as these changes occurred, what did -- what did it
      do to your ability to schedule the work?

      Mr. Wastweet: Made it extremely difficult to plan something and stick to your
      plan.

      Mr. Ramseyer: And in connection with certain deliveries, let’s say concrete,
      if you had a day change very quickly to a red day and you had scheduled a
      concrete pour, couldn’t you just reschedule that concrete pour for the
      following day and get back on schedule?

      Mr. Wastweet: No.

      Mr. Ramseyer: Why not?

      Mr. Wastweet: Usually our pours were fairly large. So it would take the
      majority of the capacity of Hard Rock Ready-Mix. So when you change a
      pour like that, it’s usually a week to two weeks out before you can
      reschedule it.
      Mr. Ramseyer: So you would lose a week to two weeks on a concrete pour
      if you got late notice of a red day?

                                           47
      Mr. Wastweet: Yes.

      Mr. Ramseyer: And what did that do to your ability to meet schedule?

      Mr. Wastweet: Made it difficult to meet.

      Mr. Ramseyer: And did these red-day changes occur throughout the
      project?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: When you would set up a concrete pour, for instance, how
      far in advance were you typically setting up that concrete pour, planning
      that concrete pour?

      Mr. Wastweet: At least two weeks in advance to be able to get the service
      that we needed.

       LCC-MZT’s Mr. Mortensen also testified regarding the impacts of receiving short
notice regarding anticipated Red Days, stating:

      I thought about this the other day as I was putting a construction schedule
      together. Shifting days is not an easy thing to do for a superintendent. You
      get subcontractors, you get material suppliers, you get everybody lined up,
      and all of a sudden now you’re going to tell them they can’t do it on this day.
      So everybody gears up and makes that change. And then you turn around
      and say, Okay, wait a minute. Now you’re going to be allowed to do it so we
      need you back on Tuesday, but Thursday we’re going to have an
      interruption.

Robert Berger, LCC-MZT’s quality control manager until approximately September 19,
2013, testified:
       [Y]ou know, we didn’t know when red days would change. So I’d have
       inspectors scheduled to come in and do some work, and then all of a sudden
       we’d find out that today’s a red day. Two days before it wasn’t a red day, or
       the day before it wasn’t a red day. And then all of a sudden it’s a red day,
       so we’d have to reschedule everybody. And it got hectic.

Moreover, according to Mr. Berger, if an inspection had to be rescheduled, “[m]ost of the
time” Mr. Berger was unable to move the “next phase of work until it’s been inspected.”

      On August 14, 2013, NAVFAC and LCC-MZT had a partnering meeting during
which the impacts of Red Days were discussed. On August 30, 2013, LCC-MZT and
NAVFAC bilaterally executed Modification No. A00010 (Modification 10) to the Contract.

                                            48
Modification 10 compensated LCC-MZT, among other things,21 “for all additional labor
material and associated costs regarding impacts associated with operation-restricted
delays (Red Days) that were incurred June 14, 2013 through August 14, 2013.”
Modification 10 also changed the completion dates by modifying the Contract, as follows:

      Extension of time is required by reason of this modification. As per the
      agreement for PC 0019 (REA – Red Day Impacts), the contract is modified
      as follows:

      (a) The Substantial Completion Date (SCD), as further defined in 5252.211-
      9301 ~ Phased Construction Schedule, is hereby extended by 31 calendar
      days to DECEMBER 16, 2013. Liquidated damages, as further defined in
      52.211-12, remain unchanged.

      (b) The Contract Completion Date, as further defined in 5252.211-9301 ~
      Phased Construction Schedule, is hereby extended by 32 calendar days to
      FEBRUARY 16, 2014. Liquidated damages, as further defined in 52.211-
      12, remain unchanged.

(capitalization and emphasis in original). During his testimony, LCC-MZT project manager
Jim Mortensen indicated that LCC-MZT and NAVFAC agreed that Red Days not
addressed in Modification 10, such as Red Days occurring in the future, would be
analyzed on a case-by-case basis. On August 26, 2013, Mr. Mortensen sent an e-mail
message to the NAVFAC team, which stated:

      Mr. Hortin,

      We have a question regarding the future RED DAY impacts that we are to
      incorporate into the project schedule: it is our understanding that we have
      basically two (2) SCD [Substantial Completion Date] dates. The first is the
      hard date based on the impacts to August 14, 2013 and the second is the
      moving date based on the future RED DAY’s. Our agreement at the
      partnering session was determined to be 22 RED DAYS to December 16,
      2013 which moves the SCD to January 7, 2014. The question is how will
      this language be incorporated into the modification [10] - right now we don’t
      see any of this included in the language of the amendment which provides
      for the extended SCD.

(capitalization in original). That same day, contracting officer Mona Carlson responded,
stating:

      Mr. Mortensen ~ This is a multiple phase situation. The modification with
      your for [sic] signature addresses the impacts from previous red day

 Modification 10 increased the value of the Contract by $32,095.00 to compensate LCC-
21

MZT for costs associated with groundwater controls on the construction project site.
                                           49
       impacts. It brings us to closure on previous days and reflects an extension
       to the SCD [Substantial Completion Date] and CCD [Contract Completion
       Date] (linked by 60 days). December 16, 2013 was longer than the actual
       days, but agreed to by both parties[.]

       As part of the agreement we agreed to incorporate into the schedule “future”
       impacts associated with the actual red day calendar. These impacts may or
       may not be realized and will most likely change so no extension will be
       granted or addressed at this time. . . . The partnering notes reflect an
       agreement that if we can meet the “future” impact date without further delay,
       the Government will extend the SCD and CCD accordingly without further
       penalty of LDs. If this date is not met, we will have to revisit the cause as to
       why not. Accordingly, monthly partnering sessions were established to
       better handle the dates on a more frequent basis. Bottom line, we cannot
       address the future impacts as they have not been realized yet.

       Is that any more clear?

(capitalization in original). In response, Mr. Mortensen stated that “[w]e concur with the
below recap of the agreement and understand that future impacts will be handled when/if
realized. We just needed to ensure the agreement was captured accurately so Mr. Baker
who was not at the meeting, can sign the document.”

Electrical Duct Bank Scaling Issue

       LCC-MZT also experienced an issue with another electrical duct bank on the P-
913 project in which the duct bank which was actually installed was double the size of
what was indicated on the design plans. This issue was separate from the issues LCC-
MZT experienced with respect to the undisclosed water line and the other electrical duct
bank, discussed above. Scott Wakefield, the owner of LCC-MZT’s subcontractor, PSW
Electric, testified with regard to this issue on direct examination by plaintiff’s counsel, Mr.
Ramseyer, as follows:

       Mr. Ramseyer: So was there an issue with a scale sizing of an electrical
       duct bank on the project?

       Mr. Wakefield: There was.

       Mr. Ramseyer: And what was that issue?

       Mr. Wakefield: The issue was that the scale was half of what was actual on
       the – was half on the drawings of what was actually in the field.

       Mr. Ramseyer: And did that impact your ability to do you contract work?

                                              50
       Mr. Wakefield: Well, it did in the fact that we were seeking approval of the
       change while performing the work, yes.

LCC-MZT’s project manager Jim Mortensen testified that “the construction schedule
identified the length and time that it would take to put in the duct bank, and the first
notification on the production reports was September 17th of 2012, and the last duct bank
was put in May 23rd, 2014.” Plaintiff did not produce any documents at trial which were
contemporaneous with when this electrical duct bank scaling issue was occurring on the
project, however, in one of plaintiff’s May 26, 2017 requests for a contracting officer’s final
decision, which are discussed below, plaintiff provided additional background on the
electrical duct bank scaling issue, stating:

       LCC-MZT originally submitted RFI - 0056 on September 24, 2012 notifying
       the Government that while performing site measurements for layout of the
       site electrical duct banks that the scale on the Electrical Site Drawings ES-
       101, ES-111 and ES-121 appear to be incorrect and the scale appears to
       be approximately fifty percent (50%) of the scale that was measured in the
       field. The Government responded on October 2, 2012 and agreed that the
       scale shown on the drawings was incorrect. The Government instructed
       LCC-MZT to change the scale . . . .

       LCC-MZT requested in Serial Letter 0015 (Tab B) a Proposed Change (PC)
       be issued for the additional costs associated with the additional duct banks
       required by the change of the scale on the drawings dated March 5, 2013.
       The Government did not acknowledge receipt until March 11, 2013. The
       Government responded in Serial Letter 0039 dated April 30, 2013 (Tab C)
       that the Government finds the response to RFI 056 did not constitute a
       change to the contract requirements . . . .

The May 26, 2017 request for a contracting officer’s final decision further explains that
after additional correspondence between LCC-MZT and NAVFAC, “[t]he Government
reversed its original position of ‘no merit’ and found ‘partial merit,’” and that “[t]he
Government issued PC 0021 for tracking purposes.” (capitalization and emphasis in
original). The May 26, 2017 request for contracting officer’s final decision continues:
       LCC-MZT took exception to the Government’s response in Serial Letter
       0063 of only “Partial Merit” and the costs associated with our Electrical
       Subcontractor (PSW Electric) was the only impact due to the incorrect
       electrical scale. PSW installed the conduit associated with this work and
       LCC-MZT with the help of other subcontractors excavated the trench,
       placed the rebar, concrete encased and backfilled the additional lineal
       footage of the added duct banks. The work was interrupted throughout the
       process by red days, red day schedule changes, impacts from weather due
       to PC-0004 contract extension, and impacts due to the restricted site. The
       proposal submitted for PC 0021 was $464,587.00.

                                              51
(capitalization and emphasis in original). LCC-MZT’s May 26, 2017 request for a
contracting officer’s final decision explains that, after further correspondence between the
parties, “[t]he Government sent LCC-MZT an offer to settle on January 5, 2016 for
$325,608.00” for PC 0021, and that “LCC-MZT accepted the Government’s offer for PC
0021 - Electrical Scale Change on February 5, 2016.”

      On May 20, 2016, the parties bilaterally executed Modification 20, which increased
the Contract $322,905.00 in relation to “PC 0021 ~ REA RFI 056 Electrical Drawing
Scales.” (capitalization and emphasis in original). Modification 20 stated the following:

       The following items are applicable to this modification:

       (1) The subject contract is hereby modified to compensate the Contractor
       for all additional labor, material, equipment, and associated costs due to the
       incorrectly labeled electrical drawing scales as further defined in the
       Contractor’s Request for Equitable Adjustment (REA) (Serial Letter No.
       0015 dated March 5, 2013 and Serial Letter No. 0026 dated May 17, 2013),
       as negotiated on May 18, 2016. These documents are hereby incorporated
       by reference.

       PC 0021 ~ REA RFI 056 Electrical Drawing Scales
       Increase: $322,905.00

       (2) Extension of time is not required by reason of this modification. All other
       terms and conditions remain unchanged.

       (3) Acceptance of this modification by the contractor constitutes an accord
       and satisfaction and represents payment in full (for both time and money)
       and for any and all costs, impact effect, and for delays and disruptions
       arising out of, or incidental to, the work as herein revised. As a result, the
       total amount of the contract is hereby increased as follows:

       Previous Contract Total:              $12,906,657.25
       New Contract Total:                   $13,229,562.25
       Modification A00020 Total:            $322,905.00

(capitalization and emphasis in original).

Substantial Completion, Contract Completion, Certified Claims, and Final Decisions

        The parties have jointly stipulated that NAVFAC determined that LCC-MZT’s work
under the Contract on the P-913 project was substantially complete on June 11, 2014. In
a letter dated July 28, 2014 sent by NAVFAC to LCC-MZT, Dana Bolte, who was, at that
time, serving as a NAVFAC contracting officer, stated:

                                              52
       In accordance with FAR 52.246-12 INSPECTION OF CONSTRUCTION,
       the Government has taken possession of all facilities within the scope of P-
       913 under the subject contract. After multiple Completion Inspections as
       described in paragraph 116 of Specification Section 01 45 0000 20,
       Substantial Completion was established on June 11, 2014. Outstanding
       deficiencies continue to be reviewed and/or resolved during the ongoing
       weekly Red Zone Meetings each Monday morning.

(capitalization in original). During the trial, Mr. Bolte testified

       after we do beneficial occupancy, we turn it over -- the facility to the
       customer. There’s normally a punch list with small items that need to be
       completed. It doesn’t prevent the customer from using the facility, but
       they’re still required to be completed per the contract. For example, painting,
       touchup, small repairs here and there.

In an e-mail message dated December 21, 2015, Mr. Bolte identified March 5, 2015 as
the date on which LCC-MZT had achieved contract completion on the P-913 project. At
the trial, Dana Bolte stated that “then there was a long delay in there, as you can see, till
March 5th, 2015. We were waiting on manuals and certificates, administrative-type
things.” Thus, NAVFAC established a substantial completion date of June 11, 2014 and
a contract completion date of March 5, 2015.

       By letter dated May 8, 2015, LCC-MZT submitted requests for equitable
adjustments (REAs) for “REAS Nos. 1 thru 40” to NAVFAC and requested payment of
$5,990,372.39. (capitalization in original). On May 28, 2015, LCC-MZT submitted its first
of three requests for a contracting officer’s final decision. LCC-MZT’s May 28, 2015
request for a contracting officer’s final decision consisted of thirteen claims: REAs 17, 27,
29, and 32 through 40, as well as PC 0025. REAs 17, 27, 29, and 32 through 40, and PC
0025. Specifically, LCC-MZT’s May 28, 2015 request for a contracting officer’s final
decision requested:

   •   In REA 17, LCC-MZT requested an adjustment to the Contract in the amount of
       $99,254.00 for price increases related to the government’s FF&E package.

   •   In REA 27, LCC-MZT requested an adjustment to the Contract in the amount of
       $134,214.00 for direct costs associated with Red Day disruptions.

   •   In REA 29, LCC-MZT requested an adjustment to the Contract in the amount of
       $252,609.00 for testing costs related to the September 19, 2013 Stop Work Order,
       as well as a time extension of twenty-seven days.

   •   In REA 32, LCC-MZT requested an adjustment to the Contract in the amount of
       $956,578.00 for additional field overhead.

                                                53
     •   In REA 33, LCC-MZT requested an adjustment to the Contract in the amount of
         $336,743.00 for loss of production due to stacking of trades, out of sequence work,
         and damage to different trades.

     •   In REA 34, LCC-MZT requested an adjustment “per the Eichleay Method” to the
         Contract in the amount of $574,497.03 for extended home office overhead.

     •   In REA 35, LCC-MZT requested an adjustment to the Contract in the amount of
         $91,714.53 for interest LCC-MZT incurred for non-payment of progress payments.

     •   In REA 36, LCC-MZT requested an adjustment to the Contract in the amount of
         $196,134.00 due to LCC-MZT’s hiring of a schedule and claims consultant needed
         to prepare time impact analyses and REAs.

     •   In REA 37, LCC-MZT requested an adjustment to the Contract in the amount of
         $11,657.00 for additional fees LCC-MZT was required to pay the court-appointed
         receiver, which LCC-MZT asserted was caused by the government’s delay.

     •   In REA 38, LCC-MZT requested an adjustment to the Contract in the amount of
         $293,522.56 for increased change order markup.

     •   In REA 39, LCC-MZT requested an adjustment to the Contract in the amount of
         $15,245.00 for attorney fees incurred by LCC-MZT as a result “of the
         Government’s unwillingness to negotiate fairly on the impacts incurred by LCC-
         MZT.”

     •   In REA 40, LCC-MZT requested an adjustment the Contract in the amount of
         $504,170.00 for additional costs LCC-MZT allegedly incurred in connection with
         PC 0004.

     •   PC 0025 was titled “Grounding Issue Additional Cost” and sought $29,706.00.

Subsequently, as discussed below, REAs 31 and 41 were submitted for a contracting
officer’s final decision later in two separate letters on May 26, 2017.

        At the trial, NAVFAC contracting officer Dana Bolte testified that NAVFAC
requested that the Defense Contract Audit Agency (DCAA) “audit” LCC-MZT’s REAs,
which Mr. Bolte stated NAVFAC “normally” did “with claims, especially big claims.” Rozell
Drake, who testified that she was an auditor with the DCAA, and had been for the last
thirty years, and that she was assigned to examine LCC-MZT’s REAs from “maybe” July
to October 2015. Ms. Drake, who appeared to be a competent and intelligent individual,
however, stated that she only “[v]aguely” remembered what her assignment with LCC-
MZT entailed, stating, “I think it was -- it was, like, an equitable adjustment, I think. I’m
guessing.”22 Ms. Drake also stated that she met with John King, who served as LCC-

22
     During Rozell Drake’s direct testimony, conducted by plaintiff’s counsel Katherine
                                             54
MZT’s scheduler, claims consultant, and interim project manager during the P-913
project, although Ms. Drake could not remember the amount of times she met with Mr.
King. Ms. Drake did remember that she met with Mr. King more than two times, but could
not remember if she met with Mr. King more than six times stating, “I don’t know. I don’t -
- I don’t know. I don’t remember. Maybe six times.”

       On October 5, 2015, John King sent Bryan Zatica an e-mail message, attached to
which was “a recap of the findings from the DCAA auditors.” John King attached the
following chart to his October 5, 2015 e-mail message:

While looking at his October 5, 2015 e-mail message during the trial, John King testified
that he forwarded the information in his October 5, 2015 e-mail message to Bryan Zatica
to show Mr. Zatica “[j]ust where the differences were found between her [Rozell Drake’s]
review and our accounting system” and “to show him where we had -- we didn’t agree
with what the review was showing from our original REA, just so he’d have an idea.”

Knudsen, Ms. Drake often quibbled with Ms. Knudsen over the definition of the terms
used in Ms. Knudsen’s questions.
                                            55
        In a memorandum dated December 31, 2015 and addressed to NAVFAC, DCAA
stated that it agreed to NAVFAC’s request for DCAA “to perform an examination of LCC-
MZT’s price adjustment claim to determine if proposed amounts comply with FAR 52.233-
1” for LCC-MZT’s REAs 32, 33, and 34. In its May 5, 2016 audit report, DCAA stated that
it questioned all of the costs claimed in REAs 32, 33, and 34 because the “claimed costs
are unrelated to the Government-caused delays ($1,772,386) and errors were found in
the claimed costs in REAs 32 and 33 ($95,432). Additionally, we identified $184,293 of
the direct labor costs in REA 32 that were claimed more than once in the total price
adjustment claim.”

        On August 1, 2016, Eileen Mitchell, Chief of the NAVFAC Contracting Office,
issued a contracting officer’s final decision denying LCC-MZT’s May 28, 2015 certified
claim for 17, 27, 29, and 32 through 40. Eileen Mitchell’s August 1, 2016 final decision,
however, stated that the “Administrative Contracting Officer determined merit for the
differing site condition associated with PC 0025” and provided LCC-MZT $28,438.37, plus
interest, and 135 days of non-compensable delay.

       On August 10, 2016, contracting officer Dana Bolte sent a letter to LCC-MZT
stating that the “Government agrees to release all potential LD’s [liquidated damages] for
Phase B equaling $157,384.” (capitalization and emphasis in original). Dana Bolte’s
August 10, 2016 letter, however, stated that potential liquidated damages for Phase A
remained applicable. At trial, Mr. Bolte testified that Phase B liquidated damages were
released to LCC-MZT, but he indicated that Phase A liquidated damages were not
released to LCC-MZT. John King also testified at trial regarding liquidated damages and
asserted that NAVFAC has retained $185,346.00 in liquidated damages. As stated above,
Modification 9 to the Contract established that Phase A liquidated damages were relevant
to the Substantial Completion Date under the Contract, while Phase B liquidated
damages were relevant to the Contract Completion Date under the Contract.

        In a letter dated May 26, 2017, LCC-MZT submitted its second of three requests
for a contracting officer’s final decision, for REA 31 to then-NAVFAC contracting officer
Terry Holmberg. In REA 31, LCC-MZT requested an adjustment of $503,023.00 to the
Contract because the government allegedly directed LCC-MZT to accelerate
performance. In a second letter also dated May 26, 2017, LCC-MZT submitted its third
and final request for a contracting officer’s final decision, for REA 41. In REA 41, LCC-
MZT requested an adjustment of $131,828.00 to the Contract for additional costs incurred
related to the electrical duct bank scaling issue. On November 17, 2017, NAVFAC Chief
of the Contracting Office, Eileen Mitchell, denied both LCC-MZT’s second request for a
contracting officer’s final decision and LCC-MZT’s third request for a contracting officer’s
final decision in full.

                                            56
                                     DISCUSSION

        In the above-captioned case, LCC-MZT requested and received contracting officer
final decisions on the following fourteen REAs, as well as PC 002523:
           Claim Number                   Claim Title           Amount Requested
   1           REA 17                “FF&E Cost Variance”             $99,254.00
   2           REA 27                “Red Day Disruptions”          $134,214.00
   3           REA 29                  “Roof Stop Work”             $252,609.00
   4           REA 31                    “Acceleration”             $503,023.00
   5           REA 32            “Additional Field Overhead”        $956,578.00
   6           REA 33               “Loss of Production for         $336,743.00
                                  Stacking of Trades, Out of
                                    Sequence Work, Trade
                                            Damage”
   7           REA 34               “Extended Home Office           $574,497.03
                                           Overhead”
   8           REA 35             “Interest Expense for Non-          $91,714.53
                                           Payment”
   9           REA 36          “Schedule & Claims Consultant        $196,134.00
                                              Fees”
  10           REA 37             “Additional Receiver Fees”          $11,657.00
  11           REA 38                  “Additional Profit”          $293,522.56
  12           REA 39                   “Attorney Fees”               $15,245.00
  13           REA 40           “Additional Costs Associated        $504,170.00
                                         with PC 0004”
  14           REA 41                “Electrical Duct Bank”         $131,828.00
  15          PC 0025            “Grounding Issue Additional          $29,706.00
                                              Cost”

23
   As discussed above, Chief of NAVFAC Contracting Office Eileen Mitchell’s August 1,
2016 final decision stated that the “Administrative Contracting Officer determined merit
for the differing site condition associated with PC 0025,” which was related to the
grounding specification issues on the P-913 project, and provided LCC-MZT $28,438.37,
plus interest, and 135 days of non-compensable delay. Modification 24, which was issued
on August 17, 2016, stated that it “incorporated by reference” Chief of NAVFAC
Contracting Office Eileen Mitchell’s August 1, 2016 final decision. Despite having been
awarded $28,438.37 plus interest for PC 0025 in Modification 24, the total amount
requested in plaintiff’s second amended complaint still includes the full $29,706.00
previously awarded for PC 0025. As will be discussed below, however, aside from arguing
that the delay from the grounding issue affected LCC-MZT’s ability to complete the P-913
project in the time required, asserting that NAVFAC was solely responsible for such delay,
and scattering such delay-related costs associated with the grounding delay throughout
LCC-MZT’s various other REAs, LCC-MZT does not specifically elaborate on any
additional entitlement grounds specifically for PC 0025. For these reasons, the court does
not address PC 0025 in a stand-alone section as it does for the remainder of plaintiff’s
REAs.
                                           57
        Whether plaintiff is entitled to relief based on the claims outlined above requires
the court to interpret the Contract between LCC-MZT and NAVFAC and the modifications
thereto. “Contract interpretation starts with the language of the contract.” SUFI Network
Servs., Inc. v. United States, 785 F.3d 585, 593 (Fed. Cir. 2015); see also Premier Office
Complex of Parma, LLC v. United States, 916 F.3d 1006, 1011 (Fed. Cir. 2019) (citing
NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)); Precision Pine
& Timber, Inc. v. United States, 596 F.3d 817, 824 (Fed. Cir. 2010), cert. denied, 562 U.S.
1178 (2011); Bell/Heery v. United States, 739 F.3d 1324, 1331 (Fed. Cir.), reh’g and reh’g
en banc denied (Fed. Cir. 2014); LAI Servs., Inc. v. Gates, 573 F.3d 1306, 1314 (Fed.
Cir.), reh’g denied (Fed. Cir. 2009); Barron Bancshares, Inc. v. United States, 366 F.3d
1360, 1375 (Fed. Cir. 2004); Foley Co. v. United States, 11 F.3d 1032, 1034 (Fed. Cir.
1993); HCIC Enters., LLC v. United States, 147 Fed. Cl. 118, 124 (2020); Nw. Title
Agency, Inc. v. United States, 126 Fed. Cl. 55, 57-58 (2016) (citing Foley Co. v. United
States, 11 F.3d 1032, 1034 (Fed. Cir. 1993)) (“The starting point for any contract
interpretation is the plain language of the agreement.”), aff’d, 855 F.3d 1344 (Fed. Cir.
2017); Beard v. United States, 125 Fed. Cl. 148, 158 (2016); Eden Isle Marina, Inc. v.
United States, 113 Fed. Cl. 372, 483-84 (2013).

        “‘“In contract interpretation, the plain and unambiguous meaning of a written
agreement controls.”’” Arko Exec. Servs., Inc. v. United States, 553 F.3d 1375, 1379 (Fed.
Cir. 2009) (quoting Hercules Inc. v. United States, 292 F.3d 1378, 1380-81 (Fed. Cir.),
reh’g and reh’g en banc denied (Fed. Cir. 2002) (quoting Craft Mach. Works, Inc. v. United
States, 926 F.2d 1110, 1113 (Fed. Cir. 1991))). “Terms must be given their plain meaning
if the language of the contract is clear and unambiguous.” SUFI Network Servs., Inc. v.
United States, 785 F.3d at 593 (citing Coast Fed. Bank, FSB v. United States, 323 F.3d
1035, 1038 (Fed. Cir. 2003)); see also Canpro Invs. Ltd. v. United States, 130 Fed. Cl.
320, 347, recons. denied, 131 Fed. Cl. 528 (2017); Beard v. United States, 125 Fed. Cl.
at 158 (“If the contract language is unambiguous, then it must be given its plain and
ordinary meaning . . . .”). The United States Court of Appeals for the Federal Circuit stated
in Massie v. United States:

       In interpreting a contract, “[w]e begin with the plain language.” “We give the
       words of the agreement their ordinary meaning unless the parties mutually
       intended and agreed to an alternative meaning.” In addition, “[w]e must
       interpret the contract in a manner that gives meaning to all of its provisions
       and makes sense.”

Massie v. United States, 166 F.3d 1184, 1189 (Fed. Cir. 1999) (quoting McAbee Constr.,
Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir.), reh’g denied and en banc suggestion
declined (Fed. Cir. 1996) (internal citations omitted)); Jowett, Inc. v. United States, 234
F.3d 1365, 1368 (Fed. Cir. 2000) (quoting McAbee Constr., Inc. v. United States, 97 F.3d
at 1435; and Harris v. Dep’t of Veterans Affairs, 142 F.3d 1463, 1467 (Fed. Cir. 1998));
Harris v. Dep’t of Veterans Affairs, 142 F.3d at 1467; see also Coast Prof’l, Inc. v. United
States, 828 F.3d 1349, 1354 (Fed. Cir. 2016); Shell Oil Co. v. United States, 751 F.3d
1282, 1305 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2014); McHugh v. DLT Sols., Inc.,
618 F.3d 1375, 1380 (Fed. Cir. 2010); Giove v. Dep’t of Transp., 230 F.3d 1333, 1340-41

                                             58
(Fed. Cir. 2000) (“In addition, we must interpret the contract in a manner that gives
meaning to all of its provisions and makes sense. Further, business contracts must be
construed with business sense, as they naturally would be understood by intelligent men
of affairs.” (citations omitted)); Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.
Cir. 1991) (indicating that a preferable interpretation of a contract is one that gives
meaning to all parts of the contract rather than one that leaves a portion of the contract
“useless, inexplicable, void, or superfluous”). A Judge of the United States Court of
Federal Claims has explained:

       “The words of a contract are deemed to have their ordinary meaning
       appropriate to the subject matter, unless a special or unusual meaning of a
       particular term or usage was intended, and was so understood by the
       parties.” Lockheed Martin IR Imaging Sys., Inc. v. West, 108 F.3d 319, 322
       (Fed. Cir. 1997). “Under general rules of contract law we are to interpret
       provisions of a contract so as to make them consistent.” Abraham v.
       Rockwell Int’l Corp., 326 F.3d 1242, 1251 (Fed. Cir. 2003). “[A]n agreement
       is not to be read in a way that places its provisions in conflict, when it is
       reasonable to read the provisions in harmony. . . . [T]he provisions must be
       read together in order to implement the substance and purpose of the entire
       agreement.” Air-Sea Forwarders, Inc. v. United States, 166 F.3d 1170, 1172
       (Fed. Cir. 1999). “A reasonable interpretation must assure that no contract
       provision is made inconsistent, superfluous, or redundant.” Medlin Const.
       Grp., Ltd. v. Harvey, 449 F.3d 1195, 1200 (Fed. Cir. 2006) (internal
       quotation marks omitted).

Dynetics, Inc. v. United States, 121 Fed. Cl. 492, 512 (2015); see also Marquardt Co. v.
United States, 101 Fed. Cl. 265, 269 (2011) (“In interpreting contractual language, the
court must give reasonable meaning to all parts of the contract and avoid rendering
portions of the contract meaningless.” (citation omitted)).

        The Federal Circuit also has indicated that “‘[t]he contract must be construed to
effectuate its spirit and purpose giving reasonable meaning to all parts of the contract.’”
Arko Exec. Servs., Inc. v. United States, 553 F.3d at 1379 (quoting Hercules Inc. v. United
States, 292 F.3d at 1380-81); see also LAI Servs., Inc. v. Gates, 573 F.3d at 1314;
Gardiner, Kamya & Assocs., P.C. v. Jackson, 467 F.3d 1348, 1353 (Fed. Cir. 2006)
(citations omitted); Medlin Constr. Grp., Ltd. v. Harvey, 449 F.3d at 1200; Hunt Constr.
Grp., Inc. v. United States, 281 F.3d 1369, 1372 (Fed. Cir. 2002) (“We begin with the plain
language when interpreting a contract . . . . The contract must be considered as a whole
and interpreted to effectuate its spirit and purpose, giving reasonable meaning to all
parts.” (citations omitted)); Beard v. United States, 125 Fed. Cl. at 158 (“In construing the
meaning of a contractual provision, the court does not interpret the disputed term or
phrase in isolation, but ‘construes contract terms in the context of the entire contract,
avoiding any meaning that renders some part of the contract inoperative.’” (quoting Pac.
Gas & Elec. Co. v. United States, 536 F.3d 1282, 1288 (Fed. Cir. 2008))).

                                             59
        It has been “‘a fundamental precept of common law that the intention of the parties
to a contract controls its interpretation.’” Tri-Star Elecs. Int’l, Inc. v. Preci-Dip Durtal SA,
619 F.3d 1364, 1367 (Fed. Cir. 2010) (quoting Beta Sys., Inc. v. United States, 838 F.2d
1179, 1185 (Fed. Cir. 1988) (quoting Firestone Tire & Rubber Co. v. United States, 444
F.2d 547, 551, 195 Ct. Cl. 21, 30 (1971))); Alvin, Ltd. v. United States Postal Serv., 816
F.2d 1562, 1565 (Fed. Cir. 1987) (“In the case of contracts, the avowed purpose and
primary function of the court is the ascertainment of the intent of the parties.”); see also
Flexfab, LLC v. United States, 424 F.3d 1254, 1262 (Fed. Cir. 2005) (“[I]ntent is
determined by looking to the contract and, if necessary, other objective evidence. In the
absence of clear guidance from the contract language, the requisite intent on the part of
the government can be inferred from the actions of the contracting officer . . . .”); LaBatte
v. United States, 142 Fed. Cl. 425, 433 (2019) (citations omitted); Canpro Invs. Ltd. v.
United States, 130 Fed. Cl. at 347 (“Contract interpretation requires determining the
intention of the parties.”).

REA 27 – Red Day Disruptions

         REA 27 sought an adjustment to the Contract in the amount of $134,214.00 and
asserts that the “inability of the government to accurately provide a schedule at the
beginning of the project or at the beginning of each month constitutes a contract change
for time and costs” under the Changes clause, FAR § 52.243-4 (2012). In plaintiff’s post-
trial brief, plaintiff asserts that in REA 27, LCC-MZT “seeks its labor costs in the amount
of $134,214 for the time workers were actually sequestered in the enclave.” According to
plaintiff, Modification 10 pertains only to Red Days occurring before August 14, 2013, and
LCC-MZT is entitled to time and costs for Red Days occurring “from August 15, 2013 to
the end of the Project,” which plaintiff contends occurred when LCC-MZT achieved
substantial completion on May 30, 2014. Plaintiff argues that “Red Days” were to be
defined in the Specifications as “non-work days.” Defendant, however, asserts that the
Contract’s Specifications state that LCC-MZT should anticipate ten Red Days per month,
and that only April 2014 had more than ten anticipated Red Days. Defendant also argues
that “LCC-MZT was already awarded all red days after December 16, 2014,” as thirty Red
Days appear to have been considered in Modification 24, which gave a 135-calendar day
time extension of the Contract’s Substantial Completion Date from December 16, 2013
to April 30, 2014. Defendant argues “LCC-MZT’s red day claim also ignores the Contract
specifications requiring that, for red days in excess of ten per month, it had to demonstrate
that, on any particular red day, 50 percent or more of its work was impacted. Only then
could it receive excusable—never compensable—delay.” (internal references omitted).

       As noted above, paragraph 1.2.1 of section 01 14 00 in the Contract’s
Specifications states:

       (1) 10 work days a month will be impacted by convoys and operations at
       the Explosive Handling Wharf Area. The impacted work days may not be
       consecutive. A schedule reflecting open or available timeframes will be
       provided to the Contractor after award, and monthly during the project. An
       updated schedule will be provided five (5) days prior to the beginning of

                                              60
       each month for the following month. Urgent operation requirements will
       require adjustments to the schedule. Changes resulting in less than 48
       hours notice will be considered a changed condition.

       (2) Notification, 10 days in advance of activities that will need to access the
       Waterfront Restricted Area (Explosive Handling Wharf Entry Control Point
       at [redacted]) will need to be coordinated with the Contracting Officer and
       SWFPAC Facilities.

       [Redacted]; the contractor shall stop all exterior work and move to their
       personnel out of visual range of [redacted] Road. There will be
       approximately 300 convoys during this project.

       During times of convoys past the construction site [sic] the contractor will
       be directed, by the Contracting Officer or designate, to a muster [sic] his
       forces so that they will not be in visual contact with the convoy. Contractor
       shall provide an area, or means to prevent observation of the convoy.
       Contractor shall submit a View Obstruction Plan for Contracting Officer
       approval.

       (3) [Redacted] Road will not be accessible during convoys or operations at
       EHW. No Equipment or material deliveries will be allowed. Contractor will
       be restricted to the Construction Enclave during convoys and Operations at
       EHW. Access to the project site will be through the [redacted] Road Trail
       from [redacted] Road, material and equipment must be staged in the
       Construction Enclave or be brought in through the [redacted] Road Trail.
       Contractor parking will be relocated to a site within 5 miles of the project
       site. Exact location will be provided by the Contracting Officer. Contractor
       will be responsible for shuttling workers from this parking area.

       a. All Zones:

              (1) Direct access must be maintained to all facilities, roads, and
              structures at all times. As a minimum, a least one road (no less than
              15’) shall be provided for vehicle access to facilities or roads.
              Separate pedestrian access must be maintained.

(capitalization in original). The Contract’s Specifications in paragraph 1.2.1 of section 01
14 00, therefore, provided LCC-MZT with an overview of what was to be expected on
days with convoy movements, which the parties refer to as Red Days, and informed LCC-
MZT that ten such Red Days were anticipated to occur each month, and could occur non-
consecutively. As the above-quoted paragraph 1.2.1 of section 01 14 00 indicates, a
change of a day’s status to an anticipated Red Day with less than forty-eight hours’ notice
also was to be “considered a changed condition.”

       Section 01 32 17.00 20 in the Specifications required LCC-MZT to submit

                                             61
schedules to NAVFAC. Paragraph 1.6.2.5 in section 01 32 17.00 20 provides that a
“schedule of monthly anticipated adverse weather delays shall be represented by
programming the Weather Calendar(s) to include non-work days occurring within work
weeks and are in addition to the non-work days associated with Federal Holidays, and/or
security delays.” (capitalization in original). Anticipated days with adverse weather,
therefore, were considered to be “non-work days,” as were “Federal Holidays and/or
security delays.” Under the Contract, “[r]egular core working hours” were an eight-and-a-
half-hour period “between 7:00 a.m. and 5:00 p.m., Monday through Friday, excluding
Government holidays.” The Contract’s Specifications also state that a “lost workday due
to weather conditions is defined as a day in which the Contractor cannot work at least 50
percent of the day on the impacted activity.” Although the Contract’s Specifications
instructed LCC-MZT to anticipate and schedule non-work days due to weather, the
Contract’s Specifications also permitted LCC-MZT to “request an adjustment” if it
experienced a lost work day due to weather.

        Paragraph 1.6.2.6 in section 01 32 17.00 20 in the Contract’s Specifications was
titled “Anticipated Operation-Restricted Delays” and states:

      The Contractor shall use the requirements listed in Specification Section 01
      14 00 “Work Restrictions” following schedule of anticipated monthly non-
      work days due to operations as the basis for establishing a [sic] “Operation-
      Restricted Delay Calendar” showing the number of anticipated non-
      workdays for each month due to operations, exercises and and [sic] are in
      addition to non-work days associated with weekends, Federal Holidays,
      and/or weather delays unless otherwise approved by the Contracting
      Officer.

      Schedule activity duration(s) shall be formulated with allowance for required
      adverse operational restrictions. Any activity duration, which could be
      impacted by prescribed operational restrictions (security drills, alerts,
      exercises or missile movements, etc.), due to the time period that the
      Contractor has scheduled the work, shall include an adjustment to include
      the anticipated operation-restricted delay. The number of anticipated
      adverse delays allocated to an activity will be reflected in the activity’s
      calendar.

(capitalization in original). As discussed above, Section 01 14 00 in the Contract’s
Specifications addressed what the parties referred to as Red Days, which were days with
convoy movements, and stated that ten Red Days were to be anticipated each month.
Paragraph 1.6.2.6 in section 01 32 17.00 20, which instructed the contractor to
incorporate “anticipated monthly non-work days due to operations” into an “Operation-
Restricted Delay Calendar” required LCC-MZT to schedule ten “anticipated monthly non-
work days due to operations” involving Red Days. Furthermore, as the above-quoted
paragraph 1.6.2.6 of section 01 32 17.00 20 indicates, these ten anticipated monthly non-
work days could be considered non-work days in addition to non-work days associated
with weekends, Federal Holidays, and/or weather delays unless otherwise approved by

                                           62
the Contracting Officer,” which were outside of LCC-MZT’s regular eight-and-a-half
working hours occurring Monday through Friday, and not counted against the time
allowed for LCC-MZT to complete the project. Furthermore, because the Contract’s
Specifications in paragraph 1.2.1 of section 01 14 00 instructed that LCC-MZT was
supposed to anticipate only up to ten Red Days in a single month, a circumstance
resulting in LCC-MZT actually experiencing more than ten Red Days on working days in
a single month was to be considered a changed condition. This is in addition to the
changed condition discussed above in paragraph 1.2.1 of section 01 14 00 regarding
changes in the schedule of a Red Day’s status with less than forty-eight hours’ notice.

          Paragraph 1.6.2.6 in section 01 32 17.00 20 in the Contract’s Specifications also
states:

          A lost workday due to security, convoy, and/or operational restriction delay,
          is defined as scheduled workday activity(s) in which the contractor’s
          workforce cannot work 50 percent or more of the day on the impacted
          activity(s). The contractor shall immediately notify the Contracting Officer
          when a lost workday due to restricted conditions has occurred and shall
          identify the activity(s) impacted; the operational-restricted condition
          encountered and the reason for resultant activity(s) impacted. The
          contractor shall record on Quality Control and Production Daily Reports the
          occurrence; the adverse restricted condition encountered, and reason for
          resultant activity(s) impacted.

          Approved lost workday for security, convoy, and/or operational restriction
          delay shall be actualized by an added as-built schedule activity(s) with
          activity ID including MM/DD/YEAR of occurrence, and as predecessor to
          the impacted activity(s). The contractor may request an adjustment in
          accordance with the contract clauses and the terms of this section (including
          the allocation of Float) if an activity’s number of actual adverse delay days
          exceeds the scheduled number of days anticipated and cause delay to
          project completion.

