# Magnus Pacific Corporation v. United States

> United States Court of Federal Claims · August 31, 2017 · 133 Fed. Cl. 640

URL: https://www.frixlaw.com/law-library/cases/4200444

## Case

- **Full name:** MAGNUS PACIFIC CORP., Plaintiff, v. the UNITED STATES, Defendant
- **Court:** United States Court of Federal Claims
- **Decided:** August 31, 2017
- **Citations:** 133 Fed. Cl. 640; 2017 WL 3765524
- **Precedential status:** Published
- **Opinion:** Opinion by Bush
- **Judges:** Bush
- **Cited by:** 8 later opinions in the Frix Law Library

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## Opinion text

In the United States Court of Federal Claims
No. 13-859 C
(Filed August 31, 2017)

* * * * * * * * * * * * * * Trial; Maropakis Jurisdictional
MAGNUS PACIFIC CORP., * Issue; Claim to Resolve
* Quantum of Credit Due Agency
Plaintiff, * for Change in Slope of Levee;
* Constructive Change to Contract
v. * for Replacement of Existing
* Riprap on Levee; Defective
THE UNITED STATES, * Plans and Specifications Claim
* for Additional Embankment Fill
Defendant. * Placed on Levee.
* * * * * * * * * * * * * *

Daniel L. Baxter, Sacramento, CA, for plaintiff.

A. Bondurant Eley, United States Department of Justice, with whom were
Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Robert E.
Kirschman, Jr., Director, Martin F. Hockey, Jr., Deputy Director, Reta E. Bezak
and Vito S. Solitro, Trial Attorneys, Washington, DC, for defendant.

________________________

OPINION
________________________

Bush, Senior Judge.

This post-trial opinion resolves all of the claims and requests for relief
presented in this suit by Magnus Pacific Corporation (Magnus or Magnus Pacific)
which spring from the restoration of a levee in Texas for the United States Section
of the International Boundary and Water Commission (IBWC).1 The IBWC is a
federal agency collaborating with its Mexican counterpart in the implementation
of border and water treaties between the two countries. The contract between
Magnus and the IBWC was awarded in December 2010; the disputes in this case
focus on levee restoration work on the Rio Grande performed by Magnus from
April 2011 through May 2012.

On the same topic as one of plaintiff’s claims related to the levee, the
government has asserted a counterclaim seeking to justify funds owed Magnus
under the contract but retained by the IBWC. The amount in controversy for all of
plaintiff’s claims is almost four million dollars, plus interest; the contract’s fixed
price, subsequent to modifications agreed to by the parties, was approximately
twelve million dollars. As discussed in detail below, plaintiff prevails on its
claims to a great extent.

BACKGROUND2

I. The Contract Claims

This is a suit brought under the Contract Disputes Act of 1978, 41 U.S.C.
§§ 7101-7109 (2012) (CDA). Am. Compl. ¶¶ 15, 20; Def.’s Br. at 58; Pl.’s Reply
at 29-30. The parties agree that in 2010, pursuant to a sealed bid, fixed price
procurement, plaintiff and the IBWC entered into a “lump-sum” contract whereby
Magnus would perform restoration work on a levee near Presidio, Texas. The
largest claim in this suit is plaintiff’s “embankment fill” claim, which asserts that
Magnus was obliged to import and place on the levee greater amounts of fill than a

1
/ Magnus has a new corporate identity: Great Lakes Environmental & Infrastructure.
During trial and post-trial briefing the parties continued to use the old corporate name of Magnus
Pacific to identify plaintiff, as will the court in this opinion.
2
/ The court adopts the parties’ style of citation for trial transcript pages. The witness’s
last name precedes the transcript citation. For example Owaidat Tr. 111-13 identifies both the
page numbers of the cited transcript as well as the fact that Mr. Louay Owaidat provided the cited
testimony. A list of witnesses whose trial testimony is cited herein is provided at the end of the
background section of this opinion.

2
reasonable bidder responding to the solicitation would have expected.3 Plaintiff’s
second-largest claim, the “riprap claim,” is that the contract, as amended, required
that Magnus place imported riprap armoring on various sections of the levee, but
the IBWC also obliged Magnus to do additional, out-of-scope riprap work.4
Plaintiff’s third and smallest claim is an appeal of the contracting officer’s final
decision which sought to justify the retainage of contract payments by the IBWC
in the amount of $466,092, a retainage of contract funds related to a disputed
credit owed the government for a mid-project change to the levee design. This
final dispute, which may best be described as the “slope change credit claim,” is
the subject of both plaintiff’s claim and the government’s counterclaim.5 The
court provides a very brief, general description of each dispute below, but reserves
a more detailed narrative of pertinent facts for the specific analysis section of this
opinion devoted to each of plaintiff’s claims.

A. Embankment Fill

Magnus’s embankment fill claim, adjusted during trial because certain
computation errors were conceded by plaintiff, is for an equitable adjustment of
the contract price in the amount of $2,851,788. Of this sum, the embankment fill
“overruns” are divided into two main categories: (1) fill required at the
construction locations where deep “slurry walls,” i.e., barriers to groundwater
movement buried in trenches sixty feet deep, were installed at the side of the
levee, and (2) fill required, more generally, along most of the levee because
Magnus was obliged to excavate existing levee material to a lower depth than
expected. Of these two embankment fill claim components, the generalized
deeper excavation of existing levee materials portion of the claim greatly exceeds

3
/ “Embankment fill is earthen material used to assist in supporting the impermeability of
a levee.” Am. Compl. at 2 n.1.
4
/ “Riprap is rock or similar material used to armor shorelines, streambeds, and levees.”
Id.
5
/ As discussed in greater detail below, plaintiff’s request for relief in its amended
complaint regarding the slope change credit is not a contractor “claim” but Magnus’s response to
a government “claim,” in the context of this court’s CDA jurisdiction. For ease of reference,
however, the court will nonetheless refer to the slope change credit claim as plaintiff’s claim, in
that it is a claim set forth in the amended complaint which references a specific amount of money
retained by the government and owed to plaintiff.

3
the portion of the claim related to the excess fill required at the slurry wall
construction locations. See Joint Exhibit (JX) 2, at 1-2.

B. Riprap

Magnus’s riprap claim, adjusted during trial because certain computation
errors were conceded by plaintiff, is for an equitable adjustment of the contract
price in the amount of $597,075. In support of this claim, Magnus contends that
three separate and distinct amounts of riprap were placed on the levee. First, the
contract at the time of award called for a certain amount of new riprap to be placed
on the levee, approximately 17,500 cubic yards (CY). JX 24, at 1. Second, when
the levee project was extensively modified by bilateral modifications triggered by
what the parties refer to as the “matrix” document,6 an additional amount of new
riprap, approximately 9750 CY, was ordered to be placed on the levee. Id.
Neither of these riprap amounts in the contract included, however, the replacement
of certain existing, unsatisfactory riprap which could not be re-used on the levee.
It is this final category of riprap work, 8101 CY of new riprap to replace existing
riprap, that is the basis of Magnus’s riprap claim. Id.

C. Slope Change Credit Dispute

Well after the matrix and related contract modifications provided the parties
with a revised statement of work for the project, another major change to the
contract occurred in late February 2012. JX 104. For a significant portion of the
length of the levee, the footprint of the proposed restored levee exceeded, on the
landside of the levee, the space provided by pertinent property boundaries. The
parties were obliged to reduce the levee’s footprint by making the landside slope
of the levee in those areas steeper and more narrow. Although the volume of the

6
/ The matrix was set forth in a memorandum issued by the IBWC after performance of
the contract had begun. JX 6. This document contains a table of data identifying additional work
required at specific portions of the levee. Each of the table entries addresses the work required
for a specific portion of the levee; the location of that section is delineated by “station” markers.
The stations marked every hundred feet of levee (along with a fifty-foot marker between
successive stations). For example, Station (STA) 65 was one hundred feet upstream from STA
66, and STA 65 + 50 was fifty feet upstream from STA 66. Work, except for the slurry wall
construction, generally proceeded along the levee in a “downstream, up station” manner,
beginning at STA 1 and ending approximately at STA 312. Sallas Tr. at 1709, 1714.

4
levee would thus be reduced, the credit owed the government due to this contract
change was not resolved amicably.

