K-Con Building Systems, Inc. v. United States

United States Court of Appeals

for the Federal Circuit

______________________

K-CON BUILDING SYSTEMS, INC.,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________

2014-5062

______________________

Appeal from the United States Court of Federal

Claims in No. 1:05-cv-01054-MMS, Judge Margaret M.

Sweeney.

______________________

Decided: February 12, 2015

______________________

WILLIAM ATKINS SCOTT, Pederson & Scott, P.C.,

Charleston, SC, argued for plaintiff-appellant.

DANIEL B. VOLK, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washing-

ton, DC, argued for defendant-appellee. Also represented

by STUART F. DELERY, ROBERT E. KIRSCHMAN, JR., BRYANT

G. SNEE.

______________________

Before PROST, Chief Judge, NEWMAN and TARANTO, Cir-

cuit Judges.

2 K-CON BUILDING SYSTEMS, INC. v. US

TARANTO, Circuit Judge.

K-Con Building Systems, Inc., entered into a contract

with the federal government to construct a building for

the Coast Guard. Once K-Con finished, the government

imposed liquidated damages for delay in completion. K-

Con sued in the Court of Federal Claims, seeking two

forms of relief. First, it requested remission of the liqui-

dated damages on two grounds—that the contract’s

liquidated-damages clause was unenforceable and that K-

Con was entitled to an extension of the completion date.

Second, it requested additional compensation based on

work performed in response to government requests that

K-Con alleges amounted to contract changes. The Court

of Federal Claims held that the contract’s liquidated-

damages clause is enforceable and that K-Con did not

comply with the written-notice precondition for invoking

the contract clause governing changes. It also held that

K-Con’s claim for an extension on the completion date

must be dismissed for lack of jurisdiction. We affirm.

BACKGROUND

On January 20, 2004, K-Con entered into a contract

with the Coast Guard, under which K-Con would con-

struct a “cutter support team building” in Port Huron,

Michigan, for $582,641. The project was to be completed

by November 20, 2004, with K-Con agreeing to pay $589

in liquidated damages for each day of delay. On May 23,

2005, the Coast Guard accepted the building as substan-

tially complete. It withheld payment of $109,554 as

liquidated damages for what it calculated to be tardiness

of 186 days. No party challenges the calculation.

On July 28, 2005, K-Con sent a letter to the govern-

ment contracting officer requesting remission of the

liquidated damages “wrongfully withheld from the con-

tract.” J.A. 259, Letter from K-Con to Contracting Officer

(July 8, 2005) (first letter). As grounds for remission, K-

Con asserted that the “liquidated damages [constituted]

K-CON BUILDING SYSTEMS, INC. v. US 3

an impermissible penalty” and that the Coast Guard

“failed to issue extensions to the completion date as a

result of changes to the contract.” Id. It provided no

details regarding its request for a time extension based on

contract changes. After the contracting officer denied K-

Con’s request for remission, K-Con sued in the Court of

Federal Claims under the Contract Disputes Act (CDA),

41 U.S.C. §§ 601-613 (2006). 1 K-Con sought remission of

$109,554 plus interest in liquidated damages on the two

grounds asserted in its July 28, 2005 letter. Original

Complaint, K-Con Bldg. Sys., Inc. v. United States, No.

05-01054C (Fed. Cl. Sept. 30, 2005).

On December 15, 2006, while litigation in the Court of

Federal Claims was underway, K-Con submitted a second

letter to the contracting officer. J.A. 263–64, Letter from

K-Con to Contracting Officer (Dec. 15, 2006) (second

letter). The second letter extensively details the contract

changes allegedly made by the Coast Guard during the

contract term and asks for a new remedy—$196,126.38

for additional work necessitated by the changes—as well

as an extension of the completion date of the contract.

