Court Opinion

ID: 2790183
Source: CourtListenerOpinion
Date Created: 2015-03-31 14:00:06.600192+00
Date Added: 2024-06-11T11:28:53.408686
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                       )
                                                  )
AMEC Environment & Infrastructure, Inc.           )      ASBCA No. 58948
                                                  )
Under Contract No. FA8903-06-D-8507               )

APPEARANCES FOR THE APPELLANT:                           David A. Rose, Esq.
                                                         Gary L. Moser, Esq.
                                                          Rose Consulting Law Firm
                                                          Valdosta, GA

APPEARANCES FOR THE GOVERNMENT:                          Lt Col James H. Kennedy III, USAF
                                                          Air Force Chief Trial Attorney
                                                         Christopher M. McNulty, Esq.
                                                         Sarah L. Stanton, Esq.
                                                          Trial Attorneys

          OPINION BY ADMINISTRATIVE JUDGE O'CONNELL ON THE
         GOVERNMENT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

        This matter is before the Board on the government's 8 August 2014 motion for
partial summary judgment pursuant to Board Rule 7(c). Appellant, AMEC
Environment & Infrastructure, Inc. (AMEC), has appealed a contracting officer's final
decision denying AMEC's certified claim on a project for the design and construction
of a building at Andrews Air Force base. The claim consists of two discrete issues:
1) $192,062 for the repair of damaged fiber optic cable; and 2) $28,639 in costs related
to an alleged change in permitting requirements by the Maryland Department of the
Environment (MDE). It is the latter issue that is the subject of the government's
motion. For the reasons stated below, the government's motion is granted.

          STATEMENT OFF ACTS (SOF) FOR PURPOSES OF THE MOTION

         Except as noted, the following material facts are undisputed 1:

1
    In its brief, AMEC disputes only a small number of the 77 paragraphs in the
           government's statement of undisputed facts (nos. 12, 21, 28-30, 32, 38, 41, 44,
           and 46). However, it fails to identify with specificity why it disputes these facts
           and, in most cases, it simply repeats what the government stated in the proposed
           finding. Board Rule 7(c)(2) provides that:

                The parties should explicitly state and support by specific
                evidence all facts and legal arguments necessary to sustain
       1. On 12 April 2006, the Air Force awarded AMEC, then known as AMEC
Earth & Environmental, Inc., a firm-fixed-price, indefinite quantity basic contract,
No. FA8903-06-D-8507, for Heavy Engineering Repair and Construction (R4, tab 1).

       2. On 9 July 2008, the Air Force Center for Engineering and the Environment
(AFCEE) issued Request for Proposal No. FA8903-06-R-9991-R025 (the RFP), which
called for the issuance of a task order under the basic contract for the design and
construction of a new strategic planning and development facility at Andrews Air
Force Base, Maryland (R4, tab 9a).

       3. On 23 October 2008, AFCEE awarded task order No. 16 to AMEC in the
amount of $28,953,273 (R4, tab 3). The task order incorporated the technical
specifications of the RFP into the contract (R4, tab 3 at 10).

       4. Pursuant to the Clean Water Act, 33 U.S.C. § 1251 et seq., and the National
Pollutant Discharge Elimination System permit program, 33 U.S.C. § 1342, to control
discharges into the navigable waters, Maryland construction projects of one acre or
more of earth disturbance must obtain coverage under an Individual or General Permit
for Stormwater Associated with Construction Activity. The Environmental Protection
Agency has delegated to MDE the authority to issue these permits. (R4, tab 9f at 880,
1113, tab 158, ~~ 4-5)

       5. As detailed extensively in the government's brief, the basic contract and the
technical specifications incorporated into the task order contained numerous
provisions that detailed the contractor's responsibility to obtain the stormwater
discharge permit. Among other provisions, they incorporated FAR 52.236-7, PERMITS
AND RESPONSIBILITIES (Nov 1991) (R4, tab 1 at 58, tab 9f at 81 ). This clause
provides in relevant part:

                    The Contractor shall, without additional expense to
             the Government, be responsible for obtaining any
             necessary licenses and permits, and for complying with
             any Federal, State, and municipal laws, codes, and
             regulations applicable to the performance of the work.

       6. At the time AMEC prepared its bid, and at the time that the parties executed
the task order, there was a general permit in place. A general permit is a discharge

             a party's position. Each party should cite to the record and
             attach any additional evidence upon which it relies.... The
             Board may accept a fact properly proposed and supported
             by one party as undisputed, unless the opposing party
             properly responds and establishes that it is in dispute.
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permit that is issued to a class of dischargers. See Code of Maryland Regulations
(COMAR) 26.08.0l.Ol(B)(35). The amount of work involved in obtaining coverage
under an existing general permit versus applying for and obtaining an individual
permit is disputed. (See, e.g., R4, tab 158, if 7) For purposes of this motion, we will
assume that there is a significant amount of additional work to obtain an individual
permit.