For the slope change credit, the IBWC retained $466,092 in contract
payments owed Magnus under the contract. Magnus argues that the slope change
credit should be $35,036, whereas the government’s position, modified during
trial, is that the IBWC is entitled to a slope change credit of $383,893. In its
amended complaint, Magnus seeks a disbursement of the retained funds in the
amount of $431,056 (subtracting a $35,036 slope change credit from $466,092
retained by the IBWC). In its counterclaim, the government seeks a ruling which
endorses a slope change credit of $383,893, so that the IBWC would only refund
to Magnus a modest amount ($82,199, subtracting a $383,893 slope change credit
from $466,092) of the retainage.

II. Overview of the Levee Restoration Project

A. The IBWC Managers of the Project Lacked Specialized Levee
Expertise

It became clear at trial that levee restoration projects are somewhat
specialized projects that benefit from specialized experience. The IBWC
employees assigned to the project at issue in this case, referred to as the Lower
Presidio Levee, were not well-versed in the technical requirements of levee
restoration. The contracting officer, Mr. Frank Delgado, testified that he had no
technical expertise in levee restoration or construction. Delgado Tr. at 474-75.
The contracting officer’s representative, who served as the IBWC’s technical
expert on this project, Mr. Frank Duran, had just begun work with the IBWC in
2010, and was in the process of obtaining his professional engineer’s license as
this project was underway. Duran Tr. at 917. He testified that the Lower Presidio
Levee project was his first levee project (along with a neighboring levee project at
about the same time). Id. at 723.

To support Mr. Delgado and Mr. Duran, the IBWC engaged a contractor to
manage restoration at the levee, Mr. Matthew Moore. His role was described as
construction inspector and construction manager. Moore Tr. at 1135, 1282. Mr.
Moore had worked on one prior levee project, which was another IBWC levee. Id.
at 1281-82. Prior to the Lower Presidio Levee, however, Mr. Moore had never

5
worked on a levee that involved slurry walls (which, in this project, were sunk
sixty feet below the levee to impede groundwater movement). Id. at 1386. Mr.
Moore improved his knowledge of slurry wall construction by questioning
Magnus employees, reading publications written by Mr. Louay Owaidat,
Magnus’s president, conducting internet research and consulting with a colleague
at his firm. Id.

B. The Levee’s Designer Also Lacked Specialized Levee Expertise,
and Suffered Cognitive Impairments During His Tenure at IBWC

Mr. Donald Atwood was the IBWC engineer who designed the Lower
Presidio Levee restoration project. He was not called to testify at trial based on
counsel’s concern that his presence at trial would be a hardship. According to
counsel, Mr. Atwood’s presence at trial would have constituted either a medical
hardship, a financial hardship, or both. Tr. at 449. Portions of Mr. Atwood’s 2015
deposition transcript became part of the trial record by joint request of counsel.
Joint Status Report of May 19, 2016, at 4 (ECF No. 64).

In 2006, Mr. Atwood suffered a traumatic brain injury from a car accident
and, from his perspective, subsequent cognitive problems eventually led to Mr.
Atwood being fired by the IBWC. Atwood Dep. Tr. at 7. The brain injury left Mr.
Atwood with “serious memory problems” and difficulties with concentration. Id.
at 7, 12. He was hired by the IBWC in 2009 and did not fully reveal the extent of
his cognitive impairments. Id. at 11. Mr. Atwood stated that his cognitive
impairments worsened over time. Id. In 2015 Mr. Atwood stated that he had been
fired from his last three jobs and that he was not the engineer or designer that he
used to be. Id. at 10-13.

Mr. Atwood came to the IBWC from a career in residential development,
for the most part designing single-family home subdivisions. Id. at 16, 18. Prior
to joining the IBWC, Mr. Atwood had never designed a levee. Id. at 22. His
design of the Lower Presidio Levee was his second levee design, after completing
the neighboring, upstream levee design just a short time before. Id. at 23. Mr.
Atwood based these two levee designs on other IBWC designs from previously
completed projects. Id. at 75-79.

After a review of all of the portions of Mr. Atwood’s deposition that were

6
presented at trial, much of it on videotape, the court concludes that Mr. Atwood’s
design of the Lower Presidio Levee was severely affected by his lack of
experience in levee construction and restoration, as well as by the cognitive
difficulties he was suffering from his brain injury. Mr. Atwood’s testimony
showed that he was learning levee design on the job, and was trying, apparently
with some difficulty, to bridge the gap from his prior experience to the specialized
tasks of levee restoration project design. See id. at 23 (stating that restoring an
“existing levee [to a] proposed [levee is] the same as designing a road with the
earthwork]”). Further, Mr. Atwood’s testimony showed that his cognitive
problems affected his work at the IBWC. Id. at 10, 12-14. Although Mr. Atwood
testified that he was able to compensate for his cognitive problems by sitting
quietly and concentrating on his work, id. at 47, his design work for this project
involved site visits and communications with IBWC staff and contractors, as well,
id. at 38, 42, 56-57, 65. Mr. Atwood clearly stated that after his car accident he
could no longer think on his feet, id. at 12, a cognitive impairment that would
necessarily have affected his design work for the IBWC. Thus, it is not surprising
that the levee design produced by Mr. Atwood that was included in the solicitation
for the Lower Presidio Levee caused problems down the line for both Magnus and
the IBWC.

The Lower Presidio Levee restoration project would renovate
approximately 5.88 miles of levee. JX 1, at 1. According to Mr. Atwood, the
design of the project took approximately six months, perhaps a bit more, to be
completed. Atwood Dep. Tr. at 54. Mr. Atwood also calculated the difference
between the volume of the existing levee and the volume of the renovated levee, a
calculation which established cost estimates for the materials expected to be used
on the project. Id. at 62-66. Mr. Atwood acknowledged, however, that his design
was not always accurate in its depiction of the existing levee. Id. at 39, 41, 57-59.
According to plaintiff’s expert, Mr. George Sills, a levee restoration designer
typically has years to develop the renovated levee’s design and agency staff also
typically have a year to write the specifications for the project. Sills Tr. at 2539-
40. At trial Mr. Sills characterized the plans and specifications for the Lower
Presidio Levee as perhaps the worst he had seen during the decades he had worked
on and/or evaluated levee projects, both for the United States Army Corps of
Engineers and in private practice. Id. at 2425.

C. Solicitation and Significant Amendments Sow Confusion

7
The IBWC issued its solicitation for the project on November 17, 2010. JX
1, at 40. The IBWC publicized the project, which was a small business set-aside,
with an estimated price from $10 million to $15 million. Id. at 1. Significant
amendments to the solicitation included a statement that estimates of the quantities
of materials required for project completion were for “informational purposes
only.” Id. at 40 (Amendment 001, issued November 19, 2010), 73 (same).
Bidders were required to attend a site visit before their bids would be considered.
Id. at 29, 64.

A number of significant solicitation amendments were issued during the
eight-day period from December 8 through December 15, 2010. For example, the
entire set of specifications for the project was revised and fully replaced on
December 8, 2010 by a 281-page document. Id. at 44; JX 23. These significant
solicitation amendments also included four sets of the IBWC’s answers to bidder
questions, updated as bidders found incorrect or confusing provisions in the
solicitation package. JX 1, at 52-54, 64-68, 73-74, 80.

Many of the IBWC’s answers to bidder questions encompassed fundamental
changes to the project and revised or replaced contract language. For example, as
of December 7, 2010, bidders still had not received access to electronic files
pertinent to the levee design, nor had they received geo-technical information as to
subsurface conditions, even though bids were due two weeks later. Id. at 52. The
IBWC promised that these files would be available shortly. Id. The geo-technical
report made available to bidders on December 9, 2010 consisted of approximately
170 pages. Id. at 55; JX 139, at 557-729.

