Mountain Chief Management Services, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of -- )

)

Mountain Chief Management Services, Inc. ) ASBCA No. 58725

)

Under Contract No. NOOl 78-08-D-5506 )

APPEARANCE FOR THE APPELLANT: Mr. Daniel W. Chattin

Chief Operating Officer

APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq.

Navy Chief Trial Attorney

Stephen L. Bacon, Esq.

Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE JAMES

This appeal arises from the contracting officer's (CO's) decision denying

Mountain Chief Management Services, Inc.' s (MCMS' s) 3 May 2012 claim for

$35,807.32 in travel costs and labor hours allegedly furnished over the maximum

2,000 hours specified for each of four employees under the captioned contract, which

MCMS timely appealed to this Board. The Board has jurisdiction of the appeal under

the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109. The parties elected to

submit their cases upon the record under Board Rule 11. The parties have submitted

Rule 4 and supplemental Rule 4 documents and briefs. The Board is to decide

entitlement only (Bd. corr.).

FINDINGS OF FACT

1. On 29 May 2008 MCMS and the Naval Surface Warfare Center,

Southeast, Dahlgren, Virginia, entered into multiple award, indefinite delivery,

indefinite quantity contract, No. NOOl 78-08-D-5506 (the contract). The contract

specified professional services from multiple contractors for Navy and Marine Corps

activities by issuance of task orders that were subject to the contract's terms and

conditions. (R4, tab l(a) at 1, 6, 15, 45)

2. The contract incorporated by reference the FAR 52.243-1, CHANGES-

FIXED-PRICE (AUG 1987), ALTERNATE I (APR 1984), clause, which provided in

pertinent part:

(a) The [CO] may at any time, by written order, and

without notice to the sureties, if any, make changes within

the general scope of this contract in any one or more of the

following:

( 1) Description of services to be performed.

(2) Time of performance (i.e., hours of the day,

days of the week, etc.).

(3) Place of performance of the services.

(b) If any such change causes an increase or

decrease in the cost of, or the time required for,

performance of any part of the work under this contract,

whether or not changed by the order, the [CO] shall make

an equitable adjustment in the contract price, the delivery

schedule, or both, and shall modify the contract.

(e) Failure to agree to any adjustment shall be a

dispute under the Disputes clause. However, nothing in

this clause shall excuse the Contractor from proceeding

with the contract as changed.

(R4, tab l(a) at 43) 1

3. The contract included the SEA 5252.216-9122, LEVEL OF EFFORT

(DEC 2000) clause, which provided in pertinent part:

(a) The Contractor agrees to provide the total level

of effort specified in the next sentence in performance of

the work described in Sections B and C of this contract.

The total level of effort for the performance of this contract

shall be (to be completed for each order) total man-hours

of direct labor ....

1

The government asserts: "Because the Contract is 'for architect-engineer or other

professional services,' FAR 52.243-1, Changes-Fixed-Price, Alternate III

(Apr 1984) is actually the applicable provision," which modified~ (a) and

added~ (t) to the Alternate I clause (gov't br. at 4 n. l ). The record includes no

contract modification to substitute the Alternate III clause (R4, tabs 1, 4-5).

However, there is no essential difference in their~ (a) provisions and the duties

of the contractor in~ (t) of Alternate III and are akin to the duties in~ (e) of the

SEA 5252.216-9122, Level of Effort (Dec 2000) clause (see finding 3).

2

(d) The level of effort for this contract shall be

expended at an average rate of approximately (to be

identified at the task order level) hours per week. It is

understood and agreed that the rate of man-hours per

month may fluctuate in pursuit of the technical objective,

provided such fluctuation does not result in the use of the

total man-hours of effort prior to the expiration of the term

hereof, except as provided in the following paragraph.

(e) If, during the term hereof, the Contractor finds it

necessary to accelerate the expenditure of direct labor to

such an extent that the total man-hours of effort specified

above would be used prior to the expiration of the term, the

Contractor shall notify the Task Order Contracting Officer

[TOCO] in writing setting forth the acceleration required,

the probable benefits which would result, and an offer to

undertake the acceleration at no increase in the estimated

cost or fee together with an offer, setting forth a proposed

level of effort, cost breakdown, and proposed fee, for

continuation of the work until expiration of the term

hereof. The offer shall provide that the work proposed will

be subject to the terms and conditions of this contract and

any additions or changes required by then current law,

regulations, or directives, and that the offer, with a written

notice of acceptance by the [TOCO], shall constitute a

binding contract. The Contractor shall not accelerate any

effort until receipt of such written approval by the [TOCO].

