ASBCA 61524

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) General Dynamics - National Steel ) ASBCA No. 61524 and Shipbuilding Company ) ) Under Contract No. N00024- l 7-C-4426 ) APPEARANCE FOR THE APPELLANT: William M. Pannier. Esq. Pannier Law, PC Thousand Oaks, CA APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. Navy Chief Trial Attorney Brian S. Smith, Esq. Senior Trial Attorney OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE PARTIES' MOTIONS FOR SUMMARY JUDGMENT This appeal involves a contract for appellant General Dynamics - National Steel and Shipbuilding Company (NASSCO) to provide Drydocking Phased Maintenance Availability repairs and alterations onboard USS Makin Island (LHD 08). The contract was a fixed-price contract for NASSCO to accomplish defined work items. However, it also provided for growth work-work that the government might assign in addition to the defined work, which NASSCO committed to perform at a fixed-labor rate and material-burden percentage. The issue in this appeal is whether certain disputed clauses that required reservations of labor and material were for growth work. NASSCO moves for summary judgment, arguing that the disputed clauses unambiguously were pre-priced reservations that capped the defined work, such that it is entitled to an equitable adjustment for any work in excess of the reservations' labor mandays and material costs. The government cross-moves for summary judgment, arguing that the disputed clauses unambiguously were reservations for growth work above and beyond the defined work, such that NASSCO must perform all of the defined work for the fixed price, even if it exceeds the reservations' labor mandays and material costs. We deny both motions because we find that the language of the disputed clauses is ambiguous-and therefore that it is necessary to resort to extrinsic evidence, which raises a genuine issue of material fact.  STA TEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 1. On June 6, 2017, the United States Naval Sea Systems Command (government) awarded Contract No. N00024-l 7-C-4426 (4426 contract) to NASSCO (R4, tab 1 at 1338). The 4426 contract required NASSCO to: [P]repare for and accomplish repair and alterations during the DryDocking Phased Maintenance Availability (DPMA) onboard USS MAKIN ISLAND (LHD 08) as specified in the statement of work provided herein and in accordance with standard items, work item specification package SSP TPPC-LHD8-SWRMC17-CNOl drawings, test procedures, and other detailed data as included in Attachments J-1 and J-2. See Notes A and C. (R4, tab 1 at 1339; app. supp. R4, tab 1 at 1-5) 2. The 4426 contract generally was a fixed-price contract (R4, tab 1 at 2-11, 14). However, NASSCO also committed in Notes A and C to provide reservations of labor and material at a fixed rate for "growth" work. Growth work was tasks that the government might assign in the future in addition to the defined work. (Id. at 1357-59) 3. The 4426 contract contained numerous Work Items (R4, tab 1 at 187-1568), which were individual sets of work requirements to accomplish a specific alteration or repair. Joint Fleet Maintenance Manual (JFMM), VII-4E-6, § Il(A), available at https://www.navsea.navy.mil/Portals/ 103/Documents/SSRAC/4E/FY20/ l 0%2026%20FY 20%20Apendex%204E%20JFMM%2001OCT2018.pdf?ver=2018 10-26-103 93 8-110. In particular, Work Items 311-21-001, 311-22-001, 311-23-002, 311-24-011, 311-25-001, and 311-26-003 (Work Items 21 through 26) addressed Ship Service Diesel Generators (SSDGs) Numbers 1 through 6, D level, respectively (R4, tab 1 at 1418-1568). 4. Paragraph 3 of each Work Item contained the requirements (R4, tab 1 at 1418-1568); see also JFMM, § VII(B )( 4 ). The first several subparagraphs of paragraph 3 (Defined Work Clauses) 1 required NASSCO to accomplish specifically enumerated tasks (defined work) (R4, tab 1 at 1418-1568). Then, paragraph 3 contained a subparagraph mandating a reservation of labor mandays and material costs (Reservation Clauses).