The court highlights here some of the IBWC’s answers to bidder questions
to give concrete examples of the types of changes to contract work that bidders
encountered from December 8, 2010 through December 15, 2010. On December
8, 2010, the IBWC slashed the estimate of imported riprap to be placed on the
levee almost in half, from 32,000 CY to 17,500 CY. JX 1, at 53. On December 11
and December 14, 2010, specifications for two types of structures on the levee
were changed. Id. at 65, 73. On December 15, 2010, payment for the slurry walls
was changed from a price per unit foot to lump sum. Id. at 80. From the time the
last of these significant changes were made to the solicitation, bidders had
approximately one week to finalize their bids. At one point, the IBWC
encouraged bidders to conduct their own surveys of the existing levee, rather than

8
rely on the information provided by the IBWC. Id. at 66. Bids were originally
required to be submitted by December 21, 2010, but the deadline was ultimately
extended to December 23, 2010. Id. at 75.

Plaintiff’s expert, Mr. George Sills, testified that the IBWC’s solicitation
package was totally inadequate to support a fixed-price bidding process. Sills Tr.
at 2425. According to Mr. Sills, first, the solicitation lacked essential data. Id.
Second, the levee design set forth in the plans and specifications did not reflect the
conditions on the existing levee. Id. Third, the IBWC’s answers to bidder
questions showed that the agency did not really understand the project, or, at the
very least, could not clearly convey its understanding of the project to bidders. Id.
at 2455, 2465-66. Fourth, Mr. Sills testified that a bidder could not have been
expected to repeatedly pose a question for which the agency had already provided
an answer, even if the answer did not resolve every inherent ambiguity in the
topic, because the time to prepare bids was limited. Id. at 2518-19. Finally, Mr.
Sills believed that the IBWC should not have expected bidders to expend their
own funds to perform additional surveys of the existing levee so that their bids
could be founded on better data than the inaccurate or insufficient data provided in
the solicitation. Id. at 2469-70; JX 98, at 3.

The court must agree with Mr. Sills that the level of error and missing
information in the solicitation documents, and the sweeping last minute changes to
the solicitation that were made during the bidding process, were problematic.
Even the government’s expert, Mr. Lee Wooten, acknowledged that the original
levee design documents included in the solicitation were flawed and provided
insufficient guidance for levee restoration. Wooten Tr. at 1904-05. Despite the
shifting sands of information contained in the solicitation package, Magnus
submitted a bid of $8,395,995 which was accepted by the IBWC on December 30,
2010. Jt. Stip. of July 28, 2016, at 1 (ECF No. 95).

D. Even Before the Solicitation was Awarded to Magnus, the
Contracting Officer’s Representative for the Project Was Aware
of Defects in the Levee’s Design

Mr. Frank Duran, who fulfilled the role of contracting officer’s technical
representative on the levee project, testified that he and the IBWC knew that the
original designs for the project were “terrible” even before the contract was

9
awarded to Magnus. Duran Tr. at 1039. According to Mr. Duran, the great
majority of the defects in the design were in the drawings which described the
construction of the levee and which depicted, erroneously, the status of the
existing levee. Id. at 1044. Mr. Duran also testified that the IBWC’s estimate of
what the project would cost was just as flawed as the design documents provided
to Magnus.7 Id. at 731.

E. Early Work on the Levee Impeded by Defective Levee Plans and
Specifications

Magnus began excavation work on the existing levee on April 18, 2011. Jt.
Stip. of August 30, 2016, at 1 (ECF No. 109). However, by this time the IBWC
had confirmed that the levee design was deeply flawed. See JX 6, at 1 (IBWC
memorandum citing “numerous design deficiencies” reflecting conflicts between
the “current plan versus existing site conditions”). Indeed, Mr. Duran testified that
he recommended to the contracting officer that the IBWC terminate the contract
for the convenience of the government rather than proceed with the construction
of a levee that could not be built as designed.8 Duran Tr. at 724-26. The IBWC
asked Mr. Duran to ameliorate the design deficiencies himself but he refused,
citing concerns about associating his professional license with this particular
design at such a late stage of the design’s development. Id. at 1039-40. The
IBWC’s “initial plan,” therefore, was to terminate the levee project contract for the
convenience of the government. Nunez Tr. at 1121. The IBWC met with Magnus
to discuss an alternative, which would be for Magnus to create better construction
drawings based on a new, accurate survey of the existing levee. JX 7. In Mr.
Duran’s words, Magnus “wanted to help the IBWC out,” rather than lose the job if
the contract was terminated for the convenience of the government. Duran Tr. at
924.

F. The IBWC’s “Matrix” Request for Additional Contract Work to
Complete the Levee Restoration

7
/ Once he got a closer look at the levee, Mr. Duran estimated, very roughly, that
Magnus’s bid of $8,395,995 would need to be doubled to account for additional, unexpected
work required on the levee. Duran Tr. at 737.
8
/ Even in 2016, Mr. Duran’s opinion that the levee contract should have been terminated
for the convenience of the government was unchanged. Duran Tr. at 726.

10
On April 18, 2011, the contracting officer issued a memorandum to
Magnus, the “matrix” document, which set forth a detailed list of work items that
would need to be completed to fully restore the existing levee. JX 6. A first step
would be for Magnus to obtain a complete and accurate survey of the existing
levee, with the actual location, width and height of the existing levee for 5.88
miles to be determined by a professional surveyor. JX 4, at 4-5. Subsequently,
Magnus would prepare detailed cost estimates for the additional work required.
JX 7, at 10-13; JX 11, at 1.

The notes for a meeting between Magnus and the IBWC held on April 21,
2011 show that the IBWC initially expected, or at least preferred, that the
additional work set forth in the matrix would not increase the contract price by
more than 25%. JX 7, at 1. In other words, the IBWC’s expectation at the start of
these contract modification negotiations was that the contract price would rise
from $8,395,995 but would remain less than $10,495,000. Nonetheless, the levee
restoration contract was modified in September 2011, in response to the matrix, so
that the modified contract price rose to $11,518,798. JX 4; JX 27; JX 108.

G. No Redesign of the Levee by Magnus

One of the disputed issues in this case is whether the changes to the contract
embodied in the matrix and related contract modifications (Modifications 001,
002, and 003) ordered Magnus to redesign the project. Defendant argues that
Magnus took on the responsibility for fixing the defective design of the levee, both
with a redesign and with its pricing of the work set forth in the matrix. Assuming
that such a redesign of the levee occurred, the government’s position is that
Magnus must now bear the risk of any cost overruns that were inherent in
Magnus’s overall redesign of the levee set forth in those contract modifications,
because those contract modifications were fixed-price. In other words, in the
government’s view, because Magnus redesigned the project and agreed to a fixed-
price modification of the contract, the IBWC is now insulated from any
responsibility for cost overruns.

Not surprisingly, plaintiff’s position is significantly different and relies on
three principal facts. First, while Magnus obtained an accurate survey of the
existing levee and prepared new construction cross-sections based on that survey,
these were simply tasks that helped Magnus implement the IBWC’s original,

11
flawed design for the levee, not a new Magnus-authored levee redesign.9 Second,
even though the matrix and related contract modifications added work to the base
contract, cost overruns in embankment fill were the result of flaws in the original
levee design, plans and specifications. Third, plaintiff contends that the contract
modifications related to riprap that flowed from the matrix negotiations included a
deferred determination of the quantity of additional riprap that might be needed to
replace existing riprap on the levee.

The preponderant weight of the evidence presented at trial, primarily
testimony discussing contemporaneous documentation of the period of
negotiations triggered by the matrix, shows that Magnus did not contract to
perform a redesign of the Lower Presidio Levee. Sallas Tr. at 1662-64; Owaidat
Tr. at 2313-27. Further, Mr. Owaidat testified that Magnus is not, and was not in
2011, a levee design firm and could not have offered to redesign the levee for the
IBWC. Owaidat Tr. at 2312, 2318-19, 2328. Although the IBWC witnesses,
particularly Mr. Frank Duran, insisted that Magnus redesigned the levee, Duran
Tr. at 731-34; Nunez Tr. at 1129-31, there is not a shred of documentary evidence
which supports that contention. The court, having weighed the evidence provided
by contemporaneous documents and witness testimony, concludes that Magnus
did not offer and did not contract to redesign the Lower Presidio Levee. Because
Magnus did not redesign the levee, the IBWC’s attempt to shift responsibility onto
Magnus for a faulty redesign of the levee is without merit.