The contracting officer denied K-Con’s requests. K-Con

then amended its complaint in the Court of Federal

Claims to add allegations about the matter covered in its

second letter and to seek, beyond the liquidated-damages

relief, a judgment of $196,126.38 and a 186-day extension.

Amended Complaint, K-Con Bldg. Sys., No. 05-01054C

(Fed. Cl. Mar. 18, 2007).

The Court of Federal Claims first ruled, in deciding

an initial government motion for summary judgment, that

the contract’s liquidated-damages clause is enforceable.

1 The cited provisions apply to this case. Since

2011, the Contract Disputes Act has been codified at 41

U.S.C. §§ 7101-7109. See Pub. L. No. 111-350, 124 Stat.

3677 (2011).

4 K-CON BUILDING SYSTEMS, INC. v. US

The court later issued two rulings in deciding a second

government motion for summary judgment. It held that

K-Con did not provide valid written notice regarding

contract changes and therefore had not satisfied a pre-

condition to claiming additional compensation under the

contract’s changes clause. And it dismissed, for lack of

jurisdiction, K-Con’s time-extension claim for remission of

liquidated damages.

K-Con appeals all three rulings. We have jurisdiction

under 28 U.S.C. § 1295(a)(3).

DISCUSSION

Whether the Court of Federal Claims had jurisdiction

under the CDA is a question of law we decide de novo.

Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir.

1995) (en banc). A plaintiff “bears the burden of estab-

lishing subject matter jurisdiction by a preponderance of

the evidence.” Reynolds v. Army & Air Force Exch. Serv.,

846 F.2d 746, 748 (Fed. Cir. 1988). “[W]e review a grant

of summary judgment by the Court of Federal Claims de

novo, drawing justifiable factual inferences in favor of the

party opposing the judgment.” Long Island Sav. Bank,

FSB v. United States, 503 F.3d 1234, 1244 (Fed. Cir.

2007). “Once the moving party has satisfied its initial

burden, the opposing party must establish a genuine issue

of material fact and cannot rest on mere allegations, but

must present actual evidence.” Id.

A

Before turning to the merits, we must determine

which issues the Court of Federal Claims had jurisdiction

to decide under the CDA. “The CDA grants [the Court of

Federal Claims] jurisdiction over actions brought on

claims within twelve months of a contracting officer’s final

decision.” James M. Ellett Constr. Co. v. United States, 93

F.3d 1537, 1541 (Fed. Cir. 1996) (citing 41 U.S.C.

§ 609(a)). Jurisdiction requires both that a claim meeting

K-CON BUILDING SYSTEMS, INC. v. US 5

certain requirements have been submitted to the relevant

contracting officer and that the contracting officer have

issued a final decision on that claim. Id. at 1541–42.

A claim is “ ‘a written demand or written assertion by

one of the contracting parties seeking, as a matter of

right, the payment of money in a sum certain, the ad-

justment or interpretation of contract terms, or other

relief arising under or relating to the contract.’ ” Reflec-

tone, 60 F.3d at 1575 (quoting regulation then codified at

48 C.F.R. § 33.201; current version at 48 C.F.R. § 52.233-

1). A claim need not “be submitted in any particular form

or use any particular wording . . . [, but it must provide] a

clear and unequivocal statement that gives the contract-

ing officer adequate notice of the basis and amount of the

claim.” Contract Cleaning Maint., Inc. v. United States,

811 F.2d 586, 592 (Fed. Cir. 1987). A contracting officer’s

final decision on a claim may either be written, 41 U.S.C.

§ 605(a), or implied from “[a]ny failure by the contracting

officer to issue a decision on a contract claim within the

period required,” id. § 605(c)(5).

Identifying what constitutes a separate claim is

important. We have long held that the jurisdictional

standard must be applied to each claim, not an entire

case; jurisdiction exists over those claims which satisfy

the requirements of an adequate statement of the amount

sought and an adequate statement of the basis for the

request. See Joseph Morton Co. v. United States, 757 F.2d

1273, 1281 (Fed. Cir. 1985) (“Congress did not intend the

word ‘claim’ to mean the whole case between the contrac-

tor and the Government; but, rather, that ‘claim’ mean

each claim under the CDA for money that is one part of a

divisible case.”); see also M. Maropakis Carpentry, Inc. v.

