Speegle Construction, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of-- )

)

Speegle Construction, Inc. ) ASBCA No. 60089

)

Under Contract No. W91278-07-D-0038 )

APPEARANCE FOR THE APPELLANT: Jesse W. Rigby, Esq.

Clark, Partington, Hart, Larry,

Bond & Stackhouse

Pensacola, FL

APPEARANCES FOR THE GOVERNMENT: Thomas H. Gourlay, Jr., Esq.

Engineer Chief Trial Attorney

David C. Brasfield, Jr., Esq.

Andrea M. Dowdy, Esq.

Engineer Trial Attorneys

U.S. Army Engineer District, Mobile

OPINION BY ADMINISTRATIVE JUDGE THRASHER

ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT

The United States Army Corps of Engineers (Corps or government) moves for

summary judgment, arguing that Speegle Construction Inc. (Speegle or appellant)

executed a bilateral modification that constituted both a release and an accord and

satisfaction barring appellant's claim as a matter of law. 1 Appellant opposes the motion. 2

We deny the motion for the reasons set forth below.

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

1. In 2006, Speegle was awarded an indefinite-delivery/indefinite-quantity

(ID/IQ) contract (Contract No. W91278-07-D-0038) (Contract), for military construction

support to the Corps' South Atlantic Division (R4, tab 4 at 1, 11). On 1 July 2010,

Speegle was awarded Task Order (TO) No. 0004 for Design-Build Repair Hurricane

Damage Phase I, Mississippi Army Ammunition Plant (MSAAP), Stennis Space Center,

1

The government's motion included an attached exhibit (ex. G-1), a Price

Negotiation Memorandum (PNM), dated 26 November 2012.

2

Appellant's response to the government's motion for summary judgment included

an attached affidavit of Jeffrey S. Page, President of Speegle Construction,

Inc., dated 24 November 2015 (ex. A-1).

Mississippi (R4, tab 5 at 2). The stated purpose of the TO was to repair damage to the

existing facilities resulting from Hurricane Katrina in September 2006 and to harden

MSAAP infrastructure against future hurricanes. Phase I of the work included

installation of underground communication system duct banks and the construction of a

new alternate communications Point of Presence (POP) facility. (R4, tab 5 at 100)

2. On 16 November 2012, the parties executed bilateral Modification

No. 000404/SC003 (Mod. 000404/SC003) modifying TO 0004 to incorporate

changes to the scope of the work on the POP facility (R4, tab 6 at 13). Shortly thereafter

it was discovered changes were required to the fire suppression system added by

Mod. 000404/SC003 due to inadequate design data and update to new equipment

parameters (ex. G-1). On 26 November 2012, the parties entered into negotiations to

implement the changes to the POP facility fire suppression system. The parties reached

agreement on all terms except the 122% field overhead rate Speegle proposed on behalf of

one of its subcontractors, L. Pugh & Associates, Inc. (L. Pugh). (Id.) The parties were

unable to reach agreement on this issue and, on 7 December 2012, the Corps issued

unilateral Modification No. 00041H (Mod. 00041H) applying a 10% field overhead rate

for L. Pugh. The modification did not provide a time extension and specifically reserved

each party's rights to pursue claims under the Disputes clause. (R4, tab 6 at 15-16)

3. By Serial Letter H-0064, dated 19 August 2013, Speegle requested that the

Corps obtain a DCAA audit ofL. Pugh's overhead rate (R4, tab 7). That same day,

Speegle sent Serial Letter H-0066 requesting a 21-day time extension, stating:

On December 7, 2012 the Government issued unilateral

modification SC01 l/00041H (attached) for Fire

Suppression Changes for the subject contract. This

unilateral was issued in the amount of $292,320.37 for

added scope to the life safety systems for the subject

contract. Please note this modification was not mutually

agreed/accepted by SCI. The amount of the modification

remains in dispute with regard to the subcontractor's

overhead rate. SCI has submitted via a separate

transmittal (reference serial letter H-0064) a request on

behalf of L. Pugh and Associates for a DCAA audit. In

addition, SCI was not granted additional contract

performance time for this specific modification.