H. Renovation of the Levee, from April 18, 2011 through May 16,
2012, Was Satisfactorily Completed, but the Embankment Fill
and Riprap Disputes Soured the Working Relationship Between
the Parties

The IBWC accepted, without change, Magnus’s proposals for the matrix-
related work on the levee. By all accounts, the IBWC was satisfied with Magnus’s
renovation of the levee. Delgado Tr. at 677; Nunez Tr. at 1127; Moore Tr. at
1271. In the third quarter of 2011, however, Magnus began to communicate to the
IBWC that it was experiencing cost overruns in the amount of embankment fill

9
/ Cross-section drawings, created for each fifty-foot station marker along the levee,
depict the existing and as-built contours of the levee at each of those points along the levee. See
supra note 6.

12
that was required to complete the levee. Owaidat Tr. at 124-25; Diettert Tr. at
358-61; Delgado Tr. at 573-74; Moore Tr. at 1245; Sallas Tr. at 1635-37. Magnus
also eventually informed the IBWC that additional riprap was placed on the levee
which was not included in the specific amounts required by the base contract or in
the matrix-based contract modifications. JX 80. Rather than negotiate the
amounts of any equitable adjustments to the contract owed Magnus, the IBWC
simply denied Magnus’s claims related to these cost overruns in their entirety. A
separate dispute regarding a credit owed the IBWC for an extensive landside slope
change to the levee also could not be resolved amicably. See supra. This
litigation followed.

III. Procedural History

Magnus filed its complaint in this court on October 31, 2013, appealing the
contracting officer’s denials of both the embankment fill claim and the riprap
claim. On January 13, 2014 the contracting officer issued a final decision holding
that the IBWC was entitled to retain $466,092 of contract payments due Magnus
in order to provide a credit to the IBWC to account for reduced quantities of
imported embankment fill occasioned by slope changes to portions of the levee.
JX 33. Magnus accordingly amended its complaint on January 29, 2014 to add an
appeal of the contracting officer’s final decision on the slope change credit issue.
The parties then conducted discovery on the issues raised in plaintiff’s amended
complaint.

As this case moved toward the trial preparation phase, the court considered
two important motions brought by the government. In one motion, the
government sought leave of the court to amend its answer to the amended
complaint in order to bring a counterclaim addressing the slope change credit
dispute. ECF No. 70. In the other motion, the government sought to narrow the
admissible scope of plaintiff’s expert opinions and testimony regarding the host of
problems caused by the levee’s inadequate design. ECF No. 69. The government
prevailed, in large part, on both of its motions.

The court issued separate opinions on the government’s motions which
significantly narrowed the scope of trial proceedings. The first opinion recognized
this court’s jurisdiction under the CDA to resolve the government’s counterclaim
on the slope change credit issue. Magnus Pac. Corp. v. United States, No.

13
13-859C, 2016 WL 3776889 (Fed. Cl. July 13, 2016) (Magnus I).
Notwithstanding its delay of more than two years, the government was permitted
to assert its counterclaim for a slope change credit, but only in the amount of the
contracting officer’s retainage of $466,092, not more. See id.

The court’s second ruling examined the expert opinion topics proposed by
plaintiff and evaluated the relevance of those topics for the resolution of plaintiff’s
riprap and embankment fill claims.10 Magnus Pac. Corp. v. United States, No.
13-859C, 2016 WL 3960447 (Fed. Cl. July 21, 2016) (Magnus II). Magnus II also
discussed the court’s jurisdiction under the CDA, and determined that the court
had jurisdiction to consider three theories of entitlement for plaintiff’s riprap and
embankment fill claims: Type I Differing Site Conditions; Defective Plans and
Specifications; and Constructive Change. 2016 WL 3960447, at *3-7. There were
no other evidentiary challenges brought to the court’s attention through the formal
process established by the court’s pretrial orders. ECF Nos. 53, 57, 62. A pre-trial
conference was held in Washington, DC on July 7, 2016.

Trial was held in Sacramento, California from August 8, 2016 through
August 11, 2016, and trial continued in Austin, Texas from September 12 through
September 22, 2016. The court has before it the trial transcript, trial exhibits, and
the parties’ post-trial briefs (Pl.’s Br. (ECF No. 135), Pl.’s Br. Supp. (ECF No.
136), Def.’s Br. (ECF No. 140), Def.’s Reply (ECF No. 144), and Pl.’s Reply
(ECF No. 145)). In this opinion, the court cites the testimony of the following trial
witnesses:

Louay Owaidat, Magnus Pacific president;

Bruce Diettert, Magnus Pacific chief financial officer;

Jeffrey Sallas, Magnus Pacific regional manager;

10
/ Defendant’s motion in limine did not target Mr. George Sills’ Expert Rebuttal Report,
which addressed, albeit very briefly, plaintiff’s slope change credit claim. Tr. at 2421. Because
none of the expert opinions at issue in the government’s motion in limine addressed the slope
change credit dispute, the court’s ruling on the motion in limine had no effect on the permissible
scope of expert trial testimony regarding plaintiff’s slope change credit claim or the
government’s counterclaim on that same issue. Magnus Pac. Corp. v. United States, No.
13-859C, 2016 WL 3960447, at *1 (Fed. Cl. July 21, 2016) (Magnus II).

14
Rodney Louviere, Magnus Pacific project manager;

Chris Douglas, Magnus Pacific project engineer;

Champ Clark, Magnus Pacific quality assurance officer;

Edison Stevens, senior soils testing technician for Fugro Consultants,
a Magnus subcontractor;

Frank Delgado, IBWC contracting officer;

Jose Nunez, IBWC Engineering Services Division chief;

Frank Duran, IBWC contracting officer’s technical
representative;

Matthew Moore, employee of subcontractor URS, who
served as IBWC’s construction manager/construction
inspector;

George Sills, plaintiff’s expert; and

R. Lee Wooten, defendant’s expert.

DISCUSSION

The court’s analysis of the trial evidence is divided into five topical
sections, in the following order: witness credibility, the slope change credit
dispute, the riprap claim, the embankment fill claim, and interest due plaintiff
under the CDA.

I. Witness Credibility

As a general matter, both parties’ witnesses were credible, except for the
witnesses discussed separately below. Mr. Louay Owaidat, the president of
Magnus, was, in particular, both well-informed and credible; in addition, his grasp

15
of the issues in dispute in this litigation was unmatched by any other witness. An
important difference must also be drawn between the witnesses for Magnus and
those for the IBWC – much more extensive levee restoration experience going into
this project was to be found among the contractor’s personnel. Similarly, the
principal expert testifying for Magnus, Mr. George Sills, was better-versed in
levee projects than was Mr. Lee Wooten, the government’s expert. Wooten Tr. at
2123; Sills Tr. at 2376-78. Thus, for most of the disputed questions of fact aired at
trial, plaintiff’s witnesses were more credible and showed greater expertise as to
levee restoration work.

A. Mr. Frank Delgado

Mr. Delgado, the IBWC’s contracting officer, was generally not a credible
witness. He was combative when asked follow-up questions regarding testimony
he had given moments earlier, and retreated from his testimony concerning
“staffing shortages” at the IBWC when plaintiff’s counsel attempted to confirm
that such shortages did indeed exist. E.g, Delgado Tr. at 460-62. In general, Mr.
Delgado’s testimony appeared to be crafted to avoid any possible inference that he
or the IBWC was at fault, to even the slightest degree, for the excess costs
incurred by Magnus during the levee restoration project. Mr. Delgado, who is
now retired, also had very little specific or detailed memory of events, and instead,
quite often relied on a somewhat generalized, impressionistic recollection of the
disputes between the IBWC and Magnus. See, e.g., Delgado Tr. at 684-85 (“I’m
not precise on this. . . . My recall is not there.”).