United States, 609 F.3d 1323, 1327–32 (Fed. Cir. 2010)

(reaching different results for different claims in deter-

mining Court of Federal Claims jurisdiction). Claim

identification is important also for application of the rule

that, once a claim is in litigation, the contracting officer

6 K-CON BUILDING SYSTEMS, INC. v. US

may not rule on it—even if the claim is not properly in

litigation because it was not properly submitted to and

denied by the contracting officer before it was placed in

litigation. Sharman Co. v. United States, 2 F.3d 1564,

1571–72 (Fed. Cir. 1993) (“Once a claim is in litigation,

the Department of Justice gains exclusive authority to act

in the pending litigation . . . [,] divest[ing] the contracting

officer of his authority to issue a final decision on the

claim.”) (citing 28 U.S.C. §§ 516–520), overruled on other

grounds, Reflectone, 60 F.3d 1572; see also John Cibinic,

Jr., et al., Administration of Government Contracts 1292–

93 (4th ed. 2006) (“The contracting officer’s authority to

settle claims does not extend to cases in which litigation

has commenced in a court. . . . [N]o final decision may be

issued on a matter that is already in litigation.”).

Our longstanding demand that a claim adequately

specify both the amount sought and the basis for the

request implies that, at least for present purposes, we

should treat requests as involving separate claims if they

either request different remedies (whether monetary or

non-monetary) or assert grounds that are materially

different from each other factually or legally. See Con-

tract Cleaning, 811 F.2d at 592 (evaluating the adequacy

of a claim on the notice it gives of the remedy requested

and the basis for that remedy); 48 C.F.R. § 52.233-1(c)

(defining a claim as a written demand for a remedy “as a

matter of right”). This approach, which has been applied

in a practical way, serves the objective of giving the

contracting officer an ample pre-suit opportunity to rule

on a request, knowing at least the relief sought and what

substantive issues are raised by the request.

We have not treated the different-remedies compo-

nent as imposing so rigid a standard as to preclude all

litigation adjustments in amounts “based upon matters

developed in litigation.” Tecom, Inc. v. United States, 732

F.2d 935, 937–38 (Fed. Cir. 1984) (“ ‘It would be most

disruptive of normal litigation procedure if any increase

K-CON BUILDING SYSTEMS, INC. v. US 7

in the amount of a claim based upon matters developed in

litigation before the court [or board] had to be submitted

to the contracting officer before the court [or board] could

continue to a final resolution on the claim.’ ”) (alterations

in original; quoting J.F. Shea Co. v. United States, 4 Cl.

Ct. 46, 54 (1983)). But we have differentiated claims

seeking different types of remedy, such as expectation

damages versus consequential damages. Case, Inc. v.

United States, 88 F.3d 1004, 1010 (Fed. Cir. 1996) (hold-

ing that two cases “involved different claims” even though

both “arose out of the same underlying set of facts and

involved [similar, if not the same] allegations of defective

specifications,” because the later-filed case requested

“additional compensation” beyond the progress payments

requested in the other case, including lost profits). In a

similar vein, merely adding factual details or legal argu-

mentation does not create a different claim, but present-

ing a materially different factual or legal theory (e.g.,

breach of contract for not constructing a building on time

versus breach of contract for constructing with the wrong

materials) does create a different claim. See Santa Fe

Eng’rs, Inc. v. United States, 818 F.2d 856, 858–60 (Fed.