Any agreement to accelerate will be formalized by contract

modification.

(R4, tab l(a) at 18-19)

4. On 7 September 2010 Ms. Dawn Brown, CO for the Naval Facilities

Engineering Command, Southeast, issued Task Order JMO 1 (TO 1) to MCMS under

the contract to provide engineering technician (ET) and construction management

(CM) services from 27 September 2010 to 26 September 2011 in support of

Humanitarian Assistance Program projects in Haiti (R4, tab 4 at 1-2, at 2, 6, 12 of21).

5. TOl 's contract line item numbers (CLINs) 5000, 5002, 5004 and 5006

required MCMS to provide two ETs and two CMs for project support; each was to

3

furnish 2,000 hours at $70.48/hr., totaling 8,000 hrs., for a price of $563,840.00 (R4,

tab 4 at I of 2I). CLINs 500I, 5003, 5005 and 5007 are not material to this dispute.

6. TOI stated: "Contractor employees performing services under this order

will be controlled, directed and supervised at all times by management personnel of

the contractor" (R4, tab 4 at 8, 13 of2I). Notwithstanding the SEA 5252.2I6-9I22,

Level of Effort provision if (d), TOI did not identify an average rate of weekly hours to

be expended (R4, tabs 4, 5).

7. Of the 8,000 hours TOI specified for CLINs 5000, 5002, 5004 and 5006 (the

ET/CM CLINs), as of 26 July 20I I both parties knew or should have known that

MCMS's invoice Nos. I-IO had billed for 6,672.74 hours (R4, tab I7, subtabs I-10),

leaving I,327.26 (8,000-6,672.74) remaining hours for those CLINs.

8. On 25 July 20 I I MCMS submitted invoice No. I I for 656 hours under the

ET/CM CLINs (R4, tab 22). Navy Program Analyst Rhonda Grimes's 26 July 20I I

email to MCMS (copied to CO Brown) stated:

I have rejected July's invoice [No. 11 of 25 July 20I l] and

there are a few items that I need to cover.

First- CLIN 5006 (CM #2) on current invoice OI l

is billing 176 hours ... ; however, your WA WF [DoD Wide

Area Workflow] invoice reflects differently, billing for I60

hours. . . . Please provide a corrected invoice.

Third - This contract [TO I] is for 2000 hours per

position. We are not invoiced/billed for your employee's

leave or paid holidays, since this is supposed to

be ... covered as part of your burdened rate.

As of 0 I August, there will be 41 workdays

remaining on this contract, or approximately 328 hours per

position; however, as currently billed/invoiced, only

approximately I 72 hours remain[2J per position. Services

are expected to continue until 26 September.

(R4, tab 20)

2

The record does not show how those "172 hours" were calculated.

4

9. MCMS's 26 July 2011 response to Ms. Grimes's email was copied to

CO Brown and stated:

We have already submitted for employees who have

rotated out to go back to Florida because they were

approved to work from home from the ROICC .... We

have already paid the ETs.... Please advise as to how you

would like to proceed with the remaining hours.

(R4, tab 23 at 1)

10. On 4 August 2011 the government paid MCMS's 1August2011 corrected

invoice No. 11 for 624 hours on the ET/CM CLINs (changing CLIN 5006 hours from

176 to 144). On 12 September 2011 the government paid MCMS's invoice No. 12 for

656 hours on the ET/CM CLINs. (R4, tab 17, subtabs 11, 12) The parties knew or

should have known that 47.26 hours remained on the ET/CM CLINs (8,000-(6,672.74

+ 624 + 656)).

11. CO Brown's 12 September 2011 email to MCMS stated:

[W]e have another issue with the Labor Invoices [for the

ET/CM CLINs] .... As the award was for 2000 hours per

person, we see that we have been billed for more than 2000

hours already on 3 personnel and nearly 2000 for the

fourth. Please explain - we have 17 more days beyond the

last invoice period.

