CBCA 5194

DENIED: March 11, 2021 CBCA 5194, 5938 SRM GROUP, INC., Appellant, v. DEPARTMENT OF HOMELAND SECURITY, Respondent. G. Scott Walters of Smith, Currie & Hancock LLP, Atlanta, GA, counsel for Appellant. James C. Caine and Stephanie Kearney-Quilling, Office of Chief Counsel, Federal Law Enforcement Training Centers, Department of Homeland Security, Glynco, GA, counsel for Respondent. Before Board Judges SOMERS (Chair), HYATT, and LESTER. SOMERS, Board Judge. SRM Group, Inc (SRM) seeks an equitable adjustment for costs incurred due to modification of a contract awarded by the Department of Homeland Security (DHS or the Government). SRM provided housing management and other services for eight buildings at a law enforcement training center. DHS removed two buildings from the scope of the contract, resulting in a downward adjustment of the contract price. A few months later, due to an unanticipated increased need for these services, the contracting officer sought to add those buildings back into the scope of the contract. When the parties could not agree, the contracting officer, using a bilateral modification, added the buildings back into the contract. SRM submitted a claim for an equitable adjustment in the amount of $2,644,968. Following CBCA 5194, 5938 2 further negotiations, SRM submitted a subsequent claim. We find that the contractor has been paid all it is entitled to receive and therefore deny the claims. Background On June 28, 2012, DHS awarded a firm-fixed price, multi-year contract to SRM, an 8(a) certified small disadvantaged business. Under this contract, DHS agreed to pay SRM $1,710,486.50 for the base year, with increasing amounts per option year, resulting in a total contract award of $36,649,908.50. The contract required SRM to provide housing management services at the DHS Federal Law Enforcement Training Center (FLETC) in Glynco, Georgia. These services, identified in the contract by contract line item numbers (CLINs), included custodial services, basic maintenance, and desk clerk services, managed by SRM personnel. SRM would provide these services in dormitories located in eight buildings on the FLETC campus, in addition to public areas in other buildings. The contract identified Buildings 185, 186, and 187 as leased dorms, with a total of 900 suite-type rooms (300 per building). Buildings 71, 95, 96, 210, 275, and 277, located on the main campus, included a total of 1199 dormitory-type rooms. SRM would also replace equipment, such as microwaves or coffee pots, or seek material reimbursement for service work requests, on a fixed-price basis, not to exceed a specified amount. The contract incorporated Federal Acquisition Regulation (FAR) contract clauses FAR 52.243-1, “Changes-Fixed-Price” Alt. II, and FAR 52.212-4, “Contract Terms and Conditions – Commercial Items.” Pursuant to the contract clauses, “changes in the terms and conditions of this contract may be made only by written agreement of the parties.” On July 15, 2013, the parties modified the contract through modification P00009 (mod. 9). The modification “removed main campus dorms 275 & 277 from this contract beginning FY14 and continuing through FY17 due to a significant decrease in occupancy rates.” Mod. 9 removed dorms 275 and 277 from the scope of the contract, decreasing the contract by $1,173,062.25, for a new total amount for the contract of $36,627,997.87. Mod. 9 also increased the per-room unit price for room cleaning in the remaining dorms from $5 to $6. In early December 2013, the contracting officer informed SRM that DHS wished to modify the contract by adding dorms 275 and 277 back into the contract. SRM submitted its price and the parties negotiated. Although SRM believes that the parties reached a tentative verbal agreement on the price, the parties never formalized that agreement in writing. Rather, a new contracting officer presented SRM a proposed bilateral modification, which increased the contract value by $744,615.40, and added an additional CLIN to cover the one-time cost of bringing the buildings back in scope. SRM did not agree, so the contracting officer modified the contract through unilateral modification (mod. 16). CBCA 5194, 5938 3 On September 4, 2014, SRM submitted a certified request for an equitable adjustment (REA) for $2,644,968.