October 6, 2015
Petition for Review of an Order of the District of Columbia
Contract Appeals Board
for Review of a Decision of the District of Columbia Contract
Appeals Board (CAB Nos. D-1369, D-1419 & D-1420)
C. McKay, Jr., Senior Assistant Attorney General for the
District of Columbia, with whom Eugene A. Adams, Interim
Attorney General at the time the brief was filed, Todd S.
Kim, Solicitor General, and Loren L. AliKhan, Deputy
Solicitor General, were on the brief, for petitioner.
Richard K. Rothschild, General Counsel for District of
Columbia Contract Appeals Board, was on the statement in lieu
of brief for respondent.
Douglas L. Patin, with whom Michael J. Cohen was on the
brief, for intervenors.
Blackburne-Rigsby and Easterly, Associate Judges, and Reid,
case came to be heard on the administrative record, a
certified copy of the agency hearing transcript and the
briefs filed, and was argued by counsel. On consideration
whereof, and as set forth in the opinion filed this date, it
is now hereby
and ADJUDGED that the order of the Contract Appeals Board
("CAB") is reversed with respect to the
intervenors' delay claims related to the storm drainage
pipe relocation, the fire pump installation, and the truck
scales wiring. The case is remanded to the CAB to adjust the
award accordingly. The CAB's decision is otherwise
affirmed regarding the claims related to the roof deck
modification, subsurface concrete obstruction,
fire-suppression system permit, and concrete mix.
Blackburne-Rigsby. Associate Judge.
case, a contractor seeks compensation for construction work
that it completed on the Fort Totten Solid Waste Transfer
Facility in Northeast Washington, D.C. for the District of
Columbia, which went beyond the initial parameters of the
construction contract. The primary question presented in this
appeal is whether the contractor's claims for
reimbursement are barred because the contractor failed to
adhere to certain procedural requirements of the contract.
District of Columbia ("Petitioner" or
"District") hired joint venturers Prince
Construction Co., Inc. and W.M. Schlosser Construction Co.,
Inc., ("Intervenors" or
"Prince/Schlosser"), to complete alterations and
repairs to the Fort Totten Solid Waste Transfer Facility.
Unexpected and unbudgeted changes during the course of the
project caused the project to be delayed by nearly one year,
and increased the cost of completing the project by over
one-half million dollars. Prince/Schlosser filed claims with
the District to be compensated for the indirect costs (such
as paying employees and subcontractors to work extended
hours, increased overhead, lost profits, and additional bond
costs) resulting from the delays ("delay claims").
Prince/Schlosser also filed separate claims for additional
uncompensated work it completed during the project.
Principally, the District argues that Prince/Schlosser's
delay claims are procedurally barred under the terms of the
parties' contract because: 1) Prince/Schlosser did not
"within [thirty] days after receipt of a written Change
Order" give the government written notice that it
"intend[ed] to assert a claim, " and 2)
Prince/Schlosser did not submit "cost or pricing data
and [a] certification that the cost or pricing data submitted
was accurate . . . ." On the merits, the District
alternatively argues that it is not responsible for the
direct or indirect costs associated with the claims.
District of Columbia Contract Appeals Board ("CAB")
rejected the District's arguments, found in favor of
Prince/Schlosser, and awarded the contractor a total of $585,
498.98, plus the interest accrued from the date of the filed
claims, pursuant to D.C. Code § 2-359.09 (2012 Repl.).
On review of the record and the District's legal
arguments, we affirm in part. We hold that
Prince/Schlosser's delay claims are not procedurally
barred by the contract because the District was on notice of
the circumstances giving rise to the claims, and therefore
was not prejudiced by the late claims. We also conclude that
submission of data reflecting actual expenses already
incurred instead of "cost and pricing data" does
not bar its claims for reimbursement.
the merits, however, we hold that the CAB erred in awarding
Prince/Schlosser damages for three of its claims: 1) the
delay claim for relocating a storm drainage pipe, 2) the
delay claim for installing a fire pump, and 3) the
"constructive change" claim seeking compensation
for installing wiring to five truck scales. Finally, we
affirm the CAB's award to Prince/Schlosser on its
remaining four claims relating to: 1) a roof deck
modification, 2) subsurface concrete obstruction, 3)
obtaining a fire-suppression system permit, and 4) purchasing
a sulfate-resistant concrete mix. Thus, we reverse the
CAB's decision on three claims, affirm the remaining four
claims, and remand to the CAB to adjust the award
September 13, 2006, the District and Prince/Schlosser entered
into a government construction contract, entitled
"Contract No. POKT-2005-B-0085-CM for Alterations and
Repairs of the Fort Totten Waste Transfer Facility"
("Contract"). "The project included the
construction of a new, three-level building addition,
including foundations, a 'tipping' floor [a floor
where trash from incoming trucks is tipped into tractor
trailers on the ramp below], walls, louvers, roofing, truck
ramps, five truck scales, compaction cranes, and a truck wash
facility." The initial Contract price was $13, 266, 000,
and the project was scheduled to be completed within 275
calendar days, with a set completion date of July 17, 2007.
the course of construction, however, the District directed
Prince/Schlosser to complete additional, previously
unbudgeted work due to unanticipated problems and authorized
price adjustments to compensate Prince/Schlosser for the
additional work, which were reflected in five change orders.