(capitalization in original). The language quoted above, discussing a “lost workday,”
appears to be the language defendant relies on when defendant argues that LCC-MZT is
required to “demonstrate that, on any particular red day, 50 percent or more of its [LCC-
MZT’s] work was impacted. Only then could it receive excusable—never compensable—
delay.” A “lost workday,” however, is “defined as [a] scheduled workday” during “which
the contractor’s workforce cannot work 50 percent or more of the day on the impacted
activity(s).” As stated above, the Contract’s Specifications contemplated that Red Days
potentially could be treated as non-work days not counted against LCC-MZT’s time to
complete the project. A lost work day, when LCC-MZT could not work more than fifty
percent of the scheduled workday, therefore, could be considered a changed condition,
and was in addition to the two other circumstances, discussed above, which also could
be considered changed conditions: (1) if LCC-MZT experienced greater than ten Red
Days on working days in a single month, or (2) if LCC-MZT experienced a change of a

                                               63
Red Day “resulting in less than 48 hours notice.” Although the Contract’s Specifications
discussed above regarding anticipated Red Days do not specify whether the above three
“changed condition[s]” were to result in LCC-MZT’s ability to “request an adjustment” in
compensability for the delays resulting from Red Days, as opposed to the adjustment in
time to complete the project, since the Contract’s Specifications already contemplated an
adjustment in time for anticipated Red Days, it would appear that the three “changed
condition[s]” discussed above could, in addition to giving LCC-MZT an adjustment in time,
also result in giving LCC-MZT an adjustment in compensation, whereas a Red Day which
did not meet one of the three “changed condition[s]” could only give LCC-MZT an
adjustment in time.
       In addition, LCC-MZT’s decision to work on anticipated Red Days does not change
that the Contract’s Specifications contemplated that the ten anticipated Red Days could
be treated as non-work days. Paragraph 1.2.1 in section 01 14 00 states that LCC-MZT
could submit a view obstruction plan to NAVFAC, which LCC-MZT did, and which
NAVFAC approved in November 2012. Thereafter, LCC-MZT was able to work during
Red Days, although LCC-MZT’s workers generally would be sequestered during convoy
movements for indefinite periods of time in a trailer. Additionally, LCC-MZT was unable
to receive deliveries during Red Days. According to plaintiff, by working on Red Days,
LCC-MZT was able to complete some work, but LCC-MZT’s ability to progress on the P-
913 project was interrupted by the sequestration and inability to receive deliveries. LCC-
MZT was not required to work on Red Days but chose to do so after NAVFAC approved
LCC-MZT’s view obstruction plan in November 2012.

        On August 14, 2013, NAVFAC and LCC-MZT had a partnering meeting, at which
the parties discussed Red Days. On August 30, 2013, LCC-MZT and NAVFAC bilaterally
executed Modification 10 to the Contract, which compensated LCC-MZT “for all additional
labor material and associated costs regarding impacts associated with operation-
restricted delays (Red Days) that were incurred from June 14, 2013 through August 14,
2013 [sic].” Modification 10 stated:

      (3) Extension of time is required by reason of this modification. As per the
      agreement for PC 0019 (REA – Red Day Impacts), the contract is modified
      as follows:

      (a) The Substantial Completion Date (SCD), as further defined in 5252.211-
      9301 ~ Phased Construction Schedule, is hereby extended by 31 calendar
      days to DECEMBER 16, 2013. Liquidated damages, as further defined in
      52.211-12, remain unchanged.

      (b) The Contract Completion Date, as further defined in 5252.211-9301 ~
      Phased Construction Schedule, is hereby extended by 32 calendar days to
      FEBRUARY 16, 2014. Liquidated damages, as further defined in 52.211-
      12, remain unchanged.

      Revised Part 1, Section 00700, pages 8, 28, & 28a, are provided.

                                           64
       (4) Acceptance of this modification by the contractor constitutes an accord
       and satisfaction and represents payment in full (for both time and money)
       and for any and all costs, impact effect, and for delays and disruptions
       arising out of, or incidental to, the work as herein revised.

(capitalization and emphasis in original). In an August 26, 2013 e-mail message from
NAVFAC contracting officer Mona Carlson to LCC-MZT’s project manager Jim
Mortensen, Ms. Carlson stated, “monthly partnering sessions were established to better
handle the dates on a more frequent basis. Bottom line, we cannot address the future
impacts as they have not been realized yet.” Mona Carlson also stated in her August 26,
2013 e-mail message that future “impacts may or may not be realized and will most likely
change so no extension will be granted or addressed at this time.” Jim Mortensen also
testified that Red Days occurring in the future would be analyzed on a case-by-case basis.
Modification 10, therefore, only addressed the impact of Red Days occurring before
August 14, 2013.

        The August 26, 2013 e-mail correspondence between NAVFAC contracting officer
Mona Carlson and Jim Mortensen indicates that NAVFAC and LCC-MZT agreed that Red
Days after August 14, 2013 would be analyzed on an individual basis. The August 26,
2013 e-mail correspondence, however, does not indicate that NAVFAC agreed that all
Red Days occurring after August 14, 2013 would be compensable. At trial, Mona Carlson
testified that she considered Red Days occurring after August 14, 2013 to be “[p]otentially”
and “[p]ossibly” compensable. The terms in paragraph 1.6.2.6 in section 01 32 17.00 20
of the Contract’s Specifications were not altered or modified to change that Red Days
could be treated as non-work days, and the Contract’s Specifications do not indicate that
LCC-MZT was to receive compensation for all non-work days associated with Red Days.
Rather, the Contract’s Specifications contemplated that Red Days could be treated in the
same manner as other non-work days, such as weekend days, and only under the
occurrence of one of the three “changed condition[s],” discussed above, could LCC-MZT
receive compensation in relation to a Red Day. LCC-MZT has not demonstrated that the
parties mutually altered the definition of Red Days in the Contract’s Specifications, but
only that the parties agreed that Red Days occurring after August 14, 2013 would be
addressed by the parties on individual bases. As such, Red Days occurring after August
14, 2013, pursuant to the Contract’s Specifications, continued to be treated as excusable
non-work days, with ten anticipated Red Days per month, and only could be considered
compensable if (1) Red Day operations exceeded greater than fifty percent of LCC-MZT’s
eight-and-a-half-hour workday, (2) there were more than ten Red Days in a given month,
or (3) a scheduling change involving a Red Day occurred with less than forty-eight hours’
notice. Whether LCC-MZT is entitled to excusable and/or compensable delay for Red
Days experienced after August 14, 2013 is discussed below.

       REA 27 also seeks “labor costs in the amount of $134,214 for the time workers
were actually sequestered.” To the extent LCC-MZT seeks labor costs occurring before
August 14, 2013, LCC-MZT’s claim is barred by the accord and satisfaction language in
Modification 10, which states that acceptance of Modification 10 “constitutes an accord
and satisfaction and represents payment in full (for both time and money) and for any and

                                            65
all costs, impact effect, and for delays and disruptions arising out of, or incidental to, the
work as herein revised.” The Contract’s Specifications did not state that LCC-MZT would
be entitled to work on Red Days. The Specifications also informed LCC-MZT that “[d]uring
times of convoys past the construction site the contractor will be directed, by the
Contracting Officer or designate, to a [sic] muster his forces so that they will not be in
visual contact with the convoy. Contractor shall provide an area, or means to prevent
observation of the convoy.” LCC-MZT had to submit to NAVFAC and have NAVFAC
approve its view obstruction plan in order to work on Red Days. That LCC-MZT’s workers
were to be sequestered during times of convoy movements was a condition required in
order for LCC-MZT to be able to work on Red Days. LCC-MZT chose to work on the
certain Red Days, during which LCC-MZT knew that its workers could be subject to
sequestration during convoy movements. LCC-MZT, therefore, is not entitled to an
increase in labor costs during such sequestration, as LCC-MZT made a decision to work
on certain Red Days and was forewarned of the possible risk of sequestration during
convoy movements. Whether LCC-MZT can recover for time lost during Red Days is
discussed below.

REA 29 – Roof Stop Work

      REA 29 relates to NAVFAC’s September 19, 2013 Stop Work Order issued after
the beams were removed following LCC-MZT’s two concrete pours on August 28, 2013
and September 4, 2013, respectively. REA 29 asserts:

       LCC MZT Team IV performed the requested testing and analysis of the
       structural roof slab. The results of the testing and analysis were that the
       extent of damage did not extend beyond areas of visible surface
       manifestation on the underside of the roof structure. The testing and
       analysis did not uncover any new areas of concern or defects in the
       concrete slab or beams: it only identified those areas which were already
       present and needed to be repaired.

REA 29 seeks an adjustment of $252,609.00 and a time extension because, according
to plaintiff, “the stop work was a disruption to the critical path activities of 27 calendar
days.” According to REA 29, LCC-MZT claims it is entitled to the extension under FAR §
52.246-12(h), which relates to impacts associated with inspection of construction.

        In plaintiff’s post-trial brief, plaintiff asserts that, while LCC-MZT “took responsibility
for the repairs of the concrete voids,” “the costs related to inspection of the structural
integrity of the roof is the responsibility of NAVFAC.” Plaintiff argues that NAVFAC
directed LCC-MZT to examine the structural integrity of the building, and that Exponent,
the third-party hired to evaluate the structural integrity of the building, “determined that
the building was structurally sound.” Plaintiff further asserts that NAVFAC contracting
officer Mona Carlson “testified that the final analysis by Exponent indicated that there was
nothing wrong with the concrete, that the roof was determined to be structurally sound,
and that LCC-MZT was entitled to its inspection costs.”

                                                66
       Defendant argues that “[a]ll costs associated with the concrete testing are the
responsibility of LCC-MZT” because “LCC-MZT was solely responsible for the concrete
pour and that, without the testing performed by Exponent, there was no way to determine
the extent of the damage and repairs needed.” Defendant contends that FAR § 52.246-
12(h) does not apply for two reasons, arguing: “First, NAVFAC did not remove or tear out
the concrete roof slab, although it could have elected to do so. The remaining conditions
outlined in the paragraph are therefore not triggered.” Defendant also asserts: “Second,
even if NAVFAC had removed the defective roof slab, LCC-MZT is only entitled to an
equitable adjustment if the work met Contract requirements. Here, no one disagreed that
the roof slab, as poured, did not meet Contract specifications.” (internal reference omitted)
(emphasis in original).

      The FAR clause cited in LCC-MZT’s REA 27, FAR § 52.246-12, titled “Inspection
of Construction,” provides:

       If, before acceptance of the entire work, the Government decides to
       examine already completed work by removing it or tearing it out, the
       Contractor, on request, shall promptly furnish all necessary facilities, labor,
       and material. If the work is found to be defective or nonconforming in any
       material respect due to the fault of the Contractor or its subcontractors, the
       Contractor shall defray the expenses of the examination and of satisfactory
       reconstruction. However, if the work is found to meet contract requirements,
       the Contracting Officer shall make an equitable adjustment for the additional
       services involved in the examination and reconstruction, including, if
       completion of the work was thereby delayed, an extension of time.

FAR § 52.246-12(h). In order to show entitlement to an adjustment under FAR § 52.246-
12(h), LCC-MZT, therefore, must show that: (1) “before acceptance of the entire work,
the Government decide[d] to examine already completed work by removing it or tearing
it out;” and that (2) the tested work met “contract requirements.” See id. If LCC-MZT
proves entitlement under FAR § 52.246-12(h), then LCC-MZT is entitled to an “equitable
adjustment for the additional services involved in the examination and reconstruction,
including, if completion of the work was thereby delayed, an extension of time.” See id.

        In the above-captioned case, as discussed above, during the first concrete pour
on August 28, 2013, LCC-MZT’s quality control manager Robert Berger, NAVFAC’s
engineering technician Dan Van Natta, and NAVFAC’s construction manager Justin
Nodolf disagreed as to whether a cold joint was forming. NAVFAC’s Dan Van Natta and
Justin Nodolf asserted that a cold joint was forming, while LCC-MZT’s Robert Berger
asserted “[t]here was no cold joint on this project” because “when the concrete is still
plastic and you’re placing concrete up against it and you’re able to vibrate it together,
there’s no cold joint.” Robert Berger also stated at trial that “[t]he concrete was setting,
but it was still plastic. There was a video shown to us at a meeting after that placement
that you could clearly see that the vibrator was going into the concrete, so it was not a
cold joint.” Dan Van Natta testified at trial that the video recording of the August 28, 2013
roof pour was

                                             67
       a short sequence of the concrete placement going from the beam pocket to
       the north and then coming back, watching a worker deposit, as I previously
       mentioned, over the first layer that had been deposited. I believe it also
       showed me digging my heel in to show that -- that it wasn’t -- we weren’t
       going to get consolidation there.

Mr. Van Natta asserted that he did not recall what happened to the video recording of the
August 28, 2013 roof pour, although Mr. Van Natta testified that he did not delete the
video recording and that “I’d have no reason to do that.”

        At trial, Robert Berger testified that he had worked in the construction industry for
over thirty years and had worked a number of concrete construction projects, including
when he was a “project manager on a concrete facility at Malmstrom that was a missile
repair facility with large amounts of rebar and concrete. It was a full concrete structure.”
Mr. Berger stated that “about half of” his thirty-plus-years of construction experience was
spent as a quality control manager, which was Mr. Berger’s position on the P-913 project.
Mr. Berger was a credible witness, asserting, multiple times, that, as quality control
manager, his perception was that he did not consider himself as a worker for LCC-MZT
or NAFVAC. Mr. Berger also stated, “[b]ecause my job is to make sure the done -- the
work is done per the plans, per the specs, and per the drawings. I’m essentially a third-
party-type employee.” NAVFAC’s Justin Nodolf testified that when he joined NAVFAC in
2011, he had no field experience as a construction manager, as Mr. Nodolf’s previous
position with Tetra Tech entailed “[p]rimarily hydraulic modeling.” Prior to the P-913
project, Mr. Nodolf stated that he did not have any experience constructing a concrete
building similar to the P-913 project. NAVFAC’s Dan Van Natta had more construction
experience than Justin Nodolf, as Mr. Van Natta had worked as a steel worker in the
“Seabees” for twenty-three years. Dan Van Natta, however, testified that he had not
constructed a concrete structure similar to the P-913 project while in the Seabees or any
structure with reinforced concrete. Therefore, Mr. Berger had considerably more
experience with concrete projects than both Mr. Van Natta, who had limited concrete
construction experience, and Mr. Nodolf, who had no concrete construction experience.
Additionally, as noted above, at trial, Mr. Nodolf displayed a more limited memory of
events during the P-913 project than Mr. Berger, especially on cross-examination by
plaintiff’s counsel. Without Dan Van Natta’s video recording of the concrete pour,
determining the extent, and at which point, the concrete was or was not plastic during the
August 28, 2013 roof pour is more difficult. Moreover, Mr. Berger’s testimony appeared
straightforward, whereas during cross-examination, Mr. Nodolf often claimed to have
experienced memory lapses, many times preceded by noticeable pauses, before
answering.

       After the August 28, 2013 roof pour, LCC-MZT and NAVFAC had a meeting
regarding the cold joints. Mr. Berger had the following colloquy with plaintiff’s counsel Mr.
Ramseyer regarding a meeting in which cold joints were discussed:

       Mr. Ramseyer: Was the contracting officer at this meeting?

                                             68
      Mr. Berger: The contracting officer was there. Dan Van Natta was there.
      Mark Aguilar was there. I think Bryan Zatica was there. I’m not sure if John
      King was there. I think he was. Jeremy Wastweet was there. I was there. I
      can’t remember any other names.

      Mr. Ramseyer: So one of the main reasons for this meeting was to discuss
      this issue of a cold joint?

      Mr. Berger: I believe it was. I -- like I say, I can’t remember if that came up
      in the meeting or if that was specifically for the meeting or if it was a – a
      partnering meeting.

      Mr. Ramseyer: Okay. But we do know that the cold joint issue was
      discussed?

      Mr. Berger: Yes. They -- they showed the video on screen saying you –
      “Here’s where you’re going to have a cold joint.”

      Mr. Ramseyer: And based on your observations or viewing of that video,
      you did not see –

      Mr. Berger: I did not.

      Mr. Ramseyer: the cold joint?

      Mr. Berger: I knew that, if I stopped the concrete placement, we would
      definitely have a cold joint. And in that location, you don’t want a cold joint.

      Mr. Ramseyer: At that meeting were you able to reach a resolution with the
      government?

      Mr. Berger: No.

       On August 30, 2013, NAVFAC issued Non-Compliance Notice No. 0003 to LCC-
MZT, which stated, “[o]n 28 August 2013, NAVFAC NW representative was onsite to
inspect the concrete placement of the structural roof slab and observed fresh concrete
being placed over hardened non-plastic concrete.” Non-Compliance Notice No. 0003
indicated that there was a “likelihood that a cold joint would occur in this location.”

        The second roof pour on September 4, 2013 did not appear to have had issues
similar to the August 28, 2013 roof pour and appears to have been uneventful. According
to the testimony of Bryan Zatica, there were “not really” any issues with the September 4,
2013 roof pour, and the September 4, 2013 roof pour “I know went fairly smoothly.” On
September 16, 2013, LCC-MZT began removing forms from the concrete on the P-913
building. Mr. Van Natta asserted that he saw “bug holes” and “huge rock pockets and

                                            69
exposed bar in some areas.” NAVFAC’s then supervisory civil engineer, Mark Aguilar,
testified that, when the forms were removed from the concrete, “[w]e saw some rock
pockets, some exposed rebar, some cold joints.” The photographs introduced into
evidence at the trial showed exposed rebar and voids, and what the witnesses referred
to as “rock pockets.” Robert Berger testified that the “correct response” to the condition
of the concrete would have been to do a “sack and patch. It’s common in concrete
construction. You -- done a lot of it.” Bryan Zatica, when shown a photograph of what he
considered to be a “rock pocket” on the P-913 project, testified “what you would do is you
would chip at that and see how solid it is. So if there’s a void behind it, then it’s a rock
pocket because the rocks will all fall out.” Mr. Zatica also testified, after having been asked
on cross-examination if the concrete was “sufficient to withstand and meet the
specifications that were set forth in the contract?” that “[a]fter you chip it out and dry pack
it, yes.” Testimony also was presented regarding the difficulty of getting the concrete into
the beams. Mr. Berger testified:

       On this project it was very difficult because the aggregate size was not really
       conducive to the mass of rebar that was in there, so it was difficult to get the
       stinger, which we call the vibrator down into it.

       We -- if I remember correctly, we requested that we be allowed to change
       the mix design to allow this concrete to better consolidate around the
       beams, and that was turned down.

Dan Van Natta agreed that “it would be very tough” for LCC-MZT to pour the concrete
mix into certain areas surrounding the rebar.

        On September 19, 2013, NAVFAC contracting officer Mona Carlson issued the
Stop Work Order asserting that “with the removal of the forms (beginning September 16,
2013) severe defects in the concrete were observed in the underside of the deck and
beams, including rock pockets, cold joints, exposed rebar, and debris. The structural
integrity is now in question.” In the September 19, 2013 Stop Work Order, Ms. Carlson
stated:

       The Government finds that the structural integrity of the facility may have
       been compromised. ln accordance with FAR 52.246-12 lNSPECTION OF
       CONSTRUCTION, you are hereby directed to stop all work pertaining to
       structural concrete as further defined by Specification Sections 03 30 00
       and 03 37 13 pending resolution of all the quality performance issues.

(capitalization in original). The September 19, 2013 Stop Work Order issued by Ms.
Carlson also stated:

       [T]o mitigate associated impacts the Government hereby directs you to
       perform the following measures in order to fully determine the extent of
       damage and identify what corrective actions, if needed, will be taken to
       facilitate Government acceptance:

                                              70
          (a) Contractor shall provide an independent third party to facilitate
          additional inspection and analysis of the structural roof slab. The
          independent third party shall be a licensed, structural engineer
          possessing appropriate qualifications, as approved by Government
          [sic], to provide a report attesting to the structural capability of the
          roof slab. The third party engineer shall provide recommendations
          for additional testing as required to determine structural capability,
          and identify future performance and/or maintenance issues such as
          leaking, spalling, cracking, etc.

(capitalization in original). The September 19, 2013 Stop Work Order further stated,
“[p]ending receipt of this direction, satisfactory corrective actions, and lifting of this stop
work order, minor concrete work will be approved on a case-by-case basis with a detailed
work plan for Government review and approval.” The September 19, 2013 Stop Work
Order indicated that the Stop Work Order would be lifted “[u]pon satisfactory receipt and
approval of this information.”

       At trial, Steve Jirsa of Exponent testified that Exponent, a “forensic-related firm,
consulting firm” with structural engineers, was retained in connection with the P-913
project, and that Exponent’s

       scope of the retention was essentially to identify any conditions related to
       the concrete roof structure, related to issues related to the placement of that
       structure, identify any sort of conditions that needed to be addressed,
       identify the -- the -- the scope of those conditions, the severity or nonseverity
       of those conditions, and then identify any sort of repair plans or repair
       measures to be undertaken and then actually to -- after that, to follow up
       and provide some quality control on the repair.

On October 9, 2013, Exponent provided a recommended plan to test the concrete roof,
which was provided to NAVFAC, stating that the “objective of the plan outlined below is
to determine the extent of poorly consolidated concrete and to repair any areas at which
such conditions adversely affect the structural capacity or durability of the building.” The
October 9, 2013 report further states:

       [W]e recommend a combination of destructive and nondestructive testing
       to determine if voids extend into the concrete beyond what are visible from
       surface defects. Nondestructive testing (NDT) techniques will be used to
       evaluate subsurface concrete in the region of the surface defects.
       Afterward, selected coring or chipping will be used to evaluate the accuracy
       of the NDT.

(capitalization in original). On October 10, 2013, Exponent sent a letter to Bryan Zatica,
which was forwarded to NAVFAC, stating that, “[b]ased on our initial surface
observations, made October 2 through 4, 2013, the observed areas of poorly consolidated

                                              71
concrete of the roof structure can be removed and repaired to meet the intended structural
design and capacity requirements of the facility, without requiring the overall
removal/replacement of the roof structure.” In a subsequent Exponent report dated
November 8, 2013, Exponent stated:

       Based on our investigation, repair of the roof structure can be performed
       that will restore the full structural capacity of the P-913 concrete roof deck,
       allowing the roof to meet its intended purpose and comply with all code
       requirements or other regulations, laws and ordinances pertaining to this
       Facility. This repair can be performed from the underside of the roof deck
       to allow continuation of work on top of the roof. Exponent is working with
       repair material suppliers to develop appropriate repair details and
       procedures to meet the above objectives.

The November 8, 2013 Exponent report also stated that “the destructive and non-
destructive testing has shown no evidence of systemic consolidation problems beyond
what is visible on the surface.” The November 8, 2013 Exponent report indicated that
shoring was put into place in five locations “in an abundance of caution.”

        On August 18, 2014, Exponent provided its final report, which stated that Exponent
“was retained by Macro-Z-Technology [MZT] at the request of NAVFAC to investigate
voids and poor consolidation (honeycombing) in the concrete roof deck structure of the”
P-913 project. Exponent stated: “Our overall objective was to restore the roof deck such
that it would meet its originally intended purposes and comply with all requirements, laws
and ordinances pertaining to this Facility.” Exponent “concluded that proper repair of the
roof structure would restore the full structural capacity and serviceability of the P913
concrete roof deck,” repairs which included “chipping at all areas of voids and
honeycombing, and replacement with appropriate structural repair materials.” Exponent’s
August 18, 2014 final report stated that the required repairs were made between
November 2013 and March 2014. At trial, plaintiff’s counsel Mr. Ramseyer asked: “Now,
as a result of your investigation, did you -- did you feel, if none of the repair work would
have done -- been done, the structure would still have carried the design loads?” and Mr.
Jirsa responded: “I believe it would have, yes.”

       As stated above, FAR § 52.246-12(h) applies, “[i]f before acceptance of the entire
work, the Government decides to examine already completed work by removing it or
tearing it out.” See id. In the above-captioned case, NAVFAC was not the entity actually
conducting the investigation into the structural capacity of the P-913 building. NAVFAC
construction manager Justin Nodolf testified that NAVFAC chose to use a third party firm
for the structural testing because NAVFAC “wanted to try to keep it as unbiased and
independent so that way then there was no -- both parties would basically, you know, be
equal on this one.”24 In the September 19, 2013 Stop Work Order, NAVFAC explicitly

24
  In defendant’s post-trial brief, defendant asserts that LCC-MZT is not entitled to costs
associated with Exponent’s testing because “no one at LCC-MZT had structural
engineering expertise, or could perform a structural analysis.” Defendant’s argument,
                                             72
instructed LCC-MZT to hire “an independent third party,” subject to NAVFAC’s approval,
“to facilitate additional inspection and analysis of the structural roof slab” and to “provide
a report attesting to the structural capability of the roof slab.”

        In response to NAVFAC, LCC-MZT hired Exponent, an independent third party,
which was approved by NAVFAC. Indeed, Exponent’s August 18, 2014 final report states
that LCC-MZT hired Exponent “at the request of NAVFAC to investigate voids and poor
consolidation honeycombing in the concrete roof deck structure of the” P-913 project.
Although defendant argues that “NAVFAC did not direct Exponent’s scope of work,”
Exponent was tasked with providing the structural testing and reporting mandated in
NAVFAC’s September 19, 2013 Stop Work Order. Moreover, NAVFAC was fully aware
of the structural testing, including coring, that Exponent was planning to engage in prior
to the testing occurring, as Exponent’s proposed repair plans were provided to NAVFAC
in October 2013. During trial, Exponent engineer Steve Jirsa testified:

       Mr. Ramseyer: Your firm was submitted -- did you understand your firm was
       submitted to the Navy for purposes of investigation and compiling repair
       specifications?

       Mr. Jirsa: I do understand that, yes.

       Mr. Ramseyer: All right. And do you understand that your firm was approved
       to perform that work?

       Mr. Jirsa: Yes.

       Mr. Ramseyer: And, sir, when you performed the investigation, was all that
       information disclosed to NAVFAC?

       Mr. Jirsa: Yes.

       Mr. Ramseyer: And the repair specifications that you and/or Mr.
       McDonald[25] put together were submitted to the Navy before any repair
       work was done?

       Mr. Jirsa: Yes. I believe so.

       Mr. Ramseyer: And the repairs -- the repair specifications you put together

however, overlooks that the testimony at trial indicated that NAVFAC wanted to hire an
independent third party because, as also stated by Justin Nodolf, “[w]e prefer to have
somebody make that independent assessment,” not because of a perceived lack of
structural expertise on the part of LCC-MZT.
25
   Mr. Jirsa testified that Brian McDonald was “the head of the buildings and structures
forensics practice” at Exponent, and that he was Mr. Jirsa’s supervisor.

                                               73
       had the approval of NAVFAC to your knowledge?

       Mr. Jirsa: To my knowledge, yes.

Thus, Exponent, after being cleared to do the work by NAVFAC, was performing work
that met the approval of NAVFAC’s September 19, 2013 Stop Work Order, and which
had to be performed prior to NAVFAC lifting the restrictions indicated in its September 19,
2013 Stop Work Order.

        To meet the requirements of the “inspection and analysis of the structural roof slab”
in NAVFAC’s September 19, 2013 Stop Work Order, Exponent proposed, in an October
9, 2013 report that was provided to NAVFAC, to test the structural capabilities of the roof
through non-destructive testing, as well as destructive testing by “selected coring” to
“evaluate the accuracy” of the non-destructive testing. Mr. Jirsa testified: “destructive
testing included coring, taking core samples in different locations, drilling of the concrete,
drilling into the concrete, and then chipping away of concrete.” Contracting officer Mona
Carlson described coring as “[a]ctually taking a round cylin- -- removal of some to
determine where the rebar is and the strength of the contract -- concrete.”26 The
photographs below in the appendix to Exponent’s August 18, 2014 report are exemplary
samples of coring:

26
   On cross-examination, in response to plaintiff’s attorney Craig Ramseyer’s question to
NAVFAC contracting officer Mona Carlson, “when there is some exceptional testing done
such as coring and ground-penetrating radar, if nothing is shown to be wrong, then there
is a provision in the FARs that you’re aware of that allows the contractor to recoup the
cost of that testing, correct?” Ms. Carlson responded: “Correct.”
                                             74
Exponent’s August 18, 2014 final report stated “we removed 47 cores.” Thus, as part of
Exponent’s assessment to satisfy NAVFAC’s concerns regarding the structural capacity
of the P-913 building, and in order to provide a report to NAVFAC regarding the structural
capacity, concrete was removed from the roof poured by LCC-MZT.

       As described above, the clause at FAR § 52.246-12(h) states that, to be entitled
to a contract adjustment, “the work” must be “found to meet contract requirements.” See
id. Defendant asserts that LCC-MZT was unable to meet this requirement because “no
one disagreed the roof slab, as poured, did not meet Contract specifications.” At the trial
on cross-examination, LCC-MZT’s Bryan Zatica, when shown one of the photographs
depicting the roof slab after the forms were removed, was asked whether the concrete in

                                            75
the photograph was “sufficient to withstand and meet the specifications that were set forth
in the contract?” Bryan Zatica responded that “[a]fter you chip it out and dry pack it, yes.”
Once the Stop Work Order was issued, however, LCC-MZT was prevented from fixing
most of the concrete irregularities until after Exponent conducted its review. The purpose
of NAVFAC’s September 19, 2013 Stop Work Order was not to determine whether the
areas where there were voids, rock pockets, or honeycombing needed to be repaired,
rather, NAVFAC’s September 19, 2013 Stop Work Order was issued to determine
whether the “structural integrity of the facility may have been compromised,” and to “fully
determine the extent of damage and identify what corrective actions, if needed, will be
taken to facilitate Government acceptance.” Exponent was to provide a report “attesting
to the structural capability of the roof slab,” and that an independent third-party inspector
“determine structural capability” of the roof. Steve Jirsa of Exponent, however, indicated
at trial that he “believe[d] it [the roof] would have” “carried the design loads” in accordance
with the Contract absent repair. Exponent’s August 18, 2014 final report stated that,
“[b]ased on our investigation, we concluded that proper repair of the roof structure would
restore the full structural capacity and serviceability of the P-913 concrete roof deck.” In
Exponent’s August 18, 2014 final report, Exponent did not state that the roof, absent
repair, was structurally compromised or that the roof, without repairs, did not meet the
Contract’s Specifications related to structural integrity. Nor did Exponent indicate that the
concrete roof needed to be removed and replaced due to structural defects. Based on
Exponent’s reports and the testimony of Mr. Jirsa, it appears that the roof was structurally
sound as poured, and that LCC-MZT did need to make repairs to the roof to fix voids,
rock pockets, and honeycombing. Exponent’s report did not mention the existence of cold
joints, as alleged by Justin Nodolf and Dan Van Natta, or that the roof was structurally
unsound, as apparently alleged by NAVFAC employee Mr. Starkel. The roof, as poured,
appears to have met the structural requirements in the Contract, although Mr. Zatica did
indicate certain further work should be done as part of finalizing the concrete pour.

        NAVFAC’s September 19, 2013 Stop Work Order required the hiring of an
independent third party to test the structural integrity of the P-913 building, and, although
the inspection involved removal of limited amounts of concrete from the roof, the
inspection did not find that the P-913 building or roof was structurally compromised.
Therefore, LCC-MZT is entitled to an equitable adjustment for the additional services
involved in the examination and repair, as well as an extension of time if completion of
the P-913 project was delayed by the Stop Work Order. Although defendant has argued
that LCC-MZT can recover “only for those costs incurred because LCC-MZT could not
progress on the critical path of the schedule with other concrete work,” FAR § 52.246-
12(h) supports that LCC-MZT can recover the costs of the “additional services involved
in the examination and reconstruction.” See id. Moreover, defendant has not identified
specific cost elements in plaintiff’s REA 29 which should not be recoverable. REA 29
seeks an adjustment of $252,609.00. Jim Mortensen testified that the costs in REA 29
were incurred in connection with Exponent’s inspection of the structural integrity of the P-
913 building and roof, which Mr. Mortensen were “[p]retty easy to compile” from invoices
submitted to LCC-MZT. Mr. Mortensen also testified that LCC-MZT had a cost code set
up to track costs associated with Exponent’s testing.

                                              76
       Based on the evidence in the record, although the costs in REA 29 appear largely
to be related to Exponent’s inspection of the roof, the $252,609.00 claimed in REA 29
includes $2,194.06 for rental of shoring equipment during the month of December 2013,
after Exponent’s inspection was completed. As stated above, Exponent’s inspection was
complete in November 2013. The shoring rental costs in December 2013 appear to be
related to the repairs being made to the underside of the roof during December 2013,
rather than to Exponent’s inspection of the roof, and LCC-MZT has stated that it is not
seeking the costs of making repairs to the roof. Consequently, LCC-MZT is not entitled to
receive $2,194.06 for rental of shoring equipment in December 2013. Thus, under REA
29, LCC-MZT is entitled to receive the difference of $252,609.00 and $2,194.06, which is
$250,414.94, as the costs of Exponent’s testing under FAR § 52.246-12(h). Whether
LCC-MZT can recover an “extension of time” under FAR § 52.246-12(h) based on delay
associated with NAVFAC’s Stop Work Order depends on whether “completion of the
work” was delayed, which is discussed below.

REA 40 – Additional Costs Associated with PC 0004
        In REA 40, LCC-MZT asserts that it is entitled to $504,170.00 associated with the
differing site condition involving the water line and duct bank because the “Government
gave LCC-MZT no choice but to sign the Change Order [Modification 9] or go out of
business.” (brackets added). REA 40 also asserts that NAVFAC’s Modification 9 “offer
was neither fair nor equitable” because LCC-MZT submitted a time impact analysis “for
one hundred fifty calendar days (150 cd) for completion of the project and the Government
offered a phased construction completion schedule for seventy-six calendar days (76 cd)
for SCD [Substantial Completion Date] and one hundred thirty-six calendar days for CCD
[Contract Completion Date].” (capitalization in original). In its post-trial brief, LCC-MZT
argues that it did not voluntarily sign Modification 9 because NAVFAC refused to
negotiate the terms of Modification 9 and because LCC-MZT only was offered a time
period of twenty-four hours to accept Modification 9. According to LCC-MZT’s post-trial
brief, LCC-MZT did not have an alternative to signing Modification 9 because “LCC-MZT
had no ability to obtain funding by other means, as its line of credit was maxed out and it
had no further bonding capacity.” Plaintiff asserts that the “evidence here establishes that
LCC-MZT was in dire financial straits as a direct result of NAVFAC’s conduct in refusing
to compensate LCC-MZT” for work LCC-MZT already had completed under the Contract.
Plaintiff also asserts that “[t]he outstanding monies owed to LCC-MZT were compounded
by NAVFAC’s improper assessment of liquidated damages against LCC-MZT.” Plaintiff
states that “while NAVFAC was on the one hand attempting to extract millions of dollars
in concessions out of LCC-MZT for its impacts due to the differing site conditions,
NAVFAC was simultaneously assessing liquidated damages against LCC-MZT for this
same differing site condition for which LCC-MZT had no responsibility or culpability.”

        Defendant argues that LCC-MZT has failed to establish that it was under duress
when signing Modification 9. Defendant asserts that LCC-MZT made a “business
decision” to sign Modification 9, that LCC-MZT failed to prove that LCC-MZT’s “allegedly
dire circumstances were the fault of NAVFAC,” and that a “limited time offer is similarly
insufficient to show duress.” Defendant argues:

                                            77
       [T]he evidence shows that there were other alternatives available to LCC-
       MZT other than signing Mod 9: namely, either wait for Ms. Carlson to return
       from vacation, or to negotiate with another Contracting Officer in her
       absence. Indeed, there were other Contracting Officers who could have
       signed Mod 9, such as Eileen Mitchell, the head of acquisitions, or one of
       Ms. Carlson’s colleagues who had a warrant.

According to defendant, “[t]hrough Mod 9, LCC-MZT waived all recovery related to the
utility line.”

        The United States Court of Appeals for the Federal Circuit has indicated that, “[t]o
render a contract unenforceable for duress, a party must establish (1) that it involuntarily
accepted the other party’s terms, (2) that circumstances permitted no other alternative,
and (3) that such circumstances were the result of the other party’s coercive acts.” N. Star
Steel Co. v. United States, 477 F.3d 1324, 1334 (Fed. Cir. 2007) (citing Rumsfeld v.
Freedom NY, Inc., 329 F.3d 1320, 1329 (Fed. Cir. 2003)); see also Dureiko v. United
States, 209 F.3d 1345, 1358 (Fed. Cir. 2000); Emp’rs Ins. of Wausau v. United States,
764 F.2d 1572, 1576 (Fed. Cir. 1985) (quoting Fruhauf Sw. Garment Co. v. United States,
111 F. Supp. 945, 126 Ct. Cl. 51, 62 (1953) (“[T]he requirements to establish duress are
exacting. Three elements must be found: ‘(1) that one side involuntarily accepted the
terms of another; (2) that circumstances permitted no other alternative; and (3) that said
circumstances were the result of coercive acts of the opposite party.’”)); Waverley View
Inv’rs, LLC v. United States, 135 Fed. Cl. 750, 793 (2018) (quoting Dureiko v. United
States, 209 F.3d at 1358), aff’d, 767 F. App’x 996 (Fed. Cir. 2019); IMS Engineers-
Architects, P.C. v. United States, 92 Fed. Cl. 52, 66 (2010), aff’d, 418 F. App’x 920, reh’g
and reh’g en banc denied (Fed. Cir. 2011); Aboo v. United States, 86 Fed. Cl. 618, 632,
aff’d, 347 F. App’x 581 (Fed. Cir. 2009). “Duress occurs when a party involuntarily accepts
another party’s terms because the circumstances permitted no alternative and such
circumstances were the result of the other party’s coercive acts.” Pew Forest Prods. v.
United States, 105 Fed. Cl. 59, 67 (2012) (citing N. Star Steel Co. v. United States, 477
F.3d at 1334). Moreover, “[t]he mere stress of business conditions will not constitute
duress. Instead defendant must have engaged in some wrongful conduct, or be the cause
of plaintiff’s plight, in order to shift responsibility for deals made by plaintiff under the stress
of financial necessity.” Sneeden v. United States, 33 Fed. Cl. 303, 310 (1995) (citing
Johnson, Drake & Piper, Inc. v. United States, 531 F.2d 1037, 1043, 209 Ct. Cl. 313
(1976) and La Crosse Garment Mfg. Co. v. United States, 432 F.2d 1377, 1382, 193 Ct.
Cl. 168, 176 (1970)); see also Artwohl v. United States, 434 F.2d 1319, 1326, 193 Ct. Cl.
382, 397 (1970). “A party to a contract will be bound by the terms thereof, unless there
exists some defense to the contract, i.e., fraud, duress, or unless the contract is found to
be unreasonable, unconscionable or contrary to public policy, or it produces an egregious,
unfair or unreasonable result.” Forest Env’t Servs. Co. v. United States, 5 Cl. Ct. 774, 777
(1984) (emphasis in original) (citing United States v. 1,557.28 Acres of Land in Osage
Cty., Kan., 486 F.2d 445 (10th Cir. 1973)).

       For accord and satisfaction, “a claim is discharged because some performance
other than that which was claimed to be due is accepted as full satisfaction of the claim.”

                                                78
Holland v. United States, 621 F.3d 1366, 1377 (Fed. Cir. 2010) citing O’Connor v. United
States, 308 F.3d 1233, 1240 (Fed. Cir. 2002)), reh’g and reh’g en banc denied (Fed. Cir.),
cert. denied, 565 U.S. 928 (2011); see also Info. Sys. & Networks Corp. v. United States,
148 Fed. Cl. 356, 363 (2020). The United States Court of Appeals for the Federal Circuit
has stated:

      Discharge of a claim by accord and satisfaction occurs when some
      performance different from that which was claimed as due is rendered and
      such substituted performance is accepted by the claimant as full satisfaction
      of his claim. Brock & Blevins Co. v. United States, 343 F.2d 951, 955, 170
      Ct. Cl. 52 (1965). However, courts may refuse to bar a claim based upon
      the defense of accord and satisfaction where the parties continue to
      consider the claim after execution of a release. Winn-Senter Constr. Co. v.
      United States, 75 F. Supp. 255, 110 Ct. Cl. 34 (1948). “Such conduct
      manifests an intent that the parties never construed the release as an
      abandonment of plaintiff's earlier claim.” A & K Plumbing & Mechanical, Inc.
      v. United States, 1 Cl. Ct. 716, 723 (1983).

Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 1575, 1581 (Fed. Cir. 1993).
Furthermore, as also stated by the Federal Circuit:

      Accord and satisfaction has been “aptly described” as a four-part test of
      “proper subject matter, competent parties, meeting of the minds of the
      parties, and consideration.” Brock & Blevins Co. v. United States, 343 F.2d
      951, 955 (Ct. Cl. 1965) (internal quotation marks and citation omitted); see
      Holland, 621 F.3d at 1382 (citing to O’Connor v. United States, 308 F.3d
      1233, 1240 (Fed. Cir. 2002) for the same proposition, which in turn cites to
      Brock & Blevins, 343 F.2d at 955). While Community Heating does not use
      the term “meeting of the minds,” see generally 987 F.2d 1575, its discussion
      of parties’ continued consideration of a claim after execution of a release
      forms part of this inquiry for purposes of the accord and satisfaction
      doctrine, see id. at 1581 (citing Brock & Blevins, 343 F.2d at 955).

Meridian Eng’g Co. v. United States, 855 F.3d 1351, 1363–64 (Fed. Cir. 2018) (footnote
omitted). Similarly, a Judge of the United States Court of Federal Claims wrote:

      The doctrine of accord and satisfaction is an absolute defense that
      terminates any previous right that a party may have had to assert a claim of
      the same subject matter. See C & H Commercial Contractors, Inc. v. United
      States, 35 Fed. Cl. 246, 252 (1996) (quoting Chesapeake & Potomac Tel.
      Co. v. United States, 228 Ct. Cl. 101, 108, 654 F.2d 711, 716 (1981));
      accord McLain Plumbing & Elec. Svc., Inc. v. United States, 30 Fed. Cl. 70,
      79-80 (1993). An “accord” is a contract under which both parties agree that
      one party will render additional or alternative performance in order to settle
      an existing claim made by the other party, and “satisfaction” is the actual
      performance of the accord. See id. The party asserting an accord and

                                           79
       satisfaction defense must establish four elements: (1) proper subject
       matter; (2) competent parties; (3) a meeting of the minds; and (4)
       consideration. See id.; accord Brock & Blevins Co. v. United States, 170 Ct.
       Cl. 52, 59, 343 F.2d 951, 955 (1965).

