October 16, 1998
Appeal of
K&P BUILDERS, INC.
LEASE AGREEMENT
PSBCA No. 4122
APPEARANCE FOR APPELLANT:
James J. Fitzgibbons, Esq.
APPEARANCE FOR RESPONDENT:
Jeannette L. Bisson, Esq.
OPINION OF THE BOARD
Appellant, K&P Builders, Inc., has appealed the final decision of the contracting officer denying its claim for $32,290 in additional costs allegedly resulting from Respondent, the United States Postal Service, requiring that a particular flooring subcontractor be used during construction of a post office in Bowie, Maryland. A hearing was held in Washington, DC. Both entitlement and quantum are at issue.
FINDINGS OF FACT
1. On June 5, 1995, Respondent and Appellant entered into a lease agreement in which Appellant agreed to construct and lease to Respondent a post office, to be constructed in accordance with Postal Service specifications, in Bowie, Maryland. The lease term was for twenty years at an annual rental of $384,000. (Joint Stipulation No. (Stip.) 1; Appeal File Tab (AF) 1; Supplemental Appeal File Tab (SAF) 50; Appellant's Exhibit No. (AE) 1).
2. The original construction specifications called for the installation of sealed concrete flooring in the workroom. However, at a 30% design review meeting held on September 7, 1995, Respondent requested a proposal from Appellant to install half-inch asphalt planking rather than sealed concrete on the workroom floor. (Stip. 9, 10; Transcript pages (Tr.) 22, 23; AE 2).
3. In a letter dated February 5, 1996, Appellant submitted a proposal to install asphalt planking on the workroom floor for an increased cost of $48,375, which equated to a $4,855 increase in annual rent. The proposal (which included Appellant's mark-ups), was based on a $42,000 quote from ATEC, which was a construction contractor Appellant contemplated using to construct the post office. (Stip. 11; Tr. 26-29; AF 13; SAF 46; AE 3, 4).
4. At a meeting held on February 6, 1996, Respondent objected to the proposal in the amount of $48,375 and requested that Appellant seek a less costly alternative to install the asphalt planking (Stip. 12, 14, 15; Tr. 30, 31, 164; AE 5).
5. Subsequently, in a letter dated February 23, 1996, Appellant submitted a revised proposal in the amount of $44,400 for installing asphalt planking on the workroom floor. The commensurate increase in annual rent was proposed to be $4,458. This proposal was based on a revised quote of $40,000 Appellant received from ATEC to install the asphalt planking. (Stip. 16; Tr. 87, 88; SAF 43, 46; AE 6).
6. Respondent rejected the February 23, 1996 proposal and began a series of meetings and telephone conversations with Appellant to negotiate the cost of installing asphalt planking (Stip. 17).
7. At one of these meetings, Respondent's project manager provided Appellant with a letter Respondent had previously received from Asphalt Flooring, Inc. This letter stated that Asphalt Flooring, Inc., was a supplier of asphalt planking on other Postal Service projects. Respondent provided this letter to Appellant on an informational basis to indicate an additional potential supplier of asphalt planking. (Tr. 194, 195; AE 7).
8. On February 29, 1996, during a telephone conversation with Respondent, Appellant proposed to install the asphalt planking for $42,900, using its original construction contractor (ATEC). Respondent agreed to this proposal. (Stip. 19, 20; Tr. 204).
9. In a letter dated March 1, 1996, the contracting officer gave Appellant a notice to proceed, and the construction completion date was set for September 1, 1996 (Stip. 6, 21; AF 1, 11).
10. On March 5, 1996, Appellant submitted a formal proposal to Respondent to install asphalt planking in the workroom at a cost of $42,900 and at an increase in annual rent of $4,306. This proposal was included in a modification to the Construction Rider in the lease which added four other items of work, and extended the construction completion date to September 27, 1996. The modification was signed by Appellant on March 25, 1996 and accepted by the contracting officer on September 18, 1996. The modification did not specify that Appellant was to use any particular supplier of asphalt planking. (Stip. 22, 24; AF 3).
11. On March 19, 1996, Appellant entered into a contract with Coakley & Williams for the construction of the Bowie post office. The contract included a liquidated damages provision of $638/day to be paid by Appellant to Coakley & Williams for each business day of delay caused by the "act or negligence of the owner, architect or of a separate contractor employed by the owner." (Stip. 23; SAF 39; AE 16).