Cir. 1987) (holding that a claim for damages related to

three change orders was different from a claim for dam-

ages related to “ ‘the collective nature of all the problems,

changes and directives issued on the project’ ”) (emphasis

in original). We have gone beyond the face of claims to

make these distinctions. See, e.g., Sharman, 2 F.3d at

1571 (equating claims that “allege[d] entitlement to the

same money based on the same partial performance, only

under a different legal label”); Scott Timber Co. v. United

States, 333 F.3d 1358, 1366 (Fed. Cir. 2003) (“Scott may

have posed slightly different legal theories for the breach,

but Scott’s claim is essentially the same as presented to

the CO.”).

In its amended complaint in this case, K-Con present-

ed three discrete claims—i.e., three distinct combinations

8 K-CON BUILDING SYSTEMS, INC. v. US

of a request for a remedy and a basis for that request.

First, it claimed that the liquidated-damages clause is

unenforceable and on that basis sought remission of

$109,554 plus interest in liquidated damages withheld by

the Coast Guard. Second, as an additional basis for

seeking the same remedy of remission, it claimed that it

was entitled to time extensions that the Coast Guard

never provided. Third, it claimed that, because of con-

tract changes made by the Coast Guard, it had to do

additional work that entitled it to $196,126.38 over and

above remission of liquidated damages. We agree with

the Court of Federal Claims that it had jurisdiction to

decide the first and third claims, which relate to enforcea-

bility of the liquidated-damages clause and to alleged

contract changes, but not the second claim, which chal-

lenges the Coast Guard’s failure to grant time extensions.

Jurisdiction over the unenforceability claim is undis-

puted, and properly so. There was adequate pre-suit

notice to the contracting officer in K-Con’s first letter, in

which K-Con clearly requested a sum certain ($118,950.68

plus interest, in remission of liquidated damages) on the

ground that the liquidated damages imposed in this case

amounted to an “impermissible penalty.” J.A. 259. There

was also, in the contracting officer’s first denial, a valid

pre-suit final decision rejecting K-Con’s contentions.

Jurisdiction over the contract-changes claim is dis-

puted. Like the Court of Federal Claims, we conclude

that there was CDA jurisdiction over that claim, based on

K-Con’s second letter to the contracting officer. That

letter provides ample detail regarding the basis for the

claim, including what specific actions by the Coast Guard

allegedly made constructive changes to contract require-

ments; and the letter clearly requests award of a sum

certain as a remedy ($196,126.38 in compensation for

extra work performed).

K-CON BUILDING SYSTEMS, INC. v. US 9

The government urges that there was no authorized

final decision on that claim before litigation on it com-

menced, because K-Con sent its second letter after filing

its original complaint, which the government says already

contained the contract-changes claim. See Sharman, 2

F.3d at 1571–72. We disagree with the premise that the

second letter’s contract-changes claim was already in

litigation when K-Con sent that letter. The original

complaint does complain about contract changes and

include some factual assertions shared by the contract-

changes claim presented in the second letter. Compare

J.A. 68 (original complaint) (“[T]he Coast Guard changed

and modified the Contract in among other ways, by failing

to properly review and approve drawings submitted by K-

Con, and directing K-Con to perform additional work that

was not required by the Contract.”) with J.A. 264–66

(second letter) (complaining of contract-changes from the

Coast Guard’s review of design submittals). But the

remedy requested in the two documents is categorically

different: the original complaint asks for remission of

liquidated damages, whereas the second letter asks for

compensation for extra work performed. That is enough

to make the requests different claims. Consequently, the

contracting officer’s rejection of the second letter’s con-

tract-changes claim, a rejection issued upon full consider-

ation of its merits, was an authorized final decision

sufficient to establish jurisdiction in the Court of Federal

Claims.

