CBCA 5841

CBCA 5841, 6070, 6260 DENIED; CBCA 6952 DENIED IN PART: July 25, 2023 FACILITY DEFENSE CONSULTANTS, INC. dba HANKE CONSTRUCTORS, Appellant, v. DEPARTMENT OF VETERANS AFFAIRS, Respondent. Leonard R. Ruzicka of Ruzicka Law Firm, LLC, St. Louis MO, counsel for Appellant. David G. Fagan, Office of General Counsel, Department of Veterans Affairs, Washington, DC, counsel for Respondent. Before Board Judges LESTER, VERGILIO, and GOODMAN. GOODMAN, Board Judge. Appellant, Facility Defense Consultants, Inc. dba Hanke Constructors (Hanke), and respondent, Department of Veterans Affairs (VA), have filed cross-motions for summary judgment in CBCA 5841, 6070, and 6260 and cross-motions for partial summary judgment in CBCA 6952.1 We grant respondent’s motion for summary judgment and deny appellant’s motion in CBCA 5841, 6070, and 6260, and we deny those appeals. We grant respondent’s motion for partial summary judgment in CBCA 6952 and deny that portion of the appeal which is the subject of the motion.2 1 These appeals are consolidated with CBCA 5967 and 6614, which are not the subject of the parties’ motions. 2 During briefing, appellant withdrew its cross-motion for summary judgment in CBCA 6952, but it continues to oppose respondent’s motion. CBCA 5841, 6070, 6260, 6952 2 Background The Contract On October 13, 2011, contract VA260-C-0909 (the contract) was awarded to appellant by the VA as a firm-fixed-price contract, in the amount of $7,009,194, to provide all necessary equipment, labor, materials, and supervision to design and construct a new, 22,700-gross-square-foot Specialty Care Clinic for the VA Medical Center in Walla Walla, Washington. Appeal File, Exhibit 2.3 The VA issued six modifications to the contract. The parties’ motions for summary judgment in CBCA 5841, 6070, and 6260 concern modifications P00003 (mod 3) and P00004 (mod 4) and appellant’s claims for what appellant characterizes as “scope creep.” A claim with regard to alleged increased costs for extra interior walls is the subject of the agency’s motion for partial summary judgment in CBCA 6952. Requests for Equitable Adjustments (REAs) 1 and 2 On April 15, 2016, appellant’s president, Mr. Brett Hanke,4 submitted an REA (REA 1) to respondent’s contracting officer,5 which was titled in the subject heading: “Request for Equitable Adjustment Due to Government Caused Delays in the Design Process (‘Design Delay REA’) and Change in Scope due to Government Design Directives (‘Scope REA’)” and sought compensation for alleged Government-caused delays, “scope creep,” and construction cost increases between 2011 and 2016. Exhibit 6 at 01869-74. In the REA, appellant stated: [A]ttached is Exhibit A which identifies the bid results in 2011 versus the current projected cost of the Project which demonstrates $3.6 million increase in costs to perform the work which will be covered in more detail in section 2 below. . . . Hanke has or will incur $3.6 million dollars more in cost to 3 All exhibits are found in the appeal file, unless otherwise noted. 4 Mr. Hanke submitted all REAs, requests for contracting officer final decisions, and appellant emails referenced in this decision. Appellant has also submitted several affidavits from Mr. Hanke in support of its motions for summary judgment and in opposition to respondent’s motions. 5 The same individual is the contracting officer referred to throughout this decision. Respondent has submitted an affidavit from the contracting officer in support of its motions for summary judgment. CBCA 5841, 6070, 6260, 6952 3 perform, unabsorbed overhead and additional design costs due to the VA caused design delays. Id. at 01869, 01873. Exhibit A to REA 1 is a schedule of values listing various categories that show the difference between appellant’s 2011 contract bid pricing and the same pricing in 2016, including any alleged changes required by the VA. Exhibit 6 at 01875-76. The total claim in REA 1 is not specifically stated as a dollar amount but can be calculated from the schedule of values: Total 2016 costs ($10,594,652.64 [soft costs: $2,119,539.64 + subcontractor costs: $8,058,747]) - Total original 2011 contract costs ($7,009,193.48 [soft costs: $1,661,150.48 + subcontractor costs: $5,348,043]) = $3,585,459.16. Id.