CBCA 6453

DENIED: April 7, 2023 CBCA 6453, 6560 BES DESIGN/BUILD, LLC, Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Todd A. Jones and Peyton D. Mansure of Anderson Jones, PLLC, Raleigh, NC, counsel for Appellant. Jennifer L. Hedge, Office of General Counsel, Department of Veterans Affairs, Pittsburgh, PA; and Laetitia C. Coleman, Office of General Counsel, Department of Veterans Affairs, Lakewood, CO, counsel for Respondent. Before Board Judges RUSSELL, DRUMMOND, and ZISCHKAU. DRUMMOND, Board Judge. These consolidated appeals by appellant, BES Design/Build, LLC (BES), arise from a construction contract with respondent, the Department of Veterans Affairs (VA). In CBCA 6560, BES challenges the termination for default of its contract and the VA’s denial of payment under pay application no. 32. In CBCA 6453, BES challenges the denial of its claim for compensation for a fifty-nine-day delay. For the reasons below, we deny the appeals. CBCA 6453, 6560 2 Background I. Contract Award, Performance, and Delays The VA awarded the subject contract to BES in September 2015. The fixed price construction contract required BES to renovate approximately 3300 square feet of interior space for a new step-down clinic located on the third floor of the VA medical facility in Fayetteville, Arkansas (the project). The clinic is listed as an historical landmark on the National Register of Historic Places. As part of the renovation work, BES was to construct six new private patient rooms and six new bathrooms. The contract also required BES to demolish and replace the existing heating, ventilation, and air conditioning (HVAC) equipment in the attic, including the relocation of 200 square feet of linear piping. The contract required the work to be completed within 270 days of the notice to proceed with an anticipated contract completion date (CCD) of June 17, 2016. The total contract price was $1,865,864.00. After issuing the notice to proceed, the VA informed BES of the presence of asbestos and the need to perform removal and abatement prior to proceeding with the contract work. It is undisputed that the presence of asbestos was not disclosed at the time that BES submitted its bid on the project. Twenty-five days later on November 23, 2015, the contracting officer submitted to BES a request for proposal (RFP) and a corresponding statement of work for asbestos removal and abatement. BES completed the asbestos removal and abatement on April 12, 2016, allowing BES to begin work on the original project nearly six months after the notice to proceed. The VA issued a modification extending the CCD by fifty-nine days, to and including October 6, 2016. After completing the asbestos work, BES’s performance did not proceed smoothly. On or about April 16, 2016, BES requested permission to use a window as a trash chute. At some point, BES damaged the window and replaced it without prior approval or a submittal to the VA. According to the VA, not only was the window particularly important to the project, but the replacement required specific details in order to comply with the State Historic Preservation Office. The VA also alleges that BES caused structural damage to the space. More specifically, BES caused damage to structural beams that, without repair, rendered the space uninhabitable. The VA felt generally insecure about BES’s ability to complete the project. During the period of performance, BES had five project managers, eight superintendents, and three mechanical subcontractors. According to the VA, “the contracting officer estimated that had BES been allowed to continue in that fashion, the project would have taken another 31 months to complete, not including rework.” Between March 2017 and October 2018, the VA, through its contracting officer for the project, issued several letters of concern outlining various issues, including “lack of CBCA 6453, 6560 3 progress,” “incomplete submittals,” “nonpayment of subcontractors,” “overstatement of work on progress payment applications,” “issues with quality and inspections,” and “inaccuracies in the daily logs.” The contracting officer deemed BES’s responses to these letters unsatisfactory but continued to work with BES to move toward completion. On October 9, 2018, BES and the VA bilaterally executed modification no. 9 (mod. 9), which extended the CCD to November 16, 2018. II.