December 31, 1996
Appeal of
G & G WESTERN PAINTING, INC.
Under Contract No. 475450-94-B-0292
PSBCA No. 3843
APPEARANCE FOR APPELLANT:
Timothy H. Power, Esq.
APPEARANCE FOR RESPONDENT:
Mark E. Dennett, Esq.
OPINION OF THE BOARD
Appellant, G&G Western Painting, Inc., has filed a timely appeal of the Contracting Officer’s final decision denying its claim for $35,573.54 in additional costs allegedly resulting from the lack of a galvanized metal surface on the structure to be painted under its contract with Respondent, the United States Postal Service. At the request of the parties, the appeal is being considered on the record in accordance with 39 C.F.R. §955.12. Only entitlement is at issue.
FINDINGS OF FACT
1. Respondent issued solicitation No. 475450-94-A-0411 on April 28, 1994, requesting proposals to paint the exterior of the bulk mail center (BMC) in Kansas City, Kansas (Appeal File Tab (AF) V).
2. Appellant’s president conducted a site visit of the facility prior to submitting Appellant’s proposal. During the course of this site visit he observed that the existing paint was defective and was in a deteriorated condition. (Deposition of Desipris, pg. (Dep.) 3, 4). He then contacted Respondent’s architect to find out what kind of paint was then on the structure. The architect did not know what kind of paint was on the building. (Dep. 6).
3. Appellant’s president made the assumption, for the purpose of preparing its proposal, that the existing paint was a latex flat exterior paint which could be removed from a galvanized metal surface by waterblasting. He based this assumption on the fact that the solicitation called for application of a latex flat exterior paint as well as the fact that the existing paint had a flat appearance as opposed to a shiny or gloss appearance. (Dep. 6, 7).
4. Although Respondent informed several of the offerors on this solicitation that the facility had been sandblasted on two occasions in the past, this information was not given to Appellant prior to submitting its proposal (AF G; Respondent’s Supplemental Appeal File, Tab (RSAF) CC). The two prior sandblasts had removed the galvanized surface from the metal in many locations on the building (AF N; RSAF X, DD; Dep.18, 19). Since the BMC had an existing coat of paint, visual inspection by Appellant’s president during his site visit did not and could not have disclosed the fact that the building had been sandblasted on two previous occasions, thereby removing the galvanizing from extensive areas of the metal surface (RSAF BB, CC; Declaration (Dec.) of Desipris).
5. Appellant’s offer was substantially lower than other proposals. The ten offers ranged from a high of $298,000 to Appellant’s offer of $122,500. However, Appellant’s offer was $72,500 lower than the next lowest offer. (AF T).
6. By letter dated June 14, 1994, Respondent informed Appellant that its proposal ($122,500) was significantly lower than that of the other offerors as well as lower than the Postal Service estimate. Appellant was requested to review its proposal and verify, in writing, the amount proposed. (AF S). Appellant verified its proposal in writing, by letter dated June 15, 1994 (AF R).
7. Respondent awarded Contract No. 475450-94-B-0292, in the fixed price amount of $122,500, to Appellant on June 27, 1994. The work was to begin on July 2, 1994, and be completed on September 30, 1994 (90 days). (AF Q).
8. The contract included the following relevant General Provisions and specifications:
G.3 DIFFERING SITE CONDITIONS (Clause 11-2) (October 1987).
a. The contractor must promptly, and before the conditions are disturbed, notify the contracting officer in writing of:
1. Subsurface or latent physical conditions at the site differing materially from those indicated in this contract; or
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b. The contracting officer will promptly investigate the conditions. If they are found to differ materially from those indicated or anticipated and will cause an increase or decrease in the contractor’s cost of, or the time required for, performance of any part of the work under this contract (whether or not changed as a result of such conditions), the contractor will be entitled to an equitable adjustment.
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SECTION 09900 - PAINTING
1.3 EXECUTION
E. Surface Preparation: Clean and prepare surfaces to be painted according to the manufacturer’s instructions for each particular substrate condition as specified.