MCMS's email of the same date stated: "We have Invoiced for the hours worked by

our contractors C3J as per the guidance passed down to us." (R4, tab 24 at 1-2)

12. On 26 September 2011 MCMS submitted invoice No. 13 for 536 hours

under the ET/CM CLINs (app. supp. R4, tab A-4).

13. MCMS's 29 September 2011 email to CO Brown stated:

Here is the [26 July 2011] response I sent Rhonda

[Grimes] concerning Invoice 11 where this issue initially

came up. Rhonda did not reply to this email and she

accepted our Invoice [11], which was then Processed as

3

The record does not show whether the ET/CMs were employees ofMCMS or

independent contractors.

5

well. If we were not going to get paid for the time we

worked, then the contractors would have left at the end of

the 2000 hrs. We were however, not given that guidance

and proceeded to work until the 23rd or 26th of Sept.

We were given guidance to work even when transferring

back and forth to Florida. We did not decide to do that on

our own and our Invoices were Approved every time for

that work.

Please let me know what [the] next steps are to get this

Invoice 013 Processed.

(App. supp. R4, tab A-5 at 3-4)

14. On 29 September 2011 CO Brown rejected MCMS's invoice No. 13,

stating: "MCMS can only bill for the remaining amount on the task order

($4,428.15).£41 No additional until further notice pending Request for Equitable

Adjustment. It appears MCMS has billed for full hours and payment has been made

with exception ofthe $4,428.15." (R4, tab 17, subtab 13 at 5) We find no evidence

that CO Brown approved in writing MCMS's incurrence of any ET/CM hours

exceeding the 8,000 hours specified by TO 1.

15. MCMS's 30 September 2011 email to CO Brown stated, inter alia:

First, Mountain Chief has been working outside the

original task order and has submitted the documentation

showing the cost associated with change. Second,

Mountain Chief was direct [sic] to work beyond the 2000

hours indicated in the original task order CLIN. We will

provide the email threat directing our CM/ET' s to work

periodically from their homes in Fl. and to work in Haiti

through September 23rd.

(App. supp. R4, tab A-6 at 1-2)

16. On 5 October 2011 MCMS resubmitted invoice No. 13 requesting 47.26

hours for one ET and one CM in September 2011, totaling $3,330.88, which the

government approved on 19 October 2011 (R4, tab 17, subtab 13 at 1, 5-7). MCMS's

4

The record does not show how CO Brown calculated $4,428.15. At $70.48/hr.

(finding 5), $4,428.15 corresponds to 62.83 hours, inconsistent with the 47.26

hours then remaining (finding 10).

6

13 invoices under TOI for the ET/CM CLINs totaled 8,000 hours, for which it was

paid $563,841.12 5 (R4, tab 17).

17. On 3 May 2012 MCMS submitted a $35,807.32 claim dated 21April2012

alleging $1,359.80 for Mr. Chattin's travel costs, and $34,447.52 for 488.74 labor

hours (536 hours invoiced - 47.26 hours paid on invoice No. 13) exceeding the 8,000

hours specified for the ET/CM CLINs (R4, tab 14).

18. The CO's 20 March 2013 final decision denied MCMS's claim in its

entirety (R4, tab 16). On 14 June 2103 MCMS timely appealed to the Board, which

appeal was docketed as ASBCA No. 58725.

19. On 15 July 2014 MCMS advised the government of the withdrawal of

appellant's "$1,300" travel training cost claim (ex. G-1 ).

PARTIES' CONTENTIONS

MCMS implicitly argues 6 that (1):

The Government directed the hours worked for the four

employee positions furnished by MCMS. The

Government controlled their training, their mobilizations

and demobilizations, authorization to work stateside, and

where and when they worked in-country [Haiti]. MCMS

had no control over how many hours its employees in these

positions worked.

(App. br. at l); that (2) Ms. Grimes's 26 July 2011 statement, "Services are expected

to continue until 26 September" "with the knowledge and consent of the [CO] was not

qualified by the presently funded 2,000 hours per position" and was "with knowledge

that this would require the technicians to work more than 2,000 hours" each (id.

at 1-2); and that (3) "The Navy ... forced MCMS to submit a revised invoice for the

hours remaining of the original 2,000 hours [per employee] even though MCMS was

directed to work more hours" (id. at 7).