       An executed bilateral modification with a release provision usually
       constitutes an accord and satisfaction unless that release is either
       ambiguous or limited in scope. See Merritt–Chapman & Scott Corp. v.
       United States, 198 Ct. Cl. 223, 228-30, 458 F.2d 42 (1972); Brock & Blevins
       Co. v. United States, 170 Ct. Cl. at 59, 343 F.2d at 954-55.

Jackson Constr. Co. v. United States, 62 Fed. Cl. 84, 92 (2004). “‘As a general rule, the
execution by a contractor of a release which is complete on its face reflects the
contractor’s unqualified acceptance and agreement with its terms and is binding on both
parties.’” K-Con Bldg. Sys., Inc. v. United States, 107 Fed. Cl. 571, 600 (2012) (quoting
Clark Mech. Contractors, Inc. v. United States, 5 Cl. Ct. 84, 86 (1984)).

        In the above-captioned case, LCC-MZT discovered the undisclosed water line and
duct bank in July 2012. In NAVFAC contracting officer Mona Carlson’s August 14, 2012
letter to LCC-MZT, Ms. Carlson stated that the water line and duct bank constituted a
differing site condition and instructed LCC-MZT to submit an REA, including costs and
schedule impacts, to NAVFAC. In the August 14, 2012 letter, Mona Carlson established
PC [Proposed Change] 0004 “[f]or tracking purposes.” LCC-MZT did not submit an REA
for the differing site condition under PC 0004 until January 18, 2013. In the January 18,
2013 REA, LCC-MZT requested an adjustment of $999,701.00 to the Contract and
asserted a schedule delay of 107 calendar days. LCC-MZT, however, excluded seven
categories of costs from its January 18, 2013 REA, including “[s]chedule recovery” and
inefficiencies related to a retaining wall. Bryan Zatica testified at trial that NAVFAC
“responded back” to the January 18, 2013 REA and “said that they would not issue a
change order with those items excluded.” At trial, Mona Carlson indicated that she was
concerned about NAVFAC’s “exposure” on the items excluded from LCC-MZT’s January
18, 2013 REA and testified “I’m not authorized to do partial settlements.”

       LCC-MZT resubmitted its REA for PC 0004 on April 17, 2013, a day before a
scheduled partnering meeting on April 18, 2013. According to plaintiff’s post-trial brief, the
“compilation of the direct costs took time and developing an estimate of the impact costs
was a difficult task.” NAVFAC contracting officer Mona Carlson testified that the purpose
of the April 18, 2013 partnering meeting was not specifically to address LCC-MZT’s April
17, 2013 REA for PC 0004. Indeed, Justin Nodolf testified that NAVFAC lacked the time
to review the entirety of LCC-MZT’s April 17, 2013 REA for PC 0004 before the April 18,
2013 partnering meeting. Mr. Nodolf testified that

       it would take us several months just to get through it to a point where we
       could at least establish an initial government position to be able to enter
       negotiations. And then depending on how the negotiations would -- would

                                             80
       go, it could be another month to two months to be able to award the -- the
       contract after that.

       The NAVFAC representatives at the April 18, 2013 partnering meeting, however,
decided to make a settlement offer of $1,500,000.00 to LCC-MZT regarding the April 17,
2013 REA and PC 0004, despite only having had one day to review LCC-MZT’s April 17,
2013 REA, which NAVFAC had first asked for in August 2012. Justin Nodolf stated that
the $1,500,000.00 settlement offer was arrived at as follows:

       So we were working basically the original proposal they gave us back in
       January. We’d gone through portions of it at that point. We had determined
       it was anywhere between 6– to 700,000 on direct costs. And so when Mona
       [Carlson] asked me, she said, how much -- how much should we offer
       them? And I said, well, it’s like 6– to 700,000 direct costs. So she said, great.
       Should we just double it and round up? And that’s where we came to the
       1.5.

(brackets added). According to Jodus Hortin, a NAVFAC contract specialist assigned to
the P-913 project, the $1,500,000.00 settlement offer was arrived at as follows:

       [I]t was a combination of the total costs presented, the original REA and our
       review of it, and the technical review and understanding of remaining
       activities. . . .

       Our position was the culmination of the seven or eight months it took to get
       a complete REA, our handling of the project site, our receipt of QC [quality
       control] daily reports, schedules. We didn’t just review this issue and
       develop a position in the span of one business day. We were actively
       working towards it for months.

(brackets added). Jodus Hortin stated that he “remember[ed] the consensus being that
we couldn’t properly substantiate entitlement for anything higher than” $1,500,000.00.

         As a result, at the April 18, 2013 partnering meeting, NAVFAC contracting officer
Mona Carlson made the offer to settle LCC-MZT’s April 17, 2013 REA for $1,500,000.00.
At trial, Bryan Zatica and John King both Ms. Carlson’s offer as a take-it-or-leave-it offer.
Bryan Zatica also testified that Mona Carlson required that LCC-MZT decide whether to
accept the $1,500,000.00 settlement offer within twenty-four hours. Ms. Carlson could not
remember whether she said the $1,500,000.00 offer was “take-it-or-leave-it” and stated
that it was a “possibility” that she said LCC-MZT needed to decide whether to accept the
$1,500,000.00 offer within twenty-four hours. Mona Carlson, however, testified that she
would not have “defaulted” or “terminated” LCC-MZT if LCC-MZT had not accepted
NAVFAC’s $1,500,000.00 offer within twenty-four hours. Bryan Zatica shared the
understanding that NAFVAC would not have terminated LCC-MZT, as Mr. Zatica testified
on cross-examination that he did not believe that LCC-MZT would have been terminated
if LCC-MZT had declined to accept NAVFAC’s offer of $1,500,000.00. Moreover, the

                                              81
record before the court does not indicate that NAFVAC threatened to take contractual
action or coercive action against LCC-MZT if LCC-MZT declined to accept NAVFAC’s
$1,500,000.00 settlement offer.

       The record before the court also does not indicate that NAVFAC was unwilling to
continue to address LCC-MZT’s April 17, 2013 request for equitable adjustment following
the conclusion of the April 18, 2013 partnering meeting. Jodus Hortin testified:

      If the 1.5 million wouldn’t have been accepted, we would have entertained
      a more thorough comprehensive cost analysis in relation to the other
      information we requested and not received, further pursued how much of
      the work was compensable and -- and how much of the time extension was
      owned by the government. The 1.5 offer was presented in lieu of the
      additional time needed to perform that more granular line item robust
      assessment, and there was no guarantee that the ultimate outcome of an
      REA would have been higher or lower.

It appears that NAVFAC, therefore, was willing to evaluate LCC-MZT’s April 17, 2013
request for equitable adjustment further if LCC-MZT had declined to accept the
$1,500,000.00 settlement offer. Allowing NAVFAC to have more time to review and
evaluate the April 17, 2013 request for equitable adjustment was an alternative to
accepting NAVFAC’s settlement of $1,500,000.00 at the time it was offered.

       LCC-MZT agreed to, and signed, NAVFAC’s $1,500,000.00 settlement offer on
April 19, 2013, according to LCC-MZT’s scheduler at the time of the April 18, 2013
partnering meeting, John King, because LCC-MZT was in need of a “cash infusion” as of
April 2013. On direct examination, Bryan Zatica had the following colloquy with plaintiff’s
counsel Mr. Ramseyer about LCC-MZT’s need for funds as follows:

      Mr. Ramseyer: So how badly did Macro-Z-Technology need cash at the
      time?

      Mr. Zatica: We needed it or we were going out of business, period.

      Mr. Ramseyer: If you did not accept the offer, did you feel that you would
      end up having to shut down the operations?

      Mr. Zatica: Yeah, we would have to close. I mean, it was an inordinate
      amount of stress in the fact that, you know, I’ve got a house that’s on the
      line with the surety. The bank has my assets tied up. I have employees that
      have been with me 25 years. I’ve got to tell them that we’re going out of
      business. You know, I’ve got children. I mean, it’s not fun.

      Mr. Ramseyer: What about -- and you had no working capital from Larkor,
      correct?

                                            82
       Mr. Zatica: Nothing.

        During the trial, MZT’s Financial Statement and Supplementary Information for the
year ending December 31, 2012 was admitted into evidence, which covered a period
concluding approximately four months before the April 19, 2013 settlement offer from the
government. In MZT’s 2012 Financial Statement, MZT lists total costs in excess of
billings27 as $1,678,257.00. Of the $1,678,257.00 total costs in excess of billings,
$930,370.00 are attributable to MZT’s work on the P-913 project. The other $747,887.00
of costs in excess of billings were attributable to projects other than the P-913 project,
indicating that MZT’s cashflow problems in April 2013 were not solely caused by MZT’s
work on the P-913 project. Although Bryan Zatica testified that the LCC-MZT joint venture
was not receiving contributions from LCC, the record before the court does not indicate
that LCC’s inability to contribute funds to LCC-MZT joint venture was caused by the
actions of NAVFAC. Indeed, Bryan Zatica stated that, during the early stages of the P-
913 project, “Larkor [sic] could not fund their portion of the joint venture” because “[t]hey
were having financial issues,” resulting in the appointment of a receiver for the LCC-MZT
joint venture.

        As stated above, “mere stress of business conditions will not constitute duress.”
Sneeden v. United States, 33 Fed. Cl. at 310. Although MZT may have been in need of
funds in April 2013, the record before the court does not support that NAVFAC took
improper coercive actions requiring LCC-MZT to accept NAVFAC’s settlement offer. LCC-
MZT could have permitted NAVFAC to further evaluate LCC-MZT’s April 17, 2013 REA,
and plaintiff and defendant could have further negotiated regarding the April 17, 2013
REA. Moreover, MZT’s financial difficulties as of April 2013 were caused by a number of
factors, not only by the Contract at issue in this case. LCC-MZT’s position that it was
forced to accept NAVFAC’s April 18, 2013 settlement offer of $1,500,000.00 overlooks
that LCC-MZT was not entitled to an instantaneous response to plaintiff’s April 17, 2013
detailed request for an equitable adjustment, a request which NAVFAC first asked for in
August 2012. The record before the court does not demonstrate that LCC-MZT was in a
position of government-caused duress when it accepted NAVFAC’s April 18, 2013
settlement offer for the April 17, 2013 REA. Indeed, it does not appear that plaintiff has
demonstrated any of the three conditions identified by the Federal Circuit in North Star
Steel Co. to establish duress: (1) that it involuntarily accepted the other party’s terms, (2)
that circumstances permitted no other alternative, and (3) that such circumstances were
the result of the other party’s coercive acts.” N. Star Steel Co. v. United States, 477 F.3d
at 1334.

      On May 2, 2013, LCC-MZT and NAVFAC bilaterally executed Modification 9 to the
Contract. Modification 9 states:

27
  At trial, Michael Becher, a partner in the accounting firm Miller Giangrande LLP, testified
that costs in excess of billings were “costs that have been incurred in excess of what’s
actually been billed to the client.”
                                             83
       The subject contract is hereby modified to compensate the Contractor for
       all additional labor, material, equipment, and associated costs regarding a
       differing site condition resulting from utility line interferences as further
       defined in the Contractor’s Request for Equitable Adjustment (REA) (Serial
       Letter No. 0005) dated August 14, 2012, the Government’s response (Serial
       Letter No. 0010) dated August 14, 2012, the Contractor’s amended REA
       (Serial Letter No 0024) dated April 17, 2013, and the settlement reached
       April 19, 2013, summarized as follows. These documents are hereby
       incorporated by reference. This settlement accounts for all associated
       impacts including re-sequencing, acceleration, seasonal impacts, changes
       to means and methods, et cetera, necessary to provide for substantial
       completion as further defined in paragraph 2 below. Neither party’s rights
       for contractual relief for future impacts/situations are waived by this
       settlement.

       PCO 0004 ~ REA – Utility Line Interference             Increase: $1,500,000

(capitalization and emphasis in original). Modification 9 also states:

       (2) Extension of time is required by reason of this modification. As per the
       agreement for PC 0004 (REA Utility Line Interference), the contract is
       modified as follows:

              (a) Substantial Completion Date (SCD) of NOVEMBER 15, 2013, as
       further defined in 5252.211-9301 ~ Phased Construction Schedule, is
       hereby established. Liquidated damages, as further defined in 52.211-12,
       have been adjusted accordingly to provide for completion as agreed.

              (b) The Contract Completion Date (CCD), as further defined in
       5252.211-9301 ~ Phased Construction Schedule, is hereby extended by
       125 calendar days to JANUARY 15, 2014. Liquidated damages, as further
       defined in 52.211-12, have been adjusted accordingly to provide for
       completion as agreed. . . .

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

(capitalization and emphasis in original).

       In REA 40, LCC-MZT asserts that “Modification A00009 did not cover
$504,170.00” of costs related to the differing site condition of the undisclosed water line
and electrical duct bank addressed in PC 0004 and in LCC-MZT’s April 17, 2013 request
for equitable adjustment, and requests “payment for the additional cost associated with
PC 0004 and obtaining a fair and equitable adjustment.” (emphasis in original).

                                             84
Modification 9 specifically identifies PC 0004, LCC-MZT’s April 17, 2013 request for
equitable adjustment, and the parties’ April 19, 2013 settlement agreement, following the
April 18, 2013 partnering meeting. Modification 9 states that the parties’ “settlement
accounts for all associated impacts including re-sequencing, acceleration, seasonal
impacts, changes to means and methods, et cetera, necessary to provide for substantial
completion.” Modification 9 also contains accord and satisfaction language, stating:
“Acceptance of this modification by the contractor constitutes an accord and satisfaction
and represents payment in full (for both time and money) and for any and all costs, impact
effect, and for delays and disruptions arising out of or incidental to the work as herein
revised.” Plaintiff’s request for additional alleged costs related to PC 0004 and the
differing site conditions is barred by Modification 9, as the parties agreed in Modification
9 that Modification 9 addressed “all associated impacts including re-sequencing,
acceleration, seasonal impacts, changes to means and methods, et cetera” and “all costs,
impact effect, and for delays and disruptions” related to PC 0004 and the differing site
conditions. Plaintiff, therefore, is not entitled to the additional amounts or time extensions
sought in REA 40.

Delay to the P-913 Project’s Critical Path

        The parties in the above-captioned case dispute whether LCC-MZT is entitled to
relief based on the delays to the project’s critical path alleged by LCC-MZT. The United
States Court of Appeals for the Federal Circuit has stated:

       “The general rule is that ‘[w]here both parties contribute to the delay neither
       can recover damage[s], unless there is in the proof a clear apportionment
       of the delay and expense attributable to each party.” Blinderman [Constr.
       Co. v. United States], 695 F.2d [552,] 559 [(Fed. Cir. 1982)], quoting Coath
       & Goss, Inc. v. United States, 101 Ct. Cl. 702, 714–715 (1944). Courts will
       deny recovery where the delays are concurrent and the contractor has not
       established its delay apart from that attributable to the government.

P.R. Burke Corp. v. United States, 277 F.3d 1346, 1359 (Fed. Cir. 2002) (quoting William
F. Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir. 1984)). “Delays
generally fall into one of three categories: (1) excusable and compensable; (2) excusable
but not compensable; and (3) not excusable.” W. Stephen Dale & Robert M. D’Onofrio,
Reconciling Concurrency in Schedule Delay and Constructive Acceleration, 39 Pub. Cont.
L.J. 161, 163 (2010) (internal quotation marks and citation omitted). FAR § 52.249-10,
titled “Default (Fixed–Price Construction) (APR 1984),” which was incorporated by
reference into LCC-MZT’s Contract, provides that a contractor may not be charged with
liquidated damages if there is an excusable delay. See FAR § 52.249-10(b) (capitalization
in original); see also England v. Sherman R. Smoot Corp. v. United States, 388 F.3d 844,
857 (Fed. Cir. 2004) (“A delay in a construction contract is excusable if it arises from either
the government’s action or external forces.”); K-Con Bldg. Sys., Inc. v. United States, 131
Fed. Cl. 275, 321 (2017) (stating that liquidated damages, based on failure to timely
complete work, may not be assessed against a contractor entitled to an extension of time
for excusable delay). Judges of the United States Court of Federal Claims have stated

                                              85
that “[f]ederal regulations provide for extensions of time for excusable delays (e.g.,
unusually severe weather), but do not provide for equitable adjustments for such delays.”
Edge Constr. Co. v. United States, 95 Fed. Cl. 407, 420 (2010) (emphasis in original)
(citing FAR § 52.249-10; and Fraser Constr. Co. v. United States, 57 Fed. Cl. 56, 59 n.2
(2003)); see also JOHN CIBINIC ET AL., ADMINISTRATION OF GOVERNMENT CONTRACTS 487
(5th ed. 2016) (stating that, during periods of excusable delay, “[g]enerally, a contractor
is excused from performance because of delays caused by factors for which neither it nor
the government is responsible; however, the contractor must bear the cost impact of such
delays”). “Moreover, to result in an excusable delay, ‘the unforeseeable cause must delay
the overall contract completion; i.e., it must affect the critical path of performance.’” K-
Con Bldg. Sys., Inc. v. United States, 131 Fed. Cl. at 321 (quoting Sauer Inc. v. Danzig,
224 F.3d 1340, 1345 (Fed. Cir. 2000)); see also Weston/Bean Joint Venture v. United
States, 123 Fed. Cl. 341, 385 (2015), aff’d, 652 F. App’x 972 (Fed. Cir. 2016); Martin
Constr., Inc. v. United States, 102 Fed. Cl. 562, 575 (2011) (“In addition, to warrant a time
extension, the contractor must show that the excusable event delayed activities along the
critical path, which consists of activities that must be performed on schedule so as not to
delay the entire project.” (citations omitted)).

       “When a contractor seeks an equitable adjustment for government-caused delay,
‘the contractor has the burden of proving the extent of the delay, that the delay was
proximately caused by government action, and that the delay harmed the contractor.’”
Ultimate Concrete, LLC v. United States, 141 Fed. Cl. 463, 480 (2019) (quoting Wilner v.
United States, 24 F.3d 1397, 1401 (Fed. Cir. 1994)), recons. denied, No. 14-549C, 2019
WL 1375929 (Fed. Cl. Mar. 26, 2019); see also T. Brown Constructors, Inc. v. Pena, 132
F.3d 724, 734 (Fed. Cir. 1997) (quoting Wilner v. United States, 24 F.3d at 1401). “The
Government’s liability for delay-related damages is limited to those delays that it caused
and that hew to the project’s critical path.” Fireman’s Fund Ins. Co. v. United States, 92
Fed. Cl. 598, 666 (2010) (citing Wilner v. United States, 23 Cl. Ct. 241, 244 (1991)); see
also MW Builders, Inc. v. United States, 134 Fed. Cl. 469, 508 (2017), recons. denied,
136 Fed. Cl. 584 (2018). Determination of the critical path is necessary for determining
compensable delay because “‘only construction work on the critical path ha[s] an impact
upon the time in which the project [is] completed.’” Ultimate Concrete, LLC v. United
States, 141 Fed. Cl. at 480 (alterations in original) (quoting Wilner v. United States, 24
F.3d at 1399 n.5 (quoting G.M. Shupe, Inc. v. United States, 5 Cl. Ct. 662, 728 (1984))).

       In the above-captioned case, the following three categories of delay are relevant
to determine whether LCC-MZT is entitled to an extension of time for excusable delay
and/or an equitable adjustment for compensable delay: (1) Red Days; (2) NAVFAC’s
September 19, 2013 Stop Work Order; and (3) grounding and energization of the P-913
building.

      Plaintiff’s retained and offered William Manginelli of Trauner Consulting Services
as an expert in the above-captioned case, to which defendant did not object. Mr.
Manginelli was admitted as an expert in four areas: (1) acceleration; (2) loss of
productivity; (3) extended field overhead; and (4) unabsorbed home office overhead.

                                             86
During Mr. Manginelli’s testimony at trial, Mr. Manginelli stated that there was “an
embarrassing error” in his original expert report. Mr. Manginelli testified:

        Now, I should point out that, in -- in -- in getting ready for this trial[28] and
        looking at my report, I -- I have an error here that I need to point out. On
        Page 13 of my report, I talk about how the planned start and end for this
        roof activity, which is 1100, install roof primer. On Page 13 I talk about how
        that was planned to start on September 25th and end on October 1st.

        And then on the next page, once I’m comparing the actual start of the
        primer, I mistakenly used the October 1st date instead of the September
        25th date.

        So where I conclude 49 days longer than planned that -- that the roof primer
        work began on November 19th, 49 days longer than planned, it’s really 55.
        So I’m off six days there.

        At the trial, counsel for the United States, Kelly Krystyniak, cross-examined Mr.
Manginelli on his original expert report and she stated that “the change in days I expect
is going to alter” Mr. Manginelli’s “money, his days.” The error in Mr. Manginelli’s original
expert report also impacted the numbers in the demonstratives plaintiff offered for use at
trial associated with Mr. Manginelli’s original expert report. In order to have coherent and
usable testimony for the court to properly assess the case, as well as to allow reference
to accurate demonstratives during Mr. Manginelli’s testimony, Mr. Manginelli was excused
to review his submitted report for accuracy. The court continued the trial to hear other
witnesses. Mr. Manginelli returned to the stand the following day, with a revised expert
report and revised demonstratives, which were added to the record in addition to Mr.
Manginelli’s original, faulty report and original, faulty demonstratives, which also remained
in the record.

        Mr. Manginelli’s revised expert report differed from his original expert report in that,
in his revised expert report, Mr. Manginelli asserted an additional six days of delay
associated with NAVFAC’s September 19, 2013 Stop Work Order, from forty-nine days
to fifty-five days. Mr. Manginelli’s error also changed his breakdown of the days he
attributed to each delay on the P-913 project, as follows:

     (1) In both his original and revised expert reports, Mr. Manginelli asserted that Red
          Days caused 71 calendar days of delay;

     (2) In his original expert report, Mr. Manginelli asserted that “[d]elays to the
         energization of the building and the concrete roof concurrently caused 33
         calendar days of delay.” In his revised expert report, this number was changed to
         thirty-nine calendar days of delay;

28
  Mr. Manginelli’s original expert report was dated July 30, 2018, almost one year before
the first day of the trial in this case.
                                               87
   (3) In his original expert report, Mr. Manginelli asserted that “[d]elays to the
       energization of the building caused 61 calendar days of delay.” In his revised
       expert report, this number was changed to fifty-five calendar days of delay;

   (4) In both his original and revised expert report, Mr. Manginelli asserted that “[f]rom
        May 31, 2014 through June 11, 2014, the failure of NAVFAC to grant substantial
        completion to LCC-MZT caused 12 calendar days of delay. There was nothing
        located in the available documents to indicate that LCC-MTZ [sic] was responsible
        for this delay.”

Despite the change in Mr. Manginelli’s calculation of delays, both his original expert report
and revised expert report stated that LCC-MZT is entitled to a total of 177 calendar days
of excusable delay on the P-913 project. Mr. Manginelli’s determination of how many of
the 177 calendar days are compensable, however, were adjusted. In his original expert
report, Mr. Manginelli asserted that all 177 calendar days would be compensable to LCC-
MZT, unless the court finds that LCC-MZT was responsible for roofing delays, in which
case only 144 of the 177 calendar days would be compensable to LCC-MZT. In Mr.
Manginelli’s revised expert report, Mr. Manginelli still stated that all 177 calendar days
would be compensable to LCC-MZT if no fault of LCC-MZT is found by the court for the
roofing delays, but he changed the number of days to which LCC-MZT would be entitled
to compensable delay in the event the court finds LCC-MZT responsible for the roofing
delays, to 138 calendar days. Due to this change in compensable calendar days, Mr.
Manginelli’s revised expert report also differed from his original expert report in the
amounts for which he asserted LCC-MZT should be entitled compensation through LCC-
MZT’s various claims submitted to the court. For the purposes of this Opinion, the court
refers to Mr. Manginelli’s revised expert report, but weighs the reliability of his expert
reports and his testimony, given the need for Mr. Manginelli to revise his original expert
report during his testimony at trial, but only after the mistakes were identified to him by
defendant’s counsel. Also, as discussed below, Mr. Manginelli offered a number of
unsupported conclusions in both his reports and in his testimony.

       In his revised expert report, Mr. Manginelli stated that delays occurring after August
14, 2013 under the Contract are a source of dispute between LCC-MZT and NAVFAC.
According to Mr. Manginelli’s revised expert report, NAVFAC schedule analyst Casey
Caughie required LCC-MZT, on a monthly basis, “to model the schedule and its impacts
in multiple ways.” For example, Mr. Manginelli contends in his revised expert report that
Mr. “Caughie had LCC-MZT prepare seven different schedules all with a data date of
August 14, 2013 to represent various delay issues experienced on the job.” In his revised
expert report, Mr. Manginelli asserted:

       As a result of NAVFAC’s active involvement in the schedule preparation
       process, the schedule updates produced after August 14, 2013 could not
       be used to reliably measure project delays. This was due both to the
       multiple variations of schedules produced with the same data date, making
       it difficult to determine which schedule to analyze, and the fact that NAVFAC
       was requiring certain schedule logic that did not necessarily model LCC-

                                             88
       MZT’s plan for the work. This tainting of the schedules was not the fault of
       LCC-MZT, but rather the result of LCC-MZT following NAVFAC’s directions.
       In fact, in its own analysis of the project, NAVFAC also did not use LCC-
       MZT’s schedule updates produced after August 14, 2013. Rather,
       Caughie’s own review of LCC-MZT’s final TIA [time impact analysis] was
       based on the August 14, 2013 schedule and the as-built information for the
       project.

       Because the schedule updates produced after August 14, 2013 could not
       be used to reliably measure project delays, a comparison of the August 14,
       2013 schedule with the as-built project information was used to identify the
       impacts that caused the delays to the project after August 14, 2013.

       Mr. Manginelli’s revised expert report stated that there were two critical paths on
the P-913 project, one which involved completion of the concrete roof, and a second
involving energization of the P-913 building. Mr. Manginelli also identified anticipated Red
Days as a NAVFAC-caused delay and asserted that, “[b]ecause of the nature of red days,
and the significant disruption they have to all work activities, red days, in effect, suspend
all work and take precedence over any other delays affecting the project.” As discussed
above, in his revised expert report, Mr. Manginelli stated:

       Thus, based on this analysis, of the 177 calendar days of delay that
       occurred from August 14, 2013 through June 11, 2014:

          •   Red days caused 71 calendar days of delay.

          •   Delays to the energization of the building and the concrete roof
              concurrently caused 39 calendar days of delay.

          •   Delays to the energization of the building caused 55 calendar
              days of delay.

          •   From May 31, 2014 through June 11, 2014, the failure of
              NAVFAC to grant substantial completion to LCC-MZT caused 12
              calendar days of delay. There was nothing located in the
              available documents to indicate that LCC-MTZ [sic] was
              responsible for this delay.

       Mr. Manginelli concluded:

       As a result of the delays that occurred during this period, LCC-MZT is
       entitled to a time extension of 177 calendar days. If it is determined that the
       delays to the concrete roof caused by NAVFAC’s issuance of the stop work
       notice were not the responsibility of LCC-MZT, or that the stop work notice
       inappropriately prevented LCC-MZT from performing out-of-sequence
       concrete activities that would have mitigating this delay, then the entire 177-

                                             89
       calendar-day time extension due LCC-MZT should be compensable. If, on
       the other hand, the delays to the concrete roof are found to be the sole
       responsibility of LCC-MZT, then 138 calendar days of the 177-calendar-day
       time extension due LCC-MZT should be compensable and the remaining
       39 calendar days should be non-compensable.

       Defendant retained Stephen Weathers of Capital Project Management, Inc.
(CPMI) and offered him at trial as defendant’s expert witness. Mr. Weathers was offered
and admitted as an expert in three areas: (1) critical path method scheduling; (2) schedule
and delay analysis; and (3) construction damages. Mr. Weathers was a more credible
witness at trial than plaintiff’s expert and also had prepared a careful expert report on all
issues, including the issues on which Mr. Manginelli offered a revised expert report. In his
expert report, Mr. Weathers stated:

       Based upon CPMI’s review of the project record and its detailed
       schedule/delay analyses it is CPMI’s opinion that the delays on the project
       are best characterized as concurrent delay. It is CPMI’s opinion that LCC-
       MZT is not entitled to any compensable delay on the project. CPMI is aware
       that while the definition or compensability of Red Days on the project was
       never formally modified by Contract, it is LCC-MZTs position that it is
       entitled to compensable delay for any Red Day that occurred after August
       14, 2013. To the extent that LCC-MZT prevails in this argument, this would
       result in 24 days of compensable delay as addressed in detail later in this
       report.

Although Mr. Weathers concluded that LCC-MZT should not be entitled to additional
excusable delay, he stated that “the $185,346 presently withheld as liquidated damages
after April 30, 2014 should be returned to LCC-MZT” because

       based upon a review of the project record, it is noted that several
       modifications were issued during the timeframe leading to substantial
       completion with several being issued after substantial completion. It is also
       noted that several Red Days were experienced during the timeframe
       leading up to substantial completion and punchlist work on the exterior of
       the building could potentially have been impacted on Red Days.
       Furthermore, as is typical with many projects during the late stages of a
       project leading up to substantial completion, many activities occur at once,
       making it difficult to distinguish and isolate with precision what activities
       comprise the critical path. In this case, the delays occurring after April 2014
       are intertwined such as to preclude a clear apportionment of delay
       responsibility. In sum, it would be fair to characterize the additional delay
       from April 30, 2014 through June 2, 2014 as excusable and non-
       compensable. Hence, the 33 day delay that the project sustained after April
       2014 is considered concurrent.

                                             90
       As stated above, plaintiff offered William Manginelli as its expert on acceleration,
loss of productivity, extended field overhead, and unabsorbed home office overhead.
Regarding the delay related claims, Mr. Manginelli’s revised expert report stated that “time
extensions for delays through August 14, 2013 were resolved by bilateral contract
modifications,” and that “[d]elays after August 14, 2013 are the subject of a dispute
between LCC-MZT and NAVFAC.” Likewise, in Mr. Weathers’ expert report, he began his
time impact analysis with August 14, 2013. As stated above, in Modification 10, the parties
resolved all Red Day delays occurring before August 14, 2013. Modification 10
established a Substantial Completion Date of December 16, 2013 and a Contract
Completion Date of February 16, 2014.

       In calculating the number of Red Days occurring after August 14, 2013, both
Stephen Weathers, defendant’s expert, and William Manginelli, plaintiff’s expert,
referenced the Red Days identified in LCC-MZT’s monthly narrative report for its May 31,
2014 update, in which LCC-MZT identified fifty-six Red Days. In Mr. Weathers’ expert
report, Mr. Weathers stated that he found an additional five Red Days, for a total of sixty-
one Red Days occurring on the P-913 project after August 14, 2013.29 In Mr. Manginelli’s
revised expert report, Mr. Manginelli identified seventy-one Red Days occurring on the P-
913 project after August 14, 2013. At trial, while Mr. Manginelli was being cross-examined
by Department of Justice attorney Kelly Krystyniak about a chart he had prepared of Red
Days occurring after August 14, 2013,30 Mr. Manginelli identified seven alleged Red Days
appearing on his chart, which had occurred on a weekend or federal holiday, and five for
which LCC-MZT did not produce a Contractor Production Report.31 In Mr. Weathers’
expert report, he asserted that, “while all Red Days are considered excusable, not all of
the Red Days encountered after August 14, 2013 can be considered compensable simply
because they occurred.” In Mr. Manginelli’s revised expert report, Mr. Manginelli asserted:

       Because of the nature of red days, and the significant disruption they have
       to all work activities, red days, in effect, suspend all work and take
       precedence over any other delays affecting the project. For example, when
       a red day occurs, work cannot be performed, and, thus, it is not possible
       that another path of work is delaying the project. This is because it is not
       possible to mitigate the impact of an ongoing delay on a red day.

 Mr. Weathers identified the following five additional dates on which Red Days occurred:
29

October 1, 2013; October 2, 2013; March 19, 2014; April 3, 2014; and April 7, 2014.

 Ms. Krystyniak noted at the trial that the undated chart prepared by Mr. Manginelli listing
30

Red Days occurring after August 14, 2013 “came in subsequent to his original report.”
31
   The seven alleged Red Days occurring on weekends or federal holidays and for which
LCC-MZT did not produce a Contractor Production Report are October 5, 2013; October
6, 2013; November 28, 2013; January 18, 2014; January 19, 2014; April 13, 2014; and
May 11, 2014. During his testimony, Mr. Manginelli also identified two weekend days on
which Red Days occurred and on which LCC-MZT was on site and for which plaintiff did
produce Contractor Production Reports, which were April 12, 2014 and May 10, 2014.
                                            91
The court has determined that anticipated Red Days could be considered non-work days
in the Contract’s Specifications and are in addition to other non-workdays, such as
weekend days, which are outside of LCC-MZT’s working hours. Under the Contract’s
Specifications , LCC-MZT could be entitled to excusable, but not compensable, delay for
delays incurred in connection with Red Days. The Contract’s Specifications also
contemplated that LCC-MZT could receive a compensable adjustment for Red Days
under the following three circumstances: (1) if LCC-MZT’s workers could not work for
more than fifty percent of a Red Day; (2) there were more than ten Red Days on working
days in a single month; or (3) there was a scheduling change related to an anticipated
Red Day with less than forty-eight hours’ notice to plaintiff. Furthermore, as discussed
above, in order for a government-caused delay to become compensable, it must affect
the project’s critical path. See, e.g., Fireman’s Fund Ins. Co. v. United States, 92 Fed. Cl.
at 666 (“The Government’s liability for delay-related damages is limited to those delays
that it caused and that hew to the project’s critical path.”).

        As discussed above Modification 10 was executed on August 30, 2013 and
resolved all Red Days occurring through August 14, 2013. From August 15, 2013 to
September 19, 2013, there were four Red Days, which occurred on August 15, 2013;
August 16, 2013; August 19, 2013; and August 20, 2013, all of which were weekdays.
The Red Days occurring on August 15, 2013; August 16, 2013; August 19, 2013; and
August 20, 2013 transformed what would have been normal work days for LCC-MZT into
potential non-work days. Plaintiff, however, has not attempted to prove that any individual
Red Day met the above requirements to potentially be considered compensable delay. In
LCC-MZT’s August 15, 2013 Contractor Production Report, LCC-MZT states: “Today was
scheduled to be a red day at 1:00 yesterday requiring us to cancel all deliveries and
concrete placement scheduled for today. There were no moves today.” As discussed
above, paragraph 1.2.1 in section 01 14 00 indicates that, for Red Days, “[c]hanges
resulting in less than 48 hours notice will be considered a changed condition.” The August
15, 2013 Red Day, scheduled with less than forty-eight hours’ notice, is, therefore,
considered a changed condition under the Contract’s Specifications. LCC-MZT does not
appear to have incurred sequestration costs in connection with the August 15, 2013 Red
Day, as there were no Red Day operations, also referred to in the Contractor Production
Reports as “moves,” on August 15, 2013. Based on the record before the court, it is
unclear what financial impact, if any, LCC-MZT experienced when having to cancel
deliveries on August 15, 2013, as LCC-MZT has not attempted to quantify the financial
impact of any individual Red Day, including the August 15, 2013 Red Day. The August
15, 2013 Red Day, however, should be considered a NAVFAC-caused change from a
workday to a non-work day and should also be considered a changed condition under the
Contract’s Specifications. As stated above, the revised expert report of William Manginelli
and the expert report of Stephen Weathers both indicated that each of the four Red Days
occurring in August 2013 delayed LCC-MZT’s completion of the P-913 project, thereby
affecting the project’s critical path. LCC-MZT, therefore, is entitled to one day of
excusable, compensable delay for August 15, 2013 as a result of NAVFAC scheduling a
Red Day with less than forty-eight hours of notice.

                                             92
        On August 16, 2013, LCC-MZT’s Contractor Production Report indicates that the
Red Day operations were for a total of 115 minutes, which was less than fifty percent of
the working hours on August 16, 2013. On August 19, 2013, LCC-MZT’s Contractor
Production Report provides that the Red Day operations were for a total of 100 minutes,
again less than fifty percent of the working hours on August 19, 2013. On August 20,
2013, LCC-MZT’s Contractor Production Report provides that the Red Day operations
were for a total of 100 minutes, which also was less than fifty percent of the working hours
on August 20, 2013. The expert reports of both William Manginelli and Stephen Weathers
indicated that the four Red Days occurring in August 2013 delayed LCC-MZT’s
completion of the P-913 project, and during defendant’s expert Stephen Weathers’
testimony, Mr. Weathers stated that “what I found was that the [roof] Pour 2 activity
slipped from August 19th, 2013 . . . to September 4th, 2013.” Nevertheless, based on the
Contractor Production Reports for each day, the Red Days occurring on August 16, 2013,
August 19, 2013 and August 20, 2013 do not indicate that any of the three requirements
contemplated by the Contract’s Specifications, discussed above, have been met to be
considered compensable delay.32 Therefore, for the four Red Days occurring in August
2013, LCC-MZT is entitled to four days of excusable delay, but only August 15, 2013 also
qualifies as a day of compensable delay.

        On September 19, 2013, NAVFAC issued its Stop Work Order. As discussed
above, under FAR § 52.246-12(h), LCC-MZT is entitled to an “equitable adjustment for
the additional services involved in the examination and reconstruction, including, if
completion of the work was thereby delayed, an extension of time,” for the period during
which Exponent was conducting its inspection of the P-913 building’s structural integrity.
The parties have jointly stipulated that NAFVAC lifted the restrictions included in the
September 19, 2013 Stop Work Order on November 26, 2013. In Stephen Weathers’
expert report for defendant, Mr. Weathers stated that LCC-MZT had intended to start
putting the roof primer onto the P-913 building on September 17, 2013. Mr. Weathers
determined that the restrictions in the September 19, 2013 Stop Work Order “impacted
the completion of the structure, but also the installation of building roofing. These delays
placed building roofing on the critical path and delayed substantial completion.” In the
revised expert report of plaintiff’s expert William Manginelli, he stated that “[i]n the August
14, 2013 schedule, the longest path of work ran through the pouring of the structural
concrete roof, to the completion of roof activities, to the installation and insulation of MEP
[mechanical/electrical/plumbing] equipment, to interior finishes, and ultimately to pre-final
inspection punchlist work.” Mr. Manginelli asserted that “the stop notice delayed the start
of the installation of the concrete roof primer from its planned start of September 25, 2013
until November 19, 2013, a delay of 55 calendar days to the concrete roof path of work.”

32
  The record before the court only includes daily Contractor Production Reports for days
occurring on the P-913 project after April 14, 2013. Plaintiff has not asserted that there
were more than ten Red Days in April 2013. Furthermore, based on the record before the
court, the only month after August 2013 which had greater than ten Red Days occurring
on work days was April 2014, which is discussed below.
                                              93
        Although both expert witnesses agreed that placing the roof primer had shifted
onto the critical path due to the issuance of the September 19, 2013 Stop Work Order,
plaintiff’s and defendant’s expert witnesses gave different intended start dates for the
installation start date for the primer, with defendant’s expert Mr. Weathers providing a
September 17, 2013 intended start date and plaintiff’s expert Mr. Manginelli providing a
September 25, 2013 intended start date. Mr. Manginelli used an LCC-MZT schedule with
a data date of August 14, 2013 to determine the start for installation of the roof primer,
whereas Mr. Weathers used an LCC-MZT schedule with a data date33 of August 31, 2013.
Although the schedules used by the experts are based off of different schedules with
different data dates, it appears that both of the schedules used by the experts were
created by LCC-MZT in mid-November of 2014, which was after substantial completion
had been achieved on the P-913 project, as all of the schedules in the record before the
court, in addition to listing a data date, list a separate date of either November 17, 2014,
or November 19, 2014. Based on the record before the court, it appears that these
schedules were submitted as part of LCC-MZT’s “Time Impact Analysis,” which was a set
of documents LCC-MZT provided to NAVFAC in an attempt to explain to NAVFAC the
ripple-effect of the various delays which occurred during the project, and in an attempt to
request adjustments based on those delays. Because the schedules used by the experts
are backward-looking, and contain information, on which items remained to be completed,
and when such items were scheduled to begin, a schedule with a more recent data date
would reflect more up-to-date information on when an outstanding project item was
scheduled to begin. Therefore, the schedule with a data date of August 31, 2013, which
was created after the fact, but represented the dates of when outstanding project items
were scheduled to begin as of the day indicated by the data date, could have contained
more up-to-date information as compared to the schedule with a less recent data date of
August 14, 2013. Therefore, without more precise evidence offered by plaintiff, the court
uses the schedule with a data date of August 31, 2013, which was the schedule used by
Mr. Weathers, and which indicates that the start date for installing the roof primer was
scheduled for September 17, 2013.