12. On August 8, 1996, Coakley & Williams sent a proposed contract to Asphalt Flooring, Inc., seeking its agreement to furnish and install asphalt planking, and to begin installation on September 1, 1996, and complete installation on September 20, 1996. The proposed contract reflected a price of $29,200. Asphalt Flooring, Inc., did not execute the contract and did not install the asphalt flooring. (Stip. 25, 27; SAF 38).
13. An October 24, 1996 modification to the lease's Construction Rider extended the construction completion date to November 19, 1996 (Stip. 26; AF 2).
14. An inspection of the project, conducted on November 27, 1996, disclosed that numerous items, including installation of asphalt planking, had yet to be accomplished (Stip. 27; SAF 32).
15. On December 22, 1996, Coakley & Williams contracted with Professional Flooring Co., Inc., for $38,242.48, to furnish and install asphalt planking on the workroom floor (Stip. 28; SAF 27).
16. On January 7, 1997, Respondent accepted the project and began paying annual rent of $402,449.40 (Stip. 29).
17. On April 7, 1997, Appellant submitted a claim to the contracting officer for an additional $32,390 for installing asphalt planking on the workroom floor. In this claim, Appellant alleged that Respondent was responsible for the additional cost of installing the asphalt planking because it recommended a contractor (Asphalt Flooring, Inc.) that failed to deliver. The amount was stated to be based on the difference in cost quoted by Asphalt Flooring, Inc., and the amount charged by Professional Flooring Co., Inc., to install asphalt planking, and included a claim for thirty days of delay, at $638 per day, representing the daily liquidated damages rate contained in Appellant's contract with Coakley & Williams . (Stip. 32; AF 7).
18. On June 30, 1997, the contracting officer denied Appellant's claim for an additional $32,390 to install the asphalt planking, and Appellant filed a timely appeal (Stip. 33, 35; AF 4, 6).
DECISION
Appellant claims that Respondent encouraged Appellant to use Asphalt Flooring, Inc., as a subcontractor to furnish and install asphalt plank flooring on the workroom floor and that when Asphalt Flooring, Inc., failed to perform, Appellant suffered $32,390 in damages. Respondent argues that it did not require Appellant to use Asphalt Flooring, Inc., as a subcontractor, nor did it expressly or impliedly warrant the ability of Asphalt Flooring, Inc., to perform. In the alternative, Respondent argues that Appellant has failed to establish that Asphalt Flooring, Inc.'s failure to perform caused Appellant to incur any increased costs to perform its contract with Respondent.
Appellant, which is the party seeking recovery, has the burden of proof in this appeal. Lancor Engineering, Inc., PSBCA No. 3948, 97-2 BCA ¶ 29,007; RKM Construction Co., Inc., PSBCA No. 3370, 94-3 BCA ¶ 27,137; Roger H. Elliott, PSBCA No. 3285, 1993 WL 73426 (Feb.12, 1993). Appellant has failed to meet this burden.
Respondent requested and Appellant agreed to substitute asphalt planking on the workroom floor in lieu of the originally specified sealed concrete floor (Findings of Fact Nos. (FOF) 2, 8, 10). Although there was a considerable negotiation between the parties concerning the final price for this modification, the record fails to indicate any attempt by Respondent to impose a particular asphalt planking supplier on Appellant. Nor does the record support an implied or express warranty by Respondent that Asphalt Flooring, Inc., could or would perform the job. At best, the record in this appeal supports only the conclusion that Respondent furnished Appellant the letter from Asphalt Flooring, Inc., to provide another possible supplier without any representations concerning the availability or ability of Asphalt Flooring, Inc., to do the job[1] (FOF 7).
What the record does show is that the parties agreed to modify the contract to have Appellant install asphalt planking at a cost of $42,900, and at an increase in annual rent of $4,306. This amount was proposed by Appellant and was based on a price quote of $40,000 Appellant received from a construction contractor (ATEC), Appellant later decided it would not employ. (FOF 5, 8, 10). Thereafter, Appellant's selected construction contractor, Coakley & Williams, unsuccessfully attempted to contract with Asphalt Flooring, Inc., to furnish and install the flooring (FOF 12). When that effort failed, Coakley & Williams entered into a contract in the amount of $38,242.48 with another asphalt planking supplier and quickly completed the job (FOF 15, 16). On these facts, it has not been shown that Appellant even lost money on installing the asphalt plank flooring and any delays in performance are attributed solely to Appellant's (and Coakley & Williams) failure to get an asphalt planking supplier under contract earlier in the job.
Accordingly, this appeal is denied.
William K. Mahn
Administrative Judge
Board Member
I concur
James A. Cohen
Administrative Judge
Chairman
I concur
David I. Brochstein
Administrative Judge
Vice Chairman