ASBCA 61493

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Watts Constructors, LLC ) ASBCA No. 61493 ) Under Contract No. W91238-14-C-0040 ) APPEARANCES FOR THE APPELLANT: Jason R. Thornton, Esq. Jeffrey B. Baird, Esq. Daniel P. Scholz, Esq. Finch, Thornton & Baird, LLP San Diego, CA APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney A.L. Faustino, Esq. Robert W. Scharf, Esq. Engineer Trial Attorneys U.S. Army Engineer District, Sacramento OPINION BY ADMINISTRATIVE JUDGE PROUTY Before us is a dispute about whether the terms of the above-captioned contract (the contract) for the construction of several buildings required appellant, Watts Constructors, LLC’s (Watts), electrical subcontractor to run electrical power lines in the buildings through rigid conduit as opposed to using more economical integrated metal clad (MC) cable. 1 Watts’s electrical subcontractor, Helix Electric, Inc. (Helix), saw what it wished to see when it reviewed the contract’s plans and specifications and used MC cable extensively in the construction. This was visible to quality assurance inspectors from the contracting agency, the United States Army Corps of Engineers (the Corps), but not objected to by the Corps until relatively late in the game. As will be discussed at length below, standard contract interpretation supports the Corps’ reading of its contract, requiring the exclusive use of conduit, not MC. Moreover, though it would have been far better for the quality assurance inspectors from the Corps to have recognized and halted Helix’s divergence from the requirements of the contract, their inaction did not change the meaning of the contract and was insufficient to support a finding of waiver of contractual compliance by the government. 1 The reader has likely seen MC cable in their experience: it’s an electrical power conductor surrounded by flexible grey metal as a single assembly (tr. 20; see also R4, tab 61 (photo) and tr. 165-66 (describing photo)). It comes in spools (tr. 91).  FINDINGS OF FACT I. Contract And Subcontract Awards In the mid-2000s, the United States Army decided to build a facility for satellite communications on Camp Roberts, California near the town of Paso Robles (tr. 131 2 (inception of project in 2006)). The contract to accomplish this goal encompassed the construction of four buildings: a satellite communications operations center (by far, the largest of the buildings); a command/administrative support center; a repair and utilities building; and a covered storage shed (R4, tab 2 at 1). This contract, in the amount of $38,914,500, was awarded to Watts on September 3, 2014 (R4, tab 2 at 2). Shortly thereafter, Watts executed a subcontract agreement with Helix to perform all of the electrical work on the project (R4, tab 52 at 14-35; tr. 17-19). The contract contained the standard Changes clause, to be found in Federal Acquisition Regulation (FAR) Part 52.243-4 providing authority of the contracting officer to change the terms of the contract (R4, tab 2 at 15-16). II. The Contractual Requirements Relating To Wiring The Corps has an institutional preference for utilizing rigid conduit to run electric power cable in buildings that it has constructed (tr. 150, 175). This is because the Corps believes that conduit-installed power lines will last longer (tr. 175-76). Helix personnel were well aware of this general desire (tr. 79), but held their own preference for power cabling, which was the use of flexible MC (tr. 22, 35, 81). As we will explain in Section III, below, although MC shares some of its characteristics, MC is not conduit. Despite their concerns that the Corps would not permit the use of MC, Helix personnel involved in planning the construction found portions of the contract’s specifications that, they believed, permitted the use of MC cable throughout and which we note below (tr.