        Both experts, Stephen Weathers and William Manginelli, stated in their respective
expert reports that because of NAVFAC’s September 19, 2013 Stop Work Order, LCC-
MZT did not begin installing the roof primer until November 19, 2013, and that the result
of the delay in work caused by the September 19, 2013 Stop Work Order was that
installation of the roof primer had shifted to the critical path. There are sixty-three calendar

33
     Mr. Manginelli testified at the trial that a data date

         is a date that -- from which the scheduling software calculates the
         completion of the project. So the way scheduling software works is, it looks
         at the data date and then it looks at the plan to complete the job and it does
         a series of forward and backward passes to establish which path is longest,
         and that predicts then what the end date will be. So if you -- if you want to
         understand what the impact to something may be, you can calculate
         multiple schedules using the same data date but [sic] just simply changing
         the downstream logic.
                                                 94
days between September 17, 2013 and November 19, 2013. Because the September 19,
2013 Stop Work Order delayed the P-913 project’s critical path for sixty-three days, and
because the court concluded, above, that NAVFAC issued the September 19, 2013 Stop
Work Order, but that, after review by Exponent, the roof was found to be structurally
sound, and that limited, non-structural irregularities in the concrete pour could be
repaired, LCC-MZT is entitled to sixty-three days of excusable, compensable delay.34
Moreover, due to the court’s award of sixty-three days of excusable, compensable delay
for the period between September 17, 2013 and November 19, 2013, LCC-MZT is not
entitled to additional days of excusable, or compensable, delay caused by Red Days
which occurred during the same period, as doing so would result in the award of multiple
days of delay for a single day occurring on the project.

        Plaintiff’s expert William Manginelli and defendant’s expert Stephen Weathers
disagreed as to the causes of delay experienced after the September 19, 2013 Stop Work
Order was lifted on November 26, 2013. Mr. Manginelli alleged in his revised expert report
that, “from November 20, 2013 until April 10, 2014, when the energization of the building
was completed, there was [sic] 93 calendar days of delay that can be attributed to the
energization of the building and the existence of red days.” In Mr. Manginelli’s testimony,
he stated that he identified the building energization path and the concrete roof path as
shifting onto the critical paths of the P-913 project after August 14, 2013. Regarding the
concrete roof path, Mr. Manginelli stated:

      So when you talk about the roof, you know, I see in the record the
      terminology of the roof kind of goes all over the place. For example, there’s
      reference to roof repairs. Those are actually on the underside of the roof,
      inside the building. Okay?

      So it -- it’s -- it’s a little bit confusing in terms of how the terminology “roof”
      has been used in the documents, I think. But essentially it’s a -- it’s a -- it’s
      a built-up component, roof component of -- of structural concrete,
      waterproofing membranes, and topping concrete.

Mr. Manginelli testified further that “the roof path began to make progress and shifted off
the critical path,” and, therefore, no longer caused delay to the completion of the work
under the Contract. He explained:

      [T]he concrete primer started on November 19th of 2013, with the start of
      the roof primer. Even though there were concrete repairs that remained,
      those repairs were underneath the roof itself. They were inside the building.
      But with the start of the roof primer, the roof itself, the watertight aspects of
      the roof, began to make progress. And that was, I believe, what was critical
      to make the building watertight so that -- so that the inside of the building
      could be completed.

34
   Compensation for the structural concrete testing during this period is discussed above
in the section covering REA 29.
                                              95
      Regarding the building energization path, which continued to delay the project, Mr.
Manginelli testified

       the building energization path, which I believe was concurrently critical with
       the roof, began to have issues associated with the design itself of the
       grounding system for the building. And -- and the building had a very
       sophisticated grounding system. The rebar within the concrete structure
       itself was all welded and also connected to the grounding system. And so
       there was a concern that stray currents, you know, anywhere on this site be
       grounded or directed to the grounding system.

       In April of 2013, the contractor was having trouble installing the grounding
       rods per the design, and the government altered the design, gave further
       instructions as to how to accomplish the driving of the grounding rods.

       In October -- October 16th, there were tests performed on that system. And
       again on October 31st. And those tests failed, and the government went
       back and made more changes to the design. So that path was continuing
       on past the -- the November 19th date where the roof primer started.

Mr. Manginelli further testified:

       The building energization path, however, remained delayed. And at this
       point I believe, for this time period of November 20 to April 10th -- November
       20, 2013, to April 10th of 2014, it’s solely critical, that is, the builder
       energization path.

       And I’ve detailed all these dates in my report, but just to summarize them
       on this chart here, the government did revise the design on November 27th
       of 2013. The contractor had some questions with respect to those revisions,
       and an RFI was issued in December of 2013. The government responded
       in January. Contractor had further questions. And then there was additional
       scope added by the government at the end of January.

                                           ***

       So the -- so the original design had grounding rods because the tests --
       there was a resistance test that the system had to pass. What the
       government had done was it -- the government designed the system, but
       then it also required a performance of that system. So you had really a
       method spec, if you will, which was defined to the contractor how to build it,
       the grounding system. But then there was also a performance test. And it
       had to test under 25-ohm resistance. Below -- 25 or below.

                                            96
      And so because this wasn’t working, the government added something
      called grounding wells, which is an entirely different type of grounding
      system. It caused the contractor to have to now re- -- you know, mobilize
      different materials and so forth. That occurred at the end of January, the
      design change occurred at the end of January of 2014.
      In March of 2014, the contractor began to install those grounding wells. And
      once that was done, the tests again failed. And then ultimately the
      government decided to accept the 30 ohms that the system had been
      achieving, in essence acknowledging that the system could not meet the
      performance spec of a 25-ohm max resistance.

                                           ***

      And so shortly thereafter on April 10th, six days later, the -- the building was
      energized.

      As I pointed out in the previous graphic, the plan date for that energization
      was in the August 14th, 2013, schedule was November 12th of 2013.
      Actually, actual energization on April 10th of 2014 would be 148 days later.

Thus, plaintiff’s expert Mr. Manginelli contended that energization, and more specifically,
grounding, was the only critical path after LCC-MZT began to install the roof primer on
November 19, 2013 until energization occurred on April 10, 2014.

      In Mr. Weathers’ expert report, he asserted:

      While the Government has acknowledged excusable delay to April 30, 2014
      through the grounding building energize issue, it identified that LCC-MZT
      had incurred concurrent delays of its own through the date the building was
      energized that would have delayed the project independently from the
      grounding issue upon which LCC-MZT has focused its argument for
      entitlement to compensable delay.

      Specifically, in order for the building to be energized, LCC-MZT had to
      complete work within the electrical room including the main switchboard
      transformers; T1, T2, T3 and T4; numerous electrical panels and all
      associated electrical conduit beforehand. In addition, LCC-MZT had to
      submit test reports following installation of the transformers and a building
      energizing plan for approval prior to energizing the building. Further, as the
      Government, notes the grounding issue was an independent issue that did
      not impact electrical room work and that this issue actually impacted the
      lightning protection system instead. Importantly, as the Government,
      contends the grounding issue that is the subject of LCC-MZT’s delay claim
      did not actually prevent proper grounding of the equipment required to
      energize the building (had LCC-MZT actually been complete with all other
      electrical room work and ready to energize the building prior to the complete

                                            97
       resolution of the grounding issue). In effect, these were two separate paths
       of work leading to energizing the building. LCC-MZT has evaluated delays
       to only one of these paths.

       Based upon a review of the project schedules, as well as LCC-MZT’s Serial
       Letter 114 April 17, 2015 describing its progress towards energizing the
       building, CPMI found that LCC-MZT was not complete with electrical room
       equipment installation related activities until March 20, 2014, the power test
       report until March 27, 2014, and the energizing plan submission approval
       until April 7, 2014. Because of these issues the project record indicates that
       the building could not have been energized by LCCMZT any earlier than it
       was actually was energized (April 9, 2014) irrespective of any potential
       restrictions from the grounding issue, testing and RFI questions responses
       which also extended the building energizing to April 9, 2014 according to
       LCC-MZT. In response to this conclusion, LCC-MZT argues in Serial Letter
       114 that the electrical room equipment was originally planned to be
       completed well in advance of the actual energizing the building, but that due
       the ongoing resolution of the grounding issue, there was no need to
       accelerate completion of the electrical work. Therefore, LCC-MZT
       essentially claims there was no concurrent delay through its own work to
       prepare for energizing the building because it was, instead, “pacing” its work
       in the electrical room along with the resolution of the grounding issue.

(internal references and footnote omitted).

       Mr. Weathers also testified that, in addition to energization delays, LCC-MZT
experienced continued delays attributable to roofing repairs, which he asserted, in
contradiction to Mr. Manginelli’s testimony, remained on the critical path after LCC-MZT
started to install the roof primer on November 19, 2013, and delayed completion of the
project. Mr. Weathers asserted:

       Standing on the job December 11, 2013, LCC-MZT, by this schedule,
       anticipates that the structural roof repairs will be completed by January 28,
       2014. I know from reading the project record that Contech does not
       complete these until March 13th, 2014. A delay from January 28th, 2014,
       through March 13, 2014.

      In LCC-MZT’s schedule titled “EHS-25 08-14-13 TIA,” which has a data date of
August 14, 2013 and appears to have been used by both Mr. Manginelli and Mr.
Weathers, LCC-MZT indicates that LCC-MZT intended to have the building energized on
November 12, 2013 and that there were seven days of float35 associated with building

35
  “Float is the amount of time an activity can slip in the schedule without impacting the
next subsequent activity (i.e., ‘free float’), or the amount of time an activity can slip without
impacting project completion (i.e., ‘total float’).” W. Stephen Dale & Robert M. D’Onofrio,
Reconciling Concurrency in Schedule Delay and Constructive Acceleration, 39 Pub. Cont.
                                               98
energization. At trial, Stephen Weathers testified that “[y]ou would at least need to move
that date seven workdays out -- seven workdays out, which is close to nine calendar days.
So the date that, if you wanted to use this schedule, he [Mr. Manginelli] could have started
as of November 21st, 2013.” As stated above, LCC-MZT also resumed roof work and
began installing the roof primer on November 19, 2013.

         The roof repairs appear to have continued until March 13, 2014. In LCC-MZT’s
memorandum for record, LCC-MZT states that its subcontractor, Contech, completed all
of the repairs by “hand patch” on March 13, 2014, which LCC-MZT asserted was longer
than anticipated due to failures in Contech’s installation produces. To the extent that
Contech’s failures in roof repair caused delay to the project, such delay would not be
considered government caused delay. See George Sollitt Constr. Co. v. United States,
64 Fed. Cl. 229, 237–38 (2005). As discussed above, delay attributed to meeting
grounding specifications, however, delayed the completion of the project until April 4,
2014, more than three weeks after roof repairs were completed. Indeed, LCC-MZT’s
schedule with a data date of February 28, 2014 does not indicate roof repairs as being
on the P-913 project’s critical path, but does indicate that grounding remained on the
critical path.

        Regarding grounding, as discussed above, LCC-MZT employee Jeremy Wastweet
and PSW Electric owner Scott Wakefield separately testified on the difficulties
encountered when attempting to ground the lightning system, including that they were
unable to drive the ground rods to the required depth due to the conditions of the ground.
After discussing the ground rod issues with NAVFAC, Jeremy Wastweet stated that the
ground rods “never did actually meet the requirements of the specification, but the last fix
that we applied were ground wells, drilled in ground wells.” According to the testimony of
William Manginelli, LCC-MZT knew “in January that the grounding system has been
changed. The design has been changed. It has to go out and procure materials.” During
his testimony, when asked whether PSW Electric could energize the building prior to
completion of grounding, PSW Electric owner, Scott Wakefield, responded “[a]bsolutely
not” because the “specifications required that the grounding resistances be met before
the building could be energized” and because “too high of a resistance could result in an
electrical shock to the personnel within the building.”

      Scott Wakefield and plaintiff’s attorney Katherine Knudsen had the following
discussion during trial:

       Ms. Knudsen: Between -- we know the time frame, about a year I believe
       you testified, for getting the grounding done to the energization. Did that
       delay the completion of your work based on what you originally scheduled?

       Mr. Wakefield: Through all the grounding systems, it delayed it a little, yes.

L.J. at 190. At trial, plaintiff’s expert witness William Manginelli stated that “[n]egative float
is when you’re completing the project after the contract completion date.”
                                               99
      Ms. Knudsen: Okay. Did the inability to energize the building earlier -- did
      that impact any other work that you had to do?

      Mr. Wakefield: It did.

      Ms. Knudsen: What work?
      Mr. Wakefield: Final energizing of the secondary distribution system panels
      and transformers and lighting and all of the subsystems to be able to test
      them and -- and for final testing of the systems.

During cross-examination of Scott Wakefield, Department of Justice attorney Kelly
Krystyniak and Mr. Wakefield had the following discussion:

      Ms. Krystyniak: So you also testified that specifications of the contract
      required the building be grounded before it’s energized. Do you recall that
      testimony?

      Mr. Wakefield: I do.

      Ms. Krystyniak: Okay. But it’s not the case that you can’t work on the
      grounding system of the building and the energization at the same time,
      correct?

      Mr. Wakefield: Define “work on.”

      Ms. Krystyniak: Sure. Did you complete everything that you needed to do in
      order to energize the building -- just had to turn on the switch -- before you
      started working on the grounding system?

      Mr. Wakefield: No.

      Ms. Krystyniak: No. Those two paths are going on at the same time,
      correct?

      Mr. Wakefield: Correct.

      Ms. Krystyniak: Okay. And so, in fact, you might be able to energize the
      building before grounding is completed, but you also might not be able to,
      right?

      Mr. Wakefield: You absolutely cannot.

      Ms. Krystyniak: Both have to be done at the same time, right?

      Mr. Wakefield: Both have to be complete before you can energize.

                                           100
       Ms. Krystyniak: Okay. Complete and done I understand are kind of terms of
       art. So the work has to be complete before you are able to energize, but the
       work to prepare for energization is going on at the same time as the work
       to prepare for grounding?

       Mr. Wakefield: Correct.

       According to Scott Wakefield and Jeremy Wastweet, NAFVAC issued a variance
and changed the twenty-five ohms requirement to thirty ohms, which PSW Electric was
able to satisfy. Mr. Wakefield asserted that it took “close to a year” from the time PSW
Electric began its grounding efforts to when PSW Electric was permitted to energize the
building. NAVFAC appears to have accepted thirty ohms for the purposes of grounding
on April 4, 2014.

      According to Mr. Weathers’ testimony, however, which was discussed above, and
which the court found credible, “the grounding issue was an independent issue that did
not impact electrical room work.” Mr. Weathers testified:

       [I]n order for the building to be energized, LCC-MZT had to complete work
       within the electrical room including the main switchboard transformers; T1,
       T2, T3 and T4; numerous electrical panels and all associated electrical
       conduit beforehand. In addition, LCC-MZT had to submit test reports
       following installation of the transformers and a building energizing plan for
       approval prior to energizing the building.

        LCC-MZT’s schedule with a data date of May 30, 2014 indicates that LCC-MZT
did not finish installing the transformers until March 20, 2014.36 Thereafter, LCC-MZT
submitted its building energization plan on March 25, 2014, which was rejected by
NAVFAC on April 1, 2014, and subsequently resubmitted by LCC-MZT to NAVFAC on
April 4, 2014, and finally approved by NAVFAC on April 7, 2014. Thus, although grounding
delayed the completion of the project until April 4, 2014, it appears that LCC-MZT,
notwithstanding the grounding delay, was not able to energize the building, at the earliest,
until April 7, 2014, because it experienced independent delays in completing other
electrical room work necessary for building energization, such as installing the
transformers and getting the building energization plan approved.

       In William Manginelli’s expert rebuttal report, Mr. Manginelli stated:

       According to LCC-MZT, once it realized the extent of the delay to the
       grounding work there was no need to meet the dates originally set forth for
       work related to the electrical room such as the installation of transformers
       and panels. Therefore, CPMI’s allegations that LCCMZT was not, “pacing”

36
   At trial, Scott Wakefield of PSW Electric did not have a precise recollection of when the
transformers were installed, stating that he “[t]hought it was February, early to mid-
February” in 2013.
                                            101
      the electrical room work as a result of the delay to the grounding path is
      unsupported and contrary to the contemporaneous knowledge of the
      parties. A contractor may “pace” the work on one path because delays on
      the critical path create float in the other paths of work, creating the
      opportunity to perform some work more efficiently at a slower pace.

During cross-examination, Department of Justice attorney Kelly Krystyniak questioned
Mr. Manginelli with respect to the above-quoted paragraph in his expert rebuttal report,
and Mr. Manginelli testified that his “understanding” of LCC-MZT pacing the electrical
room work came from “conversations John King,” LCC-MZT’s scheduler, interim project
manager and claims consultant. Mr. Manginelli further testified on cross-examination as
to the work needed to energize the building:

      Ms. Krystyniak: My question to you was: If grounding doesn’t occur until
      April but they’re also not ready to turn on the lights until pretty soon close to
      there because of delay on the contractor’s part, wouldn’t that be concurrent
      delay? To which I believe you responded that they were -- they knew that
      the grounding was going to be driven out, and so maybe they slowed down
      intentionally, something along those lines? Or they diverted work?

      Mr. Manginelli: I think what I said was I can’t speak to intention. What I can
      speak to is priorities, right? So what happens in -- when you’re managing
      all the various priorities -- let’s -- let’s -- let’s say we’re standing in January
      of -- where are we, 2014 now, right? We’re standing in January. We just got
      brand new work scope from the government for the grounding system. We
      still have other components of the electrical system to install.

      I think you asked me if they were -- if they slowed down the other work
      because of the -- the grounding scope, and I said I can’t speak to their intent.

      The -- what you have is a situation where you’re managing priorities. So
      there’s a -- there’s a term that’s -- that’s -- that’s thrown around that’s used
      in our industry called “pacing,” right? And the -- the idea there is that, as
      your priorities are focused on one thing more than the other, then the lesser
      priority work may slow down.

      Whether that’s intentional, whether there’s some reason to have it
      intentional, there may be, there may be a cost savings to slow it down --
      whether that’s intentional or not, I can’t really speak to. But I do think that
      that is what occurred during this time frame. In other words, the priorities
      became the grounding system over completing the internal mechanical and
      electrical room, which includes the transformers and some other
      components.

                                             ***

                                             102
       Ms. Krystyniak: So your conclusion that they intentionally -- I wouldn’t use
       the word pacing -- your conclusion that they intentionally paced the work for
       the energization was again based on conversations with MZT and not
       independently verified?

       Mr. Manginelli: No. I think that what I just testified to was that I don’t know
       whether Mr. King’s statement here is true. I don’t know whether they
       intentionally paced or whether it was just a function of the priorities of having
       new work. I believe that either way the priorities of having new work are the
       important factor here. He indicated this statement, which I put in the rebuttal
       report, but that is not what -- it’s not a driving factor for me in my conclusion.

                                              ***

       Mr. Manginelli: What’s a driving factor for me in my conclusion is the fact
       that there was new work scope that had to be planned and executed, and
       that that would have taken for any contractor a priority over the completion
       of the known work scope.

       As indicated from the exchange at trial immediately above, Mr. Manginelli’s
conclusion that LCC-MZT’s team was pacing its work is based on speculation and
unverified conversations with John King. In plaintiff’s post-trial brief, plaintiff does not cite
to evidence to support that LCC-MZT’s team was pacing the work necessary to energize
the building in conjunction with the grounding work. LCC-MZT, therefore, has failed to
show that LCC-MZT suffered a compensable delay due to the faulty grounding work
because, as discussed above, it was concurrent with LCC-MZT’s delay related to other
aspects of building energization, including installing the transformers and getting the
building energization plan approved. See United Constructors, LLC v. United States, 95
Fed. Cl. 26, 40 (2010) (“The general rule is that where both parties contribute to a delay,
neither can recover damages.” (citing P.R. Burke Corp. v. United States, 277 F.3d at
1359–60)).

       On August 1, 2016, Eileen Mitchell, Chief of the NAVFAC Contracting Office,
issued a contracting officer’s final decision stating that the “Administrative Contracting
Officer determined merit for the differing site condition associated with PC [Proposed
Change] 0025,” related to the grounding issue, and provided LCC-MZT with $28,438.37,
plus interest, and 135 days of excusable delay. On August 17, 2016, Dana Bolte
unilaterally issued Modification 24 to the Contract which increased the value of the
Contract by $48,533.74 for the grounding issues LCC-MZT experienced during
construction. Modification 24 states that it incorporates Chief of NAVFAC Contracting
Office Eileen Mitchell’s August 1, 2016 final decision and provides:

       (2) An extension of time is required by reason of this modification. The
       contract is modified as follows:

                                              103
      a. The Substantial Completion Date (SCD), as further defined in 5252.211-
      9301 ~ Phased Construction Schedule, is hereby extended by one-
      hundred-thirty-five (135) calendar days to April 30, 2014. Liquidated
      damages, as further defined in 52.211-12, remain unchanged.

      b. The Contract Completion Date (CCD), as further defined in 5252.211-
      9301 ~ Phased Construction Schedule, is hereby extended by one-
      hundred-thirty-five (135) calendar days to July 1, 2014. Liquidated
      damages, as further defined in 52.211-12, remain unchanged.

(capitalization in original). Modification 24 was the last adjustment by NAVFAC to the
plaintiff’s Contract’s Substantial Completion Date, which was changed from December
16, 203 to April 30, 2014, and the Contract Completion Date, which was changed from
February 16, 2014 to July 1, 2014.

       At trial, NAVFAC scheduler Casey Caughie testified that Dana Bolte, who issued
Modification 24 to the Contract, had asked him prior to the issuance of Modification 24 to
consider LCC-MZT’s time impact analysis for the grounding issue, as well as Red Days
which occurred during that time period. At trial, while looking at a March 10, 2015
memorandum that he prepared for Mr. Bolte prior to the issuance of Modification 24, Mr.
Caughie testified:

      Dana [Bolte] also told me to consider the red days again. And at that point
      the contractual substantial completion date was the 16th of December of
      2013. So what he described to me to do was to say that up to that point red
      days are under the contract and after that point it’s outside of the contract
      period, so give them all the red days for lost work that -- that happens after
      that date.

Casey Caughie’s March 10, 2015 memorandum indicates that he concluded that there
were thirty Red Days occurring between December 16, 2013 and April 9, 2014.
Modification 24, therefore, appears to have incorporated the thirty Red Days found by Mr.
Caughie between December 16, 2013 and April 9, 2014 within the 135-day extension in
Modification 24, and awarded LCC-MZT with excusable, non-compensable delay related
to those thirty Red Days.

         Casey Caughie’s March 10, 2015 memorandum does not, however, appear to
account for the five Red Days which occurred on November 20, 2013, November 21,
2013, November 25, 2013, November 26, 2013, and November 27, 2013. Based on the
Contractor Production Reports, the anticipated Red Days on November 20, 2013 and
November 21, 2013 were canceled at the end of the previous respective days, without
time for LCC-MZT to schedule any deliveries. Although the anticipated Red Days on
November 20, 2013 and November 21, 2013 were canceled, as discussed above, per the
Contract’s Specifications, LCC-MZT could be entitled to one day of excusable delay for
each anticipated Red Day. As also discussed above, provided there was a delay to the
critical path, LCC-MZT could be entitled to compensable delay for anticipated Red Days

                                           104
under the following three circumstances: (1) if LCC-MZT’s workers could not work for
more than fifty percent of a Red Day; (2) there were more than ten Red Days on working
days in a single month; or (3) there was a scheduling change related to an anticipated
Red Day with less than forty-eight hours’ notice to plaintiff. Because Red Day operations
were canceled within forty-eight hours’ notice on November 20, 2013 and November 21,
2013, those two days meet the requirements and could be considered excusable and
compensable days of delay according to the Contract’s Specifications. As discussed
above, however, compensability also is dependent on whether the delays affected the
project’s critical path. See Fireman’s Fund Ins. Co. v. United States, 92 Fed. Cl. at 666.
Because the anticipated Red Days operations on November 20, 2013 and November 21,
2013 were canceled, it is unclear what impact, if any, these cancellations had on the
critical path. Although the Contractor Production Reports for these two days indicate that
deliveries could not be rescheduled because of the short notice, there is no indication that
the inability to reschedule the deliveries affected work items which were on the critical
path on these two days, and plaintiff has not provided evidence to support that scheduled
work items which were on the critical path on these two days were otherwise affected by
the cancellation of these two anticipated Red Day operations. As explained in Mr.
Weathers expert report, the cancellation of the anticipated Red Days in November 2013
“should not be considered compensable as no impact to the critical progress was
demonstrated,” and plaintiff’s expert Mr. Manginelli did not specifically address the
cancellation of the anticipated Red Days in November 2013 in his revised expert report.
Because plaintiff has not demonstrated impact to the critical path, plaintiff is entitled to
excusable delay for November 20, 2013 and November 21, 2013, but not compensable
delay. For the remaining November 2013 Red Days not accounted for in Mr. Caughie’s
March 10, 2015 memorandum, the Red Day operations on November 25, 2013 were
limited to 114 minutes and the Red Day operations on November 26, 2013 were limited
to twenty-eight minutes, both of which are less than fifty percent of the working hours on
those days. Red Day operations on November 27, 2013 also were limited to less than fifty
percent of the work hours, with only 119 minutes of activity related to Red Day operations.
The Contractor Production Reports for November 25, 2013, November 26, 2013, and
November 27, 2013 also do not indicate that Red Day operations were scheduled with
less than forty-eight hours’ notice. LCC-MZT, therefore, is entitled to excusable delay for
those five days in November 2013 not accounted for in Mr. Caughie’s March 10, 2015
memorandum, but none of them are compensable.

        Mr. Caughie also did not account for the Red Days occurring in December 2013
prior to December 16, 2013, which was, as discussed above, the date from which
Modification 24’s Substantial Completion Date was extended, and the date beginning
which the time extension in Modification 24 included Mr. Caughie’s tally of remaining Red
Days which had occurred during the P-913 project. According to a list prepared by
plaintiff’s expert William Manginelli,37 there were four Red Days which occurred during

37
   The court notes that unlike Mr. Manginelli, defendant’s expert Mr. Weathers did not
prepare a list of every Red Day occurring after August 14, 2013. Instead, Mr. Weathers
separated the number of Red Days occurring within different time periods, without stating
the exact days on which a Red Day occurred. Although the court refers to Mr. Manginelli’s
                                            105
that time period. Based on the Contractor Production Reports, on December 12, 2013,
there were 220 minutes of Red Day operations, which is less than fifty percent of LCC-
MZT’s working hours on December 12, 2013. On December 13, 2013, the Red Day
operations occurred for only 140 minutes. LCC-MZT’s December 14, 2013 Contractor
Production Report does not indicate that there were Red Day operations or that
December 14, 2013 was scheduled as a Red Day but subsequently canceled with less
than forty-eight hours’ notice, and LCC-MZT, therefore, is not entitled to an excusable or
compensable delay on December 14, 2013. On December 16, 2013, there were 134
minutes of Red Day operations, which is less than fifty percent of LCC-MZT’s working
hours. The Contractor Production Reports for December 12, 2013, December 13, 2013,
and December 16, 2013 do not indicate that Red Day operations were scheduled with
less than forty-eight hours’ notice. Thus, LCC-MZT is entitled to three days of excusable,
delay for Red Days occurring in December 2013 prior to December 16, 2013, but none of
the three days are compensable.

       According to Mr. Manginelli’s chart, there were twenty-five Red Days on working
days between December 16, 2013 and April 9, 2014. As stated above, Modification 24’s
135-day extension incorporated Mr. Caughie’s count of thirty Red Days during this
timeframe. The discrepancy between the twenty-five Red Days counted by Mr. Manginelli,
and the thirty Red Days counted by Mr. Caughie is unclear, as Mr. Caughie did not list
the dates of the alleged thirty Red Days in his March 10, 2015 memorandum. Upon the
court’s review of the Contractor Production Reports of the Red Days listed in Mr.
Manginelli’s chart, none of the Red Days occurring between December 16, 2013 and April
9, 2014 had Red Day operations impacting more than fifty percent of LCC-MZT’s eight-
and-a-half working hours or indicated that Red Day operations were scheduled with less
than forty-eight hours’ notice, and, as indicated above, December 2013, January 2014,
February 2014, and March 2014 did not have more than ten Red Days a month on work
days. LCC-MZT, therefore, is not entitled to additional compensation for Red Days
experienced between December 16, 2013 and April 9, 2014.

       From April 9, 2014 to May 30, 2014, the only delays identified by the parties’
experts were delays related to Red Days. For the month of April 2014, as discussed
above, Red Days occurring from April 1, 2014 to April 9, 2014 were accounted for in the
135-day extension awarded in Modification 24. After review of the Contractor Production
Reports, however, the court counted eleven total Red Days on work days in the month of
April 2014, eight of which occurred after April 9, 2014. LCC-MZT, therefore, is entitled to
eight days of excusable delay for the month of April 2014. In addition, although none of
the Contractor Production Reports for the Red Days in April 2014 indicate that Red Day
operations impacted for more than fifty percent of LCC-MZT’s working hours on those
days or that the Red Days were scheduled with less than forty-eight hours’ notice, the
Contract’s Specifications in paragraph 1.2.1 of section 01 14 00, state that “10 work days
a month will be impacted by convoys and operations at the Explosive Handling Wharf

list of Red Days, the court also conducted extensive review of the Contractor Production
Reports in the record before the court, thereby verifying the accuracy of Mr. Manginelli’s
list.
                                           106
Area.” The Contract’s Specifications in paragraph 1.6.2.6 of section 01 32 17.00 20 states
that the “contractor may request an adjustment in accordance with the contract clauses
and the terms of this section (including the allocation of Float) if an activity’s number of
actual adverse delay days exceeds the scheduled number of days anticipated and cause
delay to project completion.” Because there were more than ten days of Red Days on
working days in April 2014, LCC-MZT is entitled to an adjustment of both time and money
for the eleventh Red Day in April 2014, as the extra Red Day was a change from the
number of anticipated Red Days in the Contract’s Specifications. The last Red Day
occurring in April 2014 was on April 30, 2014. According to LCC-MZT’s EHS-33 schedule
with a data date of March 31, 2014, LCC-MZT intended to engage in work on the P-913
project’s critical path on April 30, 2014. LCC-MZT, therefore, is entitled to one day of
excusable, compensable delay for April 30, 2014. Although LCC-MZT could be entitled
to the labor rates of when its laborers were sequestered on April 30, 2014, because April
30, 2014 constitutes a day of compensable delay, and the Red Day operations are
documented in LCC-MZT’s April 30, 2014 Contractor Production Report, LCC-MZT’s REA
27 does not contain the necessary labor rates for the court to calculate damages related
to sequestration, and plaintiff did not provide any additional documentation or any
testimony at trial about the labor rates for April 30, 2014. In sum, from April 9, 2014 to
April 30, 2014, LCC-MZT is entitled to eight days of excusable delay, one day of which is
considered compensable delay.

        In May 2014, there were six Red Days occurring on working days. On May 8, 2014,
there were 258 minutes of Red Day operations, which exceeds fifty percent of LCC-MZT’s
scheduled eight-and-a-half working hours for May 8, 2014. LCC-MZT’s May 8, 2014
Contractor Production Report indicates that LCC-MZT was working on NAVFAC’s punch-
list on May 8, 2014, which LCC-MZT’s EHS-34 schedule with a data date of April 30, 2014
identifies as being on the P-913 project’s critical path. LCC-MZT, therefore, is entitled to
on day of excusable, compensable delay for May 8, 2014. LCC-MZT’s Contractor
Production Reports for the remaining Red Days in May 2014 do not indicate that any of
the Red Day operations occurred for more than fifty percent of LCC-MZT’s working hours
or were scheduled with less than forty-eight hours’ notice. The Contractor Production
Report for May 28, 2014 states, however, that LCC-MZT was notified at 1:00 p.m. that
the following day, May 29, 2014, was going to be a Red Day. Therefore, LCC-MZT is
entitled to one day of excusable, compensable delay for May 29, 2014, as the Red Day
operations were scheduled with less than 48 hours’ notice, provided that there was a
delay to the critical path. As with the Contractor Production Report for May 8, 2014, the
Contractor Production Report for May 29, 2014 indicates that LCC-MZT was working on
NAVFAC’s punch-list on May 29, 2014, which LCC-MZT’s EHS-34 schedule with a data
date of April 30, 2014 identifies as being on the P-913 project’s critical path. In addition,
LCC-MZT’s May 29, 2014 Contractor Production Report indicates that LCC-MZT also
was working on “site prep & fence construction,” which “came to a halt” during the May
29, 2014 Red Day operations. LCC-MZT’s EHS-34 schedule with a data date of April 30,
2014 indicates that the “Perimeter Fence” activity was scheduled to be completed on May
16, 2014, and had ten days of float. By May 29, 2014, the ten days float associated with
fencing had thus expired, and the perimeter fence activity, in addition to NAVFAC’s
punch-list, also was on the critical path. LCC-MZT, therefore, is entitled to one day of

                                            107
excusable, compensable delay for May 29, 2014, as the Red Day operations were
scheduled with less than forty-eight hours’ notice and delayed the critical path. In sum,
for May 2014, LCC-MZT is entitled to six days of excusable delay, two days of which are
compensable, for May 8, 2014 and May 29, 2014. Similar to the April 30, 2014 Red Day,
LCC-MZT might be entitled to the labor rates of when its laborers were sequestered on
May 8, 2014 and May 29, 2014, as the Red Day operations are documented in LCC-
MZT’s Contractor Production Reports for those two days, but, as with the April 30, 2014
Red Day, LCC-MZT’s REA 27 does not contain the necessary labor rates for the court to
calculate damages related to sequestration.

        In LCC-MZT’s EHS-35 schedule with a data date of May 30, 2014, LCC-MZT listed
a substantial completion date of May 30, 2014. NAVFAC, however, recognized
substantial completion on June 11, 2014. In William Manginelli’s revised expert report,
Mr. Manginelli stated that “NAVFAC began using the project, allowing other contractors
and government employees to occupy the facility and the project site as of May 28, 2014,
which, according to LCC-MZT, met the definition of substantial completion that was
agreed to when substantial completion was establish [sic] in A00009.” The May 28, 2014
letter Mr. Manginelli refers to in his revised expert report is a letter from NAVFAC stating
that “you are notified that the following Government Contractors or Government
individuals are approved for access to your site” beginning on June 1, 2014. In Mr.
Weathers’ expert report for defendant, Mr. Weathers stated:

       It appears that LCC-MZT’s own issues with completing the work and
       punchlist contributed to, if not drove, the delays to substantial completion
       through June 2, 2014. LCC-MZT’s analysis has not addressed its slow
       progress. However, based upon a review of the project record, it is noted
       that several modifications were issued during the timeframe leading to
       substantial completion with several being issued after substantial
       completion.

Mr. Weathers concluded that “it would be fair to characterize” the delay “through June 2,
2014 as excusable and non-compensable.” Mr. Weathers, however, did not attempt to
characterize the delay, or otherwise explain why there was a delay from June 2, 2014
until NAVFAC recognized substantial completion on June 11, 2014.

                                            108
      Modification 9 provides:

In LCC-MZT’s Contractor Production Reports for May 28, 2014, May 29, 2014, and May
30, 2014, LCC-MZT states that it was performing punch-list work as well as “Sack & Patch
misc.,” “site prep & fence construction,” and “install benches at bathroom 119 & 138.”
LCC-MZT, therefore, was completing work through May 30, 2014. NAVFAC’s May 28,
2014 letter indicates that NAVFAC began allowing its contractors to use the P-913
building on June 1, 2014, which indicates that LCC-MZT received a building occupancy
date letter on May 28, 2014. LCC-MZT, however, was still completing non-punch-list work
as of May 28, 2014, and LCC-MZT’s own schedule does not indicate a substantial
completion date until May 30, 2014. May 31, 2014 was a Saturday and June 1, 2014 was
a Sunday, which are non-work days. LCC-MZT’s Contractor Production Reports from
June 2, 2014 through June 11, 2014 indicate that LCC-MZT was completing punch-list
work and cleaning the site. The court concludes that NAVFAC incorrectly defined
substantial completion under LCC-MZT’s Contract as occurring on June 11, 2014,38 and
that substantial completion instead occurred on June 2, 2014, the Monday after NAVFAC
informed LCC-MZT that its contractors were authorized to use the P-913 building and
when LCC-MZT only had punch-list work remaining to complete. LCC-MZT, therefore, is
entitled to nine days of excusable, compensable delay, as NAVFAC’s delayed issuance
of substantial completion appears to be the sole cause of the delay after June 2, 2014 to
June 11, 2014.

38
   According to LCC-MZT’s June 11, 2014 Contractor Production Report, SWFPAC
inspected the P-913 facility on June 11, 2014, at 2:00 p.m.
                                          109
      Based on the court’s above discussion, LCC-MZT is entitled to the following
delays, as summarized in the below chart:

         Time Period                Excusable Delay              Compensable Delay

 August  15,    2013       to             4 days                         1 day
 September 16, 2013
 September 17, 2013 to                   63 days                       63 days
 November 19, 2013
 November 20, 2013 to                     8 days                        0 days
 December 16, 2013
 December 17, 2013 to April               0 days                        0 days
 9, 2014
 April 10, 2014 to May 30,               14 days                        3 days
 2014
 May 31, 2014 to June 11,                 9 days                        9 days
 2014
 Total                          98 days of excusable delay     76 days of compensable
                                                                        delay

As indicated in the above chart, LCC-MZT is entitled to ninety-eight days of excusable
delay, seventy-six of which constitute compensable delay. In Modification 24, NAVFAC
set the Contract’s Substantial Completion Date as April 30, 2014 and the Contract
Completion Date as July 1, 2014. A ninety-eight-day extension of time extends the
Substantial Completion Date to August 6, 2014 and the Contract Completion Date to
October 7, 2014.

        NAVFAC has continued to retain $185,346.00 in liquidated damages due to LCC-
MZT’s alleged late completion. On August 10, 2016, contracting officer Dana Bolte sent
a letter to LCC-MZT stating that the “Government agrees to release all potential LD’s
[liquidated damages] for Phase B equaling $157,384.” (capitalization in original). As
discussed above, Modification 9 established that Phase A liquidated damages were to be
applied if substantial completion was not achieved by the Substantial Completion Date,
whereas Phase B liquidated damages were to be applied if contract completion was not
achieved by the Contract Completion Date. Dana Bolte’s August 10, 2016 letter stated
that LCC-MZT remained subject to potential liquidated damages for Phase A. During his
testimony at trial, Mr. Bolte also testified that Phase B liquidated damages were released
to LCC-MZT, but he indicated that Phase A liquidated damages had not been released
to LCC-MZT. The $185,346.00 in liquidated damages, therefore, appear to be liquidated
damages withheld as Phase A liquidated damages. Based on the court’s above
conclusions, the revised Substantial Completion Date under the Contract becomes
August 6, 2014, which the court found that LCC-MZT achieved on June 2, 2014.
Consequently, NAVFAC cannot withhold Phase A liquidated damages, and LCC-MZT is
entitled to $185,346.00, which NAVFAC is inappropriately withholding as liquidated
damages. LCC-MZT may also be entitled to interest on the amount of liquidated damages
                                           110
withheld, which is discussed below.

REA 32 – Additional Field Overhead
       In REA 32, LCC-MZT seeks an adjustment of $956,578.00 due to costs associated
with additional field office overhead, also known as extended field office overhead
incurred due to alleged government delays. In its post-trial brief, plaintiff states that
$390,480.00 for field office overhead was compensated through modifications, and that
the $956,578.00 requested in REA 32 does not include amounts previously awarded for
field office overhead in earlier modifications. As discussed below, LCC-MZT and its
expert, Mr. Manginelli, asserted that LCC-MZT had a daily rate for field office overhead
of $3,119.00, and that LCC-MZT is entitled to $3,119.00 multiplied by the number of
compensable days of delay.

       In defendant’s post-trial brief, defendant states:

       Defendant does not contest that, should the Court find that LCC-MZT is
       entitled to recover any direct costs, it would be entitled to a “10/5/3” markup
       on those costs.[39] However, by seeking to recover both direct costs with
       markup, and a daily rate for 177 days of delay, it seeks to recover twice
       which, as Mr. Bolte explained, is impermissible double-dipping.

Defendant also asserts that, “because field office overhead is largely labor, Mr. Weathers
[defendant’s expert] estimates that REA 32 includes 4,600 LCC-MZT labor hours. LCC-
MZT, similarly, cannot recover these costs twice.” (internal references omitted).
Defendant alternatively argues that “[s]hould the Court determine that LCC-MZT is
entitled to recover a daily rate for field office overhead, it should adopt the rate calculated
by” defendant’s expert Mr. Weathers, at $2,733.00 per day, “rather than” plaintiff’s expert
Mr. Manginelli’s rate of $3,119.00 per day, because “neither LCC-MZT nor Mr. Manginelli
have ever clarified which components make up Mr. Manginelli’s daily rate.” In plaintiff’s
post-trial brief, plaintiff argues that defendant’s application of the “10/5/3” markup rates to
plaintiff’s REA for additional field office overhead is “nonsensical” because the “10/5/3
rule applies to direct costs -- field office overhead represents an indirect costs, not a direct
cost.” Plaintiff asserts that defendant’s interpretation of the 10/5/3 rule “would mean that
a contractor could not recover field office overhead, which would be advance and implicit
waiver of such costs based on the 10/5/3 contractual provision.”

