ASBCA 61434

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Gulf Pacific Contracting, LLC ) ASBCA No. 61434 ) Under Contract No. FA4417-16-D-0002 ) APPEARANCE FOR THE APPELLANT: Laurence J. Zielke III, Esq. Zielke Law Firm, PLLC Louisville, KY APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrant, Esq. Air Force Deputy Chief Trial Attorney Christopher M. Judge-Hilborn, Esq. Maj Michelle E. Gregory, USAF Trial Attorneys MAJORITY OPINION BY ADMINISTRATIVE JUDGE PROUTY The Davis-Bacon Act, 40 U.S.C. §§ 3131-3148, is a fact of life in federal government construction contracting. By requiring the payment of local prevailing wages to contractor employees in certain circumstances, it may force contractors to pay their employees more than they might otherwise when they begin contract performance and to further increase wages in the midst of performance or following the exercise of options by the government. The Federal Acquisition Regulation (FAR) provides a contracting officer (CO) multiple ways to address these increased costs through prescribed clauses to be inserted into a contract. One such clause (which we will refer to as “the no-adjustment clause” throughout) takes the approach of informing the contractor that there will be no adjustment to the prices in the awarded contract unless it is provided for elsewhere in the contract, which implies that (unless there is a separate contract provision saying otherwise) the contractor should price its option years to take into account the risk of increased wages. That is the clause that was included in the above- captioned contract (the contract) which is the subject of today’s dispute. This appeal is before us under the auspices of Board Rule 11, which permits its resolution on the record, without a hearing and live testimony. As detailed below, appellant, Gulf Pacific Contracting, LLC (Gulf Pacific), had a contract to perform various construction-related services at Hurlburt Field in Florida. Coincident with the government’s exercise of its first option year, the Department of Labor (DOL) issued new wage determinations, with the upshot being that Gulf Pacific needed to pay some of its employees more during the option period. Gulf Pacific demanded additional 1 compensation from the government and the CO refused, pointing to the no-adjustment clause, which precluded such additional payment. Gulf Pacific appeals this decision, arguing that it was not on notice that it would be required to absorb this cost in its option pricing and that the no-adjustment clause is defective. Judge Clarke agrees with Gulf Pacific, contending that the FAR-required no-adjustment clause contained in the contract did not meet the requirements of the policy portion of the FAR which set forth the CO’s options for addressing wage adjustments. We respectfully disagree with Judge Clarke. The drafters of the FAR made the no-adjustment clause consistent with their earlier dictates about how to handle such situations. Gulf Pacific also argues that the no-adjustment clause is ambiguous. It is not. Gulf Pacific, as discussed below, is entitled to no additional compensation. FINDINGS OF FACT On September 26, 2016, the United States Air Force 1st Special Operations Contracting Squadron awarded to Gulf Pacific the contract, a firm-fixed-price, indefinite- delivery indefinite-quantity (IDIQ) construction contract, to paint the interior of facilities, paint the exterior of facilities, and stripe runway pavement at Hurlburt Field in Florida (R4, tab 4 at 1-4). The base period of performance was one year, with four option years (id. at 5-6). As part of the solicitation that led to the award of the contract, offerors were required to provide prices for the base year and each option year, and those prices were to come from a “Line Item List” attached to the solicitation that the contractor was to fill out (app. supp. R4, tab 14 at 4-6). The Line Item List is an extensive 15-page document and includes services that may be ordered under separate contract line items, estimated quantities of those services, and space for the contractor to insert its pricing. It includes separate pricing lists for the base year and all four individual option years.