The Court of Federal Claims did not have jurisdiction

over K-Con’s time-extension claim. At bottom, the time-

extension claim is a request for remission of liquidated

damages on the ground that the Coast Guard failed to

issue time extensions for additional work added to the

10 K-CON BUILDING SYSTEMS, INC. v. US

contract. 2 K-Con squarely placed that claim in litigation

through its original complaint, which means that K-Con

had to present that claim adequately in its first letter, not

in the post-suit second letter. But the first letter plainly

fails to allege enough detail to provide adequate notice of

the basis for any time extension. Indeed, K-Con admitted

to the Court of Federal Claims that its first letter “could

not be a valid [time-extension] claim.” J.A. 44.

2 It might be argued that there are in fact two time-

extension claims at issue: (1) a time-extension claim from

the first letter and original complaint requesting remis-

sion of liquidated damages; and (2) a time-extension claim

from the second letter and amended complaint requesting

a declaratory judgment of a 186-day extension. Compare

J.A. 259 (first letter) (requesting remission in part be-

cause “the government failed to issue extensions”), and

J.A. 68 at ¶ 6, 11 (original complaint) (same), with J.A.

266 (second letter) (requesting “an extension in the con-

tract performance period resulting from [certain contract]

changes”), and J.A. 85 (amended complaint) (same). But

K-Con has identified only one concrete benefit it would

receive from its requested declaratory judgment of enti-

tlement to a 186-day extension: remission of the liquidat-

ed damages withheld for tardiness under the contract.

See Sharman, 2 F.3d at 1571. In other circumstances, a

declaratory judgment of a time extension might be a free-

standing and independently meaningful remedy.

K-CON BUILDING SYSTEMS, INC. v. US 11

B

1

On the merits, we first address K-Con’s claim that the

liquidated-damages clause is unenforceable as imposing

an impermissible penalty. K-Con faces a steep climb in

trying to establish unenforceability. “When damages are

uncertain or difficult to measure, a liquidated damages

clause will be enforced as long as ‘the amount stipulated

for is not so extravagant, or disproportionate to the

amount of property loss, as to show that compensation

was not the object aimed at or as to imply fraud, mistake,

circumvention or oppression.’ ” DJ Mfg. Corp. v. United

States, 86 F.3d 1130, 1133 (Fed. Cir. 1996) (quoting Wise

v. United States, 249 U.S. 361, 365 (1919)). “With that

narrow exception, ‘[t]here is no sound reason why persons

competent and free to contract may not agree upon this

subject as fully as upon any other, or why their agree-

ment, when fairly and understandingly entered into with

a view to just compensation for the anticipated loss,

should not be enforced.’ ” Id. (alteration in original)

(quoting Wise, 249 U.S. at 365); see also 48 C.F.R.

§ 11.501(b). “[T]he test is objective,” and “regardless of

how the liquidated damage figure was arrived at, the

liquidated damages clause will be enforced if the amount

stipulated is reasonable for the particular agreement at

the time it is made.” DJ Mfg. Corp., 86 F.3d at 1137

(citations and internal quotation marks omitted).

We agree with the Court of Federal Claims that the

liquidated-damages clause here is enforceable. The clause

sets a rate of $589 per day of delay for a $582,641 con-

tract. K-Con has alleged that the Coast Guard made

certain errors in arriving at the $589 figure for inclusion

in the contract, such as a “mathematical error [amounting

to an additional] $26.30/day.” Appellant’s Br. at 18. K-

Con’s allegations, however, are immaterial. Even if the

alleged errors were made, the ultimate rate of $589 per

12 K-CON BUILDING SYSTEMS, INC. v. US

day is reasonable. DJ Mfg. Corp., 86 F.3d at 1137. At the

time of contracting, it was foreseeable that delay would

create a number of costs for the Coast Guard, including

costs for travel, inspection, and other work by government

personnel—all continuing beyond the date by which such

activities for this contract should have ended. J.A. 203–

04 (contracting officer tabulating various costs); see also

48 C.F.R. § 11.502(b) (requiring that rates in

“[c]onstruction contracts with liquidated damages provi-

sions . . . include the estimated daily cost of Government

inspection and superintendence” as well as “other ex-

pected expenses”). The exact dollar figure of those costs

was “uncertain or difficult to measure,” but given the

general existence of such costs, it cannot be said that the

$589-per-day rate agreed upon by the parties at the time

of contracting was “so extravagant[] or disproportionate to

the amount of property loss” as to constitute an imper-

missible penalty on K-Con, rather than a reasonable

estimate of the costs that delay in job completion would

likely impose. See DJ Mfg. Corp., 86 F.3d at 1133–34.

