ASBCA 62221

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Metro Machine dba General Dynamics ) ASBCA No. 62221 NASSCO-Norfolk ) ) Under Contract No. N00024-16-D-4408 ) APPEARANCES FOR THE APPELLANT: Michael J. Gardner, Esq. Christopher M. O’Brien, Esq. Greenberg Traurig LLP McLean, VA APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. Navy Chief Trial Attorney Philip S. Lazarus, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE PROUTY This appeal is about the overhaul of a guided missile destroyer that took longer than the delivery order (DO) on the above-captioned contract (the contract) allowed for. The long pole in the tent turned out to be the replacement of a davit and winch used to place a small boat into the water from the deck of the destroyer and to pluck it out. The repair of old parts and installation of new ones by appellant, Metro Machine’s (NASSCO’s), subcontractor, Advanced Integrated Technologies (AIT), didn’t go well and AIT had to repair some of its work and its own subcontractor on the job wound up supplanting it at the end. The work was thus completed late, providing the basis for the Navy to impose liquidated damages, which it did and which NASSCO challenges here. 1 As the reader might have surmised: NASSCO 2 blames the Navy for the davit problems, arguing that the contractual requirement that it (AIT, actually) subcontract with the davit’s original equipment manufacturer (OEM) for certain work made the Navy responsible for any problems AIT had with the OEM and that when the OEM was not available, it was the 1 The parties elected to proceed under Board Rule 11, in which there is no hearing and we decide the merits of this dispute on the basis of the written record. 2 The appeal here is not technically a pass-through claim by AIT since the challenged liquidated damages were assessed against NASSCO; nevertheless, the advocacy often reads as if it were being advanced by AIT (NASSCO is sometimes presented in its briefs as an objective third party, rather than as an interested party to the lawsuit). In any event, we refer to arguments as being made by NASSCO herein, even if they appear to be advanced by AIT. Navy’s responsibility to oversee AIT’s work and save it from its own mistakes; the Navy blames NASSCO and AIT. The Navy argues that this dispute was already largely resolved by means of a bilateral change order which (says the Navy) constituted an accord and satisfaction. Unfortunately for the Navy, the “bilateral” change order in the record is signed only by the Navy, effectively stopping this defense in its tracks. Nevertheless, the delays were the responsibility of AIT and thus NASSCO, not the Navy. NASSCO has also challenged the use of the liquidated damages clause that it had agreed to, but we find it to have been proper. FINDINGS OF FACT I. Preliminaries: the Contract and the DO A. The Contract The contract at issue in this case is a multiple award task order contract (MATOC) 3 for the maintenance, modernization, and repair (also referred to as “overhaul” herein) of U.S. Navy warships (specifically, guided missile destroyers and cruisers) at the Navy’s Mid-Atlantic Maintenance Center, located at Naval Station Norfolk in Norfolk, Virginia (R4, tab 1.1 at GOV 1, GOV 18-19 4). It consisted of a base year and four option years, and the DOs could be issued in either firm-fixed-price or cost-plus-fee varieties (id. at GOV 2-10). The contract was awarded to NASSCO on February 17, 2016 (id. at GOV 1). One set of contract provisions sets forth procedures to follow if, in the midst of the overhaul, the contractor finds more work that needs to be done on a ship than originally planned for. That section in the Statement of Work begins in Section 3.0 and goes through Section 3.5. (R4, tab 1.1 at GOV 22-23) Section 3.1, “Identification of Condition Found,” requires the contractor to notify the government of “needed repairs” and to recommend corrective action for issues not identified in the original DO. It specifies the contractor should make notification to the government within one day of discovery, to be later followed by a more detailed “condition found report” (CFR) including the contractor’s recommendations. (Id.