July 12, 1994
Appeal of
PINNER CONSTRUCTION COMPANY, INC.
Under Contract No. 059984-86-V-0304
PSBCA No. 3377
APPEARANCE FOR APPELLANT:
Thomas H. Edwards, Esq.
APPEARANCE FOR RESPONDENT:
Doris Godinez-Phillips, Esq.
OPINION OF THE BOARD
This appeal is taken from a final decision of a Contracting Officer denying $26,590.62 of Appellant's quantum claim of $38,155.67. At the election of the parties the appeal is being decided on the record without a hearing.
BACKGROUND
In a prior decision (Pinner Construction Company, Inc.) PSBCA Nos. 2425, 2470 and 2543, 91-3 BCA ¶ 24,143 this Board decided several claims or portions of claims which were in dispute between the parties. One of the claims involved a differing site condition encountered by Appellant ("Pinner"), a Postal Service contractor, when Pinner's earthwork and grading subcontractor, Howard Contracting, Inc. ("Howard") discovered demolition debris at the site for the construction of the Oakwood Station located in Los Angeles, California. Both entitlement and quantum issues were litigated, although in regard to the differing site condition portion of the appeals, Respondent agreed that Pinner had indeed encountered such a condition.
Respondent advocated a total cost approach in determining the amount of equitable adjustment due Pinner for the costs encountered by Howard as a result of the differing site condition. Utilizing that approach, as supported by a Postal Service audit, Respondent contended that Howard's portion of the extra costs incurred totaled $47,110.06. Pinner advocated the use of a modified total cost approach in ascertaining Howard's extra costs. Pinner's method of calculation divided Howard's contract into five phases and applied the total cost approach to only two of the five phases. Based on this calculation Pinner contended Howard's extra cost incurred attributable to the differing site condition totaled $79,948.87.
In the prior decision the Board rejected Respondent's total cost approach due to a soil removal estimate which used erroneous elevations and erroneous equipment rental costs. The Board also rejected Pinner's approach as a basis for calculating the equitable adjustment, and instead determined that Pinner was entitled to payment for 236 additional truck trips needed to export the soil laden debris from the work site. The appeal was remanded to the parties for final negotiation of the amount Appellant was entitled to recover for the additional 236 truck trips.
No timely request for reconsideration of the decision was made by either party and they proceeded to negotiation of the final equitable adjustment under the contract. The parties were able to negotiate a settlement of all amounts in dispute except for the portion of the claim covering the extra costs incurred by Howard. On September 16, 1992, the Contracting Officer issued his final decision on this matter which included awarding Appellant an additional amount of $1746.19 on behalf of Howard. This amount represented the cost of 236 additional truck trips ($42,421.00) plus overhead and profit ($6435.25) less an amount previously paid to Pinner for Howard's costs ($47,110.06).
The amount presently in dispute between the parties, is $26,590.62,[1] which Appellant seeks to recover in this appeal.
DECISION
In its appeal Appellant contends that since the Board rejected Respondent's total cost method of calculation, based in part on testimony by
Appellant's expert as to elevations shown on a contract grading plan, it therefore intended to accept Appellant's modified total cost approach when it determined that Appellant was entitled to payment for 236 additional truck trips for exporting debris from the work site.[2] Appellant's contention is incorrect. The summary of the decision specifically stated that "Appellant is entitled to payment for the 236 additional truck trips to have debris hauled from the project site less that amount already granted by the Contracting Officer." It thereafter directed the parties to recalculate equipment rental rates utilizing Caltrans rates. The decision thereafter addressed the issues of contract extension, liquidated damages and profit on daily delay costs. The summary then specifically stated "The appeal is otherwise denied." Nowhere in the summary or discussion prior to the summary did the Board state that Pinner, on behalf of Howard, was entitled to anything more than payment for the additional 236 truck trips.[3]
Appellant's modified total cost approach was not accepted. However, rather than reject Appellant's claim on behalf of Howard for lack of proof, [4] and especially in light of Respondent's concession that a differing site condition was encountered, the Board determined on the basis of the evidence presented that payment should be made for the 236 extra truckloads of debris exported. Thus, a basis of negotiation was provided to the parties to reach an equitable adjustment on the differing site condition claim.
While the calculation of the adjustment may not have made Howard whole for all its extra costs, such as inefficiencies and rework, Appellant's proof on these latter points was general in nature and imprecise. Additionally it was not readily quantifiable.
In its calculation of the added amount due Appellant for Howard's additional work Respondent utilized Appellant's cost figures for the period that Howard hauled the debris from the site. Respondent calculated the added costs to be $179.75 per trip.[5] Appellant strenuously objects to Respondent's calculation but has provided no alternate calculation other than the continued
espousal of its modified total cost approach. Accordingly the $179.75 per trip amount is accepted as a reasonable amount.
Appellant has been paid the total amount due for the added trips, plus overhead, profit and commission, an amount of $49,030.87. Accordingly, Appellant is entitled to no additional payment. The appeal is denied.
James D. Finn, Jr.
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Board Member
[1]Appellant's earlier claim of $79,948.07 was
reduced downward to $73,029.54 as the result of the Board decision, thus
reducing the cost difference between the parties to $25,919.48. The addition of Pinner's commission and
credit for the added amount allowed in the Contracting Officer's September 1992
decision calculates to $26,590.62.
[2]Total cost and modified total cost theories of
recovery are looked upon by both Courts and Board with disfavor. S.W. Electronics & Mfg. Corp. v.
United States, 655 F.2d 1078 (Ct. Cl. 1981); J.D. Hedin Const. Co. v.
United States, 347 F.2d 235 (Ct. Cl. 1965); J.W. Bateson Co., Inc.,
ASBCA No. 22337, 78-2 BCA ¶ 13,523.
A total cost theory is tolerated only when no other mode of recovery is
available and when the reliability of the supporting evidence is substantiated G.M.
Shupe, Inc. v. United States, 5 Cl.
Ct. 662 (1984).
[3]Appellant intimates that limiting recovery to the
236 truck trips is illogical as neither party advocated such an approach in
measuring the amount of recovery. The
Board however is not limited to the parties' theories of recovery in
determining the amount of equitable adjustment.
[4]See James A. Boyajian v. United States,
191 Ct. Cl. 233, 245 (1970), and cases cited therein.