K-Con counters that the rate cannot reflect a reason-

able estimate of costs because it includes personnel costs

that “would have been incurred no matter what.” Appel-

lant’s Br. at 19. Specifically, K-Con argues that Coast

Guard “personnel did not work any more hours, work any

differently, or get paid any more or any less” due to delay

under the contract. Id. This argument is meritless. It is

reasonable to expect that delay, if it occurs, will require

personnel to devote more time and resources to the project

than they would have if the project had been completed on

time. Moreover, even if the same personnel might work

the same number of hours regardless of delay, it is rea-

sonable to expect that delay would force them to re-

allocate their hours and impair their ability to give

planned attention to other projects, to the detriment of

those other projects. In short, inefficiency plausibly

breeds administrative costs, which the agreed-upon rate

K-CON BUILDING SYSTEMS, INC. v. US 13

here properly estimated. See Jennie-O Foods, Inc. v.

United States, 580 F.2d 400, 413 (Ct. Cl. 1978). K-Con

has not raised a genuine issue of material fact regarding

the rate’s reasonableness.

2

The second merits issue involves K-Con’s claim that it

is entitled to compensation for additional work it per-

formed because of what it says were constructive changes

made to the contract by the Coast Guard. The relevant

portion of the contract’s changes clause reads as follows:

(b) Any other written or oral order . . . from

the Contracting Officer that causes a change shall

be treated as a change order under this clause;

provided, that the Contractor gives the Contract-

ing Officer written notice stating

(1) the date, circumstances, and source of the

order and

(2) that the Contractor regards the order as a

change order.

....

(d) . . . [E]xcept for an adjustment based on de-

fective specifications, no adjustment for any

change under paragraph (b) of this clause shall be

made for any costs incurred more than 20 days be-

fore the Contractor gives written notice as re-

quired.

48 C.F.R. § 52.243-4 (Aug. 1987); see J.A. 145 (contract

incorporating the changes clause).

K-Con alleges that the Coast Guard made two sets of

changes to the contract. First, it alleges that, on January

28, 2004, the Coast Guard requested that the building’s

eave height be increased by four inches. Second, it alleges

that, starting in April 2004 and continuing through July

14 K-CON BUILDING SYSTEMS, INC. v. US

2004, the Coast Guard requested various changes upon

reviewing K-Con’s design submissions. We agree with the

Court of Federal Claims that, with regard to all of the

alleged changes, K-Con did not comply with the written-

notice requirement of the contract’s changes clause.

Throughout the period that the Coast Guard was al-

legedly making changes, K-Con never objected to the

Coast Guard’s actions or suggested that it was entitled to

an adjustment of contract terms. Rather, K-Con repeat-

edly expressed its intent to incorporate the Coast Guard’s

requests as though they were consistent with the terms of

the contract. E.g., J.A. 345–46 (K-Con responding to

Coast Guard’s review comments with brief, affirmative

statements, such as “[w]ill comply,” “[c]orrection will be

made,” and “[d]etail will be revised”). It was only once K-

Con submitted its contract-changes claim in its second

letter to the contracting officer—more than two years

after any of the changes at issue were allegedly ordered—

that K-Con seems to have provided written notice ade-

quate under paragraph (b). Only then did K-Con identify

the “date, circumstances, and source of the order[s]” it

objected to and indicate that it “regard[ed] the order[s] as

change order[s].” 48 C.F.R. § 52.243-4(b).