       7. The technical specifications for the RFP (as incorporated in the task order)
referenced the contractor obtaining coverage under the general permit, including the
following:

                1.6.10    STORM WATER DISCHARGE PERMIT AND
                          STORMWATER POLLUTION PREVENTION
                          PLAN

                          In conjunction with the Construction Officer, the
                          Contractor shall apply for and obtain coverage
                          under State of Maryland MDE General Permit
                          for Discharges of Storm Water from
                          Construction Activities when 1 or more acres (or
                          0.4 or more hectares) ofland area are disturbed
                          by construction or related construction support
                          operations, including clearing, grubbing,
                          grading, excavation, soil or gravel lay down
                          areas, and demolition that exposes soil.

(R4, tab 9f at 81) There does not appear to be any reference in the technical
specifications to an individual permit.

       8. The crux of the problem here is that the existing general permit,
No. MDRl 0, expired on 31 December 2008, a little more than two months after task
order execution. This permit clearly stated that it would expire on that date. 2 (General
NPDES Permit Number MDRlO (MDRlO), cover page). It also stated that MDE had
the authority to require an individual permit (MDRlO at 1).

       9. A new General Permit for Stormwater Associated with Construction
Activity was set to take effect on 1 January 2009, but it did not due to a "legal
challenge" on 31 December 2008. The legal challenge resolved on 13 July 2009, but

2
    By Order dated 13 January 2015, the Board directed the parties to file a copy of the
        general permit. The Air Force filed the general permit with the Board on
        27 January 2015. By letter to the Board dated 13 February 2015, AMEC
        confirmed that the permit filed by the Air Force was the general permit that was
        in effect until 31 December 2008.
                                             3
between 1 January 2009 and 13 July 2009, MDE required all applicants to apply for
and obtain an individual permit. (R4, tab 158, ~ 4)

       10. These events not only caught AMEC by surprise but, according to AMEC,
both the legal challenge and the non-renewal of the general permit caught MDE by
surprise as well (compl. ~ 4 ). AMEC does not allege that the government knew about
these events in advance and/or caused the non-renewal of the general permit.

        11. MDRlO provided that a contractor that wished to obtain coverage under the
permit must submit an application, referred to as a notice of intent, that contained
various information about the project (MDRlO at 2-3). It is undisputed that, if AMEC
or any contractor had submitted a valid notice of intent and application for coverage
under the existing general permit prior to 1 January 2009, it would not have been
required to apply for an individual permit (R4, tab 15 8, ~ 11 ). It is not entirely clear
when AMEC applied for an individual permit but it is undisputed that it was after
1 January (see, e.g., R4, tab 15) (AMEC letter to Air Force dated 13 February 2009
stating that individual permit would be required).

       12. In its proposal for the task order, AMEC represented that its "local
professionals" in its northern Virginia office were "well versed in the environmental
requirements for this project in Maryland." Further, it stated that its "knowledge of the
local environmental regulations and permitting requirements will help us
prepare ... permit applications that will streamline the permitting process." (R4, tab 11
at 29-30)

       13. On 26 September 2011, AMEC submitted a request for equitable
adjustment seeking costs related to the permitting issue that it estimated at $26,341
(R4, tab 76 at 1-6). On 20 March 2013, AMEC submitted a certified claim seeking
$28,639 related to the permitting issue (R4, tab 82). The contracting officer denied the
claim in a decision dated 8 July 2013 (R4, tab 83 at 1-7).

                                       DECISION

        Summary judgment is appropriate when there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). When considering a motion for
summary judgment, the Board's function is not to weigh the evidence and determine
the truth of the matter but to determine whether there is a genuine issue for trial. Id.
at 249. The moving party bears the burden of establishing the absence of any genuine
issue of material fact and all significant doubt over factual issues must be resolved in
favor of the party opposing summary judgment. However, the party opposing
summary judgment must show an evidentiary conflict on the record; mere denials or
conclusory statements are not sufficient. Mingus Constructors, Inc. v. United States,
812 F.2d 1387, 1390-91 (Fed. Cir. 1987).