39
   NAVFAC contracting officer Dana Bolte testified regarding the “10/5/3” approach as
follows:

       So they get 10 percent on the prime’s direct cost. So any -- any work, direct
       work or direct costs MZT had, they get a 10 percent markup. On the 5
       percent, any of their subs’ direct costs, they get a 5 percent markup on. And
       then the 3 percent is home office.

Mr. Bolte asserted that LCC-MZT elected in its proposal to receive the “10/5/3” markup
on “any change to the contract.”
                                             111
       A Judge of this court had stated that “[f]ield overhead costs, otherwise known as
jobsite overhead, are administrative costs that ‘increase as a result of passage of time on
a project,’ such as field worker salaries, work trailer costs, and temporary utility fees.”
JMR Constr. Corp. v. United States, 117 Fed. Cl. at 441 (quoting WILLIAM SCHWARTZKOPF
& JOHN J. MCNAMARA, CALCULATING CONSTRUCTION DAMAGES 157-58 (2000)); see also
George Sollitt Constr. Co. v. United States, 64 Fed. Cl. at 242 (stating that an extended
field office overhead claim “requests damages for costs that are increased due to
maintaining a presence at the construction site for a longer period than originally
anticipated in the bid”). “Field office overhead refers to fixed periodic costs incurred at the
contractor’s field office. Examples are rent paid for a job trailer, field office telephone
expense, and salaries of clerical workers stationed in the field office.” JAMES ACRET &
ANNETTE DAVIS PERROCHET, CONSTRUCTION LITIGATION HANDBOOK § 7:16 (3d ed. 2020).

       Another Judge of the Court of Federal Claims indicated:

       The recovery of home office[40] and field office overhead is intended to
       compensate a contractor for delays in contract performance caused by the
       Government. The theory for this recovery is that the contractor plans for the
       expenditure of resources on a project based upon the expected duration of
       the project, and if a project extends for a longer duration than planned, a
       greater level of resources must be devoted to the project. When the delay
       is the responsibility of the Government, it is appropriate for the contractor to
       recover the increased expenditure of overhead resources caused by the
       delay.

Delhur Indus., Inc. v. United States, 95 Fed. Cl. 446, 467 (2010) (citations omitted).
Extended field overhead costs, if proven, are potentially recoverable in this court. See
JMR Constr. Corp. v. United States, 117 Fed. Cl. at 441; see also K-Con Bldg. Sys., Inc.
v. United States, 107 Fed. Cl. at 597 (“There is no question that, as a general rule, a
contractor can recover extended overhead as damages for government-caused delay.”
(citations omitted)); George Sollitt Constr. Co. v. United States, 64 Fed. Cl. at 242
(“Extended field office overhead also may sometimes be recovered as delay damages.”).

     At trial, NAVFAC contracting officer Dana Bolte and Department of Justice attorney
Ms. Murdock-Park had the following exchange about the “10/5/3” approach:

40
  Whether LCC-MZT is entitled to recovery of unabsorbed home office overhead, also
known as extended home office overhead, is discussed below when addressing plaintiff’s
REA 34 – “Extended Home Office Overhead.” Examples of home office overhead include
“expenses incurred at the contractor’s home office,” include rent, salary, and telephone
expense. See JAMES ACRET & ANNETTE DAVIS PERROCHET, CONSTRUCTION LITIGATION
HANDBOOK § 7:16.
                                             112
       Ms. Murdock-Park: Have you ever heard of the concept of 10/5/3?

       Mr. Bolte: Yeah, that’s a -- if you’re referring to field office overhead, that is
       -- 10/5/3 is a percentage, 10 percent/5 percent/3 percent. It’s a NAVFAC
       standard for a con- -- it’s a choice a contractor can accept to recoup field
       office overhead, extended field office overhead.

       Ms. Murdock-Park: What is the other choice that the contractor could make?
       Mr. Bolte: They could go with a different method of a daily rate, or we
       negotiate a daily rate, and that cost would be applied if we ever extended
       the contract due to government-caused delays. That’s a method.

       They could use -- they could charge those overhead costs as a direct cost.
       That’s allowable per the FAR. And there’s the percentage method where
       they accept the NAVFAC alternate. There’s also, if they didn’t want the 10
       percent/5 percent/3 percent standard, they could negotiate higher rates.

       On cross-examination, Mr. Bolte and plaintiff’s attorney Craig Ramseyer had the
following discussion about the 10/5/3 markup:

       Mr. Ramseyer: There was a little discussion about, on Friday [on direct
       examination], with regard to the 10/5/3 mechanism for markups; correct?

       Mr. Bolte: Yes.

       Mr. Ramseyer: And I think the feeling was, for instance, a 10 percent on a -
       - on another direct cost was a markup to cover field overhead; correct?

       Mr. Bolte: Extended field office overhead, yes.

       Mr. Ramseyer: And you understand that field overhead is a function of time?

       Mr. Bolte: Not necessarily.[41]

41
   Plaintiff’s expert William Manginelli described extended field office overhead as “time-
related costs,” testifying:

       [T]he field overhead costs are costs that are required to keep the job
       progressing every day. So we characterize these as -- as -- as primarily
       time-related costs in that the theory is that, if the job goes longer, these
       costs continue to carry on, if you will.

       So the easiest example is the -- the field trailer that the -- that the project
       manager is working out of, the Porta-Johns, things like that, that are not
       related to any particular item of work but are simply required in order to stay
       on the job.
                                             113
Mr. Ramseyer: Well, each day a contractor’s out there, he’s incurring costs
for that trailer and the supervisors that cost part of that, the water and the
drinking fountain, the power to the site. Those are all parts of field overhead
in your recollection; correct?

Mr. Bolte: Yes.

Mr. Ramseyer: And the longer that goes on, the longer he has to pay that;
right?

Mr. Bolte: Yes.

Mr. Ramseyer: And in your experience, that field overhead expense pool is
normally taken down to, like, a daily rate?

Mr. Bolte: That’s an option the contractor can choose.

Mr. Ramseyer: All right. So when the -- when you have a time-related
damage such as this, there’s -- and the claim is that it is extended field
overhead, there’s no direct costs to mark up. The very damage is the
extended field overhead; correct?

Mr. Bolte: If -- so with the 10 percent/5 percent/3 percent rule, it doesn’t
matter if the contract is extended or not. MZT only got those percentage
markups for field office overhead.

Mr. Ramseyer: On the direct costs?
Mr. Bolte: On direct costs, yes.

Mr. Ramseyer: Right?

Mr. Bolte: It’s -- it is a risk which method you decide to choose.

Mr. Ramseyer: So if, in fact, the contract has been delayed hypothetically
for six months and the only damage the contractor is seeking is that six
months, extra months that that trailer’s out there and the power’s coming to
the site, you’re spending money on water and supervisors and all that,
there’s no direct costs to mark up. The very damage you’re seeking is that
six months; right?

Mr. Bolte: Yes.

                                     114
       In the Contract, paragraph 4, titled “Change Order Markup Rates,” provides:

       In accordance with Section 00100, as part of the Contractor’s proposal the
       contractor shall provide proposed modification/change order percentage
       rates, for field overhead, home office overhead, primes overhead on
       subcontractors (for construction work only), and proposed profit. Markup
       rates for design firms will be negotiated when needed. The proposed
       change order markup rates will be awarded as part of the contract and will
       be used as the markup for both additive and deductive modifications for
       both prime and all subcontractors for modifications totaling up to a
       cumulative total value of 10% of the base bid amount. Any modification
       exceeding 10% (cumulative total value) of the original contract amount will
       be negotiated in accordance with FAR Part 15, DFARS Part 215, and any
       other applicable Federal Regulations.

(capitalization and emphasis in original).

        LCC-MZT’s proposal for the P-913 project was not offered or admitted into
evidence, although it is listed on plaintiff’s pre-trial exhibit list. As discussed above,
however, NAVFAC contracting officer Dana Bolte testified that, “for this contract, they
[LCC-MZT] bid 10 percent/5 percent/3 percent,”42 with the ten percent accounting for
LCC-MZT’s “[e]xtended field office overhead.” Plaintiff does not dispute that it proposed,
and that LCC-MZT and NAVFAC agreed to such figures for the markup rates described
in paragraph 4 of the Contract, and that such markup rates were incorporated into the
various modifications which occurred throughout the project. Paragraph 4 of the Contract,
quoted above, did not, however, prevent LCC-MZT from requesting or recovering
damages for the additional field office overhead expenses incurred by LCC-MZT over the
time in which the project was extended due to government-caused delay, which the court
found, above, was seventy-six days of compensable delay, with such delay going
unrecognized by NAVFAC, and unawarded by way of any previous modification or
change order executed during the project. LCC-MZT would be entitled to such additional
field office overhead consistent with the seventy-six days of compensable delay found by
the court, provided the court is able to determine the quantum of damages, which, as
discussed below, the parties’ experts propose can be determined by a daily rate of field
office overhead incurred throughout the project, which is discussed below. The court
notes, however, that in a number of REAs before the court, including REA 32, LCC-MZT
added a ten percent markup on top of the base costs requested, as well as a five percent
markup for “Prime Mark Up on Subcontractors,” a three percent markup for “Prime Home
Office Overhead,” and a three percent markup for “Prime Profit.” To the extent that LCC-

42
   The fourth markup rate discussed in paragraph 4 is “proposed profit,” which, for a
reason which is unclear, was not included as part of Mr. Bolte’s general discussion of the
“10/5/3” markup rates. In a number of LCC-MZT’s REAs before the court, LCC-MZT also
requests a three percent markup related to “Prime Profit.” (capitalization in original). In
addition, LCC-MZT submitted an REA for “Additional Profit,” which is discussed below.
(capitalization in original).
                                             115
MZT requests an additional ten percent markup related to field office overhead on top of
its requested base costs in REA 32, which, allegedly, represents the total amount of
additional field office overhead incurred on the project, less the amount previously
awarded to LCC-MZT through the various contract modifications, such additional markup
would be unallowable as duplicative. In sum, LCC-MZT is not prevented or limited by
paragraph 4 from receiving the extended field overhead costs requested in REA 32, but
is limited to extended field overhead costs in accordance with court’s finding above that
LCC-MZT is entitled to seventy-six days of compensable delay.

        As discussed above, plaintiff’s and defendant’s experts proposed different daily
rates for the court to use for calculating extended field office overhead on the project.
Plaintiff’s expert witness William Manginelli stated in his revised expert report that LCC-
MZT’s daily field overhead rate should be $3,119.00. Mr. Manginelli’s revised expert
report provided:

       A review of LCC-MZT project costs identified that LCC-MZT has spent a
       total of $2,966,760 on field office overhead costs from the project’s NTP
       [notice to proceed] through substantial completion, a period of 826 calendar
       days. These field office overhead costs include project supervision, site
       safety, office trailer, portable toilets, utilities for the office trailer, office
       supplies, drinking water, rental equipment, fuel, dump fees, small tools and
       consumables, cell phones, reproduction and copier costs, construction
       lighting, administrative, insurance, and tax costs. According to LLC-MZT
       [sic], of this amount, $390,480 was compensated for in contract
       modifications.

       The field office overhead costs incurred during this 826-calendar-day
       period, minus what was reimbursed in contract modifications, produces a
       daily field office overhead rate of $3,119.

(capitalization in original; footnote omitted). Regarding the $390,480.00 of compensation
in contract modifications, William Manginelli testified: “I asked Mr. King to go back through
the change orders and tell me what amount of field overheads have been paid through
the change order markups just to ensure that there was no double counting of -- of field
overhead costs.”

       In the expert report of defendant’s expert witness Stephen Weathers, he stated
that he “generally agrees with” the “methodology” used by Mr. Manginelli to calculate
LCC-MZT’s daily rate of extended field office overhead. Mr. Weathers, in his expert report,
however, also asserted that “the amount of costs associated with field general
conditions[43] incurred by LCC-MZT on the project total $2,648,206,” minus “$390,480 in
Contract Modifications for general conditions type costs,” which produces a total of
$2,257,726.00. Mr. Weathers’ expert report stated that “[d]ividing the total general

43
  Mr. Weathers testified that “‘[g]eneral conditions,’” or “GCs,” “is also a word used
commonly for field office overhead.”
                                             116
conditions incurred on the project ($2,257,726) by the project duration of 826 days (i.e.,
from March 7, 2012 to June 11, 2014) results in an average daily general conditions rate
of $2,733.”

        The experts’ dispute regarding the appropriate daily rate for extended field office
overhead stems from the experts differences in the experts’ calculations of field overhead
cost pools, with plaintiff’s expert, Mr. Manginelli, finding a total cost pool of $2,966,760.00,
and defendant’s expert, Mr. Weathers, finding a total cost pool of $2,648,206.00. In Mr.
Manginelli’s revised expert report, he states that a “review of LCC-MZT project costs
identified that LCC-MZT has spent a total of $2,966,760 on field office overhead costs
from the project’s NTP [Notice to Proceed] through substantial completion, a period of
826 calendar days.” Mr. Manginelli then cited to an exhibit attached to his revised expert
report, titled “Job Cost Detail,” which is a 196-page document that appears to be a ledger
kept by LCC-MZT of expenditures, cost codes, time spent, and dates associated with
LCC-MZT and subcontractor work throughout the duration of the P-913 project. Aside
from being included as an exhibit attached to Mr. Manginelli’s revised expert report and
cited to in his revised expert report, no explanation or detail was provided on the figures
included in the “Job Cost Detail” in the revised expert report. The last page in the “Job
Cost Detail” provides the following totals:

It is unclear how Mr. Manginelli calculated his extended field office overhead cost pool
out of the immediately above numbers. Mr. Manginelli’s revised expert report does not
contain a chart indicating how Mr. Manginelli sorted through LCC-MZT’s costs to
determine the extended overhead cost pools.

       At trial, Stephen Weathers, defendant’s expert, testified:

       In this case, Mr. Manginelli arrived at a daily rate of $3,119. I did a similar
       exercise based upon the cost report that I had available, and I came up with
       $2,733 a day.

       We’re not too far off. . . . I had asked for backup to let me know what cost
       elements Mr. Manginelli was including in his pool of field office overhead
       costs of $2.966 million. That has not been provided to me as we sit here
       today.

       I’ve provided in my report a road map to exactly how I arrived at my pool of
       cost of $2.257 million. And these costs -- I think the Court understands this

                                             117
       -- include site supervision, trailers, insurance costs, walkie-talkies, cell
       telephones, the -- the costs that comprise the -- the infrastructure that the
       contractor sets up to manage the project over the course of the -- the
       duration.

       In Mr. Weathers’ expert report, he attached as an exhibit a list of costs which total
$2,935,498.93, which is slightly less than Mr. Manginelli’s figure of $2,966,760.00. Mr.
Weathers’ report determined that there are costs of $2,648,205.93, minus $390,480.00
for contract modifications, for “Total GCs” of $2,257,725.93.

       At the trial, plaintiff’s attorney Craig Ramseyer cross-examined Stephen Weathers
regarding his cost pool, as follows:

       Mr. Ramseyer: So, for instance, they [LCC-MZT] have as an overhead cost
       “MOB [mobilization] OF EQUIP [equipment],” and you did not include that
       in your overhead pool, true?

       Mr. Weathers: True.

       Mr. Ramseyer: And, for instance, they have bond premium costs, you did
       not include that in your overhead pool, correct?

       Mr. Weathers: Correct.

       Mr. Ramseyer: That’s the PP -- “P&P BONDS”?

       Mr. Weathers: Performance of [sic; and] payment bonds.

       Mr. Ramseyer: Okay. And you know that as a -- over time, a contractor will
       pay an additional premium or have to renew their bonds if the project doesn't
       finish within a certain time period, correct?

       Mr. Weathers: Correct.

       Mr. Ramseyer: So whether or not they have to pay the additional premiums
       is a function of whether the project has run over or not?

       Mr. Weathers: Yes.

       Mr. Ramseyer: All right. And so I think we'll agree, but maybe not, that
       experienced persons such as yourself and Mr. Manginelli, reasonable
       minds can disagree on what should be an overhead pool and what should
       not be in an overhead pool for purposes of conducting -- of calculating a
       daily rate?

       Mr. Weathers: Yes. And I just -- if I can just talk about the bond.

                                            118
       Typically, that’s a fairly large sum that’s paid right out of the start of the
       project when they purchase the performance of payment bonds. But you’re
       correct, then over time, to the extent there’s a modification, there’s a bond
       that’s fixed to that. So it would be a small growth.

       But, yes, the fact that I’m at 2700 and Mr. Manginelli’s at 3100, I call us in
       the ballpark. I would have just liked to have seen his cost component so I
       could have perhaps pointed out this is not a time-related expense and
       should not be included in the pool.

(capitalization in original).

        Of the costs excluded from the extended field office overhead cost pool used by
Mr. Weathers, with the exception of performance and payment bonds, the court is unable,
based on the record before the court, to determine that any of the excluded costs should
be added back into the extended field office overhead cost pool and potentially be
awarded to plaintiff. Mr. Weathers was not cross-examined about the majority of the
excluded field office overhead costs, and Mr. Manginelli did not provide a basis as to why
those amounts should be included in the extended field office overhead cost pool. The
payment and performance bonds, however, appear to increase over time and in
connection with modifications, of which there were twenty-five to the Contract. The court,
therefore, concludes that the extended field office overhead pool should be found to be
$2,648,205.93 (Mr. Weathers’ cost pool) plus $86,943.00 (payment and performance
bonds) minus $390,480.00 (amount used by both Mr. Weathers and Mr. Manginelli for
contract modifications), producing a total extended field office overhead cost pool of
$2,344,218.93. The extended field office overhead cost pool of $2,344,218.93 is divided
by the 826-day figure used by both Mr. Weathers and Mr. Manginelli to produce a daily
rate of $2,838.04. As stated above, the court determined that LCC-MZT is entitled to
seventy-six days of compensable delay. Seventy-six times the daily rate of $2,838.04
produces extended field office overhead costs of $215,691.04, to which LCC-MZT is
entitled as damages.

REA 34 - Extended Home Office Overhead

       REA 34 states that “LCC-MZT is requesting payment for the extended home office
overhead per the Eichleay Method[44] for the extended time LCC-MZT spent on the project
due to the Governments Delays Impacts and Disruption” in the amount of $574,497.03
for 348 “Total delay days.” In Mr. Manginelli’s revised expert report, he asserted that there
were “574 calendar days of impacts that delayed the project’s contract completion date
from August 8, 2013 until March 5, 2015,” which according to Mr. Manginelli, “establishes

44
  As discussed below, the “Eichleay Method” mentioned in plaintiff’s REA 34 refers to a
calculation of damages for extended home office overhead as originally described in
Eichleay Corp., ASBCA No. 5183, 60–2 B.C.A. (CCH) ¶ 2688, adhered to on recons.,
ASBCA No. 5183, 61-1 B.C.A. (CCH) ¶ 2894 (1960).
                                            119
that LCC-MZT is due $790,439 in unabsorbed home office overhead for this impact.” In
plaintiff’s post-trial brief, plaintiff asserts that “[w]hen a contract is extended, there is a
potential for unabsorption, meaning that the home office now has to support the Project
for a longer period, but that project may not be able to fully absorb its share of the home
office.” As discussed below, plaintiff argues in its post-trial brief that the Eichleay formula
does not require that “LCC-MZT’s forces be completely idle during a government-caused
delay.” Plaintiff contends that the periods of indefinite suspension in the above-captioned
case include “the notice to proceed delay, utility disruption and Red Days.”

       Defendant argues that “LCC-MZT presented no evidence at trial that it was
instructed by the Contracting Officer to standby on the Contract, must [sic] less
indefinitely.” Defendant argues that during Red Days, LCC-MZT often was able to work
on those days and, therefore, LCC-MZT was not indefinitely delayed by Red Days.
Defendant also asserts that REA 34 includes claims for delays which were previously
addressed by bilateral modifications, including “35 days of delay for the bid protest filed
at Contract award (modification A00003); 125 days of delay for the utility line interference
(Mod 9); and 31 days of delay attributable to red days prior to August 14, 2013 (Mod 10).”
(internal references omitted). Defendant further contends that “[e]ach of these bilateral
modifications include ‘accord and satisfaction’ language.”

       As stated by a Judge of the United States Court of Federal Claims:

       The term “home office overhead” refers to the general administration costs
       of running a business, such as accounting and payroll services, general
       insurance, salaries of upper-level management, heat, electricity, taxes, and
       depreciation. See e.g., Interstate Gen. Gov’t Contractors, Inc. v. West, 12
       F.3d 1053, 1058 (Fed. Cir. 1993). These are indirect costs, “expended for
       the benefit of the whole business, [and thus] by their nature cannot be
       attributed or charged to any particular contract.” Nicon, Inc. v. United States,
       331 F.3d 878, 882 (Fed. Cir. 2003) (quoting Altmayer v. Johnson, 79 F.3d
       1129, 1132 (Fed. Cir. 1996)).

       Contractors typically recoup these indirect costs by allocating them to
       individual contracts in proportion to those contracts’ direct costs. Charles G.
       Williams Constr., Inc. v. White, 271 F.3d 1055, 1057–58 (Fed. Cir. 2001);
       Ralph C. Nash & John Cibinic, Unabsorbed Overhead and the “Eichleay”
       Formula: Rampant Confusion, 16 No. 5 Nash & Cibinic Report ¶ 23 (May
       2002). But, in the event of a government-caused delay or suspension of
       work, “the stream of direct costs against which to assess a percentage [of
       home office overhead]” is decreased. C.B.C. Enterprises, Inc. v. United
       States, 978 F.2d 669, 671 (Fed. Cir. 1992). The resulting shortfall is termed
       “unabsorbed” home office overhead. Nicon, Inc. v. United States, 331 F.3d
       at 882.

JMR Constr. Corp. v. United States, 117 Fed. Cl. at 442 (alterations in original); see also
The Redland Co. v. United States, 97 Fed. Cl. 736, 746 (2011) (“Home office overhead

                                             120
is among a contractor’s indirect costs, “costs ‘that are expended for the benefit of the
whole business, [and] by their nature cannot be attributed or charged to any particular
contract.’” (citing Nicon, Inc. v. United States, 331 F.3d 878, 882 (Fed. Cir. 2003)); George
Sollitt Constr. Co. v. United States, 64 Fed. Cl. at 241 (“Extended home office overhead
costs are a type of delay damages that may sometimes be recovered.”). Additionally, the
Federal Circuit has explained:

       Where the government suspends performance of a contract, the
       contractor's indirect costs, such as home office [overhead], often accrue
       beyond the amount originally allocated to that particular contract. These
       additional indirect costs may thus be “unabsorbed.” The Court of Claims
       consistently allowed a contractor to recover not only additional direct costs
       that accrue to a contract where completion of performance is delayed by
       the government, but also any unabsorbed, indirect costs that result.

West v. All State Boiler, Inc., 146 F.3d 1368, 1372 (Fed. Cir. 1998) (alterations in original).
The Judge of the United States Court of Federal Claims in JMR Construction Corp. stated
that “[t]he Circuit has held that the so-called ‘Eichleay’ formula is the sole method through
which contractors are able to recover for unabsorbed home office overhead.” JMR Constr.
Corp. v. United States, 117 Fed. Cl. at 442 (citing E.R. Mitchell Constr. Co. v. Danzig,
175 F.3d 1369, 1372 (Fed. Cir. 1999) (citing Eichleay Corp., ASBCA No. 5183, 60–2
B.C.A. (CCH) ¶ 2688)).

       When applying the Eichleay formula:

       The Eichleay formula requires that contractors satisfy several “strict
       prerequisites.” Nicon, 331 F.3d at 882. First, the contractor must
       demonstrate that there was a government-caused delay not excused by a
       concurrent contractor-caused delay. P.J. Dick Inc. v. Principi, 324 F.3d
       1364, 1370 (Fed. Cir. 2003). Second, the contractor must show that it
       incurred additional overhead expenses, either because the contract’s
       performance period was extended or because the contractor would have
       finished prior to the un-extended performance period's close. Id. Third, the
       contractor must establish that it was required to remain “on standby” for the
       duration of the delay. Id.

JMR Constr. Corp. v. United States, 117 Fed. Cl. at 442; see also Kudsk Constr., Inc. v.
United States, 144 Fed. Cl. 446, 452 (2019); Jackson Constr. Co. v. United States, 62
Fed. Cl. at 96–103.

       The “standby inquiry,” is “multifaceted.” P.J. Dick, Inc. v. Principi, 324 F.3d 1364
(Fed. Cir. 2003). “In making that inquiry, the court should first determine whether the CO
[contracting officer] has issued a written order that suspends all the work on the contract
for an uncertain duration and requires the contractor to remain ready to resume work
immediately or on short notice.” Id. at 1371. If so, “the contractor need not offer further
proof of standby,” but if not, “the contractor must then prove standby by indirect evidence,”

                                             121
and meet three requirements. Id. “First, the contractor must show that the government-
caused delay was not only substantial but was of an indefinite duration,” “[s]econd, the
contractor must show that during that delay it was required to be ready to resume work
on the contract, at full speed as well as immediately,” and “[t]hird, the contractor must
show effective suspension of much, if not all, of the work on the contract.” Id. (citations
omitted). Furthermore,

       [i]f the contractor can make a prima facie showing of the standby elements,
       “the burden of production shifts to the government to show either that it was
       not impractical for the contractor to obtain ‘replacement work’ during the
       delay, or that the contractor's inability to obtain or perform replacement work
       was caused by a factor other than the government’s delay.”

JMR Constr. Corp. v. United States, 117 Fed. Cl. at 443 (emphasis in original) (quoting
Nicon, Inc. v. United States, 331 F.3d at 883).

        Regarding the delays related to (1) the bid protest from a disappointed bidder,
which occurred at the GAO upon Contract award to LCC-MZT, (2) the utility line differing
site conditions and (3) Red Days through August 14, 2013, all such delays resulted in
bilateral contract modifications, Modifications 3, 9, and 10, which each included “accord
and satisfaction” language, thus, barring claims for additional costs associated with those
modifications.

        LCC-MZT also requests Eichleay damages for the extended home office overhead
it alleges it incurred during the period for which the Stop Work Order was issued in relation
to the concrete pour on August 28, 2013. As discussed above, when making the inquiry
into whether the contractor was on standby, “the court should first determine whether the
CO [contracting officer] has issued a written order that suspends all the work on the
contract for an uncertain duration and requires the contractor to remain ready to resume
work immediately or on short notice.” P.J. Dick Inc. v. Principi, 324 F.3d at 1371
(capitalization in original). If so, “the contractor need not offer further proof of standby.”
Id. The Stop Work Order issued on September 19, 2013 by NAVFAC contracting officer
Mona Carlson stated: “ln accordance with FAR 52.246-12 lNSPECTION OF
CONSTRUCTION, you are hereby directed to stop all work pertaining to structural
concrete as further defined by Specification Sections 03 30 00 and 03 37 13 pending
resolution of all the quality performance issues.” (capitalization in original). Additionally,
in the Stop Work Order, Ms. Carlson stated: “Pending receipt of this direction, satisfactory
corrective actions, and lifting of this stop work order, minor concrete work will be approved
on a case-by-case basis with a detailed work plan for Government review and approval.”
This language of the Stop Work Order reflects that the only work that was ordered to be
stopped was “work pertaining to structural concrete.” It does not indicate, however, that
all work on the project needed to be stopped. The Stop Work Order, therefore, does not
establish that “the CO has issued a written order that suspends all the work on the
contract.” P.J. Dick Inc. v. Principi, 324 F.3d at 1371. Moreover, John King testified that
during the period of time in which the Stop Work Order was in effect, NAVFAC did approve
and permit some concrete work to take place, including “shotcrete work,” as well as “some

                                            122
cast-in-place concrete work too.” On September 27, 2013, NAVFAC issued a letter
permitting LCC-MZT “to proceed with shotcrete activities pertaining to the loading dock
walls, sally ports, and transformer walls.” Given the scope of work that the Stop Work
Order suspended, i.e., structural concrete work only, LCC-MZT cannot rely on the Stop
Work Order itself as proof that it was on standby during the duration of the Stop Work
Order, for purposes of proving standby and entitlement to Eichleay damages for that
period.

       As indicated above, the United States Court of Appeals for the Federal Circuit in
P.J. Dick stated that if the contractor cannot prove standby through the Stop Work Order,
“the contractor must then prove standby by indirect evidence.” P.J. Dick Inc. v. Principi,
324 F.3d at 1371. “First, the contractor must show that the government-caused delay was
not only substantial but was of an indefinite duration,” “[s]econd, the contractor must show
that during that delay it was required to be ready to resume work on the contract, at full
speed as well as immediately,” and “[t]hird, the contractor must show effective suspension
of much, if not all, of the work on the contract.” Id. (citations omitted). As determined
above, LCC-MZT cannot show “effective suspension of much, if not all, of the work on the
contract,” as the language of the Stop Work Order stated that the work to be stopped was
“work pertaining to structural concrete.” Id.

        As also discussed above, the Stop Work Order directed that LCC-MZT “provide an
independent third party,” which was required to be a government-approved, licensed,
structural engineer, “to facilitate additional inspection and analysis of the structural roof
slab,” including a “report attesting to the structural capability of the roof slab.” The Stop
Work Order also stated that “[p]ending receipt of this direction satisfactory corrective
actions and lifting of this stop work order minor concrete work will be approved on a case-
by-case basis with a detailed work plan for Government review and approval.” The same
day the Stop Work Order was issued, September 19, 2013, LCC-MZT submitted a letter
in response to NAVFAC’s Stop Work Order, in which LCC-MZT stated that “LCC-MZT will
provide an independent third party to facilitate additional inspection and analysis of the
Roof Slab Structural Concrete Placement #1.” (capitalization in original). Steven Jirsa,
who at the time of the P-913 project worked for Exponent, testified that LCC-MZT retained
Exponent in connection with the P-913 project at Naval Base Kitsap Bangor. Mr. Jirsa
stated that Exponent’s “scope of the retention was essentially to identify any conditions
related to the concrete roof structure.” On October 9, 2013, Exponent provided a
recommended plan to test the concrete roof, determine the extent of the defects, and
develop a repair plan. In defendant’s post-trial brief, defendant asserts, “[b]y November
8, 2013, Exponent had completed its investigation, although LCC-MZT did not provide a
report to NAVFAC until November 21, 2013.” In a report dated November 8, 2013, which
was titled “Roof Deck Cast-In-Place Concrete Evaluation,” Exponent stated that it
performed destructive testing, as well as non-destructive testing, on the concrete roof. On
November 19, 2013, LCC-MZT was permitted to start installation of the roof primer. In a
letter dated November 20, 2013, Exponent provided its repair plan for structural and non-
structural repairs. Thereafter, NAFVAC received Exponent’s report, and the parties have
jointly stipulated that NAFVAC lifted the restrictions in the September 19, 2013 Stop Work

                                            123
Order on November 26, 2013. Therefore, the scope of Exponent’s work was limited to
“work pertaining to structural concrete,” similar to the language of the Stop Work Order.

       Plaintiff also includes Red Days occurring after August 14, 2013 in its Eichleay
damages calculation. In plaintiff’s post-trial brief, LCC-MZT does not put forth specific
argument or analysis for why it should be entitled to Eichleay damages for Red Days or
other delays. Instead, plaintiff argues for Eichleay damages entitlement for all delays
generally, stating:

       NAVFAC has asserted that LCC-MZT was not on standby and is thus not
       entitled to Eichleay damages. The basis for this assertion appears to be that
       LCC-MZT continued to perform some work during periods of delay.
       However, it is not required that LCCMZT’s forces be completely idle during
       a government-caused delay. Indeed, “application of the Eichleay formula
       does not require that the contractor’s work force be idle. It simply requires
       that overhead be unabsorbed because performance of the contract has
       been suspended or significantly interrupted and that additional contracts are
       unavailable during the delay when payment for the suspended contract
       activity would have supported such overhead.” Interstate General
       Government Contractors, Inc. v. West, 12 F.3d 1053, 1057 (Fed. Cir. 1993).
       “Contractors that perform ‘minor tasks’ during a government-caused delay
       are not precluded from proving standby. . . . It is sufficient, for purposes of
       establishing standby, if a contractor can demonstrate that work was
       ‘stopped or significantly slowed.’” JMR Construction Corp. v. U.S., 117 Fed.
       Cl. 436, 443 (2014).

      Plaintiff’s argument that a contractor’s workforce need not be idle to prove standby
was discussed by the United States Court of Appeals for the Federal Circuit in P.J. Dick:

       A closer reading of Interstate indicates that its reference to “idleness” simply
       means the workers need not be “physically standing by idly.” Id. at 1057 n.
       5 (referencing a quote in a previous opinion and stating “these two phrases
       [‘stand by idly and suspend its work’] clearly refer to standing by in the sense
       that no work is being performed on the contract, not that there must be
       workers physically standing by idly”); see also id. at 1057 n. 4 (“If the test
       were whether the contractor's work force assigned to the contract in issue
       was standing by, the contractor would be penalized for, and thus deterred
       from, mitigating its damages for direct costs by reassigning its employees
       to other jobs or laying them off during the period of delay.”).

P.J. Dick, Inc. v. Principi, 324 F.3d at 1372 (emphasis in original; footnote omitted). In
P.J. Dick, the plaintiff argued that “a contractor is automatically on standby any time there
is a government-caused delay of an uncertain duration extending the performance of the
contract, at the end of which the contractor can be required to immediately resume work.”
Id. at 1370. The Federal Circuit in P.J. Dick, however, disagreed, finding that, as outlined
above, there are two additional elements that must be established, creating the three-

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pronged standby inquiry. See id. at 1369-72. In discussing the third prong, that “the
contractor must show effective suspension of much, if not all, of the work on the contract,”
the Federal Circuit explained: “Indeed, every case where this court has held a contractor
to be placed on standby has involved a complete suspension or delay of all the work or
at most continued performance of only insubstantial work on the contract.” Id. at 1372.

       At trial in the above-captioned case, several members of LCC-MZT testified that
once the view obstruction plan was approved by NAVFAC, in an e-mail message on
November 16, 2012, which was prior to the August 14, 2013 date in plaintiff’s Eichleay
damages calculation, LCC-MZT was permitted to work on Red Days, although they
remained sequestered during actual asset movements, for the duration of the project.
Moreover, LCC-MZT was permitted to work both prior to and after a Red Day’s asset
movements. LCC-MZT’s inability to work during Red Day asset movements did not
continue consecutively from one day into the next, let alone from one month into the next.
Mr. King testified that LCC-MZT “made progress on every day we worked out there.”
Furthermore, while LCC-MZT was not able to receive deliveries on Red Days after the
View Obstruction Plan was approved, LCC-MZT has not established that the work
performed on Red Days was unsubstantial, or “minor.” See P.J. Dick Inc. v. Principi, 324
F.3d at 1374 (citing Altmayer v. Johnson, 79 F.3d at 1134).

         Regarding the delays incurred due to the inability to meet grounding specifications,
discussed above, the court found that there was concurrent delay because LCC-MZT was
not able to otherwise energize the building, as LCC-MZT had experienced delays to other
tasks necessary to energize the building, such as installing transformers and getting the
Building Energization Plan approved. As stated above, a prerequisite to receiving
Eichleay damages is that the contractor incurred “government-caused delay not excused
by a concurrent contractor-caused delay.” JMR Constr. Corp v. United States, 117 Fed.
Cl. at 442 (citing P.J. Dick Inc. v. Principi, 324 F.3d at 1370). Because there was
concurrent contractor-caused delay involved with energization of the P-913 project,
plaintiff is not entitled to receive Eichleay damages related to government-caused delays
regarding building energization. In sum, plaintiff has not carried its burden to establish
that it is entitled to recover any Eichleay damages for delays on the P-913 project, which
included delays caused by the Stop Work Order, Red Days, or the inability to meet
grounding specifications.

REA 31 – Acceleration

        In REA 31, LCC-MZT seeks an adjustment of $503,023.00 because NAVFAC
allegedly “directed LCC-MZT to accelerate, work additional shifts, work week-ends to
mitigate the Government’s Delays, Impacts and Disruptions.” Plaintiff’s expert witness,
William Manginelli, stated that LCC-MZT is entitled to an adjustment of $324,039.00 for
acceleration costs, which is substantially lower than the amount claimed by plaintiff in
REA 31. Plaintiff asserts that, “[t]hroughout the Project, NAVFAC denied it had any
responsibility for any delay, thereby forcing LCC-MZT to accelerate, both constructively
by its actions, and directly through its Progress Letters.” (capitalization in original). In
plaintiff’s post-trial brief, plaintiff asserts that REA 31 seeks “costs associated with

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acceleration which includes trade stacking, working out of sequence, working overtime,
and working weekends, to mitigate the delays, impacts and disruptions that were out of
LCC-MZT’s control.” According to plaintiff, NAVFAC’s alleged “directions to accelerate”
caused LCC-MZT to “increase the number of crews, add shifts and perform weekend
work, and re-sequence work.” Plaintiff’s post-trial brief also states that “REA 31 is solely
for the additional overtime and weekend work.”

      Defendant argues that LCC-MZT is not entitled to an adjustment for acceleration.
Defendant, quoting REA 31, asserts:

       LCC-MZT’s REA does not assert which work was accelerated, when (or if)
       a request for a time extension was ever made, and whether the agency
       either denied the request or failed to act on it, and thus cannot meet
       elements one, two, or three. Instead, the REA claims generally that “[t]he
       Governments Delays Impacts and Disruptions included but were not limited
       to (1) differing site conditions (2) Red Days (3) Stop Work (4) FFE
       installation and (5) acceleration due to not acknowledging additional time
       for the Governments Delays Impacts and Disruptions.”

(internal references omitted). Defendant contends that the “Contract progress notices
were not intended to direct to [sic] LCC-MZT complete the Contract work sooner than
anticipated, but rather to recoup delay already encountered.” Defendant also argues that
REA 31 seeks costs “duplicative of those settled by the multiple bilateral modifications
signed throughout the course of the Contract,” including Modifications 3, 9, and 10.

        Under the Changes clause in FAR § 52.243-4, the contracting officer may issue a
written order “[d]irecting acceleration in the performance of the work.” See FAR § 52.243-
4(a). “Even absent a formal order under the Changes clause, the contracting officer may
still constructively change the contract, ‘either due to an informal order from, or through
the fault of, the government.’” Zafer Taahhut Insaat v. Ticaret A.S., 833 F.3d 1356, 1361
(Fed. Cir. 2016) (emphasis in original) (quoting NavCom Def. Elecs., Inc. v. England, 53
F. App’x 897, 900 (Fed. Cir. 2002)). The United States Court of Appeals for the Federal
Circuit in Fraser Construction Co. v. United States determined that, in order to succeed
on a constructive acceleration claim, a contractor must prove “five elements:”

       (1) that the contractor encountered a delay that is excusable under the
       contract; (2) that the contractor made a timely and sufficient request for an
       extension of the contract schedule; (3) that the government denied the
       contractor’s request for an extension or failed to act on it within a reasonable
       time; (4) that the government insisted on completion of the contract within
       a period shorter than the period to which the contractor would be entitled by
       taking into account the period of excusable delay, after which the contractor
       notified the government that it regarded the alleged order to accelerate as
       a constructive change in the contract; and (5) that the contractor was
       required to expend extra resources to compensate for the lost time and
       remain on schedule.

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Fraser Constr. Co. v. United States, 384 F.3d 1354, 1360-61 (Fed. Cir. 2004); see also
Garco Constr., Inc. v. Sec’y of Army, 856 F.3d 938, 945-46 (Fed. Cir. 2017) (finding that
contractor “fail[ed] to mak[e] a prima facie case of constructive acceleration” because
subcontractor “JTC never formally requested a time extension, and the government,
therefore, could not have denied JTC’s non-existent request”), cert. denied, 138 S. Ct.
1052 (2018); Zafer Taahhut Insaat v. Ticaret A.S., 833 F.3d at 1362; United Constructors,
LLC v. United States, 95 Fed. Cl. at 40 (quoting Fraser Constr. Co. v. United States, 384
F.3d at 1360-61). In United Constructors, the Judge of the United States Court of Federal
Claims wrote:

       The general rule is that where both parties contribute to a delay, neither can
       recover damages. P.R. Burke Corp. v. United States, 277 F.3d 1346, 1359–
       60 (Fed. Cir. 2002); In re R.J. Lanthier Co., Inc., ASBCA No. 51636, 04–1
       BCA ¶ 32481, 2003 WL 22953681 (Dec. 9, 2003) (“When performance is,
       arguendo, ‘delayed by multiple causes acting concurrently, and only one
       cause is excusable, i.e., where other causes lie with the contractor, courts
       and boards have adopted the approach that neither party will benefit from
       the delay. Consequently, in a “Changes” clause analysis, a contractor
       cannot recover acceleration costs flowing from a concurrent delay, unless
       the record supports a clear apportionment of the delay and expense
       attributable to each party.’”) (quoting Appeal of Hemphill Contracting Co.,
       Inc., ENGBCA No. 5840, 94–1 BCA ¶ 26491, 1993 WL 476309 (Nov. 12,
       1993)). But see W. Stephen Dale, &, Robert M. D’Onofrio, Reconciling
       Concurrency in Schedule Delay and Constructive Acceleration, 39 PUB.
       CONT. L.J. 161, 194, 227–28 (2010) (arguing that concurrent delays are
       “excusable but not compensable” and entitle the contractor to more time;
       requiring the contractor to adhere to original schedule constitutes
       constructive acceleration).

