Court Opinion

ID: 2760817
Source: CourtListenerOpinion
Date Created: 2014-12-15 21:00:29.798241+00
Date Added: 2024-06-11T10:51:04.663740
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                             )
                                         )
Mountain Chief Management Services, Inc. )           ASBCA No. 58725
                                         )
Under Contract No. NOOl 78-08-D-5506     )

APPEARANCE FOR THE APPELLANT:                        Mr. Daniel W. Chattin
                                                      Chief Operating Officer

APPEARANCES FOR THE GOVERNMENT:                      Ronald J. Borro, Esq.
                                                      Navy Chief Trial Attorney
                                                     Stephen L. Bacon, Esq.
                                                      Trial Attorney

                  OPINION BY ADMINISTRATIVE JUDGE JAMES

       This appeal arises from the contracting officer's (CO's) decision denying
Mountain Chief Management Services, Inc.' s (MCMS' s) 3 May 2012 claim for
$35,807.32 in travel costs and labor hours allegedly furnished over the maximum
2,000 hours specified for each of four employees under the captioned contract, which
MCMS timely appealed to this Board. The Board has jurisdiction of the appeal under
the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109. The parties elected to
submit their cases upon the record under Board Rule 11. The parties have submitted
Rule 4 and supplemental Rule 4 documents and briefs. The Board is to decide
entitlement only (Bd. corr.).

                                 FINDINGS OF FACT

        1. On 29 May 2008 MCMS and the Naval Surface Warfare Center,
Southeast, Dahlgren, Virginia, entered into multiple award, indefinite delivery,
indefinite quantity contract, No. NOOl 78-08-D-5506 (the contract). The contract
specified professional services from multiple contractors for Navy and Marine Corps
activities by issuance of task orders that were subject to the contract's terms and
conditions. (R4, tab l(a) at 1, 6, 15, 45)

       2. The contract incorporated by reference the FAR 52.243-1, CHANGES-
FIXED-PRICE (AUG 1987), ALTERNATE I (APR 1984), clause, which provided in
pertinent part:

                     (a) The [CO] may at any time, by written order, and
               without notice to the sureties, if any, make changes within
                the general scope of this contract in any one or more of the
                following:

                         ( 1) Description of services to be performed.

                         (2) Time of performance (i.e., hours of the day,
                             days of the week, etc.).

                         (3) Place of performance of the services.

                       (b) If any such change causes an increase or
                decrease in the cost of, or the time required for,
                performance of any part of the work under this contract,
                whether or not changed by the order, the [CO] shall make
                an equitable adjustment in the contract price, the delivery
                schedule, or both, and shall modify the contract.

                        (e) Failure to agree to any adjustment shall be a
                dispute under the Disputes clause. However, nothing in
                this clause shall excuse the Contractor from proceeding
                with the contract as changed.

(R4, tab l(a) at 43) 1

      3. The contract included the SEA 5252.216-9122, LEVEL OF EFFORT
(DEC 2000) clause, which provided in pertinent part:

                       (a) The Contractor agrees to provide the total level
                of effort specified in the next sentence in performance of
                the work described in Sections B and C of this contract.
                The total level of effort for the performance of this contract
                shall be (to be completed for each order) total man-hours
                of direct labor ....

1
    The government asserts: "Because the Contract is 'for architect-engineer or other
        professional services,' FAR 52.243-1, Changes-Fixed-Price, Alternate III
        (Apr 1984) is actually the applicable provision," which modified~ (a) and
        added~ (t) to the Alternate I clause (gov't br. at 4 n. l ). The record includes no
        contract modification to substitute the Alternate III clause (R4, tabs 1, 4-5).
        However, there is no essential difference in their~ (a) provisions and the duties
        of the contractor in~ (t) of Alternate III and are akin to the duties in~ (e) of the
        SEA 5252.216-9122, Level of Effort (Dec 2000) clause (see finding 3).
                                               2
                      (d) The level of effort for this contract shall be
              expended at an average rate of approximately (to be
              identified at the task order level) hours per week. It is
              understood and agreed that the rate of man-hours per
              month may fluctuate in pursuit of the technical objective,
              provided such fluctuation does not result in the use of the
              total man-hours of effort prior to the expiration of the term
              hereof, except as provided in the following paragraph.

