ASBCA 81879

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) Pave-Tech Inc. ) ASBCA No. 61879 ) Under Contract No. N62473-09-D-1605 ) APPEARANCE FOR THE APPELLANT: Christopher R. Sillari, Esq. Finch Thornton Baird, LLP San Diego, CA APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq. Navy Chief Trial Attorney Anthony Hicks, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE WILSON ON THE GOVERNMENT’S MOTION FOR PARTIAL SUMMARY JUDGMENT The Navy moves for partial summary judgment, alleging that Pave-Tech, Inc. may not recover $1,557,754.28 of its $2,555,408.85 claim, related to field office overhead, because it has used a per diem rate method, deviating from its prior usage of a percentage cost basis, thus running afoul of our holding in M.A. Mortenson Co., ASBCA No. 40750 et al., 98-1 BCA ¶ 29,658 at 146,946 (Senior Deciding Group). While we find that a dispute exists as to material facts related to $929,050.86 of appellant’s appeal, appellant admitted it used the per diem rate for the other $628,703.42, yet used the percentage rate for its accounting up to now. We grant the Navy’s motion as it applies to that amount. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. Naval Facilities Southwest (Navy or government) awarded Contract No. N62473-09-D-1605 to Pave-Tech, Inc. (PT or appellant). This was an Indefinite Delivery Indefinite Quantity contract for “airfield paving and heavy-duty paving areas for military operation vehicles at various locations within” several western and southwestern states. (R4, tab 1 at 1-2) This contract incorporated by reference Federal Acquisition Regulation (FAR) 52.233-1, DISPUTES (JUL 2002) – Alternate I (DEC 1991) and Defense Federal Acquisition Regulation Supplement (DFARS) 252.243-7001, PRICING OF CONTRACT MODIFICATIONS (DEC 1991) which applied FAR Part 31 and DFARS Part 231 (R4, tab 1 at 28, 30). 2. The parties signed Task Order 12 on July 12, 2012, a firm fixed price contract for paving at Camp Pendleton, CA (R4, tab 10).  3. The parties held a kickoff meeting on August 29, 2012. The minutes for this meeting contained the following question and statement: “Field Overhead . . . Does your company charge their field overhead by the percentage method or daily rate method? Please be advised, that all of your DOD contracts must use the same method. It cannot change from contract to contract or modification to modification.” (R4, tab 15 at 4235, 4239) The Navy also sent appellant a letter on December 11, 2012, stating: [I]n order to comply with [the FAR], the company must have established one method of field office overhead calculation based on the company’s established and consistently followed accounting practices. This generally means calculating either a per diem rate (time distribution base) or a percentage mark- up (direct cost distribution base). The contractor’s established method will be consistently applied in all changes for all contracts. (R4, tab 18 at 4258) This letter contained NAVFAC Form 4330/43, which was a sample form instructing contractors to select either a percentage or per diem method of accounting for field office overhead (FOOH) costs (R4, tab 18 at 4261). 4. Appellant sent the Navy an updated Time Impact Analysis (TIA) by email dated June 13, 2013, revising an earlier submission on January 24, 2013 (app. opp’n ex. A (hereinafter Gonzalez decl.), ex. 15 at 1). This TIA was for “impacts incurred by Pave-Tech Inc. due to the Government actions that have caused delays to the overall project” (id. at 1). This showed the current schedule “has a slide or extension of [Contract Completion Date] of 278 Days” which included “198 Days On Going” for design delays (id. at 9). “Pave Tech will be seeking compensation for both impacts to our design and impacts to our construction. Please keep in mind these impacts are ongoing and as previously stated will be updated monthly.” (Id.) 5. On November 6, 2013, appellant sent an email to the Navy concerning an anticipated modification (mod) to include installation of a gas line.