                                            4
       The most cogent explanation of AMEC's legal theory is contained in the REA it
submitted to the contracting officer and later incorporated in its claim. (AMEC's
complaint responds to certain paragraphs in the contracting officer's final decision but
does not contain a recitation of the facts or an explanation of its legal theory.
Similarly, its brief contains no meaningful recitation of the facts or law from its
perspective.) According to the REA, AMEC is entitled to recover under a constructive
change theory. (R4, tab 76 at 1)

       The Court of Appeals for the Federal Circuit recently considered a claim for a
constructive change in a case involving similar facts. In Bell/Heery v. United States,
the contract for the design/build of a federal correctional institute required the
contractor to perform cut-to-fill operations in compliance with the rules and
regulations of the New Hampshire Department of Environmental Sciences.
Bell/Heery, 739 F.3d 1324, 1326 (Fed. Cir. 2014). These requirements included
obtaining and complying with an Alteration of Terrain (AOT) permit. Id. at 1326-27.
According to the complaint, the state agency would not allow the contractor to perform
cut-to-fill operations in the manner upon which the contractor calculated its bid and it
imposed numerous restrictions that went beyond the standard AOT permit
requirements. Id. at 1329. The contract in Bell/Heery contained the same Permits and
Responsibilities clause as the contract in this case. Id. at 1327.

       The Federal Circuit rejected the contractor's claim for a constructive change.
As the Court of Appeals observed, to demonstrate a constructive change, the contractor
must show: (1) that it performed work beyond the contract requirements; and (2) that
the additional work was ordered, expressly or impliedly by the government.
Bell/Heery, 739 F.3d at 1335. The Court of Appeals held that the complaint solely
alleged that the actions of the state caused the contractor to incur the additional costs,
and that the contractor failed to allege that the Federal Government demanded
additional work beyond that required by the contract. Id.

        The Federal Circuit's opinion in Bell/Heery governs this case. The additional
work that AMEC contends it performed arose as a result of a change in the state
permitting requirements (SOF ~ 9). AMEC does not allege that the Federal
government played any role in the non-renewal of the general permit. AMEC also
does not allege that the Federal government required AMEC to perform any work
beyond that required by the task order. In fact, AMEC's complaint affirmatively states
that "[t]he physical requirements to implement erosion controls in accordance with
MDE standards and Best Management Practices did not change" and AMEC did not
request costs for any such work. To the contrary, the complaint states that its claim is
solely for the additional time, expenses and professional services required to obtain the
individual permit from MDE. (Compl. at 1-2) Under these facts, AMEC cannot
recover for a constructive change. Bell/Heery, 739 F.3d at 1335.

                                            5
       To the extent that AMEC's complaint could be read as asserting a theory other
than constructive change, we observe that the Federal Circuit in Bell/Heery also
rejected the contractor's claim for relief based on a breach of contract. The Court of
Federal Claims had rejected this contention, holding:

              [T]hat the Permits and Responsibilities clause clearly and
              unambiguously allocated the costs for complying with all
              permit requirements solely to BH because that clause
              expressly states that "[t]he Contractor shall, without
              additional expense to the Government, be responsible for
              obtaining any necessary licenses and permits, and/or
              complying with any Federal, State, and municipal laws,
              codes, and regulations applicable to the performance of the
              work .... "

Bell/Heery, 739 F.3d at 1331. The Federal Circuit affirmed, holding that because "the
Permits and Responsibilities clause ... unequivocally assigns all of the risk for
complying with the permitting requirements" to the contractor without additional cost
to the government and because the contractor had failed to identify any countervailing
contractual duty, the trial court correctly dismissed the contractor's breach of contract
claim. Id. at 1334.

       AMEC does not address the Permits and Responsibilities clause in its brief.
However, it seems to contend that, because the contract referenced the procedures that
were in place for obtaining coverage under the general permit, it should be
compensated for any work beyond obtaining such coverage. But it is undisputed that
AMEC was required to obtain an NPDES permit to perform the contract work and that
the existing permit expired on 31 December 2008. Thus, if AMEC were unable to
submit a notice of intent seeking coverage under the old permit by 31 December 2008,
it would have had to obtain a permit under whatever procedures MDE implemented on
1 January 2009. AMEC seems to have assumed that those procedures would be no
more burdensome than the procedures that were in place until 31 December 2008. But
the government made no such representation, and the contract provided no assurance
that AMEC would be compensated for increased permitting costs after 1 January 2009.

       The Permits and Responsibilities clause addressed costs incurred in obtaining
permits and it clearly required AMEC to obtain the necessary permits at no additional
expense to the government. Because the Permits and Responsibilities clause placed
this burden on the contractor, as a matter of law, it may not recover any additional
expenses from the government.

                                            6
                                    CONCLUSION

       For the foregoing reasons, the government's motion for partial summary
judgment is granted and the appeal is denied with respect to the claim for additional
costs associated with permitting requirements.

       Dated: 16 March 2015

                                                lrJJkL~~
                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

                                                 I concur

                                      ---AA:/
I concur

d:~~
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. 58948, Appeal of AMEC
Environment & Infrastructure, Inc., rendered in conformance with the Board's Charter.

       Dated:

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

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