                      (e) If, during the term hereof, the Contractor finds it
              necessary to accelerate the expenditure of direct labor to
              such an extent that the total man-hours of effort specified
              above would be used prior to the expiration of the term, the
              Contractor shall notify the Task Order Contracting Officer
              [TOCO] in writing setting forth the acceleration required,
              the probable benefits which would result, and an offer to
              undertake the acceleration at no increase in the estimated
              cost or fee together with an offer, setting forth a proposed
              level of effort, cost breakdown, and proposed fee, for
              continuation of the work until expiration of the term
              hereof. The offer shall provide that the work proposed will
              be subject to the terms and conditions of this contract and
              any additions or changes required by then current law,
              regulations, or directives, and that the offer, with a written
              notice of acceptance by the [TOCO], shall constitute a
              binding contract. The Contractor shall not accelerate any
              effort until receipt of such written approval by the [TOCO].
              Any agreement to accelerate will be formalized by contract
              modification.

(R4, tab l(a) at 18-19)

       4. On 7 September 2010 Ms. Dawn Brown, CO for the Naval Facilities
Engineering Command, Southeast, issued Task Order JMO 1 (TO 1) to MCMS under
the contract to provide engineering technician (ET) and construction management
(CM) services from 27 September 2010 to 26 September 2011 in support of
Humanitarian Assistance Program projects in Haiti (R4, tab 4 at 1-2, at 2, 6, 12 of21).

       5. TOl 's contract line item numbers (CLINs) 5000, 5002, 5004 and 5006
required MCMS to provide two ETs and two CMs for project support; each was to

                                            3
furnish 2,000 hours at $70.48/hr., totaling 8,000 hrs., for a price of $563,840.00 (R4,
tab 4 at I of 2I). CLINs 500I, 5003, 5005 and 5007 are not material to this dispute.

       6. TOI stated: "Contractor employees performing services under this order
will be controlled, directed and supervised at all times by management personnel of
the contractor" (R4, tab 4 at 8, 13 of2I). Notwithstanding the SEA 5252.2I6-9I22,
Level of Effort provision if (d), TOI did not identify an average rate of weekly hours to
be expended (R4, tabs 4, 5).

       7. Of the 8,000 hours TOI specified for CLINs 5000, 5002, 5004 and 5006 (the
ET/CM CLINs), as of 26 July 20I I both parties knew or should have known that
MCMS's invoice Nos. I-IO had billed for 6,672.74 hours (R4, tab I7, subtabs I-10),
leaving I,327.26 (8,000-6,672.74) remaining hours for those CLINs.

       8. On 25 July 20 I I MCMS submitted invoice No. I I for 656 hours under the
ET/CM CLINs (R4, tab 22). Navy Program Analyst Rhonda Grimes's 26 July 20I I
email to MCMS (copied to CO Brown) stated:

               I have rejected July's invoice [No. 11 of 25 July 20I l] and
               there are a few items that I need to cover.

                       First- CLIN 5006 (CM #2) on current invoice OI l
               is billing 176 hours ... ; however, your WA WF [DoD Wide
               Area Workflow] invoice reflects differently, billing for I60
               hours. . . . Please provide a corrected invoice.

                        Third - This contract [TO I] is for 2000 hours per
               position. We are not invoiced/billed for your employee's
               leave or paid holidays, since this is supposed to
               be ... covered as part of your burdened rate.

                      As of 0 I August, there will be 41 workdays
               remaining on this contract, or approximately 328 hours per
               position; however, as currently billed/invoiced, only
               approximately I 72 hours remain[2J per position. Services
               are expected to continue until 26 September.

(R4, tab 20)

2
    The record does not show how those "172 hours" were calculated.
                                          4
     9. MCMS's 26 July 2011 response to Ms. Grimes's email was copied to
CO Brown and stated:

               We have already submitted for employees who have
               rotated out to go back to Florida because they were
               approved to work from home from the ROICC .... We
               have already paid the ETs.... Please advise as to how you
               would like to proceed with the remaining hours.

(R4, tab 23 at 1)

       10. On 4 August 2011 the government paid MCMS's 1August2011 corrected
invoice No. 11 for 624 hours on the ET/CM CLINs (changing CLIN 5006 hours from
176 to 144). On 12 September 2011 the government paid MCMS's invoice No. 12 for
656 hours on the ET/CM CLINs. (R4, tab 17, subtabs 11, 12) The parties knew or
should have known that 47.26 hours remained on the ET/CM CLINs (8,000-(6,672.74
+ 624 + 656)).

         11. CO Brown's 12 September 2011 email to MCMS stated:

              [W]e have another issue with the Labor Invoices [for the
              ET/CM CLINs] .... As the award was for 2000 hours per
              person, we see that we have been billed for more than 2000
              hours already on 3 personnel and nearly 2000 for the
              fourth. Please explain - we have 17 more days beyond the
              last invoice period.