Two years is well beyond the 20-day time limit im-

posed by paragraph (d). And the notice provision serves

an important purpose in a contract in which some gov-

ernment requests are plainly contemplated under the

contract. Timely written notice differentiates requests

the contractor views as outside the contract from those it

deems contemplated by the contract. See Singer Co.

Librascope Div. v. United States, 568 F.2d 695, 711 (Ct.

Cl. 1977) (“[T]he work was done without notice to the

contracting officer that Librascope considered the effort

involved to be extra-contractual. . . . The contractor’s

failure to protest, while perhaps not an outright bar to the

claim, is nevertheless an evidentiary consideration which,

in these circumstances, takes on controlling signifi-

K-CON BUILDING SYSTEMS, INC. v. US 15

cance.”). And it gives the government timely notice of

what amounts it might be on the hook for, so that it will

not be surprised by money claims later, as well as an

opportunity to address demands for more money when it

might yet avoid them.

Sometimes, extenuating circumstances have weighed

against strict enforcement of the time limit. See generally

Powers Regulator Co., GSBCA No. 4668, 80-2 BCA

¶ 14,463 (Apr. 30, 1980) (reviewing how the time limit has

been enforced by boards of contract appeals and enumer-

ating exceptions to its strict enforcement); see also Hoel-

Steffen Const. Co. v. United States, 456 F.2d 760, 767–68

(Ct. Cl. 1972) (noting that a “severe and narrow applica-

tion of the notice requirements [of the suspension clause

in the then-extant Federal Procurement Regulations] . . .

would be out of tune with the language and purpose of the

notice provisions, as well as with this court’s wholesome

concern that notice provisions in contract-adjustment

clauses not be applied too technically and illiberally

where the Government is quite aware of the operative

facts”). But there are no such extenuating circumstances

here. K-Con has proffered no evidence suggesting that

the Coast Guard knew or should have known that K-Con

considered the work requests to be contract changes until,

at the earliest, K-Con submitted its first letter to the

contracting officer. That letter, sent a year after the last

of the alleged changes, lacks any detail with regard to

what K-Con considered to be the changes made and offers

the Coast Guard a simple choice between acceding to K-

Con’s demands or being sued. Such notice does not com-

ply with the changes clause.

K-Con’s sole counterargument is that it did not have

to comply with the notice provision of the changes clause

because compliance would have been futile. Even if a

futility exception exists, however, K-Con’s argument fails

because it has not shown that compliance would have

been futile. The Coast Guard never stated or implied in

16 K-CON BUILDING SYSTEMS, INC. v. US

advance that it would reject allegations of contract chang-

es. See J.A. 252 (“Design Coordination Review Com-

ments” form, which left a space for the contractor to

respond with action code “dc,” meaning “[d]o not concur

with [the Coast Guard’s] comment for reasons as indicat-

ed”). And although the contracting officer, in response to

K-Con’s second letter, did ultimately reject K-Con’s con-

tract-changes claim, deeming that fact sufficient to estab-

lish futility would threaten to erase the notice

requirement. In any event, it is unknown what would

have happened had K-Con broached the issue of changes

around the time the Coast Guard made the work requests

at issue. The submission of the second letter prompted

the Coast Guard to make a choice between giving in to K-

Con’s demands or subjecting itself to further litigation;

timely objections would have presented a very different

choice between at least four options—refraining from

making requests regarding K-Con’s work, altering the

nature of the requests, keeping the requests the same but

making equitable adjustments to the contract, or rejecting

the allegations of changes altogether and thereby risking

litigation or a halt to the project. K-Con failed to comply

with the changes clause, and its after-the-fact specula-

tions about what would have happened had it complied do

not create a genuine dispute of material fact regarding

whether it should be excused for its failure.

CONCLUSION

For the foregoing reasons, the judgment of the Court

of Federal Claims is affirmed.

AFFIRMED