In addition, Mr. Delgado’s trial testimony presented, on multiple topics, a
different version of events, more favorable to the IBWC’s position, than the
version of events he provided during a deposition taken by Mr. Baxter. E.g.,
Delgado Tr. at 469-73; 490-92, 509-11; 622-24; 638-39; 641-43, 672-74. The
accumulation of these inconsistencies in testimony detracted from Mr. Delgado’s
credibility. Mr. Delgado’s testimony also showed that at the time he denied
Magnus Pacific’s largest claim, he was influenced by rumors at the IBWC,
unfounded rumors discredited at trial, that Magnus had falsified some of the
records that substantiated the quantities of embankment fill required to complete
the restoration of the levee. See id. at 628-30, 649-54. In general, Mr. Delgado’s
testimony evinced a bitterness toward Magnus and a continuing suspicion as to the
factual bases of Magnus Pacific’s claims, attitudes which appeared to be grounded

16
more in personal animus than in an objective review of the work performed by
Magnus to restore the levee. Cf., e.g., id. at 677-78 (begrudgingly conceding that
Magnus had “properly constructed” the restored levee). Overall, the court was not
convinced that Mr. Delgado’s testimony at trial was accurate or credible.

B. Mr. Frank Duran

Although Mr. Frank Duran, the contracting officer’s representative for the
IBWC, retained vivid impressions of the levee restoration project, his testimony
was inconsistent as to project work and communications between the IBWC and
Magnus. For example, Mr. Duran stated that Magnus personnel were clearly
warned, in writing, that their revised cost estimates for contract completion were
too low, but he later testified, unconvincingly, that only an ambiguous instruction
to “double check your numbers” had been provided in writing. Duran Tr. at 737-
42. Mr. Duran, as he recounted these communications, had a very loose estimate
as to the number of such warnings that were provided to Magnus, ranging from
two or three instances, to “several times.” Id.

Only one letter on the topic of Magnus’s cost proposals was identified at
trial, however. Further, this IBWC letter, specifically relied upon by Mr. Duran as
an example of the warnings provided Magnus, contained no warning to Magnus
that its proposed costs in response to the matrix were too low. JX 11. Indeed, it
would be difficult to ascertain from this letter that Magnus was being asked to
“double check” its quantity estimates. Id. Mr. Duran did not improve his
credibility by testifying that he “believed” a “second round” of comments had
been sent to Magnus; no second letter or email was ever identified among the trial
exhibits. Duran Tr. at 928, 1028-29.

The “warning letter” testimony was just the tip of the iceberg for Mr.
Duran’s credibility problems. He explained that a portion of his deposition
testimony was inaccurate because he had misunderstood the question posed to
him. Duran Tr. at 730. On the stand, Mr. Duran initially refused to concede that
as of March 2013 the IBWC had taken a firm position that Magnus’s embankment
fill claim would be denied in its entirety, but, after hearing his deposition
testimony to the contrary, changed his trial testimony on that point. Id. at 755-57.
From these and other aspects of Mr. Duran’s testimony, the court viewed Mr.
Duran’s testimony as having a high probability of containing inaccuracies and an

17
excessive amount of “spin.”11

Like Mr. Delgado, Mr. Duran’s testimony at trial seemed to be fueled in part
by a desire to justify his decision to recommend against any payment to Magnus
for its claims. For example, Mr. Duran used a number of targeted, narrow
questions from plaintiff’s counsel as opportunities to complain generally that
Magnus’s claims lacked supporting data and consistency. Duran Tr. at 758-59,
762, 774, 833. There were also a number of occasions when Mr. Duran’s
deposition testimony, which generally tended to be less hostile to Magnus’s
version of events, impeached statements he made at trial that were highly critical
of Magnus’s claims. See id. at 815-16, 841-42, 888-89, 894-96. Mr. Duran’s
testimony, as a general matter, lacked credibility because Mr. Duran appeared to
be slanting his testimony at trial quite clearly in support of his decisions to reject
any possible validity of Magnus’s claims.

The portion of Mr. Duran’s testimony that most clearly demonstrates his
lack of credibility was his discussion of a letter sent by the IBWC to Magnus
requesting cost proposals to complete the restoration work on the levee. This
letter, dated July 1, 2011, is straightforward in its request for detailed cost
proposals. JX 11, at 1. There is not, however, a single sentence in this letter
which implies that Magnus’s cost proposals that had been advanced in previous
discussions were too low. The only specific mention of a cost concern is an
upward limitation on price for additional work on Reach 1, the upstream portion
of the levee. Id.; see also JX 7, at 1 (similarly noting an upward limitation set by
the IBWC for the cost of work contemplated by the matrix). Nonetheless, Mr.
Duran insisted at trial that the warning contained in the text of this letter was that
Magnus needed to double-check its figures because the IBWC was concerned that
Magnus’s cost proposals were too low. There is no such warning in the text of the
July 1, 2011 letter and Mr. Duran’s interpretation of the plain text of that letter

11
/ Mr. Duran, when confronted with documents in the record such as letters or emails,
repeatedly relied on undocumented phone conversations in an attempt to lend credence to his
testimony regarding the content of communications between Magnus and the IBWC. See, e.g.,
Duran Tr. at 737-41, 802, 883-84, 896-97, 1035-37, 1106. Based on Mr. Duran’s demeanor at
trial, and testimony from other witnesses which contradicted his statements, see, e.g., Sallas Tr.
at 1622-23; Owaidat Tr. at 2340-41, the court considers Mr. Duran’s testimony as to the alleged
content of these phone calls to be unreliable, at best.

18
was neither logical nor credible.12 Duran Tr. at 802-03, 1020-28. Judging both
the content of Mr. Duran’s testimony and his demeanor as a witness, the court
finds that his testimony was largely not credible.

C. Mr. Matthew Moore

Mr. Moore, the contractor who performed contract inspection and
management services for the IBWC on the levee, was engaging and affable when
questioned at trial. His testimony, however, tended to wander through a fog of
ambiguity and confusion, and was quite often difficult to follow. Here is an
example of one of his answers on the stand, when Mr. Moore was questioned
whether he ever had difficulty with or asked Magnus to revise any of the daily
construction reports submitted to him:

It seems like in the beginning, there was several working
with Rodney that I was asked – I asked him – not I was
asked – I was asked to include more information or if
there was a specific conversation during the day that I
didn’t notice was on theirs which happens once in a blue
moon for them to, hey, could you include that this
conversation took place or – in their daily report as
opposed to I would – what was your statement? – having
difficulty – having difficulty with their reports, so – but –

Moore Tr. at 1139. Mr. Moore then clarified, with the assistance of counsel, that
there were very few instances when he asked Magnus to revise a daily report. Id.
at 1140.

Clarification of Mr. Moore’s confusing statements was elusive, however,
when he could not remember what steps he had taken to arrive at certain opinions.
For example, Mr. Moore came to believe, it appears, that the contract documents

12
/ By way of contrast, Mr. Sallas, Magnus’s regional project manager, confirmed that
this letter, when read according a plain meaning to its terms, contained no warning that Magnus’s
cost estimates were too low. Sallas Tr. at 1620-22. Mr. Owaidat testified that he, too, disagreed
with Mr. Duran, and demonstrated that Mr. Duran’s proposed interpretation of the letter was not
supported by any portion of the plain text of that document. Owaidat Tr. at 2331-38.

19
did not represent that the existing levee material was suitable to be re-used as
embankment fill placed on the levee for levee restoration. Moore Tr. at 1158. At
his deposition, Mr. Moore testified that he did not review contract documents for
the specific purpose of forming that opinion. Id. at 1157. At trial, he changed his
testimony to state that he had reviewed contract documents for that purpose. Id. at
1155.

Exactly how that review of contract documents by Mr. Moore might have
occurred was never clear, as shown by the following testimony given at trial by
Mr. Moore:

I believe once I received the plans and specs, I looked at
it, and I don’t remember finding information in there that
stated that the existing material could be reused.
....
I believe at some point I would have looked through
those, looking for does – is there statements that or some
– something that would show that the existing material is
there.
....
[Do you have a specific recollection . . . ?]
Not specific. I believe I would have in the beginning.
Or – or when someone asked can we reuse this as – a
blanket.
....
I believe in the beginning when Magnus started work
that I would have dove into it deeper to look to say is
there something out there that says the material’s
probably generally good and – and base – do – or do we
really need testing on everything, which we would
anyway per plans and specs. But what do we think we’re
looking at here.
[But you believe you would have, but you don’t have any
specific recollection . . . .]
Correct.

Moore Tr. at 1155-59. In the end, it is unclear whether the deposition testimony

20
stating that Mr. Moore did not review contract documents to form his opinion, or
his trial testimony stating that he believed he would have reviewed contract
documents to form his opinion, better reflects what actually happened. Mr.
Moore’s testimony contained persistent and significant ambiguities of this type.