Reference paragraph (D) of the subject modification

wherein it states: The contract completion date shall

remain unchanged by this modification. SCI does

acknowledge additional contract time was added to

modification 000404/SC003 - Misc. Scope changes to

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POP Facility; however that modification was

dated/executed on November 11, 2012, (21) days prior to

issuing the unilateral modification for the Fire

Suppression System.

The subject modification (SC01 l/00041H) significantly

increased the scope of the Fire Suppression System .... This

additional work added hundreds of man-hours as a result of

this additional scope. SCI respectfully requests that a

minimum of 21 calendar days be added to the contract

performance. Though it could be argued that additional

days can be substantiated, SCI is only seeking (at this time),

uncompensated days that represent the 21 day difference in

issue/execution dates for modification SCOO 1/0004 lH and

modification 000404/SC003. This delay and inaction on

the part of the Government delayed our ability to process a

change order to the subcontractor, which subsequently

delayed shop drawings, fabrication of materials and

installation of the subject FE-25 system. As of this date,

SCI still is waiting on the remaining required materials to

be delivered for the FE-25 System. In summary, SCI is

seeking 21 additional days to this contract.

(R4, tab 9 at 2)

4. The contracting officer's representative responded to Serial Letter H-0066 by

email on 4 September 2013, stating that the Corps was considering the time extension if

Speegle would confirm that there was no other cost involved with the time extension

(R4, tab 10). Speegle responded that same day stating there were costs involved, but that

it was waiving its rights "for extended overhead or other costs for this associated time

request" (R4, tab 11 ).

5. The parties' entered into negotiations on 4 September 2013, in response to

Speegle's 19 August 2013 proposal (R4, tab 12). The Corps' PNM associated with the

negotiation, under ''DESCRIPTION OF CHANGE" states, "Request for adjustment for

mod 00041H" and, "The purpose of this modification is to provide a complete equitable

adjustment for any and all impacts, delays and costs associated with modification

00041H issued unilaterally on 7 December 2012" (id. ii 1). Under "NECESSITY FOR

CHANGE" the PNM merely repeated the statement regarding purpose in paragraph 1

(id. ii 2). Paragraph 6, "TIME DISCUSSION," stated:

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The Contractor sought an adjustment as a result of

modification 00041H for the Fire Suppression System in

serial letter H-0066, dated 19 August 2013, requesting

21 days additional contract time.

The Contractor's request for time adjustment in serial

letter H-0066 and request for audit in serial letter H-0064

were not provided within the time limit prescribed in the

Changes Clause; therefore, no time extension is

warranted. However, there is mutual benefit in providing

a 21-day time extension at no additional cost in order to

reach a complete equitable adjustment for any and all

impacts, delays, and costs associated with modification

00041H issued unilaterally on 7 December 2012. This

time extension does not represent any additional cost but

has the potential to reduce the extended field overhead

costs associated with outstanding change order requests

SCO 17 for Feeders and SC020 for Additional Duct Bank.

(Id. ~ 6) In conclusion the PNM summed up the negotiation by stating:

At the conclusion of negotiations, the contractor and

government were in agreement on the time extension.

The contractor stated that Speegle Construction, Inc.

elected to waive its rights for extended overhead or other

costs associated with this additional time.

The Government and the Contractor agreed that the final

negotiated settlement as shown below was fair and

reasonable, and that an equitable adjustment to the

contract for all work associated with this change will be

forthcoming, including all applicable costs for overhead

and impact.

(Id.~ 8)

6. On 18 September 2013, the parties executed bilateral Modification No. 00041N

(Mod. 00041N) (R4, tab 6 at 29). The modification (block 14) explicitly stated its

purpose was to provide a time extension for adverse weather for December 2012 through

July 2013, and for "Request for adjustment for mod 00041H" stating, "The purpose of

this modification is to provide a complete equitable adjustment for any and all impacts,

delays and costs associated with modification 0004 lH issued unilaterally on 7 December

4

2012." The modification extended the contract completion date by 32 days, but did not

provide any further price adjustment. (Id. at 30) The modification also included the

following release clause:

In consideration of a modification agreed to herein as

complete equitable adjustment for the Contractor's

August 19, 2013 proposal(s) for adjustment, the

Contractor hereby releases the Government from any and

all liability under this contract for further equitable

adjustments attributable to such facts or circumstances

giving rise to the proposal for adjustment.

