ASBCA 59234

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Jaynes Corporation ) ASBCA No. 59234 ) Under Contract No. W912PL-09-C-OOIO ) APPEARANCE FOR THE APPELLANT: Judith Ward Mattox, Esq. Colorado Springs, CO APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq. Engineer Chief Trial Attorney John F. Bazan, Esq. Engineer Trial Attorney U.S. Army Engineer District, Los Angeles OPINION BY ADMINISTRATIVE JUDGE CLARKE This is a quantum case relating to our 7 May 2013 Rule 12.3 and Rule 11 decision in Jaynes Corporation, ASBCA No. 58385. The Board has jurisdiction pursuant to the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. DISCUSSION The Army Corps of Engineers awarded Contract No. W9l2PL-09-C-OO10 to Jaynes Corporation (Jaynes) on 26 May 2009 to design and build an unmanned aircraft systems operations facility at Creech Air Force Base, Indian Springs, Nevada. Jaynes Corporation, ASBCA No. 58385, 13 BCA ~ 35,311 at 173,348. Jaynes claimed that the government improperly rejected certain pipe to be used in a fire sprinkler system. In our 7 May 2013 decision the Board found "[t]he government changed the contract when it rejected appellant's initial pipe submittal. Appellant is entitled to recover its costs associated with the change, plus CDA interest on that amount from the date of receipt of the claim by the contracting officer." Jaynes, 13 BCA ~ 35,311 at 173,353. We sustained the appeal on entitlement and remanded the matter to the parties to determine quantum. Id. The parties were unable to agree on quantum and on 1 April 2014 we docketed appellant's request that the Board determine quantum as ASBCA No. 59234. Jaynes claims increased costs of $56,305 plus CDA interest from 20 June 2012 (app. br. at 2; app. reply hr. at 7). Although the government challenges certain profit and Jaynes' failure to credit the government with salvage value of the rejected pipe, it does not dispute the accuracy of the itemized costs that Jaynes presents or the 20 June 2012 date. While the government admits that it "must pay Jaynes reasonable costs related to what this constructive change caused Jaynes in damages" (gov't br. at 1), it makes several arguments in its defense of quantum that we briefly discuss. Jaynes' Quantum Numbers Jaynes' 20 June 2012 certified claim is in the amount of $56,305. Jaynes, 13 BCA ii 35,311 at 173,352. This amount is based on Southland Industries, Inc., Jaynes' pipe subcontractor, calculation of the cost of the replacement Wheatland 1 pipe of$50,579.70 (app. br. at 2, ex.Bat 5of11). This amount included a 17% mark-up for "Margin" (app. br., ex.Bat 5of11). Appellant included an affidavit from Mr. Nicolas Sfeir, VP Southland Industries, stating that a "mark-up" of 17% margin was their normal rate for similar government work (id. at 2of11). We interpret margin to include both overhead and profit. Appellant takes Southland's $50,579.70 and calculates its claim as follows: Cost for Material (Schedule 40 Pipe) $50,579 Appellant's Overhead and Profit (10%) $ 5,058 Appellant's Bond and Insurance $ 668 Total $56,305 {App. br. at 2, ex.Bat 5of11) Adjustments to Jaynes' Quantum Numbers In his affidavit, Mr. Sfeir explains that the cost of materials amount of$28,221.39 used above was an estimate and that the actual cost was $27,434.69. Therefore, the $50,579.70 must be reduced by $786.70 for a value of $49,793.00. The claim value is then changed as follows: Cost for Material (Schedule 40 Pipe) $49,793.00 Appellant's Overhead and Profit (10%) $ 4,979.30 Appellant's Bond and Insurance $ 668.00 Total $55,440.30 (App. br., ex.Bat 1 of 11, ex.Cat 13-16of16) 1 The support for this amount states that it is for the rejected Allied pipe, but the invoices and Mr. Sfeir's affidavit establish that Southland used the Wheatland numbers (app. br., ex.Bat 1, 5of11). 2 Salvage Value ofRejected Allied Pipe Appellant states that the salvage value of the rejected Allied pipe is $1,295 (app. br., ex.Bat 9of11).