MCMS's email of the same date stated: "We have Invoiced for the hours worked by
our contractors C3J as per the guidance passed down to us." (R4, tab 24 at 1-2)

       12. On 26 September 2011 MCMS submitted invoice No. 13 for 536 hours
under the ET/CM CLINs (app. supp. R4, tab A-4).

         13. MCMS's 29 September 2011 email to CO Brown stated:

              Here is the [26 July 2011] response I sent Rhonda
              [Grimes] concerning Invoice 11 where this issue initially
              came up. Rhonda did not reply to this email and she
              accepted our Invoice [11], which was then Processed as

3
    The record does not show whether the ET/CMs were employees ofMCMS or
         independent contractors.

                                           5
               well. If we were not going to get paid for the time we
               worked, then the contractors would have left at the end of
               the 2000 hrs. We were however, not given that guidance
               and proceeded to work until the 23rd or 26th of Sept.

               We were given guidance to work even when transferring
               back and forth to Florida. We did not decide to do that on
               our own and our Invoices were Approved every time for
               that work.

               Please let me know what [the] next steps are to get this
               Invoice 013 Processed.

(App. supp. R4, tab A-5 at 3-4)

        14. On 29 September 2011 CO Brown rejected MCMS's invoice No. 13,
stating: "MCMS can only bill for the remaining amount on the task order
($4,428.15).£41 No additional until further notice pending Request for Equitable
Adjustment. It appears MCMS has billed for full hours and payment has been made
with exception ofthe $4,428.15." (R4, tab 17, subtab 13 at 5) We find no evidence
that CO Brown approved in writing MCMS's incurrence of any ET/CM hours
exceeding the 8,000 hours specified by TO 1.

         15. MCMS's 30 September 2011 email to CO Brown stated, inter alia:

               First, Mountain Chief has been working outside the
               original task order and has submitted the documentation
               showing the cost associated with change. Second,
               Mountain Chief was direct [sic] to work beyond the 2000
               hours indicated in the original task order CLIN. We will
               provide the email threat directing our CM/ET' s to work
               periodically from their homes in Fl. and to work in Haiti
               through September 23rd.

(App. supp. R4, tab A-6 at 1-2)

       16. On 5 October 2011 MCMS resubmitted invoice No. 13 requesting 47.26
hours for one ET and one CM in September 2011, totaling $3,330.88, which the
government approved on 19 October 2011 (R4, tab 17, subtab 13 at 1, 5-7). MCMS's

4
    The record does not show how CO Brown calculated $4,428.15. At $70.48/hr.
        (finding 5), $4,428.15 corresponds to 62.83 hours, inconsistent with the 47.26
        hours then remaining (finding 10).
                                            6
13 invoices under TOI for the ET/CM CLINs totaled 8,000 hours, for which it was
paid $563,841.12 5 (R4, tab 17).

       17. On 3 May 2012 MCMS submitted a $35,807.32 claim dated 21April2012
alleging $1,359.80 for Mr. Chattin's travel costs, and $34,447.52 for 488.74 labor
hours (536 hours invoiced - 47.26 hours paid on invoice No. 13) exceeding the 8,000
hours specified for the ET/CM CLINs (R4, tab 14).

        18. The CO's 20 March 2013 final decision denied MCMS's claim in its
entirety (R4, tab 16). On 14 June 2103 MCMS timely appealed to the Board, which
appeal was docketed as ASBCA No. 58725.

       19. On 15 July 2014 MCMS advised the government of the withdrawal of
appellant's "$1,300" travel training cost claim (ex. G-1 ).

                              PARTIES' CONTENTIONS

        MCMS implicitly argues 6 that (1):

               The Government directed the hours worked for the four
               employee positions furnished by MCMS. The
               Government controlled their training, their mobilizations
               and demobilizations, authorization to work stateside, and
               where and when they worked in-country [Haiti]. MCMS
               had no control over how many hours its employees in these
               positions worked.

(App. br. at l); that (2) Ms. Grimes's 26 July 2011 statement, "Services are expected
to continue until 26 September" "with the knowledge and consent of the [CO] was not
qualified by the presently funded 2,000 hours per position" and was "with knowledge
that this would require the technicians to work more than 2,000 hours" each (id.
at 1-2); and that (3) "The Navy ... forced MCMS to submit a revised invoice for the
hours remaining of the original 2,000 hours [per employee] even though MCMS was
directed to work more hours" (id. at 7).