United Constructors, LLC v. United States, 95 Fed. Cl. at 40.

       Referencing the four Progress Letters sent to LCC-MZT in late 2012 and early-to-
mid 2013, plaintiff argues that the “[a]cceleration was directed by NAVFAC due to the
delays, impacts, and disruptions arising out of the differing site conditions, Red Days, and
other impacts.” As discussed above, however, delays arising out of the differing site
conditions of the water line and electrical duct bank, as well as Red Days through August
14, 2013, were resolved by bilateral contract Modifications 9 and 10, respectively.
Modification 9 includes the following language:

       The subject contract is hereby modified to compensate the Contractor for
       all additional labor, material, equipment, and associated costs regarding a
       differing site condition resulting from utility line interferences as further
       defined in the Contractor’s Request for Equitable Adjustment (REA) (Serial
       Letter No. 0005) dated August 14, 2012, the Government’s response (Serial
       Letter No. 0010) dated August 14, 2012, the Contractor’s amended REA

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       (Serial Letter No 0024) dated April 17, 2013, and the settlement reached
       April 19, 2013, summarized as follows. These documents are hereby
       incorporated by reference. This settlement accounts for all associated
       impacts including re-sequencing, acceleration, seasonal impacts, changes
       to means and methods, et cetera, necessary to provide for substantial
       completion as further defined in paragraph 2 below. Neither party’s rights
       for contractual relief for future impacts/situations are waived by this
       settlement.

(emphasis added). Modification 9 further stated: “Acceptance of this modification by the
contractor constitutes an accord and satisfaction and represents payment in full (for both
time and money) and for any and all costs, impact effect, and for delays and disruptions
arising out of or incidental to the work as herein revised.” As concluded in earlier in this
Opinion, this language bars plaintiff from recovery of any costs related to the utility line,
including costs related to acceleration.

      Modification 10 also has identical “accord and satisfaction” language to that which
appears in Modification 9. As discussed above, Modification 10 stated:

       The subject contract is hereby modified to compensate the Contractor for
       all additional labor, material, equipment, and associated costs regarding
       impacts associated with operation-restricted delays (Red Days) that were
       incurred June 14, 2013 through August 14, 2013 as further defined in the
       Contractor’s Request for Equitable Adjustment (REA) (Serial Letter No.
       0034 dated July 16, 2013, No. 0036 dated July 19, 2013, and No. 0037
       dated July 19, 2013), and the settlement reached August 14, 2013,
       summarized as follows. These documents are hereby incorporated by
       reference.

Modification 10 extended the Substantial Completion Date of the Contract by “31 calendar
days to DECEMBER 16, 2013,” and the Contract Completion Date by “32 calendar days
to FEBRUARY 16, 2014,” and stated: “Acceptance of this modification by the contractor
constitutes an accord and satisfaction and represents payment in full (for both time and
money) and for any and all costs, impact effect, and for delays and disruptions arising out
of, or incidental to, the work as herein revised.” (capitalization and emphasis in original).
Although Modification 10 does not include the above-stated language in Modification 9
which explicitly bars acceleration claims, the accord and satisfaction language in
Modification 10 quoted above encompasses costs “arising out of or incidental to the work
as herein revised.” Therefore, plaintiff’s claim for acceleration damages arising out of any
Red Days through August 14, 2013, the date up to which Modification 10 provided LCC-
MZT excusable delay for Red Days, is also barred.

      Previously, the court determined that the delay associated with the inability to meet
grounding specifications was concurrent with LCC-MZT’s own delay in achieving building
energization. As was indicated above, the court in United Constructors stated, “[t]he
general rule is that where both parties contribute to a delay, neither can recover

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damages.” See United Constructors, LLC v. United States, 95 Fed. Cl. at 40 (citing P.R.
Burke Corp. v. United States, 277 F.3d at 1359–60). LCC-MZT, as a contributor to the
delay, therefore, is not entitled to acceleration costs for the delay arising out of the
problems with the grounding specifications.

        Additionally, plaintiff requests acceleration costs it alleges were incurred because
of delays caused by Red Days occurring after August 14, 2013. As determined above,
plaintiff could be entitled to an award of one calendar day of contract extension for each
Red Day that occurred after August 14, 2013, notwithstanding that LCC-MZT was not
awarded such an extension for Red Days which coincided with other periods of
compensable delay, such as delays caused by the Stop Work Order, or with days already
constituting non-work days, such as federal holidays and weekend days, or when the Red
Day had already been accounted for in a Contract Modification, such as the thirty Red
Days included in the 125-calendar-day extension pursuant to Modification 24. As
discussed above, the United States Court of Appeals for the Federal Circuit in Fraser
Construction Company v. United States indicated that, to be entitled to acceleration costs,
a contractor must establish that it “encountered a delay that is excusable under the
contract.” See Fraser Constr. Co. v. United States, 384 F.3d at 1361. The Federal Circuit
in Fraser, however, did not specify whether it is sufficient to establish excusable, non-
compensable delay, as opposed to excusable, compensable delay, in order to recover
acceleration costs. See id. Generally, the difference between the two is the existence of
concurrent delay. See W. Stephen Dale & Robert M. D’Onofrio, Reconciling Concurrency
in Schedule Delay and Constructive Acceleration, 39 Pub. Cont. L.J. 161, 163 (2010)
(“For a delay to qualify as excusable and compensable, the Government must have been
‘the sole proximate cause of the contractor’s additional loss, and the contractor [must] not
have been delayed for any other reason during that period.’ This obligation thus includes
the requirement that ‘there was no concurrent delay on the part of the contractor.’”
(emphasis and alteration in original) (quoting Triax-Pac v. Stone, 958 F.2d 351, 354 (Fed.
Cir. 1992) and George Sollitt Constr. Co. v. United States, 64 Fed. Cl. at 238)). As
discussed earlier in this Opinion, however, Red Days have the potential to be considered
excusable, non-compensable delay, as opposed to excusable, compensable delay,
consistent with the Contract’s Specifications, and not because there is, or is not,
concurrent delay associated with a given Red Day. In addition, provided that plaintiff can
establish that the critical path of the project was impacted, the circumstances under which
LCC-MZT may be entitled to compensation for a Red Day are: (1) if LCC-MZT’s workers
could not work for more than fifty percent of a Red Day; (2) there were more than ten Red
Days on working days in a single month; or (3) there was a scheduling change related to
an anticipated Red Day with less than forty-eight hours’ notice to plaintiff. Although the
Fraser allows the recovery of acceleration costs if excusable delay is established,
regardless of compensability, see Fraser Constr. Co. v. United States, 384 F.3d at 1361,
LCC-MZT’s Contract’s Specifications specifically limit compensation only to Red Days
meeting any of the three circumstances described above. Therefore, provided that LCC-
MZT has met the remaining elements outlined by the Federal Circuit in Fraser, which is
discussed below, LCC-MZT could only be entitled to compensation for Red Days which
the court has found to constitute excusable, compensable delay, per the Contract’s
Specifications.

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        As the Federal Circuit in Fraser Construction Co. v. United States noted, to prove
for entitlement to acceleration damages the contractor must prove “that the contractor
made a timely and sufficient request for an extension of the contract schedule,” and “that
the government denied the contractor’s request for an extension or failed to act on it within
a reasonable time.” Id. On May 8, 2015, LCC-MZT submitted REA 27, along with the
majority of its other REAs. By this time, however, the P-913 project had already achieved
substantial completion, which the court has concluded occurred on June 2, 2014. In its
post-trial brief, LCC-MZT does not appear to argue that any other relevant request was
made during the pendency of the project for an extension of time in relation to Red Days
occurring after August 14, 2013. In defendant’s post-trial brief, defendant argues that
LCC-MZT did not assert “when (or if) a request for a time extension was ever made, and
whether the agency either denied the request or failed to act on it.”

       In its post-trial brief, LCC-MZT asserts, however, that in addition to providing a time
extension in relation to Red Days through August 14, 2013, “[t]he parties further agreed
that any delays incurred due to Red Days or other Owner causes after August 14, 2013
would be separately analyzed later.” (emphasis in original). Based on e-mail
correspondence between LCC-MZT and NAVFAC shortly after the August 14, 2013
partnering session, it appears that LCC-MZT is referring to an informal agreement
between LCC-MZT and NAVFAC not to provide LCC-MZT with relief for Red Days
following August 14, 2013 until after they were realized, and that a schedule would be
made which accounted for future Red Days, and that if LCC-MZT could finish the project
within the time allotted in that schedule, NAVFAC would not assess any liquidated
damages going forward. On August 26, 2013, Mr. Mortensen sent an e-mail message to
the NAVFAC team member Jodus Hortin, which stated:

       Mr. Hortin,

       We have a question regarding the future RED DAY impacts that we are to
       incorporate into the project schedule: it is our understanding that we have
       basically two (2) SCD [Substantial Completion Date] dates. The first is the
       hard date based on the impacts to August 14, 2013 and the second is the
       moving date based on the future RED DAY’s. Our agreement at the
       partnering session was determined to be 22 RED DAYS to December 16,
       2013 which moves the SCD to January 7, 2014. The question is how will
       this language be incorporated into the modification [10] - right now we don’t
       see any of this included in the language of the amendment which provides
       for the extended SCD.

(capitalization in original). That same day, Ms. Carlson responded, stating:

       Mr. Mortensen ~ This is a multiple phase situation. The modification with
       your for signature addresses the impacts from previous red day impacts. It
       brings us to closure on previous days and reflects an extension to the SCD

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      and CCD [Contract Completion Date] (linked by 60 days). December 16,
      2013 was longer than the actual days, but agreed to by both parties[.]

      As part of the agreement we agreed to incorporate into the schedule “future”
      impacts associated with the actual red day calendar. These impacts may or
      may not be realized and will most likely change so no extension will be
      granted or addressed at this time. . . . The partnering notes reflect an
      agreement that if we can meet the “future” impact date without further delay,
      the Government will extend the SCD and CCD accordingly without further
      penalty of LDs. If this date is not met, we will have to revisit the cause as to
      why not. Accordingly, monthly partnering sessions were established to
      better handle the dates on a more frequent basis. Bottom line, we cannot
      address the future impacts as they have not been realized yet.

      Is that any more clear?

(capitalization in original). Mr. Mortensen stated in response that “[w]e concur with the
below recap of the agreement and understand that future impacts will be handled when/if
realized. We just needed to ensure the agreement was captured accurately so Mr. Baker
[the court-appointed receiver assigned to the LCC-MZT joint venture] who was not at the
meeting, can sign the document.” Thus, LCC-MZT and NAVFAC appear to have agreed
that Red Days occurring after August 14, 2013 “would be handled when/if realized,” but
if the Project was completed “without further delay, the Government will extend the SCD
[Substantial Completion Date] and CCD [Contract Completion Date]” to include the Red
Days that were realized. (capitalization in original).

      During direct examination of Jeremy Wastweet, LCC-MZT’s superintendent and
foreman during the P-913 project,45 plaintiff’s counsel Mr. Ramseyer and Mr. Wastweet
had the following conversation regarding the documentation in the Daily Production
Reports of times when LCC-MZT was sequestered due to asset movements on Red
Days:

      Mr. Ramseyer: We talked a little bit about this sequestering, and did you set
      up a cost code so you could track the time that your workers were actually
      sequestered and not working?

      Mr. Wastweet: Yes.

      Mr. Ramseyer: And so when you went through the sequestering process on
      the days when you had to sequester, at the end of the day on your
      production reports or in some other reports would you cost code the time of
      all those individuals?

45
  As indicated above, Jeremy Wastweet was demoted from superintendent to foreman
on approximately September 18, 2013.
                                           131
       Mr. Wastweet: Yes.

       Mr. Ramseyer: Would that be turned in to the office?

       Mr. Wastweet: Yes.

       Mr. Ramseyer: And did that allow those sequestered hours to be tracked?

       Mr. Wastweet: Yes.

Thus, the testimony at trial demonstrates that LCC-MZT was notifying NAVFAC of when
sequestering was actually occurring. It also appears that Red Days were discussed or
identified in several of the monthly partnering meetings, monthly schedule updates, and
schedule narratives. The record before the court, however, does not reflect that the
plaintiff sent requests for extensions of time to the defendant for Red Days occurring post-
August 14, 2013 until LCC-MZT began submitting several iterations of its Request for
Equitable Adjustment Time Impact Analysis (REA TIA), starting with Serial Letter No.
0105, dated August 6, 2014. By that time, substantial completion of the contract had
already occurred, as the court determined above that substantial completion occurred on
June 1, 2014. LCC-MZT, therefore, has not established that it “timely” requested an
extension of time for Red Days. See Fraser Constr. Co. v. United States, 384 F.3d at
1361 (contractor must have “made a timely and sufficient request for an extension of the
contract schedule”). The court, again, notes a credibility issue with respect to plaintiff’s
expert. Mr. Manginelli, in his original expert report and revised expert report, stated, “in
consideration of NAVFAC’s denial of the initial submission of its TIAs, LCC-MZT
accelerated the work where and how it could, incurring substantial costs.” Because LCC-
MZT’s initial Time Impact Analysis was submitted on August 6, 2014, at a time when
substantial completion had already occurred, this submission could not have occasioned
LCC-MZT to have to accelerate work on the project.

       Even if the court were to find that LCC-MZT’s entries on Daily Production Reports,
monthly schedule updates and narratives, or conversations during monthly partnering
meetings could, in some way have constituted requests for extensions of time, there is
no indication that NAVFAC represented to LCC-MZT that LCC-MZT would not be
permitted to recoup the time it spent sequestered during Red Day movements. As
discussed above, NAVFAC represented at the August 14, 2013 partnering meeting, as
well as in an e-mail message on August 26, 2013, that Red Days occurring after August
14, 2013 would be addressed in the future on an individual basis. Mona Carlson’s August
26, 2013 email message stated that “if we can meet the ‘future’ impact date without further
delay, the Government will extend the SCD and CCD accordingly without further penalty
of LDs [Liquidated Damages]. If this date is not met, we will have to revisit the cause as
to why not.” (capitalization in original). Thus, it appears that NAVFAC did not represent to
LCC-MZT that no extension of time would be granted for future Red Days. On the
contrary, Ms. Carlson’s e-mail message indicates that NAVFAC was prepared to provide
LCC-MZT with additional time for actualized Red Days if there were no further delays,
and that it was only after substantial completion, in NAVFAC’s responses to LCC-MZT’s

                                            132
REA’s, and in Chief of the NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016
final decision, that the government represented to LCC-MZT that LCC-MZT would not be
awarded an extension of time for Red Days occurring after August 14, 2013. LCC-MZT
has not established that “the government denied the contractor’s request for an
extension” for Red Days, thereby prompting LCC-MZT to accelerate work in response to
the denial of its request. See Fraser Constr. Co. v. United States, 384 F.3d at 1360-61.
LCC-MZT, therefore, is not entitled to acceleration damages in relation to Red Days.

       LCC-MZT also requested acceleration damages in relation to delay caused by the
September 19, 2013 Stop Work Order. While the court found above that NAVFAC’s Stop
Work Order entitled LCC-MZT to 63 days of excusable, compensable delay, from
September 17, 2013 to November 19, 2013 that only establishes the first element in an
acceleration analysis. In its post-trial brief, LCC-MZT generally asserts that “[t]hroughout
the Project, NAVFAC denied it had any responsibility for any delay, thereby forcing LCC-
MZT to accelerate, both constructively by its actions, and directly through its Progress
Letters.” As noted above, the four contract progress notices issued by NAVFAC in 2012
and 2013 were in relation to delays arising out of the differing site conditions of the utility
line, which were resolved by bilateral modifications with accord and satisfaction language,
and would not entitle plaintiff to additional damages for an acceleration claim. In plaintiff’s
expert’s revised report, however, plaintiff’s expert Mr. Manginelli cited to Serial Letter No.
81, issued by NAVFAC contracting officer Mona Carlson on January 30, 2014, as
evidence of a NAVFAC order for LCC-MZT to accelerate work. Serial Letter No. 81 states:

       On Monday, January 27, 2014, your Project Manager provided the
       Government with a resequenced Network Analysis Schedule (NAS), with a
       Data Date of 20-Jan-14 and a Print Date of 22-Jan-14. We believe this
       schedule was intended to accurately reflect your plan to complete the
       remaining work on this contract, in a timelier manner, by Area (i.e. Areas 1
       thru 7 and an All Area Finish). After a review of this NAS, the Government
       notes that the Finish Dates of the following activities has past [sic], as of 27
       January 2014:

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                                           ***

       Your NAS shows a Finish Date of 25-Mar-14. Given that these activities are
       not complete as of 27 January 2014, our confidence in your completion by
       25 March 2014 remains a concern. In accordance with FAR 52.236-15
       Schedules for Construction Contracts, you are hereby directed to take the
       necessary measures to complete these activities and maintain your finish
       date of 25 March 2014 including increasing the number of shifts, overtime,
       additional crews, etc., to ensure progress will be regained. Submit a plan,
       no later than February 5, 2014 detailing the actions to be taken to finish the
       work activities listed above and maintain schedule with each subsequent
       NAS submission.

(capitalization in original).

        Serial Letter No. 81 was not discussed by any of the witnesses at trial. As
discussed above, Steve Jirsa from Exponent determined that Contech’s repair work “all
had to be removed” and replaced because “pumped grout patch material was found to
have bubbled at the bonding between the substrate at the beam repairs.” To the extent
that the delays to the action items listed in Serial Letter No. 81 relate to the rework of
Contech’s roofing repair work, plaintiff would be unable to recover any acceleration costs
because that delay was not considered a government-caused delay, and any request by
NAVFAC for LCC-MZT to make up time for the non-excusable delay would not entitle
LCC-MZT to acceleration costs related to those items. Moreover, LCC-MZT has not
pointed to any document or testimony during trial which indicates that LCC-MZT
requested an extension of time in relation to the delay caused by the Stop Work Order,
other than the REAs which LCC-MZT submitted after the substantial completion date of
the project. Therefore, as was the case with LCC-MZT’s claim for acceleration costs
associated with Red Days occurring after August 14, 2013, LCC-MZT has failed to show
that it timely requested an extension in relation to the delay caused by the Stop Work
Order. LCC-MZT, therefore, has not met its burden of proof for entitlement to acceleration
damages related to the delay caused by the Stop Work Order, or any of the other causes
of delay discussed above.

                                            134
REA 33 - Loss of Production for Stacking of Trades, Out of Sequence Work, Trade
Damage

        In REA 33, LCC-MZT seeks an adjustment of $336,743.00 because of alleged
“loss of production due to stacking trades, out of sequence work, overtime work and trade
damage performed to mitigate the Governments Delays Impacts and Disruptions.” The
narrative to REA 33 states, in identical language to LCC-MZT’s REA for acceleration
(REA 31), discussed above, that: “The Government on no less than four (4) occasions
(See NAVFAC Serial Letters 0012, 0014, 0023 & 0037) directed LCC-MZT to accelerate,
work additional shifts, work week-ends to mitigate the Government’s Delays, Impacts and
Disruptions.” (capitalization in original). The narrative included in REA 33 defines
“Government Delays, Impacts and Disruptions” as including “but not limited to (1) differing
site conditions, (2) Red Days, (3) Stop Work (4) FFE installation, and (5) acceleration due
to not acknowledging additional time for the Government’s Delays, Impacts and
Disruptions.” (capitalization in original). This language also is identical to that used in REA
31. In the section of REA 33 titled “Estimate & Supporting Documents,” LCC-MZT
provides a spreadsheet of what appears to be LCC-MZT’s comparison between budgeted
and actual costs for eight “WORK ELEMENT[s],” including: “3rd Party QC Testing,”
“Concrete Pavement,” “Door & Ballistic Installation,” and “Grading restoration.”
(capitalization in original). The spreadsheet attached to REA 33 aggregates the
differences between these budgeted and actual costs, which, after including additional
costs for “Painter Trade Damage,” “WSFP – trade Damage,” and “HVAC – Trade
Damage,” as well as “Apartment Rental,” and “CSP (temp apartment)” costs, totals
$271,061.89. (capitalization in original). Another page of the spreadsheet in REA 33
adjusts the $271,061.89 for items such as “Equipment Ownership and Operating
Expenses,” field and home office overhead, prime profit, bond premium and “B & O
[business and occupation] Tax,” to come up with LCC-MZT’s final total claim amount of
$336,743.00. (capitalization in original). The remainder of LCC-MZT’s REA 33 is
dedicated to over 100 pages of unexplained cost matrices, subcontractor invoices, and
daily reports, some of which are handwritten and illegible.

       Chief of the NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016 final
decision denied the claims in LCC-MZT’s REA 33 in full. Focusing primarily on the
sequence of events involving the differing site conditions caused by the utility line, and
the reference in REA 33’s narrative to the four contract progress notices in 2012 and
2013, the contracting officer’s final decision concluded that REA 33 had no merit because
then-NAVFAC contracting officer Mona Carlson was “within the authority of FAR clause
52.236-15, Schedules for Construction Contracts” to have “directed LCC-MZT to increase
the number of crews; increase the number of shifts or alter work schedules to allow for
longer production days; establish a secondary pre-fabrication production area; and
increase work days to seven calendar days per week,” and that in so doing, the
contracting officer took “steps necessary to improve the project’s progress because LCC-
MZT failed to implement an effective recovery plan.” As explained in the fourth and final
contract progress notice sent by Mona Carlson on April 12, 2013, LCC-MZT was

                                             135
approximately “174-calendar days behind the CCD [Contract Completion Date],” and “[t]o
date, you have failed to facilitate the resolution of your claim regarding the unforeseen
utility line interferences.”

        In his revised expert report, Mr. Manginelli used a different calculation than what
was used by LCC-MZT when LCC-MZT submitted REA 33, which aggregated the
difference between budgeted and actual costs. Mr. Manginelli asserted that LCC-MZT is
entitled to a higher, $507,044.94 amount under REA 33 for loss of productivity, compared
to the $336,743.00 submitted by plaintiff to the contracting officer. Mr. Manginelli’s revised
expert report asserted that an

       appropriate methodology for calculating lost productivity resulting from the
       delay and impacts described above, is a measured-mile approach. The
       measured mile approach is the comparison of productivity for unimpacted
       (efficient) and impacted (inefficient) work on the same project. The
       measurement of inefficiency is essentially the measurement of productivity
       relative to that attained in performing the unimpacted work. The results are
       then related back to a quantifiable amount of additional labor or equipment
       hours. The resulting damages are only calculated once the comparative
       measurement is completed.

Mr. Manginelli further asserted, however, that “[a]s a result of the project being
continuously impacted” by delays, “LCC-MZT was not able to perform any of its work as
it had planned.” Mr. Manginelli asserted, “[t]hus, there was no unimpacted period that
could be used in the measured mile.” Instead, Mr. Manginelli compared LCC-MZT’s work
on the P-913 project to an unrelated P-971 project which, as discussed above, was a
previous building project that LCC-MZT had worked on, also on Kitsap Bangor Naval
Base, in 2004, and which Mr. Manginelli generally asserted “was also subject to red days
and operational restrictions.” Mr. Manginelli alleged that “[b]ecause LCC-MZT had
performed well on that project, it used the actual performance cost and labor records”
from the P-971 project “as a basis for calculating its bid on this project.” Mr. Manginelli
attempted to reason that “[g]iven that LCC-MZT used the production rates achieved on
the P-971 project as the basis for its bid on this project, a reasonable measure of the lost
productivity would be its labor overrun on this project.” Mr. Manginelli also asserted that
LCC-MZT’s bid was reasonable because it was “within 2.3% of the next low bidder.”

        As noted above, in Mr. Manginelli’s revised expert report, he argued that
$507,044.94 is owed to LCC-MZT for loss of productivity. In explaining how he arrived at
that figure, Mr. Manginelli’s revised expert report stated that “[t]o complete the entire
project, LCC-MZT expended $3,068,077 for 51,159 total labor hours.” (footnote omitted).
Mr. Manginelli further asserted that the 51,159 total labor hours, however, “is inclusive of
change order hours,” i.e., hours spent which were compensated by the various
modifications to the Contract, and that “LCC-MZT does not separate change order hours
from its overall labor hours,” but “does separate out labor costs for change orders from
its overall labor costs,” consisting of “approximately $500,000 on labor costs associated
with change order work.” In order to arrive at the number of labor hours expended on the

                                            136
project not inclusive of the amount “associated with change order work,” Mr. Manginelli
divided the amount of labor hours LCC-MZT expended on the total Contract, 51,159 labor
hours, by the total amount he asserted was expended on the project, $3,068,077, to come
up with a “labor rate of $59.97.” Mr. Manginelli calculated that “LCC-MZT spent
approximately 8,337 hours on change order work ($500,000 / 59.97) and 42,822 hours
on contract work.” In order to calculate the amount of labor hours and costs he alleges
are associated with loss of production on contract work, Mr. Manginelli asserted:

       LCC-MZT’s estimate establishes that LCC-MZT planned to expend 35,438
       hours to construct the project. However, as noted above, 42,822 hours were
       expended on contract work. Therefore, 7,384 hours were lost due to the
       inefficiency caused by the impacts described herein. That figure multiplied
       by the effective labor rate of $59.97 equals a total loss due to inefficient
       work of $442,818, without markups.

(footnote omitted). After markups, which includes $44,281.80 associated with “Prime
Contractor Field Office OH [overhead] (10%),” the final total cost for loss of production in
Mr. Manginelli’s revised expert report increased to $507,044.94. Plaintiff’s argument in its
post-trial brief for REA 33 is exclusively based on Mr. Manginelli’s analysis.

       Defendant’s expert Mr. Weathers, in his expert report, challenged Mr. Manginelli’s
calculation of entitlement for loss of productivity, stating that plaintiff’s expert’s calculation
“has not considered any inefficient hours incurred on the project that are traceable to
LCC-MZT’s actions/inactions.” Also, with regard to Mr. Manginelli’s comparison of this
project to the P-971 project, Mr. Weathers asserted that “[t]here has been no evidence
provided to demonstrate that LCC-MZT had performed well on the P-971 project and/or
that LCC-MZT used the actual performance cost and labor records from this project
performed 8 years ago as a basis for calculating LCC-MZT’s bid on this project.”
Additionally, Mr. Weathers’ expert report stated that Mr. Manginelli’s analysis, “while
framed as a measured mile analysis is tantamount to a total cost claim where the amount
claimed is based on the difference between (1) the actual hours incurred on the base
Contract scope of work as compared to (2) the bid hours.” In addition to relying on Mr.
Weathers’ analysis, defendant argues in its post-trial brief that since “LCC-MZT has
essentially submitted a total labor cost claim,” “to recover under a total cost approach, a
contractor must prove: ‘(1) the impracticability of proving its actual losses directly; (2) the
reasonableness of its bid; (3) the reasonableness of its actual costs; and (4) lack of
responsibility for the added costs.’” (quoting Propellex Corp. v. Brownlee, 342 F.3d 1335,
1339 (Fed. Cir. 2003)). Defendant contends that LCC-MZT has not established any of
these four requirements. Defendant further asserts, regarding Mr. Manginelli’s deduction
of $500,000-worth of labor hours from his total cost calculation, that Mr. Manginelli

       was unable to provide a clear answer as to which labor, exactly, that figure
       covered. In his deposition, he testified that the figure represented “labor
       associated” with change orders. But at trial, he claimed that the $500,000
       was intended to encompass all potential duplication, including “the roof
       testing,” “extended field overhead,” “directed acceleration associated with

                                              137
       the utility relocation” and “red-day disruption.” Neither Mr. Manginelli nor
       any other LCC-MZT witness was able to explain which costs make up the
       $500,000 deduction. And as Mr. Weathers testified, LCC-MZT’s other
       REAs—without taking into account any labor associated with already-paid
       change orders or roof repair—seek recovery of 15,586 hours. This amount
       is over twice the number of hours sought by REA 33.

(internal citations omitted; emphasis in original).

        A loss of productivity claim “is based upon the theory that individual compensable
changes to a Contract, taken as a whole, can have such a disruptive effect on the
contractor's performance that the contractor has a compensable claim for costs in addition
to the amounts of its individual change orders.” Jackson Constr. Co., Inc. v. United States,
62 Fed. Cl. at 103–04.

      In Ace Constructors, Inc. v. United States, a Judge on the United States Court of
Federal Claims has stated that a contractor may recover for loss of productivity, also
known as “loss of efficiency,”

       if it can establish both that a loss of efficiency has resulted in increased
       costs and that the loss was caused [by the government].” Cibinic and Nash
       745. “That loss of productivity of labor resulting from improper delays
       caused by defendant is an item of damage for which plaintiff is entitled to
       recover admits of no doubt.” Luria Bros., 369 F.2d at 712 (citing Abbett Elec.
       Corp. v. United States, 142 Ct. Cl. 609, 162 F. Supp. 772 (1958)) (emphasis
       added). Productivity is, by its very nature, difficult to measure or quantify.
       The impossibility of proving the amount of loss of productivity with
       exactitude does not bar recovery for the loss. Luria Bros., 369 F.2d at 712
       (citing Needles v. United States, 101 Ct. Cl. 535, 618, 1944 WL 3698
       (1944)). A plaintiff need not prove loss of productivity “by books and records;
       almost always it has to be proven by the opinions of expert witnesses.” Luria
       Bros., 369 F.2d at 712. “However, the mere expression of an estimate as to
       the amount of productivity loss by an expert witness with nothing to support
       it will not establish the fundamental fact of resultant injury nor provide a
       sufficient basis for making a reasonably correct approximation of damages.”
       Id. (citing Wunderlich Contracting, 351 F.2d at 968).

Ace Constructors, Inc. v. United States, 70 Fed. Cl. 253, 282 (2006), aff’d, 499 F.3d 1357
(Fed. Cir. 2007); see also Sauer Inc. v. Danzig, 224 F.3d at 1348-49 (finding that the
contractor “need not establish delay to overall contract completion to succeed on its
disruption claim”); Edge Constr. Co. v. United States, 95 Fed. Cl. at 420.

        In Propellex Corp. v. Brownlee, the United States Court of Appeals for the Federal
Circuit stated:

                                             138
       [T]he preferred way for a contractor to prove increased costs is to submit
       actual cost data because such data “provides the court, or contracting
       officer, with documented underlying expenses, ensuring that the final
       amount of the equitable adjustment will be just that—equitable—and not a
       windfall for either the government or the contractor.” Dawco Constr., Inc. v.
       United States, 930 F.2d 872, 882 (Fed. Cir. 1991), overruled on other
       grounds by Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995).

Propellex Corp. v. Brownlee, 342 F.3d at 1338-39. The Federal Circuit in Propellex further
explained that alternative to proving increased costs through actual cost data, contractors
can use the total cost method, in which

       the measure of damages is the difference between the actual cost of the
       contract and the contractor's bid. See Raytheon Co. v. White, 305 F.3d
       1354, 1365 (Fed. Cir. 2002). Before a contractor can obtain the benefit of
       the total cost method, it must prove: (1) the impracticability of proving its
       actual losses directly; (2) the reasonableness of its bid; (3) the
       reasonableness of its actual costs; and (4) lack of responsibility for the
       added costs. Servidone, 931 F.2d at 861.

Propellex Corp. v. Brownlee, 342 F.3d at 1338. A further alternative to proving increased
costs through actual cost data, is the measured mile method which is “a form of total cost
calculations that requires subjective judgment calls by the expert, who estimates
damages by comparing periods of production that are unaffected by the contractor's
alleged government-caused delay, with periods during which delays affected its
production adversely.” Daewoo Eng’g and Constr. Co., Ltd. v. United States, 73 Fed. Cl.
547, 580-81 (2006), aff’d, 557 F.3d 1332 (Fed. Cir.), reh’g and reh’g en banc denied,
(Fed. Cir.), cert. denied, 558 U.S. 990 (2009); see also Fireman’s Fund Ins. Co. v. United
States, 92 Fed. Cl. at 699-704. “Contract Boards have accepted the Measured Mile
method on occasion. We assume that a finder of fact faced with such a method of
estimating damages would want to have confidence in the experts' ability and objectivity.”
Daewoo Eng’g and Constr. Co., Ltd. v. United States, 73 Fed. Cl. at 581 (“We did not
have such a level of confidence in plaintiff's experts. Cross examination showed their
choices of productive and non-productive periods to be arbitrary at best. More likely, they
were chosen to achieve a pre-determined result.”).

        Because of the errors in Mr. Manginelli’s original expert report prepared for the
plaintiff, and his often unpersuasive testimony offered at trial before and also after he
revised his report, especially compared to defendant’s expert Mr. Weathers on the same
subject matter,46 Mr. Manginelli’s credibility has been scrutinized carefully by the court
before arriving at conclusions on the various requests for damages included in plaintiff’s
complaint. For example, although Mr. Manginelli made mention of the measured mile
method in his analysis for loss of productivity, Mr. Manginelli ultimately concluded that

46
   As noted above, the court found Mr. Weathers more credible and far more persuasive
in his testimony at trial and in his expert report than Mr. Manginelli, plaintiff’s expert.
                                           139
“there was no unimpacted period that could be used in the measured mile,” and that “a
reasonable measure of the lost productivity would be its labor overrun on this project.” As
explained above, Mr. Manginelli took what he alleged were the planned, or bid, labor
hours for the project and subtracted them from the labor hours actually expended on the
project, and then subtracted the labor hours allegedly resulting from modifications to the
Contract, for a cumulative difference of 7,384 labor hours, to all of which Mr. Manginelli
believes LCC-MZT is entitled. Mr. Manginelli’s analysis, however, demonstrates no
degree of specificity when accounting for either the 8,337 labor hours he claimed he
discarded as associated with “change order work,” or the additional 7,384 labor hours to
which he believes LCC-MZT is entitled as lost to inefficiency. Therefore, it is unclear the
extent to which the additional labor hours requested include labor hours caused by delays
or impacts for which the court has found, above, that LCC-MZT should not be
compensated, or for which plaintiff may have contributed to delays that each party
asserted were caused by the other party. As discussed throughout the Opinion, the court
has found that several of the delays claimed by plaintiff were not compensable because
either the defendant was not solely responsible for the delays, or because the Contract’s
Specifications did not provide for compensation. For example, in the case of anticipated
Red Days, the court has found that the only circumstances under which LCC-MZT may
be entitled to compensation for a Red Day are: (1) if LCC-MZT’s workers could not work
for more than fifty percent of a Red Day; (2) there were more than ten Red Days on
working days in a single month; or (3) there was a scheduling change related to an
anticipated Red Day with less than forty-eight hours’ notice to plaintiff. Indeed, the court
found above that the vast majority of Red Days after August 14, 2013 did not rise to
become considered compensable. Because plaintiff’s expert Mr. Manginelli does not
explain the origin of the additional labor hours claimed, the court cannot accept the labor
hours identified and claimed by Mr. Manginelli or the plaintiff, as plaintiff bears the burden
of proof to recover any additional labor hours. See Ace Constructors, Inc. v. United States,
70 Fed. Cl. at 274 (stating that “the burden is on” the contractor “to establish the amount
of the equitable adjustment by a preponderance of the evidence” (citing Teledyne
McCormick-Selph v. United States, 218 Ct. Cl. 513, 588 F.2d 808, 810 (1978))).

       In addition, although LCC-MZT has consistently maintained that it is not looking to
recover costs associated with concrete repairs, especially for the work done by LCC-
MZT’s subcontractor, Contech, due to Contech’s initial faulty concrete repair, Mr.
Manginelli’s lost productivity analysis seems calculate compensation for such additional
labor hours associated with concrete repairs. If Mr. Manginelli only reduced the additional
labor hours, as he claims, by those associated with the various modifications to the
Contract, work which concrete repair would not be considered because it was not subject
to any modification, and if the amount of labor hours included in LCC-MZT’s bid did not
account for the significant concrete repairs that occurred on the project, which could not
have been foreseen when LCC-MZT submitted its bid for this project, then Mr.
Manginelli’s calculation would necessarily include the additional labor hours for concrete
repair in the 7,384 labor hours to which Mr. Manginelli believes LCC-MZT is entitled.
Because Mr. Manginelli did not identify, explain, or break down with any degree of
specificity the allocation of claimed additional labor hours, his calculations cannot be

                                            140
verified and plaintiff has not met its burden of proof to establish entitlement to the cost of
such additional labor hours.

       Mr. Manginelli and the Department of Justice attorney, Ms. Krystyniak, had the
following exchange on cross-examination about the nature of the 8,337, or $500,000.00-
worth of labor hours plaintiff’s expert had deducted from the total labor hours incurred on
the project:

       Ms. Krystyniak: Okay. Okay. So I’d like to turn now to your loss of
       productivity analysis. So your report opines that MZT is entitled to recover
       approximately $442,00 plus markup associated with their loss of
       productivity on the project, correct?

       Mr. Manginelli: I believe that’s correct. I think I have the report --

                                             ***

       Ms. Krystyniak: Because, Mr. Manginelli, your loss of productivity analysis
       doesn’t change depending on who’s found to be at fault for the roof, correct?

       Mr. Manginelli: Correct.

       Ms. Krystyniak: You opine that, regardless, MZT is entitled -- regardless of
       who is to blame for the roof, MZT is entitled to recover their loss of
       productivity?

       Mr. Manginelli: Yes. On the -- the base -- on the basis this analysis was
       done, yes.
                                          ***

       Ms. Krystyniak: So instead, because -- you concluded that because MZT
       had based their bid on the P-913 contract on the P-971 contract, on which
       they told you they had performed well, you could just look at the total
       number of hours that they bid on this contract and see what the labor
       overrun was and that would be your loss of productivity. Is that fair?

       Mr. Manginelli: With some adjustments, I felt that was about the best
       approach available given the documentation that was available, yes.

       Ms. Krystyniak: And which adjustments did you make?

       Mr. Manginelli: I took out hours that I believed were associated with other
       REAs, like you mentioned the roof, for example.

       Ms. Krystyniak: Mm-hmm.

                                             141
Mr. Manginelli: As -- as well as change orders. So I’m referring to the
$500,00 that I translated into hours on an earlier page in the report.

Ms. Krystyniak: So it’s your testimony that $500,000 represents hours
reflected in the REAs that are also pending before the government?

Mr. Manginelli: Yes. My -- my intent was to make a deduction so that there
was no duplication. And on that I worked with Mr. King.

                                       ***

Ms. Krystyniak: So when I spoke to you last November [during your
deposition], you told me that that $500,000 represented change order work,
so work that had already been performed and compensated, correct?

Mr. Manginelli: Yes. I think the -- this is about the third time in this deposition
that we discussed this 500,000, and I admitted that I needed to go back and
verify the -- the purpose of it. The -- the change orders were not just previous
change orders or approved change orders. They were the change orders
that -- that Mr. King had put together.

And so I -- admittedly at this point in time, I was, you know, confused as to
what exactly he had done, and since then I went back and went over that
with him.

                                       ***

Ms. Krystyniak: Okay. So at the time you testified that it was your
understanding that it was just hours or estimate of labor hours associated
with change orders, but you’ve since gone back and verified that $500,000
encompasses change orders and REAs?

Mr. Manginelli: Yes. I think earlier in the deposition I had indicated that I was
not sure. That I needed to go back and check that.

Ms. Krystyniak: And so you hadn’t confirmed that before opining that MZT
is entitled to recover under their loss of productivity?

Mr. Manginelli: Well, again, I had gone over those numbers with Mr. King
early on and asked him that -- you know, what I wanted that number to
represent, but I did not get into the details of what the number was.

                                       ***

                                       142
       Ms. Krystyniak: So essentially -- I think you said this already, but essentially
       your loss of productivity analysis is a comparison between the hours that
       they bid and the labor hours that they ended up spending, correct?

       Mr. Manginelli: Yes, with a deduction to try to ensure there was no
       duplication of other changes.

       Ms. Krystyniak: And you already mentioned this, but you did not do two
       paths of loss of productivity, one for which MZT is liable for the roof issues
       and one for which it is not, correct?

       Mr. Manginelli: No. My understanding was that the 500,000 took that out of
       the productivity and into a different REA.

       Ms. Krystyniak: So the 500,000 took out all the labor in change orders,
       correct? That’s your understanding?

       Mr. Manginelli: Yes.

       Ms. Krystyniak: And also all the labor associated with the roof work?

       Mr. Manginelli: Yes. Well, not the labor associated with the roof work. I
       believe it was testing associated with the roof work.

       Ms. Krystyniak: Sure. And I think your report indicates that there is a
       pending REA for cost associated with the roof testing that you are not
       opining on, correct?

       Mr. Manginelli: That’s correct.

Based on this conversation at trial between Mr. Manginelli and Ms. Krystyniak, it indeed
appears that Mr. Manginelli’s analysis included in his revised expert report and testimony
was not specific on the types of labor hours that he deducted from the total labor hours
on the project, and he testified that he did not “get into the details of what the number
was” when preparing either his original expert report or revised expert report. Without any
degree of specificity or certainty in his analysis and calculations, Mr. Manginelli as
plaintiff’s expert witness, was not able to support, by a preponderance of the evidence,
that defendant was responsible for the additional labor hours and costs LCC-MZT seeks
to recover. LCC-MZT’s REA 33, as submitted in LCC-MZT’s request for contracting
officer’s final decision was similarly without explanation on these issues. Therefore,
without further explanation in plaintiff’s REA 33, and because plaintiff solely relies on Mr.
Manginelli’s analysis and calculations, the court finds that LCC-MZT has failed to
establish entitlement to compensation for loss of productivity.