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3. Siding and Soffit, Vehicle and Dock Doors: - Remove all paint from galvanized steel substrate and associated structural steel. Remove coatings to bare galvanized metal and do not distort panel form. Sand blasting will be permitted in preparing the substrate to clean metal. Damage to the profile of the galvanizing shall be as little as feasible and blasting shall not cut into base metal or destroy the galvanizing. 1.5 mil profile will be considered maximum. Damaged panels shall be replaced at no cost to the owner. Due to formed metal shape special care shall be exercised to prevent excessive blasting along corners/ridges. (AF Q).
9. The contract specified that the exterior surface of the BMC facility, beneath the existing paint, was galvanized metal. (RSAF DD; Respondent’s Answer, ¶ 5).
10. Prior to commencing work, on June 30, 1994, Respondent’s project architect informed Appellant’s president that sandblasting would be necessary to remove the existing paint down to the galvanized metal surface. Appellant’s president stated he intended to use waterblasting instead of sandblasting because he believed the water would cause less harm to the galvanized surface than the more abrasive sand. (Dep. 12).
11. Appellant attempted to remove the existing paint by waterblasting but was unable to do so. Appellant then conducted a solvent solubility test on the existing paint and found it to be a chlorinated rubber paint. Waterblasting would not be effective at removing a chlorinated rubber paint. This test also disclosed that the previous sandblasts of the structure had removed the galvanized zinc coating under the test area and left a pitted surface. (Dep. 15-19).
12. In a telephone call on August 22, 1994, followed by a letter dated August 26, 1994, Appellant informed Respondent that previous sandblasts had left a surface which was pitted and was no longer galvanized. Appellant further informed Respondent that it would be necessary to sandblast to remove the existing paint because it was a chlorinated rubber paint, but that further sandblasting would “create a worst [sic] condition.” (Dep. 19, 20; RSAF X).
13. Respondent requested Appellant to sandblast a test area to determine the best way to proceed. After witnessing the results of this test (on September 6, 1994), Respondent acknowledged that sandblasting would “effectively destroy the remaining galvanize” and, therefore, relaxed the specifications by deleting from Specification 09900, Section 1.3E.3 the language “. . . and blasting shall not cut into base metal or destroy the galvanizing.” The specifications were further modified to require Appellant to apply the prime coat to the panels on the same day they were sandblasted. (AF K-M).
14. Utilizing sandblasting to remove the existing paint from the exterior ungalvanized metal surface, Appellant completed the job by November 16, 1994 (AF I). Appellant’s president was on the job site throughout the performance of this contract (Dec. of Desipris).
15. The fact that some areas of the building’s metal surface lacked the specified galvanized coating increased the difficulty of removing the old paint and thereby caused an increase in the amount of time and material needed to sandblast. The increase in time spent sandblasting also increased the rental cost for the sandblasting equipment. The modification requirement to prime the surface immediately after sandblasting created inefficiencies in the surface preparation/ priming operation which likewise increased the time spent in performing these tasks. (Dep. 24-29; Dec. of Desipris).
16. By letter dated December 12, 1994, Appellant indicated it would be submitting a claim representing the increased cost allegedly resulting from the specification modification. Appellant further explained that it considered the lack of galvanizing on the metal surface to constitute a differing site condition that caused increased time and cost of sandblasting and painting. (AF I). On January 5, 1995, Appellant submitted its claim in the amount of $35,573.54, allegedly caused by the modification to the specifications granted by Respondent. Appellant’s claim sought compensation only for those areas where the underlying metal surface no longer had the specified galvanized surface[1]. (AF H; Dep. 21).
17. By final decision dated April 17, 1995, Respondent ‘s contracting officer denied Appellant’s claim without referencing Appellant’s differing site condition allegations (AF B). Appellant timely appealed the contracting officer’s final decision by letter dated July 6, 1995 (AF A).
DECISION
Appellant bases its claim on the lack of a galvanized surface on the metal to be painted under this contract. Appellant argues that this condition constituted a type I differing site condition[2] under the contract’s Differing Site Conditions clause. In the alternative, Appellant argues that Respondent withheld from Appellant (but not other offerors) superior knowledge of the fact that the facility had been sandblasted previously on two occasions.