Collectively, the five change orders authorized an increase
to the Contract price of approximately $1, 028, 178, but only
authorized a time extension to the project by one day. The
project did not meet the scheduled deadline and concluded on
April 4, 2008, 261 days after the planned completion date.
five change orders only compensated Prince/Schlosser for the
costs directly associated with the unexpected problems, and
they did not reimburse Prince/Schlosser for the indirect
costs incurred during the additional 261 days of work that
were not budgeted for under the contract. These indirect
costs included paying employees and subcontractors to work
extended hours, increased overhead, lost profits, and
additional bond costs. In May 2008, one month after closing
the project, Prince/Schlosser submitted written notice to the
District that it would be seeking reimbursement for those
additional costs. The parties negotiated in May and November
of 2008, but failed to reach an agreement.
then submitted delay claims to the District's contracting
officer on April 23, 2009, in an effort to obtain
compensation. Prince/Schlosser sought delay claims for
indirect costs in the amount of $1, 099, 325.
Prince/Schlosser also submitted two additional claims for
direct costs on June 24, 2009: 1) $32, 280.67 for the
additional cost of wiring five truck scales; and 2) $8,
908.63 for the additional cost of making a concrete solution
sulfate-resistant.The District's contracting officer did
not approve any of the claims, and Prince/Schlosser appealed
to the CAB.
a hearing before the CAB, the District argued primarily that
Prince/Schlosser's delay claims were barred under the
contract and that, in any event, all of the claims lacked
merit. Specifically, the District asserted that the delay
claims were barred because Prince/Schlosser: 1) failed to
submit written notice of its intended claims within
"[thirty] days after receipt of a written Change Order,
" and 2) failed to submit certified
"cost or pricing data, " which prevented the District
from properly assessing the merits of Prince/Schlosser's
disagreed with the District, and held that
Prince/Schlosser's failure to comply with the thirty-day
notice requirement was not a violation of the Contract
because "[b]oards and courts have generally not strictly
enforced such notice requirements absent a finding that the
government is prejudiced" by the untimely notice. The
CAB concluded that there was no prejudice to the District
here because "the District was well aware of the
operative facts underlying each of the" delay claims
given that Prince/Schlosser "promptly notified the
District" of each event leading to the delays. The CAB
also held that Prince/Schlosser was not required to submit
certified "cost or pricing data" with its delay
claims because it filed the claims after it accrued the
actual costs associated with the delay, and once
Prince/Schlosser incurred "the impact costs by
performing changed work, cost or pricing data [was] no longer
the basis of negotiation of the adjustment." The CAB
determined that Prince/Schlosser complied with the Contract
when it provided the actual breakdown of its indirect costs.
the merits of the claims, the CAB reviewed the Contract,
heard testimony from representatives of both parties as well
as an expert witness who evaluated the schedule delays, and
found that Prince/Schlosser should be awarded damages.
Specifically, the CAB found the District responsible for the
contractor's indirect costs resulting from the additional
work, including: 1) relocating a storm drainage pipe, 2)
installing a fire sprinkler pump, 3) removing a subsurface
concrete obstruction, 4) obtaining a fire-suppression system
permit, and 5) completing a roof deck
modification. It also found the District responsible for
the costs incurred from the unanticipated tasks of wiring
truck scales and using a sulfate-resistant concrete mix. The
CAB calculated the award by adding together
Prince/Schlosser's incurred costs for which the CAB
concluded the District was responsible, which amounted to
$585, 498.98. This petition for review followed.
Standard of Review
interpretation is a legal question, which this court reviews
de novo. Tillery v. District of Columbia
Contract Appeals Bd., 912 A.2d 1169, 1176 (D.C. 2006).
We nonetheless "accord great weight to the [CAB's]
construction of a government contract, so long as that
construction is not unreasonable." Id. at 1175
(quoting Unfoldment, Inc. v. District of Columbia
Contract Appeals Bd., 909 A.2d 204, 208-09 (D.C. 2006))
(alteration in original). In reviewing the CAB's
decision, we "look not only to the case law on which the
[CAB] relied but to other decisions of the United States
Court of Appeals for the Federal Circuit, the former United
States Court of Claims and its successors, and the various
federal boards of contract appeals." District of
Columbia v. Org. for Envtl. Growth, Inc.
("OFERGO I"), 700 A.2d 185, 198 (D.C.
1997); see also Abadie v. District of Columbia Contract
Appeals Bd., 916 A.2d 913, 919 (D.C.
B.Prince/Schlosser's Delay Claims ...