REA 17 - Furniture, Fixtures, and Equipment (FF&E) Cost Variance

                                            143
        LCC-MZT’s REA 17 states that it “is to provide the adjustment due to the price
increases from the FF&E package quotation to purchase, storage and installation.” In
plaintiff’s post-trial brief, plaintiff asserts that LCC-MZT is entitled to $99,254.00 because
of price increases from the prices quoted in Modification 2, as well as for “extended”
storage fees incurred by LCC-MZT. Plaintiff argues that Modification 2 was issued in July
2012, which is “approximately two years before project completion.” (emphasis in
original). According to plaintiff, “LCC-MZT was directed to purchase the FF&E by
NAVFAC on February 21, 2013,” and “[w]hile NAVFAC claims that LCC-MZT should have
arranged for ‘late delivery,’ this would also result in added cost, and there is no testimony
to the contrary. Overall, it would be inequitable for LCC-MZT to absorb these costs.”
Plaintiff asserts that its claimed increased costs constitute a change under the Changes
clause, FAR § 52.243-4.

        By contrast, defendant argues that LCC-MZT failed to comply with the terms in the
Contract when purchasing the FF&E, and that LCC-MZT’s claimed costs are not
attributable to government action. Defendant contends that Modification 2 “was planned,
with its terms agreed upon in the original Contract,” and “fairly compensated LCC-MZT in
accordance with the Contract.” According to defendant’s post-trial brief, “the Contract
specifications require prior approval to receive additional compensation for discontinued
items; unless otherwise approved, FF&E was required to be purchased and installed
‘exactly as designed and specified, or approved equal, by the Government, URS
[Corporation] and its subcontractor.’”

       The Changes clause, FAR § 52.243-4, cited by plaintiff, states:

       (a) The Contracting Officer may, at any time, without notice to the sureties,
       if any, by written order designated or indicated to be a change order, make
       changes in the work within the general scope of the contract, including
       changes—

          (1) In the specifications (including drawings and designs);

          (2) In the method or manner of performance of the work;

          (3) In the Government-furnished property or services; or

          (4) Directing acceleration in the performance of the work.

FAR § 52.243-4(a).

      As discussed above, section 01 50 01 of the Contract’s Specifications, titled
“PROCUREMENT AND INSTALLATIONS OF FURNITURE, FIXTURES AND
EQUIPMENT,” provides at paragraph 1.1 that LCC-MZT “shall provide the procurement
and installation of all Furnishings, Fixtures, and Equipment (FF&E) exactly as designed
and specified or approved equal by the Government, URS, and it’s subcontractor 3B
Designs during the design phase of this project.” (capitalization in original). Paragraph

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1.2.1 in section 01 50 01 of the Contract’s Specifications states that the FF&E package
was to be a “planned modification,” and that “[u]pon receipt of required funding, the Prime
Contractor shall be authorized by the Contracting Officer, as a planned modification to
the construction contract, to procure and install all Final FF&E using Federal Government
price schedules (NAVSUP BPAs and/or GSA).” (capitalization in original). Paragraph 1.2
states that the FF&E package awarded was to include “shipping, freight, handling,
installation, and the contractor’s FF&E Handling and Administration Rate (HAR)
percentage as applied to the final FF&E total cost.” (capitalization in original). Regarding
the Handling and Administration Rate, paragraph 1.2.1 states:

       The HAR [Handling and Administration Rate] includes all of the Prime
       Contractor’s effort related to storage, coordination, handling, administration
       of subcontractors, and all other associated costs and profit for the
       procurement of FF&E. The Prime Contractor will propose in the contract
       solicitation the FF&E HAR. The prime Contractor’s proposed HAR may not
       exceed 5 percent of the total FF&E costs, as noted on the bid schedule.

(capitalization in original). Regarding “PROCUREMENT AND INSTALLATION” of the
FF&E, paragraph 1.3 in Section 01 50 01 of the Contract’s Specifications states:

       The Contractor shall coordinate the building completion date with the
       installation dealer(s) specified in the FF&E Package.

       The FF&E package provided to the Prime Contractor at the modification
       award shall reflect current pricing certified by the manufacturers and the
       Interior Designer of Record, NAVFAC NW. Pricing will be guaranteed, but
       the Prime Contractor shall be responsible for verifying the pricing prior to
       the award of the modification.

       The Prime Contractor shall anticipate possible manufacturer price
       increases if order placement is delayed. It is recommended to order the
       FF&E product once the planned modification is awarded and funds are
       received to avoid incurring additional costs. Delayed production and
       delivery dates can be noted at the time of order placement to coincide with
       building completion dates. Any costs incurred due to manufacturer price
       increases will be the burden of the Prime Contractor.

(capitalization in original).

       On July 3, 2012, NAVFAC contracting officer Mona Carlson unilaterally issued
Modification 2, which increased the value of the Contract by $514,026.25 to compensate
LCC-MZT for the costs, but not for the time, associated with providing and installing the
FF&E package set forth in Modification 2, which included items such as beds, rifle
cabinets, treadmills, squat racks, microwaves, and televisions. Attached to Modification 2
is a document titled “FINAL COST ESTIMATE SUMMARY - revised,” (capitalization and
emphasis in original), which included a line-item breakdown of the $514,026.25 provided

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to LCC-MZT through Modification 2. The breakdown included the prices for all of the
FF&E items to be purchased, including a subtotal of $226,882.00 for items manufactured
by Turnbull, and a subtotal of $106,335.74 for all other items. An amount of $95,882.00
was added to the Turnbull items for “Installation,” and an amount of $21,267.15 was
added to the remaining items for “Delivery and Installation.” (capitalization and emphasis
in original). An amount of $39,181.92 was added for “WA State Sales/Use Tax” at 8.7%,
and an amount of $24,477.44 was added for “Contractor’s HAR” at 5%. (capitalization in
original). A separate document attached to Modification 2, titled “STEEL BERTH AND
LOCKER QUOTE,” indicates that the prices for the items manufactured by Turnbull were
taken from a quote dated August 15, 2011, but Modification 2 does not indicate from what
date the remaining items in the FF&E package were quoted. (capitalization and emphasis
in original).

      According to Bryan Zatica’s testimony, NAVFAC issued Modification 2 when LCC-
MZT “roughly” was mobilizing to the project site. Bryan Zatica testified that “typically”

      [y]ou want to do it [the FF&E] at the very end. You want to have them come
      in -- and unfortunately they don’t show up like a desk. They show up with
      pieces and parts, screws and nuts and all that stuff. So you want to make
      sure that the place is cleaned, ready, install the FF&E, wipe it down, walk
      out the door.

According to the testimony of LCC-MZT’s project manager Jim Mortensen, in February
2013, he attempted to “request proposals for the FF&E package only to have the suppliers
tell me that we weren’t authorized to purchase.” Thereafter, LCC-MZT requested
authorization from NAVFAC to purchase from the sources in the FF&E package. On
February 21, 2013, Mona Carlson sent LCC-MZT a letter stating that LCC-MZT was
“hereby authorized to utilize General Services Administration (GSA) supply sources for
the purchase of furniture, fixtures, and equipment (FF&E) under the subject contract.”
Based on the invoices included in REA 17, LCC-MZT ordered at least some of the items
in the FF&E package by late June of 2013, and stored the FF&E package offsite until it
was installed. When attempting to install the FF&E package, Jim Mortensen testified that
LCC-MZT “had to build an alternate route to offload it on the job site” because “[m]ost of
the furniture and accessories that went in the building would not fit through the doors on
the -- from the parking lot side because they had shielded barriers, concrete barriers,
wouldn’t allow you to get in and around inside the building.”

       LCC-MZT’s REA 17 seeks compensation “due to price increases from the FF&E
package quotation to purchase, storage, and installation.” [sic] LCC-MZT’s post-trial brief
asserts that “[i]ncreased material prices, new prices for the replacement of discontinued
items, extended storage costs and costs for construction of an alternate access route are”
included in REA 17. Regarding storage costs, as discussed above, paragraph 1.3 of
section 01 50 01 of the Contract’s Specifications states that LCC-MZT “shall coordinate
the building completion date with the installation dealer(s) specified in the FF&E
Package,” and that “[d]elayed production and delivery dates can be noted at the time of
order placement to coincide with building completion dates.” Paragraph 1.3 of section 01

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50 01, therefore, indicates that LCC-MZT could have requested a delayed delivery date
instead of having stored the FF&E package offsite. The record before the court does not
indicate whether LCC-MZT would have incurred additional fees if it had chosen to delay
delivery instead of storing the FF&E package offsite.47 Regardless, Modification 24
compensated LCC-MZT for storage costs, which were included in the five percent markup
of $24,477.44 for LCC-MZT’s Handling and Administration Rate, as explained in
paragraph 1.2.1 of section 01 50 01 of the Contract’s Specifications, which states that
“HAR [Handling and Administration Rate] includes all of the Prime Contractor’s effort
related to storage, coordination, handling, administration of subcontractors, and all other
associated costs and profit for the procurement of FF&E.” (capitalization in original).
Moreover, paragraph 1.2.1 in section 01 50 01 of the Contract’s Specifications provides
that LCC-MZT’s “proposed HAR may not exceed 5 percent of the total FF&E costs.” LCC-
MZT, therefore, received the maximum in storage costs based on the amount awarded
to LCC-MZT through Modification 24, in accordance with the Contract’s Specifications,
and is not entitled to additional FF&E storage costs.

        As discussed above, also included in plaintiff’s request in REA 17 for $99,254.00
were additional installation costs resulting from having to build an “alternate route” to off-
load the FF&E package onto the job site. As stated above, paragraph 1.2.1 of section 01
50 01 of the Contract’s Specifications states that the amount of the FF&E modification
“will be the actual cost of these items from the Federal Government price schedules
(NAVSUP BPAs and/or GSA), including any freight and installation charges from the
furniture supplier as well as the Prime Contractor’s HAR.” (capitalization in original).
Paragraph 1.2.1 also stated that the Handling and Administration Rate was to include “all
of the Prime Contractor’s effort related to storage, coordination, handling, administration
of subcontractors, and all other associated costs and profit for the procurement of FF&E.”
(emphasis added). As explained above, LCC-MZT received the maximum allowable
Handling and Administration Rate per the Contract’s Specifications, which was five
percent. Included in the award for Modification 2 were amounts of $95,822.00 and
$21,267.15 related to installation, as well as $24,477.44 for LCC-MZT’s Handling and
Administration Rate. Thus, NAVFAC compensated LCC-MZT for installation in
accordance with the Contract. Moreover, REA 17 does not include an amount specifically
related to the additional costs associated with having to build an alternate route. LCC-
MZT’s Jim Mortensen, who testified that he prepared REA 17, had the following exchange
with plaintiff’s attorney, Mr. Ramseyer on direct examination regarding the amount
requested REA 17:

47
     At closing argument, plaintiff’s attorney asserted:

         [T]here’s a good chance -- and we haven’t had any direct testimony on this
         -- but I would suggest to the Court that there’s going to be an extra cost for
         a delayed delivery, and it’s going to be -- you are going to also run into the
         issue of not being able to pick out of inventory and hold product that has
         been discontinued. So I don’t think it was a -- I don’t think it’s a feasible --
         from a practical standpoint, I just don’t think that that would be feasible.
                                              147
       Mr. Ramseyer: And after having compiled the costs in this matter, can you
       tell us what the amount of this REA 17 submitted to the government was?

       Mr. Mortensen: Well, REA 17 was the difference of the cost.

       Mr. Ramseyer: Yes.

       Mr. Mortensen: What we did is we went through and priced it all out and
       came back. And at the bottom it says $99,254.00

Plaintiff’s REA 17 compiled all of the costs of material and labor from LCC-MZT and its
subcontractors related to the FF&E package, and appears to subtract the amounts
received through Modification 24, although LCC-MZT has not identified the specific nature
of many of the figures used in LCC-MZT’s breakdown of expenditures related to the FF&E
package. The amount that LCC-MZT allegedly expended to build the alternate route does
not appear to be derivable out of the expenditure spreadsheets attached to REA 17, and
this amount also was not provided during the trial, nor did LCC-MZT offer testimony
regarding the costs to build an alternate route. The court, therefore, is unable to determine
how much LCC-MZT expended above and beyond what was awarded in Modification 2
specifically to complete the alternate route. LCC-MZT, therefore, has not met its burden
to establish entitlement to additional costs for building an alternate route for the
installation of the FF&E package.

       Additionally, plaintiff’s REA 17 requested costs related to the increased prices of
items to replace FF&E package items which were discontinued by the time LCC-MZT
purchased the FF&E package, as well as costs related to the increase in prices of non-
discontinued items which were described as more expensive at the time they were
procured by LCC-MZT from the time they were quoted and funds were awarded to LCC-
MZT in Modification 2. Modification 2 was awarded on July 3, 2012, and LCC-MZT was
authorized by NAVFAC to purchase the FF&E package on February 21, 2013.
Modification 2 indicated that the prices for the items manufactured by Turnbull were based
on a quote dated August 15, 2011, and Modification 2 does not indicate the date on which
the remaining items were quoted. Based on the invoices attached to REA 17, it appears
that LCC-MZT ordered at least some of the items in the FF&E package by late June of
2013. Regarding the discontinued items, paragraph 1.3.11 in section 01 50 01 of the
Contract’s Specifications states: “Submit any revisions or deviations caused by
discontinued items to the Contracting Officer for approval by the NAVFAC Interior
Designer.” Paragraph 1.3.10 of section 01 50 01 states that “price adjustments must be
negotiated” for the FF&E package. To the extent LCC-MZT attempted to replace
discontinued items, LCC-MZT was required by the Contract to contact NAVFAC for
approval for changes to the FF&E package based on discontinued items.

       The record before the court, however, does not indicate that LCC-MZT contacted
NAVFAC about a change to the FF&E package caused by discontinued items. In Chief
of the NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016 final decision, Ms.
Mitchell states that “[t]here is no record that you notified the ACO regarding FF&E price

                                            148
changes and that you waited to file a claim with the alleged price differences.”
(capitalization in original). Regarding the increased costs of items at the time LCC-MZT
ordered the FF&E package, the Contract’s Specifications in paragraph 1.3 of section 01
50 01, quoted above, stated that “[t]he Prime Contractor shall anticipate possible
manufacturer price increases if order placement is delayed.” The record before the court
does not provide a basis on which to determine whether the alleged price increases were
the result of the delayed ordering of the FF&E package, or were the result of NAVFAC
using outdated prices at the time it issued Modification 2. In REA 17, LCC-MZT provided
certain quotations of FF&E items in October 2012, but LCC-MZT has not established that
the prices used in Modification 2 were not accurate at the time Modification 2 was issued
on July 3, 2012. Moreover, as was the case with the replacement of discontinued items,
the record before the court does not indicate that LCC-MZT notified NAVFAC regarding
any increased prices. Finally, paragraph 1.3 of section 01 50 01 stated that “[a]ny costs
incurred due to manufacturer price increases will be the burden of the Prime Contractor.”
As such, LCC-MZT has not met its burden to establish entitlement to increased purchase
costs related to the FF&E package as claimed in REA 17.

REA 36 – Schedules & Claims Consultant Fees

       In REA 36, LCC-MZT seeks $196,134.00 for additional costs incurred by its
subcontractor Mirack from December 17, 2013 to March 27, 2015. The narrative in REA
36 states:

       MIRACK [sic] Construction provided LCC-MZT consulting services for the
       Time Impact Analysis and Request for Equitable Adjustment from
       December 2013 through March 2015. These services included but were not
       limited to (1) Review of all Correspondence to and from Owner (2) Weekly
       and Monthly Schedule Review (3) Review of Daily Logs from
       Superintendent and Quality Control Personnel (4) Client Meetings (5)
       Preparation of Time Impact Analysis and (6) Preparation of the Additional
       Costs.

(capitalization in original). The narrative in REA 36 further asserts, in similar language to
many of LCC-MZT’s other REAs:

       The Government required LCC-MZT to accelerate, stack trades and re-
       sequence the work to mitigate the Government’s disruptions, impacts,
       delays to meet the December 16, 2013 Substantial Completion Date and
       February 16, 2014 Contract Completion Date. The Government’s Delays,
       Impacts and Disruptions delayed the completion of the project and required
       LCC-MZT to hire a schedule and claims consultant to prepare the Time
       Impact Analysis and Requests for Equitable Adjustments. Per FAR clauses
       52.243-04-Contract Changes, 52.236-02 Differing Site Conditions, 52.246-
       12-Inspection, 52.236-11-Use & Possession, 52.242-14-Suspension of
       Work, 52.245-01-Government Property and 52.211-13-Time Extensions,
       LCC-MZT is requesting payment of these additional costs.

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(capitalization in original). REA 36 includes markups, assigning 10% for “Prime Field
Office Overhead,” 5% for “Prime Mark Up on Subcontractors,” 3% for “Prime Home Office
Overhead,” 3% for “Prime Profit,” and 0.484% for “B & O Tax.” (capitalization in original).
REA 36 also includes Mirack’s monthly invoices, with the first charge on December 17,
2013, and the last charge on March 27, 2015. The only description provided in each
invoice is “Consulting for P-913 EHW Security Force Facility Claim and Schedule.” The
monthly invoices only are broken down by week, indicating how many hours are being
charged by Mirack for that week, with hours charged at the rate of $155.00 per hour. In
plaintiff’s post-trial brief, plaintiff argues that “LCC-MZT was forced to obtain assistance
from a consultant given the difficulty caused by the delays to the Project.” (citing Clark
Concrete Contractors, Inc. v. Gen. Servs. Admin., GSBCA No. 14340, 99–1 BCA ¶ 30280,
1999 WL 143977 (1999)). Plaintiff asserts that “[w]hile NAVFAC has argued that it is
unclear what services were provided and whether LCC-MZT is seeking costs relating to
prosecution of claims, this is simply not accurate.” Plaintiff contends that it produced
Mirack’s invoices, “which demonstrate that LCC-MZT is only seeking costs for invoices
issued by Mirack during the extended duration.” Plaintiff also contends that Mr. King, who
was Mirack’s employee and served as LCC-MZT’s scheduler, claims consultant, and
interim project manager, “testified that REA 37 [sic] only seeks costs incurred by LCC-
MZT for changes-related work during the extended duration.” According to plaintiff,
“NAVFAC’s expert, Mr. Weathers, concurred that LCC-MZT is entitled to these costs if
they were incurred in preparing REAs and associated time impact analyses, but he
believes the invoices” in REA 36 “are not clear as to what the consultant was doing during
the claimed time period.”

         During the trial, defendant’s expert Mr. Weathers was briefly questioned about
REA 36 on direct examination, and provided a demonstrative which offered his opinion
that “[t]o the extent LCC-MZT can establish that it incurred the scheduling and consulting
cost as a result of the requirement to establish its entitlement to time extensions, LCC-
MZT would be entitled to these costs.” In defendant’s post-trial brief, defendant argues
that because “LCC-MZT was solely responsible for scheduling and, to perform under the
Contract, it needed an approved Scheduler.” Defendant also argues that “costs expended
for prosecution of claims against the Government are not recoverable unless part of
‘contract administration,’” and that plaintiff cannot recover for costs associated with REAs,
because “[c]osts incurred for preparing the REAs are part of LCC-MZT’s costs for
‘prosecution of claims against the Government.’” (quoting Tip Top Constr., Inc. v.
Donahoe, 695 F.3d 1276, 1283 (Fed. Cir. 2012) (citing FAR 31.2015-47(f)(1))). Defendant
further contends that “[t]he Scheduler, therefore, is properly part of LCC-MZT’s overhead
costs and already recovered under the Contract’s terms, not a separate cost for which it
is entitled to compensation,” and that “[w]hether the Scheduler was an employee of LCC-
MZT, or a subcontractor—such as Mr. King through Mirack—was part of the means and
methods that determined [sic] by LCC-MZT.” In addition, defendant contends that the
invoices do not “point to what portions [of each invoice] relate to which REAs.” Defendant
also argues that “the costs claimed are unreasonable” because “Mirack costs are marked
up twice:” once for CJW, the company to which Mirack was a subcontractor and “which
contracted with LCC-MZT,” and then another time for LCC-MZT. Defendant also asserts

                                            150
that LCC-MZT did not ever “present evidence that Mr. King was actually even approved
as the Project’s Scheduler.” (capitalization in original). Defendant also contends that “the
timeframe presented for recovery under the REA is unreasonable.” Finally, defendant
argues that “LCC-MZT failed to demonstrate with necessary particularity that the invoices
attached to its REA relate to anything other than items Contractually required, or to the
prosecution of its claims against NAVFAC,” but that “if the Court determines that LCC-
MZT is entitled to recover any portion of its scheduling and claim consulting costs, LCC-
MZT’s claims should be limited to only those amounts proven to be related to its
computation of the TIA [Time Impact Analysis].” (capitalization in original).

       FAR § 31.205-33(b) provides that “[c]osts of professional and consultant services
are allowable,” subject to certain limitations. FAR § 31.205-33(b) (2020). Relevant to the
case brought by plaintiff, one of the limitations, which is set forth in FAR § 31.205-47,
states that “the prosecution of claims or appeals against the Federal Government” are
“unallowable.” FAR § 31.205-47(f) (2020). In Tip Top Construction, Inc. v. Donahoe, 695
F.3d 1276, the United States Court of Appeals for the Federal Circuit examined whether
consulting fees incurred during the negotiation of an equitable adjustment were classified
as general contract administration costs, or costs “incurred in connection with the
prosecution of a CDA claim, the former being recoverable, but the latter not.” Id. at 1282-
83 (citing Bill Strong Enters., Inc. v. Shannon, 49 F.3d 1541, 1549 (Fed. Cir. 1995),
overruled on other grounds, Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995)).
The Tip Top court, quoting the Federal Circuit’s previous analysis in Bill Strong, stated:

       “If a contractor incurred the cost for the genuine purpose of materially
       furthering the negotiation process, such cost should normally be a contract
       administration cost allowable under FAR 31.205-33, even if negotiation
       eventually fails and a CDA claim is later submitted. On the other hand, if a
       contractor’s underlying purpose for incurring a cost is to promote the
       prosecution of a CDA claim against the Government, then such cost is
       unallowable under FAR 31.205-33.”

Tip Top Constr., Inc. v. Donahoe, 695 F.3d at 1283-84 (capitalization in original) (citations
omitted) (quoting Bill Strong Enters., Inc. v. Shannon, 49 F.3d at 1549–50); see also
Meridian Eng’g Co. v. United States, 122 Fed. Cl. 381, 422 (2015) (“[T]he trial court should
determine whether certain costs are for contract administration or CDA prosecution,
based on whether or not the costs were incurred for ‘the genuine purpose of materially
furthering the negotiation process,’ i.e., for contract administration purposes.” (quoting Bill
Strong Enters., Inc. v. Shannon, 49 F.3d at 1550)), aff’d in part, rev’d in part on other
grounds, 885 F.3d 1351 (Fed. Cir. 2018); SUFI Network Servs., Inc. v. United States, 105
Fed. Cl. 184, 192–93 (2012); Env’t Tectonics Corp. v. United States, 72 Fed. Cl. 290, 298
(2006); SAB Constr., Inc. v. United States, 66 Fed. Cl. 77, 90 (2005), aff’d, 206 F. App’x
992 (Fed. Cir. 2006).

       In REA 36, LCC-MZT claims entitlement to “Schedule & Claims Consulting Fees”
incurred from LCC-MZT’s use of subcontractor Mirack from December 2013 to March
2015. The parties stipulated that LCC-MZT used Mirack’s employee, John King, as LCC-

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MZT’s scheduler for the P-913 project. He replaced Mr. Kugan, also a subcontractor to
LCC-MZT, as scheduler in November 2012. Mr. King was LCC-MZT’s only scheduler for
the duration of the project after Mr. Kugan’s departure. The parties stipulated that, in
addition to his role as scheduler, Mr. King also performed other “various duties on the
Project,” such as claims consultant and “interim project manager.” Based on the record
before the court, it appears that the costs claimed in REA 36 relate to the services
provided to LCC-MZT by no one other than Mr. King, as it appears that no other individual
was acting in the capacity of LCC-MZT’s scheduler or claims consultant between
December 2013 and March 2015.

        As discussed throughout this Opinion, LCC-MZT engaged in multiple negotiations
and exchanges of information with NAVFAC in an attempt to agree on how exactly the
project was impacted by the various delays. To the extent that the costs claimed in REA
36 were incurred from Mr. King’s assistance in preparing LCC-MZT’s Time Impact
Analysis, such costs were incurred to benefit the project and for the “genuine purpose of
materially furthering the negotiation process,” Bill Strong Enters., Inc. v. Shannon, 49 F.3d
at 1550, and, therefore, would be allowable costs in accordance with FAR § 31.205-33.
Mr. King testified, however, that he also assisted in the preparation of LCC-MZT’s three
requests for a contracting officer’s final decision, the first of which request was submitted
by letter dated May 28, 2015, and which contained language stating that the letter is
“intended as a claim by LCC-MZT Team IV (LCC-MZT) pursuant to the Contract Disputes
Act of 1978, as amended (48 U.S.C. [§] 601-613), and constitutes a written demand for
payment of additional sums due LCC-MZT as set forth below on the above referenced
project.” As discussed above, LCC-MZT is not entitled to any consulting costs which were
incurred in relation to the “prosecution of claims or appeals against the Federal
Government,” see FAR § 31.205-47, and “if a contractor’s underlying purpose for
incurring a cost is to promote the prosecution of a CDA claim against the Government,
then such cost is unallowable.” See Tip Top Constr., Inc. v. Donahoe, 695 F.3d at 1284.
Therefore, to the extent that the costs requested in REA 36 were incurred from Mr. King’s
assistance in preparing LCC-MZT’s requests for a contracting officer’s final decision, such
costs are not recoverable in this court.

       As stated above, the only description included in each of the invoices is that the
invoices were for “Consulting for P-913 EHW Security Force Facility Claim and Schedule,”
and no testimony was provided at trial to further explain each invoice. (capitalization in
original). The generality of this description in each invoice means the court is unable to
determine which part of each invoice, if any, were the result of Mr. King’s assistance to
prepare the requests for a contracting officer’s final decision. Based on the record before
the court, it appears that LCC-MZT and Mr. King began preparing LCC-MZT’s requests
for a contracting officer’s final decision no later than December 17, 2014. That LCC-MZT
began preparing the requests for a contracting officer’s final decision on December 17,
2014 was alluded to in a May 8, 2015 letter from LCC-MZT to NAVFAC which stated that,
during the negotiation process of LCC-MZT’s Time Impact Analysis, NAVFAC sent a letter
to LCC-MZT on December 17, 2014 in which NAVFAC “restated the Government’s
position for partial merit and contract extension of eight (8) days for Red Days and
inclement weather,” and that “LCC viewed this [December 17, 2014] letter as the final line

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in the sand and started preparation to submit for a Contracting Officer’s Final Decision.”
(capitalization in original). Because the invoices in REA 36 from December 2014 to March
2015 do not differentiate which costs, if any, are associated with Mr. King’s assistance in
the preparation of the LCC-MZT’s requests for a contracting officer’s final decision, and
no testimony was provided to explain the breakdown of each invoice, there is no way for
the court to determine which costs, if any, after December 17, 2014, were not incurred “in
connection with . . . the prosecution of claims against the Federal Government,” as
deemed unallowable by FAR § 31.205-47. LCC-MZT, therefore, has not met its burden
of proof to establish entitlement to the costs associated with the invoices in REA 36 from
December 17, 2014 to final month of invoices in REA 36, March 2015.

       For the earlier invoices included in REA 36, from December 2013 to December 16,
2014, LCC-MZT, as noted above, could be entitled to such scheduling and consulting
costs to the extent such costs were incurred in relation to the seventy-six days of
excusable, compensable delay found by the court earlier in this Opinion. Based on the
absence of testimony at trial and the absence of exhibits in the record before the court, it
is unclear, however, if such costs also may have been included in the cost pools used by
the parties experts to determine the daily field office overhead incurred during the P-913
project, discussed earlier in this Opinion. Indeed, defendant’s expert Mr. Weathers
explained in his expert report that both he and Mr. Manginelli derived their respective daily
rates for field office overhead using field office overhead cost pools which included costs
for LCC-MZT’s supervisors, such as the project manager. Although Mr. King was an
employee of Mirack during the P-913 project, the parties have jointly stipulated Mr. King
served as an interim project manager on the P-913 project, in addition to scheduler and
claims consultant. Because of the lack of specificity relating to what work is covered by
the invoices, and due to the ambiguity of Mr. King’s role for the duration of the P-913
project, it is unclear whether the scheduling and consulting costs requested in REA 36
were included in this court’s award to LCC-MZT for additional field office overhead. LCC-
MZT, therefore, has not met its burden to establish that it is entitled to the additional costs
associated with scheduling or claim consulting as requested in REA 36.

REA 39 – Attorney Fees

        REA 39 “seeks recovery of attorneys’ fees in the amount of $15,245.00 paid in
connection with preparing LCC-MZT’s request for a contracting officer’s final decision.”
Attached to REA 39 was the invoice from the Procopio firm, dated March 12, 2015, the
firm which also represents plaintiff during the proceedings in this court in the above-
captioned case. The invoice indicates that $3,352.00 were for services for the month of
February 2015, as well as $10,190.07 charged as “BALANCE FORWARD,” for a total of
$13,542.07. The invoice does not indicate when the $10,190.07 “BALANCE FORWARD”
was incurred, or even what “BALANCE FORWARD” references, and there is no evidence
in the record to support the $10,190.07 marked as “BALANCE FORWARD.”
(capitalization in original). The $3,352.00 charges for February 2015 include the following
line-item breakdown of the services conducted by the firm:

                                             153
REA 39 also includes markups of 5% for “Prime Mark Up on Subcontractors,” 3% for
“Prime Home Office Overhead,” 3% for “Prime Profit,” and 0.484% for “B & O Tax.” In
Chief of NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016 final decision, LCC-
MZT’s REA 39 for attorney fees was addressed and denied in full.

       On the eighth day of trial, defendant orally moved for a judgment as a matter of
law pursuant to Rule 52(c) (2019) of the Rules of the United States Court of Federal
Claims on a number of issues, including REA 39. Defendant asserted that there was no
testimony offered with respect to REA 39, nor was REA 39 ever moved into evidence. In
response, plaintiff’s attorney Mr. Ramseyer explained that he believed that, before trial,
there was a status conference in which the court indicated that issues of attorney’s fees
would be deferred to post trial. Similarly, plaintiff’s attorney Ms. Knudsen’s impression
also was that REA 39 would be dealt with after the trial, even though REA 39 was not for
attorney’s fees related to preparing this litigation, but was for attorney’s fees related to
preparing the request for contracting officer’s final decision, and was submitted in the

                                            154
request for contracting officer’s final decision.48 On the ninth day of trial, when defendant’s
motion for judgment as a matter of law was again discussed, plaintiff offered to withdraw
the claim in REA 39. Rather than offering to recall Mr. King, who had prepared the
narrative to REA 39, as a witness, the parties agreed to admit REA 39, but not the
narrative, and no additional testimony was offered to support the REA. Defendant’s
motion for judgment as a matter of law also was denied.

        Chief of the NAVFAC Contracting Office, Eileen Mitchell, who had both REA 39
and the accompanying narrative, addressed REA 39 in her August 1, 2016 final decision,
as follows:

       LCC-MZT asserts that its disagreements with the Government on time
       impacts required legal counsel and advice. FAR Paragraph 31.205-47(f)
       states “Costs not covered elsewhere in this subsection are unallowable if
       incurred in connection with -- (1) Defense against Federal Government
       claims or appeals or the prosecution of claims or appeals against the
       Federal Government.” I find no merit; these claimed costs are contrary to
       the FAR costs principles.

(capitalization and emphasis in original). In defendant’s post-trial brief, defendant asserts
that “[f]or many of the same reasons that LCC-MZT is not entitled to recover any portion
of its claims for Mr. King’s scheduling and claim consultant fees, it is not entitled to
recovery for its claim for attorney fees.” (internal citations omitted). Defendant further
asserts:

       Plaintiff’s counsel stated that the attorney fees in REA 39 were for costs
       associated with “the contracting officer’s final decision of bracing that
       together.” Examination of the line items in the one invoice attached to REA
       39 demonstrates that all of the costs claimed are either for unallowable
       claim preparation costs, or for other unallowable costs.

        The court reviewed the application of FAR § 31.205-47 and the limitation of
recovering costs which are incurred “in connection with . . . the prosecution of claims
against the Federal Government,” FAR § 31.205-47(f), when addressing REA 36, above.
This FAR provision also applies to attorneys’ fees. See FAR § 31.205-47(a) (including
“the costs of legal services” in the definition of “Costs” (emphasis in original)). As stated
above, costs incurred related to the preparation of LCC-MZT’s requests for a contracting
officer’s final decision are unallowable, as each request stated that it was “intended as a
claim by LCC-MZT Team IV (LCC-MZT) pursuant to the Contract Disputes Act of 1978,
as amended (48 U.S.C. 601-613), and constitutes a written demand for payment of
additional sums due LCC-MZT as set forth below on the above referenced project.” See
Tip Top Constr., Inc. v. Donahoe, 695 F.3d at 1284 (quoting Bill Strong Enters., Inc. v.

48
   Notably, Department of Justice attorney Ms. Murdock-Park did not share plaintiff’s
counsels’ position, and she stated that “I do not have the same recollection, Your Honor.
I also don’t remember this being directed to defer.”
                                             155
Shannon, 49 F.3d at 1550 (“[I]f a contractor’s underlying purpose for incurring a cost is to
promote the prosecution of a CDA claim against the Government, then such cost is
unallowable under FAR 31.205-33. (capitalization in original)); see also SUFI Network
Servs., Inc. v. United States, 105 Fed. Cl. at 192 (stating that “there is no per se bar to
recovery of the plaintiff’s attorneys’ fees “that pre-date a contractor’s actual filing of its
Board appeal,” but identifying Bill Strong as “the leading authority on the allowance of
legal costs in government contracts”).

         At trial in the above-captioned case, no testimony was provided to support any of
the charges included in the single February 2015 invoice from the Procopio firm, which
was attached to REA 39, even after the discussion of whether or not to admit REA 39 and
the attached invoice, but not to admit the narrative to REA 39, and counsel did not ask to
recall Mr. King. Furthermore, the $10,190.07 entry for fees labeled as “BALANCE
FORWARD” in the February 2015 invoice are not supported by evidence in the record,
and, therefore, plaintiff has not met its burden to establish that the $10,190.07 charged
as “BALANCE FORWARD” are recoverable. (capitalization in original). With respect to
the line-item costs in the February 2015 invoice, which, on their face, relate to assistance
with the preparing LCC-MZT’s requests for a contracting officer’s final decision, or further
litigation, such costs are unallowable in accordance with FAR § 31.205-47(f), and fall
under the analysis, discussed above, set forth in Bill Strong and its progeny. See, e.g.,
Bill Strong Enters., Inc. v. Shannon, 49 F.3d at 1549–50. For the balance of line-items
that do not on their face implicate FAR § 31.205-47(f) as unallowable costs, the court is
unable to determine whether such costs were incurred in relation to events that the court
has determined above to have been the result of government-caused, compensable,
delay. Therefore, plaintiff has not met its burden to demonstrate the costs were allowed,
and, LCC-MZT, therefore, is not entitled to the costs included in REA 39.

REA 37 – Additional Receiver Fees

         In REA 37, LCC-MZT seeks an adjustment to the Contract in the amount of
$11,657.00 because “LCC-MZT incurred additional cost for the Court appointed Receiver
for the joint venture” due to the various delays to the P-913 project. REA 37 states that
“Hill International provided administration of the contract per the mandate of the Superior
Court of California for LCC-MZT.” In plaintiff’s post-trial brief, plaintiff argues “if the Court
finds that the Project was delayed due to the actions of NAVFAC, LCC-MZT is permitted
to recover such receiver costs incurred as a direct result of the delay.” According to
plaintiff, defendant’s expert witness Stephen Weathers indicated that, if such delay is
proven, LCC-MZT would be entitled to receiver costs of $23.00 per day of delay.

       In defendant’s post-trial brief, defendant argues that “LCC-MZT is not entitled to
these costs [for the receiver] because it has not established causation or foreseeability.”
Defendant argues that “[p]articularly because the Receiver was appointed after the joint
venture began having problems and LCC-MZT was responsible for bringing about the
receivership, it is also responsible for any attendant costs.” According to defendant,
“[e]ven if LCC-MZT could establish causation due to the Government’s actions, it still
cannot establish that it is entitled to recover any Receiver costs because such costs were

                                              156
not foreseeable at the time the parties entered into the Contract.” Defendant cites to
breach of contract cases, such as, Vermont Yankee Nuclear Power Corp. v. Entergy
Nuclear Vermont Yankee, LLC, 683 F.3d 1330 (Fed. Cir.), reh’g and reh’g en banc denied
(Fed. Cir. 2012), in which the United States Court of Appeals for the Federal Circuit stated,
generally, that “a plaintiff must show that the type of damages are foreseeable as well as
the fact of damage.” See id. at 1344–48.

        In plaintiff’s REA 37, plaintiff is seeking another set of damages arising out of the
delay incurred on the P-913 project. As discussed above, in order to establish entitlement
to compensation for delay, a contractor must prove that the government was solely
responsible for the delay, and, in addition, that the government was the “sole proximate
cause of the contractor’s additional loss.” See George Sollitt Constr. Co. v. United States,
64 Fed. Cl. at 229 (“For the government to be found to have caused compensable delay,
the general rule is that the government must have been ‘the sole proximate cause of the
contractor’s additional loss, and the contractor would not have been delayed for any other
reason during that period.’” (all emphasis in original) (quoting Triax-Pac v. Stone, 958
F.2d at 354)); see also Reconciling Concurrency in Schedule Delay and Constructive
Acceleration, 39 Pub. Cont. L.J. at 163. That the government must be the sole proximate
cause of the contractor’s loss is similar to the requirement in establishing entitlement to
various types of damages in breach of contract cases that the damages must have been
foreseeable when the contract was awarded. See, e.g., Vermont Yankee Nuclear Power
Corp. v. Entergy Nuclear Vermont Yankee, LLC, 683 F.3d at 1334); see also Shell Oil Co.
v. United States, 130 Fed. Cl. 8, 34 (2017) (stating that to recover expectation damages
for a breach of contract, the plaintiff “must show that: ‘(1) the damages were reasonably
foreseeable by the breaching party at the time of contracting; (2) the breach is a
substantial causal factor in the damages; and (3) the damages are shown with reasonable
certainty’” (quoting Indiana Michigan Power Co. v. United States, 422 F.3d 1369, 1373
(Fed. Cir. 2005)); DMS Imaging Inc., v. United States, 123 Fed. Cl. 645, 655 (2015).
Plaintiff bears the burden of proof to establish that the damages were foreseeable at the
time of contract formation. See DMS Imaging, Inc. v. United States, 123 Fed. Cl. at 655
(citing Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1273 (Fed. Cir. 2008)).
        In the above-captioned case, the Contract NAVFAC awarded to LCC-MZT had
been set aside as a Section 8(a) contract. LCC was an eligible Section 8(a) contractor,
and although MZT was not, MZT entered into a joint venture with LCC. As stated by Bryan
Zatica, LCC “could not fund their [LCC’s] portion of the joint venture. They [LCC] were
having financial issues.” The parties have jointly stipulated that on September 27, 2012,
a California State court directed that Kenneth Baker of Hill International be appointed as
receiver of the LCC-MZT joint venture. Bryan Zatica testified that “Mr. Baker was a court-
appointed receiver for MZT and Larkor to ensure that when the Navy did pay us that the
money went appropriately to the vendors and suppliers and not to one company or the
other.” Although the court has found that LCC-MZT is entitled to ninety-eight days of
excusable delay, seventy-six of which days are compensable, LCC-MZT is not entitled to
additional receiver fees for the seventy-six days of excusable, compensable delay
because the government was not the “sole proximate cause” of the financial difficulties
experienced by the joint venture partner, LCC, which resulted in the necessity to have a
court-appointed receiver assigned to LCC, and the receiver fees incurred by LCC-MZT

                                            157
were not foreseeable at the time LCC-MZT was awarded the Contract. As discussed
earlier in this Opinion, there is no evidence in the record that NAVFAC contributed to
LCC’s financial difficulties, which began toward the beginning of performance under the
Contract. LCC-MZT, therefore, has not met its burden of proof to establish entitlement to
additional receiver fees for a period of compensable delay.

REA 41 – Electric Duct Bank

        REA 41, dated February 5, 2016, is a claim for additional costs, in the amount of
$131,828.00, associated with the installation of an electrical duct bank due to the fact that
the actual electrical duct bank was double the size of what was indicated in the design
plans. The costs sought in REA 41 due to the electrical duct bank’s size are unrelated to
plaintiff’s REA 40, discussed above, in which LCC-MZT sought additional costs related to
the undisclosed location of a water line and a separate electrical duct bank. The water
line and electrical duct bank related to REA 40 were the subject of PC 0004 and
Modification 9 to the Contract. In plaintiff’s post-trial brief, plaintiff states:

       The duct bank identified in REA 41 is not the same electrical duct bank that
       was mislocated on the drawings. This claim arises because the contract
       drawings incorrectly identified the actual size of the duct bank. The duct
       bank shown on the plans was half the size of what was actually installed at
       the Project.