(Id. at 30-31)

7. By email dated 23 September 2013, after Mod. 00041N was signed, Speegle

requested the status of its request for a DCAA audit on behalf of L. Pugh (R4, tab 13 at

2). The Corps responded with Serial Letter C-0025, dated 11December2013, stating in

part that "Serial letter H-0066 requested a 21-day time extension as a result of damages

incurred from modification lH .... [M]odification IN was issued bilaterally providing a

complete equitable adjustment for any and all impacts, delays and costs associated with

modification [0004]1H." (R4, tab 14)

8. Speegle responded on 6 February 2014, stating that a DCAA audit ofL. Pugh's

overhead rate was warranted and that it never agreed to waiving its rights to any

additional overhead due L. Pugh and that it would not have agreed to Mod. 00041 N if

specific verbiage regarding L. Pugh's extended office overhead had been included (R4,

tab 15).

9. By Serial Letter H-0069, dated 19 May 2014, Speegle submitted a Request for

Equitable Adjustment (REA), seeking $132,248.76 based upon a revised overhead rate

for L. Pugh of 74.19% that included both field and office overhead (R4, tab 16). The

Corps denied the REA on 21January2015 (R4, tab 17).

10. Speegle submitted a certified claim by letter dated 18 February 2015,

asserting that the negotiation between the parties for Mod. 00041 N did not address

L. Pugh's overhead rate, and that the parties had engaged in numerous discussions

regarding that overhead rate after the modification was issued thus indicating the issue

was unresolved (R4, tab 3).

11. A contracting officer's final decision (COFD) was issued on 20 April 2015

denying Speegle's claim on the basis that Mod. 00041N was bilateral and contained a

5

full release of claims (R4, tab 2). Speegle timely appealed the COFD to the Board on

20 July 2015 (R4, tab 1).

DECISION

We will grant summary judgment only if there is no genuine issue as to any

material fact, and the moving party is entitled to judgment as a matter of law. Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material fact is one that may affect the

outcome of the decision. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).

All significant doubt over factual issues must be resolved in favor of the party opposing

the summary judgment. Mingus Constructors, Inc. v. United States, 812 F.2d 1387,

1390-91 (Fed. Cir. 1987).

The government argues appellant's execution of Mod. 00041 N constituted both a

release and an accord and satisfaction barring appellant's claim as a matter of law (gov't

mot. at 5-8). Although separate affirmative defenses, a single agreement "may constitute

both a release and an accord and satisfaction, either of which may bar future claims.

Holland v. United States, 621F.3d1366, 1377 (Fed. Cir. 2010). We address each

argument in tum.

Release

The government argues Mod. 00041N included an unqualified general release and

there are no facts establishing one of the limited exceptions to the general rule that a

general release, which is not qualified on its face, bars any claims based upon events

occurring before execution of the release (gov't mot. at 5-8). Regarding the scope of the

release, the government asserts:

The language contained in Modification

No. 00041 N clearly encompassed the disputed overhead

at issue in this appeal. The "Scope of Work" section of

the modification specifically stated that its purpose was to

"provide a complete equitable adjustment for any and all

impacts, delays and costs associated with modification

00041H issued unilaterally on 7 December 2012." The

release referenced Appellant's request for equitable

adjustment and stated that Appellant was releasing

Respondent "from any and all liability under this contract

for further equitable adjustments attributable to such facts

or circumstances giving rise to the proposal for

adjustment." (SUF No. 8). No reservation of rights or

exclusions were included in the release language.