Mr. Moore also confessed, repeatedly, that his memory of events on this
levee was not sufficient to answer specific questions. See, e.g., Moore Tr. at 1141,
1148, 1154-55, 1158, 1172-73, 1192, 1320. In addition, like Mr. Delgado and Mr.
Duran, there were several instances where his deposition testimony and trial
testimony did not match. See id. at 1157-58, 1161-64, 1167-68, 1237-38. The
court viewed Mr. Moore’s testimony as less credible than most of the other
witness testimony at trial because of the amount of confusion, problems with
recall, and inconsistencies with prior deposition testimony he exhibited on the
stand.

To give a final example of Mr. Moore’s lack of credibility, Mr. Moore was
asked how he arrived at a particular conclusion in his technical analysis rejecting
the entirety of Magnus’s riprap claim. Even after a review of every relevant trial
exhibit, Mr. Moore could not say with any certainty why his analysis stated that
Magnus had not reviewed two important types of information when Magnus
estimated the work and expense required to complete all of the riprap work on the
levee. Moore Tr. at 1192-93. In essence, Mr. Moore’s trial testimony on this
topic shed absolutely no light on a key dispute in Magnus’s riprap claim. Mr.
Moore, who was the only representative of the IBWC with a daily presence on the
levee, was too befuddled by the passage of time, in most instances, to provide
credible testimony as to the factual underpinnings and merits of plaintiff’s claims
in this suit.

II. Slope Change for Levee Modifies Contract

On February 27, 2012 in Modification 004, the IBWC unilaterally modified
the contract to change the landside slope of the levee from a wider, gentler 3:1
ratio to a slimmer, steeper 2.5:1 ratio from STAs 172 to 263. JX 104, at 1. This
change would cause a reduction of embankment fill in the body of the levee
because it reduced the volume of the levee on the landside between these stations.
Accordingly, the parties entered into negotiations as to the reduction in the fixed
contract price that would reflect Magnus’s reduced costs. Id. According to the

21
exhibits related to this change and undisputed witness testimony provided at trial,
the levee slope change was required because several portions of the levee design
encroached on existing fixed objects, such as utility poles and drains, or right-of-
way and easement boundaries; therefore, the agency discovered that the levee
landside edge needed to be moved inward from what was originally shown in its
design for the project. See, e.g., JX 29; JX 32; JX 33; JX 72; JX 104; Owaidat Tr.
at 134, 156-57; Duran Tr. at 875-76.

The scope of the slope changes to the levee eventually expanded to include
a number of portions of the levee beyond those contemplated in Modification 004.
The stations ultimately affected by the slope change included STAs 61 to 68, 97 to
113, 153 to 157, and 176 to 260. JX 29; JX 32; JX 72. That is approximately one-
third of the length of the levee that was affected by inaccurate information in the
levee design provided to Magnus by the IBWC at the outset. See JX 72 (Duran
Memorandum of March 8, 2013) (noting that “right of way constraints would not
allow for the originally designed levee footprint”). Some additional work, work-
flow inefficiencies, delays and additional construction costs flowed from the levee
slope change. JX 32; Owaidat Tr. at 154-58. Although Magnus provided the
IBWC with a detailed description of the impacts of the levee slope change on
Magnus’s levee restoration work, and a cost proposal which reflected those
impacts, the IBWC never asked for more specific supporting data and never
performed an analysis which would serve to rebut the amount of the increased
costs of slope change-related work contained in Magnus’s final slope change
credit proposal.

The parties were not able to achieve consensus as to the amount of the credit
due the IBWC for the slope change pursuant to Modification 004. JX 30; JX 103.
On January 13, 2014, the contracting officer issued his final decision on the
dispute, holding that Magnus owed the IBWC $466,092 for the slope change. JX
33. The contract was never modified to incorporate that decision. As a practical
matter, the IBWC continues to retain $466,092 that is owed, under the terms of the
contract, to Magnus. In this court, Magnus seeks to invalidate the agency’s
retention of those funds in large part, although Magnus’s claim acknowledges that
Magnus owes the IBWC $35,036 for a slope change credit for reduced
embankment fill costs. Accordingly, in this suit Magnus seeks $431,056 related to
the slope change dispute (subtracting $35,036 from $466,092 retained by the

22
IBWC). The government counterclaims for a slope change credit of $383,893.13
Def.’s Br. at 59. The government concedes only that Magnus is due a “modest
refund” from the funds retained by the government related to the slope change
credit dispute, id. at 1, apparently in the amount of $82,199 (subtracting $383,893
from the retained amount of $466,092).

A. Maropakis Challenge to Plaintiff’s Slope Change Credit Claim

Before resolving the merits of the slope change credit dispute, the court
must address the government’s jurisdictional challenge to plaintiff’s claim
challenging the IBWC’s retainage of $466,092. The government grounds its
argument in an overly broad interpretation of the holding of M. Maropakis
Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir. 2010) (Maropakis).
Def.’s Br. at 58; Def.’s Reply at 29. Although the government correctly quotes the
holding in that case, defendant ignores a number of decisions which have
interpreted Maropakis more narrowly than the sweeping interpretation of
Maropakis advanced by the government in this litigation. Further, Maropakis is
easily distinguishable from the case at bar. Finally, an earlier precedential
decision of the United States Court of Appeals for the Federal Circuit appears to
support a jurisdictional ruling in plaintiff’s favor for its slope change credit claim,
unless Maropakis forecloses reliance on this precedent.

One bedrock principle of CDA caselaw is that CDA claims must first be
presented to a contracting officer for a final decision before they are litigated in
this court. E.g., England v. Swanson Group, Inc., 353 F.3d 1375, 1379 (Fed. Cir.
2004) (citing James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1541-42
(Fed. Cir. 1996)). Some CDA claims, however, are government claims which
have been the subject of a contracting officer’s final decision adverse to a
contractor. These government CDA claims which have met the CDA’s
presentment requirement provide jurisdiction in this court for the contractor’s
appeal of the adverse contracting officer’s decision, even if the contractor has not
submitted its own claim on that topic to the contracting officer. See, e.g., Garrett
v. Gen. Elec. Co., 987 F.2d 747, 749 (Fed. Cir. 1993) (“The [CDA] . . . provides

13
/ Although the government’s amended answer included a counterclaim on this issue for
$466,092, ECF No. 91, at 11, the government’s expert revised this figure to $383,893 based upon
trial testimony which changed his analysis. Def.’s Br. at 43.

23
that a contractor may appeal a Government claim to the appropriate board without
submitting a claim of its own to the CO.”). Nonetheless, although contractor
appeals of adverse contracting officer decisions are within the CDA jurisdiction of
the court in this manner, the contractor’s appeal is typically limited in scope
because it is not founded on the contractor’s own claim which received its own
contracting officer’s decision. See Maropakis, 609 F.3d at 1330 (noting that this
court had jurisdiction over a contractor’s “claim relating to liquidated damages,”
but ruling that certain defenses to the government’s assessment of liquidated
damages were beyond the scope of the contractor’s appeal).

The question here is whether Magnus, in its slope change credit claim, fails
to satisfy the jurisdictional test expressed in Maropakis: “[A] contractor seeking
an adjustment of contract terms must meet the jurisdictional requirements and
procedural prerequisites of the CDA, whether asserting the claim as an affirmative
claim against the government or as a defense to a government action.” 609 F.3d at
1331. Another expression of this jurisdictional principle is found in the previous
paragraph of Maropakis: “[E]ven when used as a defense to a government claim,
a contractor’s claim for contract modification must adhere to the jurisdictional
requirements of the CDA.” Id. (citations omitted). The precise “contract
modification” or “adjustment of contract terms” proposed by the plaintiff in
Maropakis was an extension of the contract’s completion date to account for
allegedly excusable delay and to prevent the enforcement of a liquidated damages
provision by the government. Id. at 1329-30. The jurisdictional flaw identified in
Maropakis was that the plaintiff failed to file a certified claim with the contracting
officer requesting an extension of the contract completion date before
commencing litigation in this court. Id. at 1329-32.