Respondent argues that MCMS has not established a written or constructive

change order for lack of evidence that the government ordered, directed or compelled

MCMS to furnish additional hours; and even ifthe record suggests the issuance of

such order or direction, MCMS did not obtain the written approval to furnish such

hours by an official with authority to bind the government (gov't br. at 6-12).

5

The $1.12 overage was probably due to rounding of invoice amounts.

6

Appellant's brief contains no "argument," so designated. The following arguments

are taken from statements in appellant's brief that cited no record evidence.

7

DECISION

MCMS has the burden of proof of a constructive change order claim by

establishing that:

( 1) [I]t was compelled by the government to perform

work that was not required by the terms of the contract;

(2) the person directing the change had contractual

authority unilaterally to alter the contractor's duties

under the contract; (3) the contractor's performance

requirements were enlarged; and (4) the additional

work was not volunteered, but was directed by a

government officer.

Northrop Grumman Systems Corp. Space Systems Division, ASBCA No. 54774, 10-2

BCA ii 34,517 at 170,242-43.

This appeal presents a single issue for decision: Did the government's 26 July

2011 statement to MCMS -

This contract [TO 1] is for 2000 hours per position ....

As of 01 August, there will be 41 workdays

remaining on this contract, or approximately 328 hours per

position; however, as currently billed/invoiced, only

approximately 172 hours remain per position. Services are

expected to continue until 26 September.

or any other government statement compel MCMS to perform the alleged 488.74

hours exceeding the 8,000 hours specified by TO 1?

MCMS argues that the government directed the hours worked by MCMS's

ET/CMs, MCMS had no control over how many hours such employees worked, and

Ms. Grimes did not qualify her 26 July 2011 statement, "Services are expected to

continue until 26 September" by the 2,000 hours per CLIN specified by TO 1 and her

statement was "with knowledge that this would require [each ET/CM] to work more

than 2,000 hours." The fatal flaw with these arguments is that they are not

substantiated by any record evidence (see n.6). Indeed, the record evidence refutes

MCMS's arguments.

TO 1 did not identify an average rate of weekly hours to be expended for

ET/CM services (finding 6). Hence, throughout the performance period MCMS could

incur and bill the 8,000 ET/CM hours at the rate it decided was appropriate. By

8

26 July 2011 both parties knew or had reason to know that MCMS had billed 6,672.74

hours of ET/CM services, leaving I,327.26 hours remaining on TOI (finding 7). On

26 July 20 I I Ms. Grimes stated to MCMS: "Services are expected to continue until

26 September" (finding 8). She did not direct MCMS to expend a specific weekly or

monthly rate for the remaining ET/CM hours during July-September 20 I I.

MCMS's I2 and 29 September 20I I emails to CO Brown stated, respectively,

that MCMS had invoiced the ET/CM hours "per the guidance passed down to us" and

"We were given guidance to work even when transferring back and forth to Florida"

(findings I I, I3). MCMS did not identify who gave such guidance or when such

guidance was given.

Ms. Grimes' 26 July 20I I email did not state or infer that if (e) of the contract's

SEA 5252.2I6-9I22, Level of Effort (Dec 2000) clause, which required the written

approval of the task order CO to accelerate TOI effort (finding 3), was not applicable

or should be disregarded. The record contains no evidence that CO Brown approved

in writing MCMS's incurrence of any ET/CM hours exceeding the 8,000 hours

specified by TOI (finding I4).

We hold that MCMS has failed to prove that the government's July-September

2011 communications regarding invoice billings and payments compelled MCMS to

expend more ET/CM CLIN hours than the 8,000 specified by TOI.

CONCLUSION

We deny the appeal.

Dated: 3 December 20 I 4

Administrati

Armed Servic11:11111111i..-~

of Contract Appeals

(Signatures continued)

9

I concur

£~~

Administrative Judge

RICHARD SHACKLEFORD

Administrative Judge

Acting Chairman Vice Chairman

Armed Services Board Armed Services Board

of Contract Appeals of Contract Appeals

I certify that the foregoing is a true copy of the Opinion and Decision of the

Armed Services Board of Contract Appeals in ASBCA No. 58725, Appeal of

Mountain Chief Management Services, Inc., rendered in conformance with the

Board's Charter.

Dated:

JEFFREY D. GARDIN

Recorder, Armed Services

Board of Contract Appeals

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