6

When read as a whole, there is no question that

Modification No. 00041N was intended to fully resolve

the fire protection change order. The scope language

cited above clearly stated that it was intended to resolve

any outstanding issues relating to Modification

No. 00041H. The actual release language covered "any

and all liability" for the facts and circumstances that gave

rise to the proposal, which was the fire protection change.

Appellant was fully capable of reading and

comprehending the three-page modification form to

ensure that it accurately described the parties['] intent.

Had Appellant not intended to release Respondent it could

have excluded the subcontractor overhead specifically,

using language similar to the closing statement in

Modification No. 00041H. The fact that full release

language was included, and garnered no objection by

Appellant, indicates the Appellant was in agreement with

a full release.

(Id. at 6)

In response, appellant argues that the intent of the parties, and thus the scope of

the release in Mod. 00014N, did not include the overhead issue as evidenced by the

language of the release and the parties' actions leading to execution of the modification

(app. resp. at 5). Additionally, appellant argues the facts establish three exceptions to the

release; mutual mistake, unilateral mistake, and continuing consideration of the claim

after release (id. at 6-8).

A release is a contract whereby a party abandons a claim or relinquishes a right

that could be asserted against another and must be interpreted in the same manner as any

other contract term or provision. Bell BC! Co. v. United States, 570 F.3d 1337, 1341

(Fed. Cir. 2009). Consequently, our examination begins with the plain language of

Mod. 00041N. The stated purposes of the modification under the description (block 14)

was to grant a request for adjustment to Mod. 00041H and to provide an equitable

adjustment for "any and all impacts, delays and costs associated with modification

00041H." Additionally, under subparagraph F, Closing Statement, there is release

language stating:

In consideration of a modification agreed to herein as

complete equitable adjustment for the Contractor's

August 19, 2013 proposal(s) for adjustment, the

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Contractor hereby releases the Government from any and

all liability under this contract for further equitable

adjustments attributable to such facts or circumstances

giving rise to the proposal for adjustment.

(SOF ii 5)

A reading of Mod. 00041N, as a whole, reveals the release language to be

ambiguous as to the scope of the release. The scope of the release is specifically tied to

the "August 19, 2013 proposal(s)" and "further equitable adjustments ... giving rise to the

proposal." Consequently, the scope of the release cannot be determined without

examination of extrinsic evidence, i.e. the 19 August 2013 proposal. Additionally, the

stated purpose of the modification is tied to the "request for adjustment to mod 00041 H."

The referenced "request" is not specifically identified but, based upon a reading of the

document as a whole, presumably refers to the 19 August 2013 letter requesting a time

extension of21 days. Additionally, the scope of the release is further muddled by the use

of "proposal(s)" to indicate their might be aspects of the proposal other than those in the

19 August 2013 letter. 3

As moving party, the government has the burden of proving that there are no

genuine issues of material fact and any doubt about factual issues is to be resolved in

appellant's favor. DTC Engineers & Constructors, LLC, ASBCA No. 57614, 12-1 BCA

ii 34,967 at 171,898. Our reading of the release language and other documents in the

record indicates there is doubt whether the scope of the release encompassed the

overhead issue. For instance, the first paragraph states, "Please note this modification

was not mutually agreed/accepted by SCI. The amount of the modification remains in

dispute with regard to the subcontractor's overhead rate." Additionally, the second

paragraph indicates the scope of the proposal was to seek an additional 21 days resulting

from the delay between execution of Mod. SC001/00041H and Mod. 000404/SC003.

(SOF ii 3) Consequently, the proposal could indicate the scope of the proposal was

limited to a request for a 21-day time extension for the government's delay between

issuing Mod. 000404/SC003 and Mod. 00041H (id.). If that is the case, the scope of the

release would not encompass the overhead issue.

The Board's task is not to resolve factual issues, but to determine whether disputes

of material fact exist. Advanced Business Concepts, Inc., ASBCA No. 55002, 06-1 BCA

ii 33,271 at 164,893. Drawing all reasonable inferences and viewing the evidentiary

record in a light favorable to the non-moving party, appellant, the scope of the release in

3

There is a least one other 19 August 2013 "proposal" in the record, appellant's proposal

that the government conduct a DCAA audit of the subcontractor's overhead rate

(R4, tab 7).