The plaintiff in this case argues, correctly, that Magnus’s slope change
credit claim is, at heart, a claim for the payment to Magnus of the contract price,
not an attempt to modify the contract or adjust its terms. Pl.’s Reply at 29.
Plaintiff’s slope change credit claim does not seek an addition to the contract
price, or any other adjustment of contract terms in favor of Magnus. Magnus’s
slope change credit claim is jurisdictionally sound because it appeals the
contracting officer’s final decision which determined that Magnus owed the IBWC
$466,092 for the slope change. Garrett, 987 F.2d at 749.

Whereas Magnus’s slope change credit claim merely requests that it be paid

24
most of the amount remaining in the contract price, the government’s counterclaim
seeks to adjust the contract price, significantly downward, by $383,893, or, in
other words, to significantly adjust the contract terms in the government’s favor in
the amount of $383,893. In the court’s view, therefore, plaintiff’s slope change
credit claim is not a claim that fits within the category of contractor claims and
defenses that seek a contract modification and that are subject to the jurisdictional
prerequisites announced in Maropakis. Thus, Magnus need not have submitted a
certified claim to the contracting officer before litigating the slope change credit
dispute in this court.14

The breadth of the jurisdictional ruling in Maropakis has been repeatedly
examined and applied by this court and the boards of contract appeals. The
critical inquiry in these decisions is whether the contractor’s claims or defenses
seek, in the CDA forum, to modify or adjust contract terms. If the claim or
defense, unlike the claim and defense in Maropakis, does not seek to adjust or
modify contract terms, the jurisdictional prerequisite described in Maropakis is not
applicable. See, e.g., Total Eng’g, Inc. v. United States, 120 Fed. Cl. 10, 15 (2015)
(“Unlike the contractor in Maropakis, Total is not seeking an adjustment of
contract terms, but is simply defending against a Government claim . . . .”);
Sikorsky Aircraft Corp. v. United States, 102 Fed. Cl. 38, 48 n.14 (2011) (limiting
the scope of Maropakis’s jurisdictional ruling, when considering a jurisdictional
challenge to the defenses raised by the plaintiff in that case, to “counterclaim
defenses that seek contract modification”); Jane Mobley Assocs., CBCA 2878,
16-1 B.C.A. ¶ 36209 (Jan. 5, 2016) (finding that Maropakis did not apply where
the contractor was merely interposing factual allegations regarding the payment
terms of the contract, and did “not seek an adjustment of contract terms or other
entitlement under the contract”); Nat’l Fruit Prod. Co., CBCA 2445, 12-1 B.C.A.
¶ 34979 (Mar. 26, 2012) (finding jurisdiction over a contractor’s defense to a
liquidated damages claim by the government because the contractor was “not
seeking a compensable change or a contract modification”).

14
/ Although the government implies that Magnus should have certified a claim regarding
the slope change credit dispute and submitted it to the contracting officer before lodging such a
claim in this suit, Def.’s Br. at 43, defendant does not discuss the CDA’s certification
requirements in its brief. Because the court finds that Magnus was not required to file a claim
regarding the disputed slope change credit with the contracting officer before litigating its claim
before this court, there is no need to decide whether such a CDA claim, if filed, would have
required certification.

25
Here, the court follows this line of persuasive authority and determines that
the holding in Maropakis does not deprive this court of jurisdiction over Magnus’s
slope change credit claim.15 The slope change credit claim does not seek to adjust
contract terms and, thus, did not require that Magnus file a claim with the
contracting officer before litigating the slope change dispute in this forum. Cf.
Jane Mobley, 16-1 B.C.A. ¶ 36209 (holding that factual defenses asserting a
breach of the implied duty of good faith and fair dealing, which seek to ensure that
a contractor reaps the contemplated value of the contract, are not claims subject to
the claim submission prerequisites described in Maropakis). Magnus’s slope
change credit claim merely interposes factual allegations that contradict the
IBWC’s proposed $466,092 decrease in the contract price. Maropakis does not
raise a jurisdictional bar to Magnus’s arguments in this regard.

The differences between Maropakis and this case are too numerous to each
merit discussion, but the contrasts discussed here easily distinguish Maropakis
from the case at bar. First, the contracting officer in this case did not issue his
final decision on the slope change credit dispute until after Magnus had filed suit
in this court. Magnus was thus forced to amend its complaint to appeal that
decision. In Maropakis, the contracting officer’s final decision on liquidated
damages was issued before the plaintiff filed suit in this court, 609 F.3d at 1326, a
sequence of events that put the Maropakis litigation in a markedly different
procedural posture.

Second, the Maropakis plaintiff never provided the contracting officer with
notice as to its exact claim and defenses on the subject of its delayed contract
performance. Id. at 1328-29. Here, the contracting officer received a detailed
letter from Magnus which set forth the exact dollar amount of the proposed slope
change credit due the government, so that the contract price could be revised
accordingly. JX 32. The contracting officer, despite receiving the letter in July of

15
/ The Federal Circuit recently distinguished a government affirmative defense, over
which the board of contract appeals exercised jurisdiction, from the defense raised by the
plaintiff in Maropakis, where CDA jurisdiction was found to be lacking. See Laguna Constr.
Co. v. Carter, 828 F.3d 1364, 1368 (Fed. Cir. 2016). The Laguna panel specifically noted that
the plaintiff in Maropakis sought to “modify the contract time” for performance without first
submitting a claim to the contracting officer seeking such a contract modification. Id. Although
cursory, the distinction drawn in Laguna is not unlike the distinction drawn by this court and the
boards of contract appeals in the decisions cited supra.

26
2013, never responded or inquired as to the figures contained in this letter, and
instead issued a final decision on the slope change credit dispute in January of
2014. The notice requirement of the CDA that was an important factor in the
Maropakis decision is not present in this case.

As a third distinction, the Maropakis plaintiff was dilatory in
communicating with the contracting officer, i.e., not responding for over ten
months to an offer by the government to consider additional information regarding
performance delays. 609 F.3d at 1326. In this case, the party that refused to
communicate its views as to the disputed slope change credit was the IBWC, not
Magnus. This is especially egregious behavior considering that Modification 004,
unilaterally imposed by the IBWC, was necessitated by the defective design
provided to Magnus by the IBWC, and considering the fact that Modification 004
required the parties to negotiate a credit to account for the change to the contract.
JX 104, at 1. Whereas in Maropakis the plaintiff was attempting to litigate its way
out of a contract dispute that it had managed very badly, here Magnus is simply
responding to a unilaterally imposed retainage that represents the government’s
attempt to unilaterally modify the contract in its favor.

The claim in this case is the polar opposite of the claim and defense asserted
by the plaintiff in Maropakis. Further, as previously discussed, the cases are also
readily distinguishable on their facts. There are procedural differences between
these two cases, as well. Given the dissimilarities between the jurisdictional
problem resolved by the Federal Circuit in Maropakis and the jurisdictional
posture of this case, the court finds further support for its view that Magnus was
not obliged to have submitted a claim to the contracting officer before appealing
the contracting officer’s final decision on the slope change credit dispute in this
forum.

Finally, the court must note the factual similarity between this case and
Placeway Construction Corp. v. United States, 920 F.2d 903 (Fed. Cir. 1990).
Placeway Construction Corporation (Placeway) completed a government
construction contract and the government retained approximately $300,000
because of damages the government might experience, although not determined at
the time, because of delays in contract performance. Id. at 905. Jurisdiction
would only lie in this court for plaintiff’s claim for the full contract price if the
contracting officer had issued a final decision on the retainage (described, in that

27
litigation, as a set-off). Id. at 906. The Federal Circuit, construing the actions of
the contracting officer to constitute a final decision on the government claim,
allowed Placeway’s claim to proceed. Id. at 907. In the words of the court:

Accordingly, we conclude that the CO made a final
decision on the government claim alleging damages
because of Placeway’s delay in contract performance.
The decision is no less final because it failed to include
boilerplate language usually present for the protection of
the contractor. Moreover, the CO’s decision was adverse
to Placeway and thus it could properly appeal to the
Claims Court. As a final decision on a government
claim, the Claims Court has jurisdiction, even though
[Placeway’s] claim was not certified.

Id.

