ASBCA 63148

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Korte Construction Company ) ASBCA No. 63148 ) Under Contract No. W912BV-19-C-0017 ) APPEARANCE FOR THE APPELLANT: Michael E. Wilson, Esq. Greenfelder, Hemker & Gale, P.C. St. Louis, MO APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney Lauren M. Williams, Esq. Thomas R. Alford, Esq. Engineer Trial Attorneys U.S. Army Engineer District, Tulsa OPINION BY ADMINISTRATIVE JUDGE STINSON ON THE PARTIES’ MOTIONS FOR SUMMARY JUDGMENT Appellant Korte Construction Company (Korte) appeals a contracting officer’s October 22, 2021, final decision denying Korte’s August 24, 2021, claim requesting the government rescind its unilateral contract modification assessing a credit of $493,639.43, in direct and indirect costs for a deductive change to contract work. We have jurisdiction pursuant to the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 7101-7109. The parties submitted opposing motions for summary judgment, responsive and reply briefs, as well as exhibits to be considered in deciding this appeal. 1 For the reasons stated below, appellant’s motion for summary judgment is denied and the government’s motion for summary judgment is granted. 1 “App. mot.” refers to appellant’s March 20, 2023, motion for summary judgment; “gov’t mot.” refers to the government’s March 20, 2023, motion for summary judgment; “app. resp.” refers to appellant’s May 10, 2023, response to the government’s motion for summary judgment; “gov’t resp.” refers to the government’s May 10, 2023, response to appellant’s motion for summary judgment; “app. reply” refers to appellant’s June 9, 2023, reply brief; and “gov’t reply” refers to its June 9, 2023, reply in support of its motion for summary judgment.  SYNOPSIS This appeal presents the issue of whether the government is entitled to a credit under a deductive change request where the contractor alleges it did not include in its cost proposal amounts required to perform work that is the subject of the deductive change request. Korte offers evidence that its mechanical subcontractor, who submitted a bid for the work that was incorporated into the contractor’s cost proposal, determined that the work was not required under the contract, and, accordingly, did not price that work. Korte now seeks to use as a shield the fact that, through incorporation of its subcontractor’s bid into its cost proposal, Korte’s contract price did not include the cost to perform work covered by the deductive change order and, as such, the government is not entitled to a credit for the work not performed. While it is true that, for certain purposes, a subcontractor’s interpretation will be imputed to a contractor if it proves that the subcontractor relied upon that interpretation in submitting its bid, the defect in Korte’s armor is that the contractor is not protected if the interpretation by the subcontractor is indefensible, and here, the evidence Korte offers in its motion for summary judgment establishes that its subcontractor recognized pre-award an ambiguity in the contract regarding whether the work was required to be performed but did not seek clarification regarding that work. Korte suggests that reference to the work in the solicitation was simply a scrivener’s error, one it admittedly had knowledge of during the solicitation process. However, Korte’s motion for summary judgment admits knowledge of an ambiguity in the solicitation, one which appellant was required to raise with the government pre-award but failed to do so. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS The parties submitted a Joint Stipulation of Material Facts (JSMF) in support of their motions for summary judgment. Our statement of facts relies upon, and adopts, certain of the parties’ JSMF, as set forth below. RFP Phase 1 1. On October 11, 2018, the government issued the Phase 1 Request for Proposals (RFP) for Solicitation No. W912BV-18-R-0047 (JSMF ¶ 1; R4, tab 3).