LCC-MZT’s project manager Mr. Mortensen testified that the duct bank which was
relevant to PC 0004 and REA 40 “is not the same duct bank as these duct banks” related
to REA 41, and that “[t]hese [REA 41] duct banks are on the drawings and shown.” Mr.
Mortensen also testified with regard to REA 41 on direct examination by plaintiff’s
counsel, Mr. Ramseyer, as follows:

       Mr. Ramseyer: Did you have involvement in compiling the costs associated
       with REA 41, “Electrical Duct Bank”?
       Mr. Mortensen: I did.

                                            ***

       Mr. Ramseyer: And what issue is this?

       Mr. Mortensen: This has to do with the production of installing the duct bank.
       There’s a copy of the construction schedule in the back of the REA. When
       you go out and put a project together, you anticipate putting your
       underground utilities in before you put your building up so that your utilities
       are constructed in one continuous flow.

       When I look at the -- the construction schedule, I believe there were seven
       or eight days allowed for putting this duct bank in. Number one, they were
       a little short because they didn’t know that it was twice as much as what

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they thought it was. But that seven or eight days was extended over about
17 months.

So you start an activity, and you stop the activity. So now you’re testing --
instead of being able to test, say, ten feet, you’re only testing three feet. So
now you got three times the testing going on in there.

And that’s why this was put together is because they were -- because of PC
004, which was the modification to put -- to relocate the water line and the
duct bank. That is not the same duct bank as these duct banks. These duct
banks are on the drawings and shown. They -- there was no flow. No
consistency.

As I said, at one point we not only dug up and started to install the duct bank
but turned around and had to rebury it in order to keep the concrete work
flowing on the building. And that all has to do with red days as well.

Mr. Ramseyer: All right. And then describe for me once again the process
by which you compiled the costs.

Mr. Mortensen: The costs on this were compiled the same way, actual costs
versus what was put in the proposal. The original proposal.

                                     ***

Mr. Ramseyer: And what’s that schedule included in this REA for?

Mr. Mortensen: That schedule is to represent what was originally proposed
for installation.

Mr. Ramseyer: Okay. And then you have a recap of production reports. Do
you see that?

Mr. Mortensen: I do.

Mr. Ramseyer: And what’s the -- what’s the purpose of including the
production daily reports recap?

Mr. Mortensen: Again, the construction said -- the construction schedule
identified the length and time that it would take to put in the duct bank, and
the first notification on the production reports was September 17th of 2012,
and the last duct bank was put in May 23rd, 2014. That’s not an eight-day
or 16-day activity.

Mr. Ramseyer: Do you feel that you accurately captured the costs
associated with the extended performance and disrupted performance of

                                     159
        installing the duct bank?

        Mr. Mortensen: I went through as meticulously as I could to look at every
        production report to identify the cost, yes.

        Mr. Ramseyer: All right. And as you look at Line 37 of the worksheet, what’s
        the total cost here?

        Mr. Mortensen: Line 37 is $131,828.

        Regarding REA 41, LCC-MZT provided a letter on May 26, 2017 which states, in
part:

        This letter is in response to NAVFAC NW’s Serial Letter PRB222/0142 –
        Request for Equitable Adjustment (REA) ~ Changed Conditions,
        Disruptions to Construction, Loss of Production due to Stacking
        Trades, Out of Sequence Work and Overtime Work to Mitigate the
        changes associated with the Incorrect Scale Shown on the Electrical
        Drawings dated October 4, 2016 and is intended as a claim by LCC-MZT
        Team IV (LCC-MZT) pursuant to the Contract Disputes Act of 1978, as
        amended (48 U.S.C. 601-613), and constitutes a written demand for
        payment of additional sums due LCC-MZT as set forth below on the above
        referenced Project.

        LCC-MZT originally submitted RFI - 0056 on September 24, 2012 notifying
        the Government that while performing site measurements for layout of the
        site electrical duct banks that the scale on the Electrical Site Drawings ES-
        101, ES-111 and ES-121 appear to be incorrect and the scale appears to
        be approximately fifty percent (50%) of the scale that was measured in the
        field. The Government responded on October 2, 2012 and agreed that the
        scale shown on the drawings was incorrect. The Government instructed
        LCC-MZT to change the scale . . . .

        LCC-MZT requested in Serial Letter 0015 (Tab B) a Proposed Change (PC)
        be issued for the additional costs associated with the additional duct banks
        required by the change of the scale on the drawings dated March 5, 2013.
        The Government did not acknowledge receipt until March 11, 2013. The
        Government responded in Serial Letter 0039 dated April 30, 2013 (Tab C)
        that the Government finds the response to RFI 056 did not constitute a
        change to the contract requirements . . . .

(capitalization and emphasis in original). The May 26, 2017 request for a contracting
officer’s final decision further explains that after additional correspondence between LCC-
MZT and NAVFAC, “[t]he Government reversed its original position of ‘no merit’ and found
‘partial merit,’” and that “[t]he Government issued PC 0021 for tracking purposes.”
(capitalization and emphasis in original). The May 26, 2017 request for contracting

                                            160
officer’s final decision continues:

       LCC-MZT took exception to the Government’s response in Serial Letter
       0063 of only “Partial Merit” and the costs associated with our Electrical
       Subcontractor (PSW Electric) was the only impact due to the incorrect
       electrical scale. PSW installed the conduit associated with this work and
       LCC-MZT with the help of other subcontractors excavated the trench,
       placed the rebar, concrete encased and backfilled the additional lineal
       footage of the added duct banks. The work was interrupted throughout the
       process by red days, red day schedule changes, impacts from weather due
       to PC-0004 contract extension, and impacts due to the restricted site. The
       proposal submitted for PC 0021 was $464,587.00.

(emphasis in original). LCC-MZT’s May 26, 2017 request for a contracting officer’s final
decision explains that, after further correspondence between the parties, “[t]he
Government sent LCC-MZT an offer to settle on January 5, 2016 for $325,608.00” for PC
0021, and that “LCC-MZT accepted the Government’s offer for PC 0021 - Electrical Scale
Change on February 5, 2016.” LCC-MZT’s May 26, 2017 request for a contracting
officer’s final decision further explains, however:

       The Government arbitrary [sic] reduced the material cost by $5,000.00 and
       the LCC-MZT’s labor cost by $80,000.00. The Government indicated that
       the offer to settle was only the direct cost for the “Design Error” and did not
       include the cost impact for Out of Sequence Work, Stacking of Trades,
       Overtime, Week-end Premium Time, Additional Dewatering, Import of
       Suitable Backfill, Export of Unsuitable Material, Red Days Disruptions, Red
       Day Changes and Impacts due to a restricted Site. . . .

       LCC-MZT had reservations regarding the arbitrary deduction of the costs
       associated with the installation of the additional duct banks and had the
       following understanding with the Contracting Officer, Mr. Dana Bolte

              1) PC0021 and all cost associated with the PC can only be for
              the design error and cannot include any costs associated with
              impacts of installation, government delays, or any other costs
              other than the design error with the scale.

              2) Any additional costs with impacts of installation,
              government delays will be submitted as a separate REA for
              review by the government.

              3) The language within the modification for inclusion of
              PC0021 will state that it is solely for the design error and will
              not exclude LCC-MZT Team IV from submitting a [sic] REA
              for the additional costs associated with the duct bank

                                            161
              installation.

       LCC-MZT prepared REA 041 - Electrical Duct Bank dated February 5, 2016
       (Tab J) and submitted [REA 41] to the Government on February 11, 2016
       for the impacts incurred during the installation for the additional duct banks
       that were due to Government delays, Disruptions to Construction, Loss of
       Production due to Stacking of Trades, Out of Sequence Work, Overtime
       Premium Pay and Week-end Work. The Government responded on
       October 4, 2016 denying REA 041 -- Electrical Duct Banks over four years
       after LCC-MZT submitted the original notification to the Government.

(capitalization and emphasis in original).

      On May 20, 2016, the parties bilaterally executed Modification 20, which increased
the Contract $322,905.00 in relation to “PC 0021 ~ REA RFI 056 Electrical Drawing
Scales.” (capitalization and emphasis in original). Modification 20 stated the following:

       The following items are applicable to this modification:

       (1) The subject contract is hereby modified to compensate the Contractor
       for all additional labor, material, equipment, and associated costs due to the
       incorrectly labeled electrical drawing scales as further defined in the
       Contractor’s Request for Equitable Adjustment (REA) (Serial Letter No.
       0015 dated March 5, 2013 and Serial Letter No. 0026 dated May 17, 2013),
       as negotiated on May 18, 2016. These documents are hereby incorporated
       by reference.

       PC 0021 ~ REA RFI 056 Electrical Drawing Scales
       Increase: $322,905.00

       (2) Extension of time is not required by reason of this modification. All other
       terms and conditions remain unchanged.

       (3) Acceptance of this modification by the contractor constitutes an accord
       and satisfaction and represents payment in full (for both time and money)
       and for any and all costs, impact effect, and for delays and disruptions
       arising out of, or incidental to, the work as herein revised. As a result, the
       total amount of the contract is hereby increased as follows:

       Previous Contract Total:              $12,906,657.25
       New Contract Total:                   $13,229,562.25
       Modification A00020 Total:            $322,905.00

(capitalization and emphasis in original).

                                              162
       At trial, Mr. Mortensen testified on cross-examination that REA 41 had nothing to
do with Modification 00020 (Modification 20). Mr. Mortensen and Department of Justice
attorney Margaret Jantzen had the following colloquy during trial:

       Ms. Jantzen: Did you consider Modification 20 when you were preparing
       this REA [41]?

       Mr. Mortensen: And Modification 20 is?

       Ms. Jantzen: The modification dealing with the electrical duct bank.

       Mr. Mortensen: Two entirely different duct banks, ma’am, in consideration
       of what was being requested.

       Ms. Jantzen: Okay. So it was your understanding that that modification
       didn’t impact this issue?

       Mr. Mortensen: That is correct.

As noted above, however, Modification 20 references “PC 0021 ~ REA RFI 056 Electrical
Drawing Scales” and states that it was for “all additional labor, material, equipment, and
associated costs due to the incorrectly labeled electrical drawing scales as further defined
in the Contractor’s Request for Equitable Adjustment (REA) (Serial Letter No. 0015 dated
March 5, 2013 and Serial Letter No. 0026 dated May 17, 2013).” Therefore, it appears
that Mr. Mortensen was incorrect when he testified during the trial that Modification 20
was not related to REA 41, which also relates to, and requests costs for, the scaling issue
of the electrical duct bank.

       In plaintiff’s post-trial brief, plaintiff argues:

       In agreeing to partial payment, LCC-MZT had the following understanding
       with Mr. Bolte, the Contracting Officer negotiating this issue: (1) All costs to
       be paid shall only be for design error and cannot include any costs
       associated with impacts of installation, government delays or any other
       costs other than the design error with the scale; (2) any additional costs with
       impacts of installation, government delay will be submitted as a separate
       REA for review by the government; and (3) the language within the
       modification for this issue shall state that it is solely for the design error and
       will not exclude LCC-MZT from submitting a REA for the additional costs
       associated with the duct bank installation.

       Despite LCC-MZT’s assertions in its post-trial brief that LCC-MZT and NAVFAC
contracting officer Dana Bolte had agreed, prior to the execution of Modification 20, that
Modification 20 was only an agreement to “partial payment,” and that “any additional costs
with impacts of installation, government delay will be submitted as a separate REA for
review by the government,” Modification 20, which was bilaterally executed, included no

                                                163
language indicating that Modification 20 was not a memorialization of the parties’
complete agreement regarding PC 0021 and the issues related to the incorrect scaling of
the electrical duct bank. To the contrary, Modification 20 states that it is for “all” costs
“associated with the “incorrectly labeled electrical drawing scales,” and includes accord
and satisfaction language. As stated above, “‘[a]s a general rule, the execution by a
contractor of a release which is complete on its face reflects the contractor’s unqualified
acceptance and agreement with its terms and is binding on both parties.’” K-Con Bldg.
Sys., Inc. v. United States, 107 Fed. Cl. at 600 (quoting Clark Mech. Contractors, Inc. v.
United States, 5 Cl. Ct. at 86). Moreover, at trial, no testimony was given to the effect that
despite the execution of Modification 20, the parties agreed that LCC-MZT would be
permitted to recover additional costs related to PC 0021 that were not included in
Modification 20, aside from Mr. Mortensen’s statement that Modification 20 was not
related to REA 41. Therefore, the accord and satisfaction language in Modification 20
bars any additional recovery related to the PC 0021 and the scaling issue of the electrical
duct bank. LCC-MZT is not entitled to any recovery associated with REA 41.

REA 38 – Additional Profit

        In REA 38, LCC-MZT seeks to recover “additional profit,” which it also refers to as
additional “markup,” in the amount of $293,522.56. The narrative for LCC-MZT’s REA 38
states:

       The Change Order Markup rates proposed by LCC-MZT were for changes
       with an aggregate total up to ten percent (10%) of the original contract value
       or $1,059,000.00. LCC-MZT has received Change Orders that total
       $2,224,105.25. LCC-MZT has submitted Proposed Change Requests
       (PCs) that total $556,411.00 and Requests for Equitable Adjustments
       (REAs) that total $4,148,935.26. Therefore, the total modifications, PCs and
       REAs total $6,929,451.51.

The narrative for LCC-MZT’s REA 38 further states that “LCC-MZT is requesting
additional markup on all change orders, PCs and REAs that exceed an aggregate total of
ten percent (10%) the [sic] original contract value [f]or an additional markup of (5%) on
$5,870,451.51.” Plaintiff’s REA 38 in the record before the court does not include any
documentation to support or further explain the totals referenced above which were used
in the narrative to REA 38.

       Plaintiff does not provide the mathematical steps it took to derive the amount
requested in REA 38, however, based on the above, plaintiff appears to have calculated
the $293,522.56 by first subtracting ten percent of the original Contract value of
$10,590,000.00, or $1,590,000.00, from the $6,929,45.51 figure alleged to account “for
all change orders, PCs and REAs,” which subtraction equals $5,870,451.51, and then by
taking five percent of the $5,870,451.51 figure, which equals $293,522.58, which is two
cents higher than the $293,522.56 requested in REA 38.

                                            164
        At the trial, Mr. King, who prepared REA 38, testified as follows on direct
examination from plaintiff’s counsel Mr. Ramseyer regarding how he derived the amount
for the additional markup in REA 38:

       Mr. Ramseyer: All right. So how -- how did you go about calculating the
       amount that was due as contained in REA 38, Exhibit 703?

       Mr. King: At the time of preparation, it included all -- it included the PC 25,
       which was the grounding issue, REAs 1 through 40, and – yeah, and that’s
       – that’s how – and then I subtracted off the 10 percent of the original contract
       amount.

Mr. King also testified that “[t]he total modifications, PCs, and REAs came out to 6.9
million, with the REAs making up 4.148 million and the PCs of 556,411 at the time this
document was prepared in May of 2015.”

        Mr. King also answered in the affirmative at trial when asked if paragraph 4 of the
Contract “formed the basis of your belief” that LCC-MZT is entitled to an additional five
percent profit markup “on amounts exceeding 10 percent” of the original contract value.
Plaintiff’s post-trial brief also states that “[s]uch additional markup is authorized” by
paragraph 4 of the Contract. Paragraph 4 of the Contract states, in part:

       4. Change Order Markup Rates. In accordance with Section 00100, as
       part of the Contractor’s proposal, the contractor shall provide proposed
       modification/change order percentage rates, for field overhead, home office
       overhead, prime’s overhead on subcontractors (for construction work only),
       and proposed profit. Markup rates for design firms will be negotiated when
       needed. The proposed change order markup rates will be awarded as part
       of the contract and will be used as the markup for both additive and
       deductive modifications for both prime and all subcontractors for
       modifications totaling up to a cumulative total value of 10% of the base bid
       amount. Any modification exceeding 10% (cumulative total value) of the
       original contract amount will be negotiated in accordance with FAR Part 15,
       DFARS Part 215, and any other applicable Federal Regulations.

(first emphasis in original; second emphasis added).

        At trial, the president of MZT, Mr. Zatica, testified on cross-examination that LCC-
MZT proposed a three percent markup for additional profit on change orders
modifications. There appears to be no document in the record before the court which
directly confirms that NAVFAC accepted the three percent markup for additional profit
proposed by LCC-MZT, however, that a three percent markup for additional profit was
agreed to by the parties is not in dispute. As discussed below, pursuant to paragraph 4
of the Contract, the contractor was to propose the rate in its bid, and that “[t]he proposed
change order markup rates will be awarded as part of the contract.” Although LCC-MZT’s
bid proposal was not offered or admitted into the record, NAVFAC appears to have

                                            165
accepted LCC-MZT’s bid proposal and awarded LCC-MZT the Contract in this case.
Absent any argument to the contrary, it would follow that NAVFAC and LCC-MZT agreed
to this three percent markup rate for additional profit by way of NAVFAC accepting LCC-
MZT’s proposal and awarding plaintiff the Contract. In addition, several of LCC-MZT’s
REAs submitted to NAVFAC for a contracting officer’s final decision, and included in the
record before the court, include a three percent markup rate for additional profit, on top
of the various underlying costs requested. Nevertheless, as explained in plaintiff’s post-
trial brief, “LCC-MZT submitted this REA based on what it considered to be a reasonable
five percent markup for the amount of the total value of changes exceeding ten percent
of the original contract amount.”

       Defendant disputes plaintiff’s entitlement to a five percent additional profit, as well
as plaintiff’s interpretation of paragraph 4 of the Contract, instead reading paragraph 4 to
provide that the markup rates become negotiable only when an individual modification is
equal to or exceeds 10% of the original Contract value. Defendant asserts that “[n]one of
LCC-MZT’s change orders or REAs exceed this amount.” Defendant further argues that
“LCC-MZT offered no testimony or evidence that there were any discussions regarding a
higher profit margin with NAVFAC, or that it had successfully negotiated a similar profit
rate on any of its other contracts with NAVFAC.” Defendant argues alternatively that

       even if the Court agrees with LCC-MZT’s interpretation of the Contract
       provision, no evidence was presented at trial to support the assertion that
       LCC-MZT would have been able to negotiate a five percent profit rate.
       Rather, the evidence established that LCC-MZT’s base bid included an
       estimated profit amount of 3.57 percent, and that LCC-MZT included a three
       percent profit markup on each of its submitted REAs that include a profit
       markup.

In plaintiff’s post-trial brief, plaintiff argues that defendant’s interpretation “reads the
phrase ‘cumulative total value’ right out of the Contract. To the extent that plaintiff argues
for entitlement to additional profit markup on the twenty-five individual Contract
modifications which were executed throughout the duration of the P-913 project, twenty-
two of the twenty-five Contract modifications included accord and satisfaction language,
thereby barring the award of additional costs. For the three Contract modifications which
did not include accord and satisfaction language, plaintiff has not presented supporting
evidence or argument which would establish that LCC-MZT’s proposed three percent
profit markup was not already incorporated in the total amounts which were awarded in
each of the Contract modifications. Therefore, plaintiff is not entitled to additional profit
markup on the twenty-five modifications to the Contract.

       With respect to the REAs presented to NAVFAC and to this court for which plaintiff
argues in REA 38 for a “reasonable” five percent additional profit markup, as noted above,
several of LCC-MZT’s REAs already include a three percent profit markup on the direct
costs requested in the REAs. Plaintiff has provided no argument to establish that it should
be entitled to an additional five percent on top of the three percent profit markup it has
already requested in its various REAs, and paragraph 4 of the Contract, quoted above,

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does not explicitly provide for an additional negotiated profit markup rate. Furthermore,
the court determined that plaintiff is not entitled to all of the REAs which were submitted
by plaintiff to the court. Aside from the liquidated damages which the court found that
NAVFAC is improperly withholding, in this Opinion, the court has found that LCC-MZT is
entitled only to the costs in REA 29 for the concrete testing required by the stop work
order, in the amount of $250,414.94, and the costs for additional field office overhead in
REA 32 for seventy-six days of excusable, compensable delay in the amount of
$215,691.04. Had either of these entitlements been recognized by NAVFAC during the
course of the P-913 project, the costs would have been awarded through Contract
modifications. Therefore, in accordance with paragraph 4 of the Contract, LCC-MZT
would have been entitled to the three percent additional profit markup for such costs, and
not a negotiated, or “reasonable” five percent, as neither of the underlying amounts
awarded for REA 29 and 32 exceeds, individually or in the aggregate, ten percent
($1,059,000.00) of the original Contract ($10,590,000.00). LCC-MZT, therefore, is entitled
to a three percent profit markup on $250,414.94 in connection with REA 29, which equals
$7,512.45, and a three percent profit markup on $215,691.04 in connection with REA 32,
which equals $6,470.73, for a total additional profit markup of $13,983.18.

REA 35 - Interest Expense for Non-Payment

        REA 35 states that “LCC-MZT is requesting payment of the interest incurred for
Government non-payment.” When submitted in LCC-MZT’s May 28, 2015 request for a
contracting officer’s final decision, REA 35 sought $91,714.53, which appears to be based
on a calculation from April 2014 to March 2015, at an annual interest rate of 5%,
calculated monthly, of “BILLINGS NOT PAID BY OWNER,” as stated in the subheading
in the document attached to REA 35. (capitalization in original). In plaintiff’s REA 35 as
submitted in plaintiff’s May 28, 2015 request for a contracting officer’s final decision,
plaintiff did not request interest in connection with the various REAs plaintiff
simultaneously submitted for a contracting officer’s final decision.

       Chief of the NAVFAC Contracting Office Eileen Mitchell’s August 1, 2016 final
decision addressed the $91,714.53 sought in connection with REA 35, stating:
       Your claim asserts the Government owes LCC-MZT interest on withheld
       payments totaling $91,714.553 without supporting documentation for the
       calculation. I find that the Government does owe you interest, in accordance
       with the Contract Disputes Act and FAR Section 33.208 - Interest on Claims
       for the 135 days extension associated with PC 0025 – Grounding Issue.
       Interest accrued on your claim from May 28, 2015 to time of payment.

(capitalization in original). The August 1, 2016 contracting officer’s final decision awarded
LCC-MZT interest in the amount of $21,290.18 in connection with its granting of the “135
calendar day extension to the contract, or $651,375 [in liquidated damages] (135 days X
$4,413 = $595,755 and 135 days X $412 = $55,620).” The August 1, 2016 contracting
officer’s final decision explained that “FAR clause 52.211-12 Liquidated Damages –
Construction rate in the contract is Phase A $4,413 per day and Phase B $412 per day.”
The award of $21,290.18 in the August 1, 2016 contracting officer’s final decision was

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calculated by tracking Treasury Rates as adjusted for each 6-month period, “as fixed by
the Treasury Secretary,” beginning on May 28, 2015, the first date LCC-MZT submitted
a request for a contracting officer’s final decision.

        The day before trial, however, plaintiff provided to defendant a document with an
entirely revised formula to calculate the interest sought in REA 35.49 In this newly provided
document, plaintiff seeks $50,544.54 of “Total Interest for Non-Payment & Liquidated
Damages,” as well as an additional total of $486,467.29 in “Interest for Outstanding
REAs.” For the portion sought under “Total Interest for Non-Payment & Liquidated
Damages,” LCC-MZT begins the interest calculation on some of the alleged non-payment
as early as 2012. For the portion sought under “Interest for Outstanding REAs” in the new
document, all interest calculations start on May 28, 2015, the date on which LCC-MZT
submitted its initial request for a contracting officer’s final decision.

       In defendant’s post-trial brief, defendant argues that because “[t]he claim
presented by LCC-MZT at trial is vastly different from the claim presented to the
Contracting Officer,” this court lacks jurisdiction to hear the claim. Alternatively, defendant
argues that “if the Court were to determine that it has jurisdiction over the claim and that
LCC-MZT is entitled to interest, it would be entitled to CDA interest,” not Prompt Payment
Act interest, because “the Prompt Payment Act does not require payment of interest when
the Government does not make payment due to a dispute over the amount of payment
due, or over Contract compliance.” (capitalization in original).50 Furthermore, defendant
argues that LCC-MZT is not entitled to any interest on REAs which the court finds to have
no merit.

        Regarding defendant’s first argument, defendant contends that the court lacks
jurisdiction to hear plaintiff’s claim because “[t]he amount of interest currently claimed in
connection with REA 35, as updated and presented to defendant on July 7, 2019, was
never presented to the Contracting Officer as a sum certain.” The United States Court of
Appeals for the Federal Circuit has stated that “‘[t]he CDA [Contract Disputes Act] grants
[the United States Court of Federal Claims] jurisdiction over actions brought on claims
within twelve months of a contracting officer’s final decision.’” K-Con Bldg. Sys., Inc. v.
United States, 778 F.3d 1000, 1005 (Fed. Cir. 2015) (quoting James M. Ellett Constr. Co.
v. United States, 93 F.3d 1537, 1541 (Fed. Cir. 1996) (citing 41 U.S.C. § 609(a))).
“Jurisdiction requires both that a claim meeting certain requirements have been submitted
to the relevant contracting officer and that the contracting officer have issued a final
decision on that claim.” Id. (citation omitted). FAR § 2.101 provides that:

49
   During defendant’s opening argument, Department of Justice attorney Ms. Murdock-
Park stated that “last night, at approximately 6:30 p.m. local time, I received three exhibits
from plaintiffs [sic] which were marked as Exhibits 1519 through 1521. These were
marked as summaries and reserved, We received these documents for the first time last
night.”
50
  It does not appear that the plaintiff raised the issue of entitlement to Prompt Payment
Act interest at trial or in its post-trial brief.
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       Claim means a written demand or written assertion by one of the contracting
       parties seeking, as a matter of right, the payment of money in a sum certain,
       the adjustment or interpretation of contract terms, or other relief arising
       under or relating to the contract. However, a written demand or written
       assertion by the contractor seeking the payment of money exceeding
       $100,000 is not a claim under 41 U.S.C. chapter 71, Contract Disputes, until
       certified as required by the statute. A voucher, invoice, or other routine
       request for payment that is not in dispute when submitted is not a claim.
       The submission may be converted to a claim, by written notice to the
       contracting officer as provided in 33.206(a), if it is disputed either as to
       liability or amount or is not acted upon in a reasonable time.

FAR § 2.101 (2020). “A claim need not ‘be submitted in any particular form or use any
particular wording . . . [, but it must provide] a clear and unequivocal statement that gives
the contracting officer adequate notice of the basis and amount of the claim.’” K-Con Bldg.
Sys., Inc. v. United States, 778 F.3d at 1005 (alterations in original) (quoting Contract
Cleaning Maint., Inc. v. United States, 811 F.2d 585, 592 (Fed. Cir. 1987)); see also
Reflectone, Inc. v. Dalton, 60 F.3d at 1575 (“We hold that sentence [1] of FAR 33.201
sets forth the only three requirements of a non-routine “claim” for money: that it be (1) a
written demand, (2) seeking, as a matter of right, (3) the payment of money in a sum
certain.”).

        Although plaintiff’s submission of REA 35 included in its May 28, 2015 request for
a contracting officer’s final decision provided a different methodology to calculate interest,
REA 35 contained a clear statement of plaintiff’s claim to entitlement to interest at the
time and identified $91,714.53 as the amount to use as a basis for the calculation.
Although the narrative to REA 35 as submitted in the May 28, 2015 request for a
contracting officer’s final decision was minimal, and the contracting officer stated that it
lacked “supporting documentation for the calculation,” the contracting officer was able to
find partial merit for the claim in REA 35. The methodology the contracting officer adopted
to find partial merit is the same methodology plaintiff now suggests using to calculate its
revised interest request with respect to its REAs submitted the court, i.e., by tracking
Treasury Rates as fixed by the Treasury Secretary, and adjusting for each 6-month
period, beginning on May 28, 2015, the date in which LCC-MZT submitted its initial
request for a contracting officer’s final decision.

        Furthermore, a plaintiff’s recovery of interest in this court in connection with a
contract dispute is a statutory obligation which is triggered under the Contract Disputes
Act, provided that a plaintiff’s underlying request for the amount in dispute meets the
jurisdictional threshold requirements of a claim, and provided further, that an amount in
connection with the claim is found to be due to the contractor. The Contract Disputes Act
states: “Interest on an amount found due a contractor shall be paid to the contractor for
the period beginning with the date the contracting officer receives the contractor’s claim,
pursuant to section 7103(a) of this title, until the date of payment of the claim.” 41 U.S.C.
§ 7109(a)(1) (emphasis added). Therefore, although LCC-MZT included interest as a

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stand-alone REA in its May 28, 2015 request for a contracting officer’s final decision, it
was not required to, and the substance, or lack thereof, in plaintiff’s REA 35 does not bar
plaintiff’s recovery of interest to the amounts found due by this court on plaintiff’s various
underlying claims. See, e.g., Essex Electro Eng’rs, Inc. v. United States, 22 Cl. Ct. 757,
766–67 (1991) (“The fact that these submissions [for interest] were properly certified and
purport to be claims is irrelevant. If there were no CDA claims, a separate claim for interest
would be ineffective, and if there had been CDA claims, a separate claim for interest
would normally be a non-sequitur.”).

        Regarding defendant’s second argument, defendant contends the Prompt
Payment Act, 31 U.S.C. §§ 3901-3907 (2018), is not applicable to the interest sought by
plaintiff because, according to defendant, “the Prompt Payment Act does not require
payment of interest when the Government does not make payment due to a dispute over
the amount of payment due, or over Contract compliance,” and “LCC-MZT explained at
trial that REA 35 related to disputed amounts withheld, including amounts withheld for
liquidated damages.” Defendant further contends that “if the Court were to determine that
it has jurisdiction over the claim and that LCC-MZT is entitled to interest, it would be
entitled to CDA interest,” rather than Prompt Payment Act interest. Defendant asserts that
“CDA interest accrues from the date the contracting officer receives a proper claim and
runs until payment of the amount due on the claim received.” Prompt Payment Act
interest, on the other hand, runs from “the day after the required payment date and ending
on the date on which payment is made.” 31 U.S.C. § 3902 (2018).

        The United States Court of Federal Claims and numerous Boards of Contract
Appeals have recognized that the Prompt Payment Act applies only in cases in which no
disagreement exists over the claim. See George Sollitt Constr. Co. v. United States, 64
Fed. Cl. at 304 (“Disputed contract payment amounts are subject to Contract Disputes
Act interest, 41 U.S.C. § 611, not Prompt Payment Act interest.”); see also Woodies
Holdings, L.L.C. v. United States, 143 Fed. Cl. 485, 504 (2019); Bay Cnty, Fla. v. United
States, 114 Fed. Cl. 755, 759 (“Although both the PPA and CDA call for interest to be
paid by the government, the statutes apply in differing circumstances. When there is no
disagreement over a payment to be made under a contract, the PPA applies. If there is a
dispute over a contract claim, the CDA is the appropriate statutory authority and its
interest provisions are applicable to that claim.” (citing Env’t Safety Consultants, Inc. v.
United States, 95 Fed. Cl. 77, 99 (2010), sub. det., 97 Fed. Cl. 190, appeal dismissed,
459 F. App’x 907 (Fed. Cir. 2011))), sub. det., 117 Fed. Cl. 131 (2014); Cargo Carriers,
Inc. v. United States, 34 Fed. Cl. 634, 645 (1995) (holding that there was no waiver of
sovereign immunity to allow Prompt Payment Act interest when nonpayment by the
agency is the result of a dispute with the business concern), aff’d, 135 F.3d 775 (Fed. Cir.
1998); MCI Worldcom Commc’ns, Inc. v. Soc. Sec. Admin., GSBCA No. 16169–SSA, 04–
2 BCA ¶ 32,689, at 161,761, 2004 WL 1798094 (2004) (holding that, “as a matter of law,
any claim for PPA interest on the disputed amount from the date of partial payment to the
date on which the contracting officer received MCI's certified claim of April 4, 2003, must
be denied”), appeal dismissed sub nom. Barnhart v. MCI Worldcom Commc’ns, Inc., 120
F. App’x 321 (Fed. Cir. 2005); Marut Testing & Inspection Servs., Inc. v. Gen. Servs.
Admin., GSBCA No. 15,412,02–2 BCA ¶ 31,945, at 157,824, 2002 WL 1813662

                                            170
(2002) (holding that because the payment amount was in disagreement, Prompt Payment
Act interest did not run upon receipt of the payment request, and awarding CDA interest
from the date the contractor filed its certified CDA claim with the contracting
officer), appeal dismissed, 66 F. App’x 886 (Fed. Cir. 2003). In Laurelwood Homes LLC
v. United States, a Judge of the United States Court of Federal Claims noted:

             Several other judges of this court have acknowledged that the
             PPA is not applicable when there is a dispute over the
             payment in question. E.g., Southern Comfort Builders, Inc. v.
             United States, 67 Fed. Cl. 124, 156 (2005). Similarly, this
             Court adopts the rationale that interest is only available when
             Government payments are “inadvertently late, and not when
             the Government refuses to pay or questions its underlying
             liability.” Inversa, S.A. v. United States, 73 Fed. Cl. 245, 247
             (2006); see also George Sollitt Constr. Co. v. United
             States, 64 Fed. Cl. 229, 304 (2005).

Laurelwood Homes LLC v. United States, 78 Fed. Cl. 290, 292–93 (2007). The court
concurs with the above-cited holdings that Prompt Payment Act interest is not applicable
when there is a dispute over the payment.

        As discussed above in this Opinion, the court found that plaintiff is entitled to
$250,414.94 in connection with REA 29 due to the concrete testing required by the Stop
Work Order. The court also found that plaintiff is entitled to $215,691.04 in connection
with REA 32 for additional field office overhead incurred from the seventy-six days of
excusable, compensable delay for which the court found LCC-MZT entitled. The court
also found that, in connection with REA 38, LCC-MZT is entitled to a three percent profit
markup on the above entitlements for REAs 29 and 32, in the amount of $7,512.45 for
REA 29, and $6,470.73 for REA 32, for a total profit markup of $13,983.18. The total
entitlements for REAs 29, 32 and 38 equal $480,089.16. With respect to these REAs for
which the court has found LCC-MZT entitled, the government disputed such entitlement,
as evidenced in the August 1, 2016 final decision of Chief of the NAVFAC Contracting
Office, Eileen Mitchell, which denied REAs 29, 32, and 38 in full. The court also found
that LCC-MZT is entitled to the remaining contract balance currently withheld, in the form
of liquidated damages, in the amount of $185,346.00. The circumstances in the above-
captioned case with respect to the withholding of payments by NAVFAC are not unlike
the case of George Sollitt, in which a Judge of the United States Court of Federal Claims
stated:

      Even if Sollitt had been granted an equitable adjustment extending the time
      of contract performance, it still would not be entitled to Prompt Payment Act
      interest for the delayed or withheld payment of portions of its monthly
      invoices. Sollitt alleges that the Navy delayed or withheld payments of
      Sollitt’s monthly invoice amounts for two reasons: “anticipated liquidated
      damages” and delayed performance.” The retention of liquidated damages
      is clearly evidenced in the record of invoice payments, and the court notes

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       that this retention constitutes the Navy’s assertion of a dispute over its
       liability for these withheld amounts. . . . [A]ny retention due to delays in
       contract performance also evidences a dispute between the parties as to
       when the Navy was liable for certain portions of Sollitt’s monthly invoices.
       Disputed contract payment amounts are subject to Contract Disputes Act
       interest, 41 U.S.C. § 611 [recodified at 41 U.S.C. § 7109], not Prompt
       Payment Act interest.

George Sollitt Constr. Co. v. United States, 64 Fed. Cl. at 304 (alterations and ellipses
added; internal references omitted) (citing Gutz v. United States, 45 Fed. Cl. 291, 298
(1999)). As discussed throughout this Opinion, NAVFAC, on a number of occasions,
warned LCC-MZT of its authority to assess liquidated damages against LCC-MZT for the
various delays on the project, and ultimately did withhold payments due to the delays. As
in the case in George Sollitt, the various warnings from NAVFAC constitute the
government’s “assertion of a dispute over its liability for these withheld amounts,” and “the
retention of payments” from NAVFAC also evidences a dispute between the parties.” See
id. Therefore, the court finds that LCC-MZT is not entitled to the calculation of interest in
accordance with the Prompt Payment Act, but is entitled to interest in accordance with
the Contract Disputes Act at 41 U.S.C. § 7109(a)(1), which, as noted above, states:
“Interest on an amount found due a contractor shall be paid to the contractor for the period
beginning with the date the contracting officer receives the contractor’s claim, pursuant
to section 7103(a) of this title, until the date of payment of the claim.” 41 U.S.C. §
7109(a)(1) (emphasis added); see also FAR § 2.101 (“[A] written demand or written
assertion by the contractor seeking the payment of money exceeding $100,000 is not a
claim under 41 U.S.C. chapter 71, Contract Disputes, until certified as required by the
statute.”). All of the claims for which the court has found LCC-MZT entitled to payment,
specifically REAs 29, 32 and 38 were submitted and certified to by LCC-MZT in its May
28, 2015 request for a contracting officer’s final decision. May 28, 2015, therefore, is the
date beginning on which LCC-MZT is entitled to interest on all of the amounts to which
this court has found LCC-MZT prevails. See id. With respect to the interest rate, 41 U.S.C.
§ 7109(b) states:

       Interest shall accrue and be paid at a rate which the Secretary of Treasury
       shall specify as applicable for each successive 6-month period. The rate
       shall be determined by the Secretary of Treasury taking into consideration
       current private commercial rates of interest for new loans maturing in
       approximately 5 years.

Id.

       As stated above, the court has found that LCC-MZT is entitled to a total of
$480,089.16for REAs 29, 32 and 38, and $185,346.00 in Contract payments withheld as
liquidated damages. This totals $665,435.16. The following table applies the interest rate
“which the Secretary of Treasury [has] specif[ied] as applicable for each successive 6-
month period,” 41 U.S.C § 7109(b), as adjusted for the amount of days in that period, to

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the amount the court has found LCC-MZT is entitled to, beginning May 28, 2015, and
ending April 23, 2021, the date of the issuance of this Opinion:

 Interest Rate   Interest   Rate   Annual          Amount of Days   Amount        Interest Owed
 Period Begin    Period End        Interest Rate   in Period        Owed          for Period
                                   in Effect
 5/28/2015       6/30/2015         2.125%          34               $665,435.16   $1,317.20

 7/1/2015        12/31/2015        2.375%          184              $665,435.16   $7,966.99

 1/1/2016        6/30/2016         2.500%          182              $665,435.16   $8,272.49

 7/1/2016        12/31/2016        1.875%          184              $665,435.16   $6,289.73

 1/1/2017        6/30/2017         2.500%          181              $665,435.16   $8,249.57

 7/1/2017        12/31/2017        2.375%          184              $665,435.16   $7,966.99

 1/1/2018        6/30/2018         2.625%          181              $665,435.16   $8,662.05

 7/1/2018        12/31/2018        3.500%          184              $665,435.16   $11,740.83

 1/1/2019        6/30/2019         3.625%          181              $665,435.16   $11,961.88

 7/1/2019        12/31/2019        2.625%          184              $665,435.16   $8,805.62

 1/1/2020        6/30/2020         2.125%          182              $665,435.16   $7,031.61

 7/1/2020        12/31/2020        1.125%          184              $665,435.16   $3,773.84

 1/1/2021        4/23/2021         0.875%          112              $665,435.16   $1,786.65

                                                                                  Total Interest:
                                                                                  $93,825.45

                                            CONCLUSION

       As stated above, the court finds that plaintiff is entitled to $250,414.94 in
connection with REA 29 due to the concrete testing required by the Stop Work Order. The
court also finds that plaintiff is entitled to $215,691.04 in connection with REA 32 for
additional field office overhead incurred from the seventy-six days of excusable,
compensable delay to which the court finds LCC-MZT entitled. The court also finds that,
in connection with REA 38, LCC-MZT is entitled to a three percent profit markup on the
above entitlements in REA 29 and 32, in the amount of $7,512.45 for REA 29, and
$6,470.73 for REA 32, for a total profit markup of $13,983.18. The total entitlement for
REAs 29, 32 and 38 equals $480,089.16. Additionally, defendant is currently withholding
$185,346.00 in liquidated damages. The court finds LCC-MZT is entitled to ninety-eight

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total days of excusable delay, resulting in entitlement to all liquidated damages currently
withheld. Therefore, the total entitlement to LCC-MZT prior to interest is $665,435.16.
Finally, the court finds LCC-MZT is entitled to $93,825.45 as interest on $665,435.16
pursuant to REA 35 for a total entitlement to plaintiff of $759,260.61. Based on the record
before the court, the plaintiff has failed to prove its entitlement to its remaining claims.
Many of the claims presented were vague or not substantiated by particularized and clear
invoices in the record, documentation or testimony. Moreover, plaintiff’s expert William
Manginelli made multiple mistakes in his calculations and offered unsupported
conclusions in his expert reports and in his testimony at trial. To the contrary, defendant’s
expert Stephen Weathers was more credible in his expert report and as an expert witness
at trial. The Clerk of the Court shall enter JUDGMENT in the amount of $759,260.61 for
plaintiff.

       IT IS SO ORDERED.
                                                  s/Marian Blank Horn
                                                  MARIAN BLANK HORN
                                                           Judge

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