8

Mod. 00041N is unclear and there is a genuine issue of material fact regarding the scope

of the release. 4

Accord and Satisfaction

The party asserting the affirmative defense of accord and satisfaction has the

burden of proving all four elements of the defense: (1) proper subject matter;

(2) competent parties; (3) a meeting of the minds; and (4) consideration. Holland, 621

F.3d at 1382; Troy Eagle Group, ASBCA No. 56447, 13 BCA ii 35,258 at 173,060. The

government argues the agreement (Mod. 00041 N) constitutes an accord and satisfaction

and thus bars appellant's claim because:

Even if Appellant had not signed the modification with

full release language, the agreement to provide additional

time in lieu of any additional costs constitutes accord and

satisfaction. The only outstanding issue after the

finalization of Modification No. 00041H was L. Pugh's

field overhead rate. As stated in the PNM for

Modification No. 00041N, no additional time extension

was warranted, but Respondent agreed to the request for

additional time in order to full and finally resolve all

aspects of the fire protection change, to include L. Pugh's

field overhead. The time extension was valuable

consideration given the substantial liquidated damage rate

and the relief from those damages that this extension may

have provided Appellant.

(Gov't mot. at 8-9)

Appellant responds that clearly there was no meeting of the minds, and therefore,

no accord and satisfaction. Appellant supports this argument by stating;

The attached affidavit of Mr. Page establishes that

no meeting of the minds occurred between the parties

relating to the purported release of the overhead claim by

the language in Modification No. 00041N. This fact is

further supported by the 6 February 2014 letter from SCI

to the Government unqualifiedly disputing the

Government's assertion that the parties' discussions and

4 Given our conclusion, we need not address appellant's asserted exceptions to the

release (app. resp. at 6-8).

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negotiations included release of the overhead claim.

[Citations omitted]

(App. resp. at 8)

Contrary to appellant's argument, appellant's mere subjective intent not to waive

its claim is insufficient to raise a genuine issue of material fact to preclude summary

judgment in defense of accord and satisfaction. Ed. Zueblin, A.G. v. United States,

44 Fed. Cl. 228, 233 (1999); see also Mingus Constructors, 812 F.2d at 1394 (a claim

cannot be reserved and asserted on the basis of intent alone). Likewise, we are not

persuaded by appellant's letter after executing the agreement asserting it did not waive

its claim creates a genuine issue of material fact that would preclude summary judgment.

We are also not persuaded by the government's argument (gov't mot. at 8). Our

reading of the 6 September 2013 PNM indicates the negotiation and execution of

Mod. 00041 N was the result of appellant's 19 August 2013 proposal/request (ex. G-1 ).

As discussed above, that proposal arguably reserved the overhead issue and limited the

scope of the proposal to the delay between execution of Mod. 000404/SC003 and

Mod. 00041H (SOF ~ 3). Drawing all reasonable inferences and viewing the evidentiary

record in a light favorable to the non-moving party, appellant, the PNM could be read to

reflect the parties' agreement to be limited to only addressing any time or cost impacts

resulting from the delay between executing Mod. 000404/SC003 and Mod. 0004 lH; not

the issue of overhead. Clearly, here there is dispute of a material fact on this issue of

whether there was a meeting of the minds between the parties. Consequently, the

government has failed in its burden of proof of establishing there is no genuine issue of

material fact that Mod. 00041N constituted an accord and satisfaction barring appellant's

claims as a matter oflaw.

CONCLUSION

The government's motion for summary judgment is denied.

Dated: 10 May 2016

dminis rative Judge

Armed Services Board

of Contract Appeals

(Signatures continued)

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I concur I concur

~~· ~HACKlEFORD

MARKN.'fEMPLER

Administrative Judge 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. 60089, Appeal of Speegle

Construction, Inc., rendered in conformance with the Board's Charter.

Dated:

JEFFREY D. GARDIN

Recorder, Armed Services

Board of Contract Appeals

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