Respondent argues that Appellant failed to prove that a differing site condition existed and, even if one did exist, Appellant failed to give notice regarding the presence of a differing site condition, as required by the Differing Site Conditions clause. Respondent further argues that if there was a site condition different than that specified in the contract, Appellant should have discovered this condition during its site visit. Finally, Respondent agues that even if there was a differing site condition, Appellant failed to prove it suffered any increase in cost or was otherwise injured.
There is no dispute between the parties that the contract specified that there would be a galvanized metal surface beneath the existing paint on the BMC facility (FOF 9). Respondent argues that there was no differing site condition because the galvanizing was partially present. We have found, however, that many locations on the BMC lacked the specified galvanized metal surface and that this condition increased the difficulty and expense of surface preparation for repainting (FOF 4, 15). Therefore, this was a subsurface condition that differed materially from what was indicated in the contract, i.e., a “type I” differing site condition. Furthermore, Respondent, by its action in relaxing the specification to allow Appellant to sandblast the previously sandblasted and pitted metal surfaces (FOF 13), tacitly recognized the existence of a condition which differed from that which was specified. See The Arthur Painting Co., ASBCA No. 20267, 76-1 BCA ¶ 11,894.
Appellant notified Respondent by telephone on August 22, 1994, and by letter dated August 26, 1994, that previous sandblasts of the facility had left the metal surface pitted and without the galvanizing specified by the contract. Appellant was notifying Respondent of this circumstance to allow Respondent to consider whether the specifications should be modified in light of the actual condition of the metal surface. (FOF 12). In so informing Respondent, Appellant adequately discharged its notice obligations under the Differing Site Conditions clause. Yadkin, Inc., PSBCA No. 2051, 88-3 BCA ¶ 21,090, modified on reconsideration, 89-2 BCA ¶ 21,709.
We find no merit to Respondent’s argument that Appellant should have discovered during its site visit that the facility’s metal surface had been sandblasted on two different occasions and no longer had galvanizing in some areas. Appellant conducted a reasonable site visit and examined what was visible but could not determine the actual subsurface condition (FOF 4). Nothing in the solicitation obligated Appellant, during its site visit, to conduct the type of tests of the metal surface Appellant later conducted. See McCann Company, PSBCA No. 152, 76-2 BCA ¶ 12,219. Although Appellant made an incorrect assumption concerning the existing paint, and thereby incorrectly assumed it could waterblast instead of sandblast to remove that type of paint, Appellant is not seeking any costs associated with using a sandblast method rather than a waterblast method. Instead, Appellant only seeks the increase in cost associated with sandblasting and immediately priming ungalvanized metal as opposed to the lesser sandblasting effort necessary to remove paint from a galvanized metal surface.
Finally, there is no merit to Respondent’s arguments that Appellant did not incur an increase in cost or was not otherwise injured as a result of the differing site condition. The amount of damages is not at issue in this appeal. We have found that Appellant incurred increased material and equipment rental costs, as well as increased labor costs resulting from the increased level of sandblasting necessary to prepare an ungalvanized metal surface. We have further found that the modification to the specifications requiring primer to be immediately placed on the sandblasted surfaces likewise increased the time necessary to perform this task. (FOF 15). We leave it to the parties to negotiate the correct amount of recovery in this appeal.
Having found that there was a “type I” differing site condition, for which Appellant is entitled to an equitable adjustment, there is no need to address Appellant’s superior knowledge arguments.
The appeal is sustained.
William K. Mahn
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
David I. Brochstein
Administrative Judge
Vice Chairman
[1]By letter dated February 10, 1995, Appellant further explained that the lack of galvanizing on the metal’s surface increased the amount of sandblasting necessary to remove the existing paint (AF F).
[2]A “type I differing site condition” is a subsurface or latent physical condition which differs materially from what is indicated in the contract (See Finding of Fact No. (FOF) 8).