CBCA 5618

GRANTED IN PART: July 9, 2018 CBCA 5618 INDUSTRIAL MAINTENANCE SERVICES, INC., Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Brenda S. Soper, President of Industrial Maintenance Services, Inc., Escanaba, MI, appearing for Appellant. David G. Fagan, Office of General Counsel, Department of Veterans Affairs, Portland, OR, counsel for Respondent. Before Board Judges SOMERS (Chair), VERGILIO, and LESTER. VERGILIO, Board Judge. The contractor, Industrial Maintenance Services, Inc., seeks an additional $5633.01 from the Department of Veterans Affairs (agency) for a change order under a contract. Particular direct costs, overhead and fees, and profit are at issue in the quantum phase of this dispute involving a Changes clause and the agency’s supplement to the Changes clause, which specifies that a contractor’s overhead and fee percentages shall be considered to include field and office supervisors and assistants (the contractor initially sought recovery for such individuals as direct costs), and that no separate allowance will be made for these costs. The contractor bears the burden of proof. The agency contends that the contractor has failed to meet its burden for some of the direct costs, and that the contractor uses the incorrect dollar value for the work impacted by the change, which is a factor when calculating overhead and profit. CBCA 5618 2 A change order extended the time for performance by five calendar days because of altered and added work. Of the costs here at issue, the agency does not dispute payment of $602.53 (for direct costs, plus markups), which the contractor is to receive. The contractor has not supported payment for a portable toilet (not payable as a direct cost under the contract), or forklift and fuel charges (both not shown to be directly related to or impacted by the change order). The contractor has not demonstrated either the dollar value of impacted work (beyond that of the work altered and added by the change order) or that additional payment for overhead or profit is warranted. The Board denies recovery on those items. Discussion Basic facts are detailed in the underlying opinion on entitlement, Industrial Maintenance Services, Inc. v. Department of Veterans Affairs, CBCA 5618, 17-1 BCA ¶ 36,850, and supplemented here as necessary. The contract contains a Changes clause (JUN 2017), 48 CFR 52.243-4 (2015), and the agency’s supplement thereto, VAAR 852.236-88 (JUL 2002), 48 CFR 852.236-88(b) (2017), which provides, in pertinent part: (4) Allowances not to exceed 10 percent each for overhead and profit for the party performing the work will be based on the value of labor, material, and use of construction equipment required to accomplish the change. As the value of the change increases, a declining scale will be used in negotiating the percentage of overhead and profit. Allowable percentages on changes will not exceed the following: 10 percent overhead and 10 percent profit on the first $20,000 . . . . Profit shall be computed by multiplying the profit percentage by the sum of the direct costs and computed overhead costs. .... (10) Overhead and contractor’s fee percentages shall be considered to include insurance other than mentioned herein, field and office supervisors and assistants, security police, use of small tools, incidental job burdens, and general home office expenses and no separate allowance will be made therefore. Assistants to office supervisors include all clerical, stenographic and general office help. Incidental job burdens include, but are not necessarily limited to, office equipment and supplies, temporary toilets, telephone and conformance to OSHA requirements. Items such as, but not necessarily limited to, review and coordination, estimating and expediting relative to contract changes are associated with field and office supervision and are considered to be included in the contractor’s overhead and/or fee percentage. CBCA 5618 3 Appeal File, Exhibit 2 at 28-30. The contractor separately has been compensated for subcontractor work; at issue is “the value of labor, material, and use of construction equipment required to accomplish the change”–direct and impact costs plus markups for overhead and profit.