       Respondent argues that MCMS has not established a written or constructive
change order for lack of evidence that the government ordered, directed or compelled
MCMS to furnish additional hours; and even ifthe record suggests the issuance of
such order or direction, MCMS did not obtain the written approval to furnish such
hours by an official with authority to bind the government (gov't br. at 6-12).

5
    The $1.12 overage was probably due to rounding of invoice amounts.
6
    Appellant's brief contains no "argument," so designated. The following arguments
        are taken from statements in appellant's brief that cited no record evidence.
                                             7
                                      DECISION

       MCMS has the burden of proof of a constructive change order claim by
establishing that:

                ( 1) [I]t was compelled by the government to perform
                work that was not required by the terms of the contract;
                (2) the person directing the change had contractual
                authority unilaterally to alter the contractor's duties
                under the contract; (3) the contractor's performance
                requirements were enlarged; and (4) the additional
                work was not volunteered, but was directed by a
                government officer.

Northrop Grumman Systems Corp. Space Systems Division, ASBCA No. 54774, 10-2
BCA ii 34,517 at 170,242-43.

      This appeal presents a single issue for decision: Did the government's 26 July
2011 statement to MCMS -

             This contract [TO 1] is for 2000 hours per position ....

                    As of 01 August, there will be 41 workdays
             remaining on this contract, or approximately 328 hours per
             position; however, as currently billed/invoiced, only
             approximately 172 hours remain per position. Services are
             expected to continue until 26 September.

or any other government statement compel MCMS to perform the alleged 488.74
hours exceeding the 8,000 hours specified by TO 1?

       MCMS argues that the government directed the hours worked by MCMS's
ET/CMs, MCMS had no control over how many hours such employees worked, and
Ms. Grimes did not qualify her 26 July 2011 statement, "Services are expected to
continue until 26 September" by the 2,000 hours per CLIN specified by TO 1 and her
statement was "with knowledge that this would require [each ET/CM] to work more
than 2,000 hours." The fatal flaw with these arguments is that they are not
substantiated by any record evidence (see n.6). Indeed, the record evidence refutes
MCMS's arguments.

       TO 1 did not identify an average rate of weekly hours to be expended for
ET/CM services (finding 6). Hence, throughout the performance period MCMS could
incur and bill the 8,000 ET/CM hours at the rate it decided was appropriate. By

                                           8
26 July 2011 both parties knew or had reason to know that MCMS had billed 6,672.74
hours of ET/CM services, leaving I,327.26 hours remaining on TOI (finding 7). On
26 July 20 I I Ms. Grimes stated to MCMS: "Services are expected to continue until
26 September" (finding 8). She did not direct MCMS to expend a specific weekly or
monthly rate for the remaining ET/CM hours during July-September 20 I I.

       MCMS's I2 and 29 September 20I I emails to CO Brown stated, respectively,
that MCMS had invoiced the ET/CM hours "per the guidance passed down to us" and
"We were given guidance to work even when transferring back and forth to Florida"
(findings I I, I3). MCMS did not identify who gave such guidance or when such
guidance was given.

        Ms. Grimes' 26 July 20I I email did not state or infer that if (e) of the contract's
SEA 5252.2I6-9I22, Level of Effort (Dec 2000) clause, which required the written
approval of the task order CO to accelerate TOI effort (finding 3), was not applicable
or should be disregarded. The record contains no evidence that CO Brown approved
in writing MCMS's incurrence of any ET/CM hours exceeding the 8,000 hours
specified by TOI (finding I4).

      We hold that MCMS has failed to prove that the government's July-September
2011 communications regarding invoice billings and payments compelled MCMS to
expend more ET/CM CLIN hours than the 8,000 specified by TOI.

                                     CONCLUSION

       We deny the appeal.

       Dated: 3 December 20 I 4

                                                   Administrati
                                                   Armed Servic11:11111111i..-~
                                                   of Contract Appeals

(Signatures continued)

                                             9
I concur

£~~
Administrative Judge
                                                 RICHARD SHACKLEFORD
                                                 Administrative Judge
Acting Chairman                                  Vice Chairman
Armed Services Board                             Armed Services Board
of Contract Appeals                              of Contract Appeals

      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 58725, Appeal of
Mountain Chief Management Services, Inc., rendered in conformance with the
Board's Charter.

       Dated:

                                                 JEFFREY D. GARDIN
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

                                           10