Magnus is in almost exactly the same position. It appeals the final decision
of the CO (which included a notice of appeal rights) on the slope change credit
and seeks payment of retained funds. The IBWC’s decision was adverse to
Magnus, and plaintiff has appealed that decision to this court. Given the
distinctions between this case and Maropakis, and the parallels between this case
and Placeway, there is at least a colorable argument that the jurisdictional ruling in
Placeway applies to the case at bar.

It is true, however, that there is language in Maropakis which may
undermine the applicability of Placeway to circumstances such as these. For
example, the court states that: “The Court of Federal Claims correctly found that
Placeway had no bearing on the CDA’s requirements for contractor claims.”
Maropakis, 609 F.3d at 1330 (citation omitted). In addition, the Maropakis panel
stated that in Placeway, “we did not address whether the Claims Court had
jurisdiction over any of Placeway’s defenses.” Id. But there is also language in an
adjacent sentence in Maropakis which restricts that panel’s discussion of the
jurisdictional barrier to claims seeking contract modifications:

Several other Court of Federal Claims cases have
directly addressed this issue and have all concluded that

28
even when used as a defense to a government claim, a
contractor’s claim for contract modification must adhere
to the jurisdictional requirements of the CDA.

Id. at 1330-31 (emphasis added) (citations omitted). It is impossible to tell from
the text of the Maropakis opinion the precedential weight the Placeway decision
provides in this case. The court, unable to discern whether the jurisdictional
holding in Placeway can be reconciled with Maropakis in the circumstances of
this case, does not rely on Placeway for its decision here.16

Having considered relevant, and even potentially relevant precedent, the
court concludes that Magnus’s slope change credit claim is not barred by
Maropakis or the CDA’s jurisdictional prerequisites discussed therein.
Jurisdiction lies both for plaintiff’s claim in this regard and the government’s
counterclaim on the same topic. The court turns now to the merits of the parties’
arguments regarding the slope change credit.

B. Disputed Slope Change Credit Claim and Related Government
Counterclaim

The dispute over the slope change credit can be resolved by answering four
straightforward questions. First, did the figure proposed by Magnus in August
2012 for the slope change credit reflect the actual cost savings Magnus realized
from the IBWC’s correction of its defective design? Second, should Mr.
Wooten’s analysis of the cubic yard cost of embankment fill govern the

16
/ If the holdings in Maropakis and Placeway were truly irreconcilable as applied to the
facts of this case, i.e., a contractor claim which does not seek a contract modification, Placeway
would control:

Where conflicting statements such as these appear in our
precedent, the panel is obligated to review the cases and reconcile
or explain the statements, if possible. If not reconcilable and if not
merely conflicting dicta, the panel is obligated to follow the earlier
case law which is the binding precedent.

Johnston v. IVAC Corp., 885 F.2d 1574, 1579 (Fed. Cir. 1989) (citing Newell Cos. v. Kenney
Mfg. Co., 864 F.2d 757, 765 (Fed. Cir. 1988)).

29
calculation of the amount of cost savings realized by Magnus because of the
changed contract work? Third, did Magnus provide adequate information to the
IBWC in support of its slope change credit proposal? Fourth, does $35,036
represent the credit due the government under the portion of Modification 004 that
changed the landside slope of certain sections of the levee? When these four
questions are answered based on the preponderance of evidence in the trial record,
it is clear that plaintiff’s position on the slope change credit prevails.

1. Magnus Did Not Realize $466,092 in Cost Savings from the
Slope Change

Magnus performed an analysis of the agency’s slope change to the levee
which calculated the requisite reduction in the amount of imported embankment
fill on the affected sections of the levee. JX 29, at 1. This proposed reduction in
fill volume, 23,841 CY, was communicated to the IBWC on August 16, 2012. Id.
The method used to calculate the slope change fill reduction amount was the
“average end-area method.” Both this method, and the figure of 23,841 CY, were
accepted by the IBWC as accurate. Duran Tr. at 878, 1005-06.

Magnus’s initial slope change credit proposal was for $466,092, derived
from a $23/CY multiplier for a 23,841 CY reduction in imported embankment fill.
JX 29, at 1. This slope change credit proposal of $466,092, however, was not an
isolated, independent negotiation between Magnus and the IBWC – the slope
change credit negotiation was integrated into more extensive negotiations
regarding the unexpected amount of embankment fill that Magnus was required to
import onto the levee. Contemporaneous documentation shows that Magnus
considered these negotiations to be inter-connected, and the preponderance of
witness testimony also showed that Magnus was pursuing a global settlement of
the finalized contract price at this time.17

17
/ Even Mr. Duran, who repeatedly averred that the IBWC was not trying to achieve a
global settlement but was treating each contract modification separately, acknowledged that the
IBWC’s acceptance of Magnus’s initial slope change credit proposal was not overly concerned
with the exact dollar amount of the credit because other, larger contract disputes needed to be
resolved at this time. See Duran Tr. at 1006 (stating that he accepted the $466,092 credit
proposal from Magnus, in part, because at the time “we had too many bigger fish to fry than
this”).

30
In a letter sent to the IBWC on July 26, 2012, for example, Magnus
provided the component amounts, per levee sections, which added up to the total
figure of 23,841 CY for the slope change fill reduction, but also noted that there
were “approximately 100,000 CY” of embankment fill overages that were also at
play during this time. JX 28, at 2. Indeed, Magnus requested in this July 26, 2012
letter that progress payments for embankment fill for June and July 2012 ignore
the slope change credit amount, because of the “overruns” in embankment fill
which would be negotiated through Magnus’s embankment fill claim. Id.
Similarly, in Magnus’s August 16, 2012 slope change credit proposal, the proposal
noted that the slope change credit embankment fill reduction amount was
accounted for in the total imported embankment amounts that would justify
Magnus’s embankment fill claim. JX 29, at 2. This correspondence is strong
evidence that Magnus’s initial slope change credit proposal was merely one facet
of Magnus’s negotiations regarding the actual costs of restoring the levee.

Witness testimony at trial also establishes that, as of the summer of 2012
and into the early months of 2013, Magnus viewed its slope change credit
proposal as one part of the dialogue between Magnus and the IBWC regarding the
correct amount of payment Magnus should receive for its restoration work on the
levee. Owaidat Tr. at 136-37, 140; Duran Tr. at 878-79, 883. Testimony
commenting on emails sent in early 2013 also shows that Magnus viewed the
slope change credit to be part and parcel of the ongoing negotiations related to
Magnus’s claims for additional embankment fill and riprap quantities. See JX 49;
JX 50; JX 51; JX 73; Owaidat Tr. at 138-40, 143-44, 146; Duran Tr. at 882. In
April of 2013, however, the negotiations for the settlement of the embankment fill
and riprap claims, along with the slope change credit, took a turn for the worse.
Simply put, the IBWC decided to take its slope change credit while staying silent
as to whether Magnus’s larger claims would be granted or denied.

On April 8, 2013, instead of comprehensively addressing the outstanding
embankment fill and riprap claims along with the slope change credit, the IBWC
announced it was owed a slope change credit of $466,092 and submitted a contract
modification for this government credit to Magnus for signature well before any
decision issued on much larger Magnus claims for embankment fill and riprap
overruns. JX 30. The IBWC had been sitting on the embankment fill and riprap
claims for about six months at this point, with no requests for additional
information from Magnus relevant to those claims. JX 2; JX 25. Mr. Owaidat

31
stated that he felt “stabbed . . . in the heart” when he received this proposed
contract modification giving the IBWC $466,092; he felt that the IBWC had
turned aside from any good faith negotiation of Magnus’s claims and was simply
going to “take [Magnus] to the cleaners.” Owaidat Tr. at 148.

Because Mr. Owaidat refused to sign this proposed modification,
Modification 006, as a stand-alone contract modification, and because many
disputes had yet to be reconciled, the government issued Modification 006 and
Modification 007 on the same day, April 26, 2013, first subtracting $466,092 and
then adding $466,092 back into the contract price.18 JX 30; JX 103. Modification
007 acknowledged that $466,092 was being added back into the contract price
because Magnus “wants to wait on a mutual agreement for this $466,092 credit
until after the Contracting Officer issues a final decision on a pending Contractor
claim for other embankment material.” JX 103.

The contracting officer denied Magnus’s embankment fill and riprap claims
in their entirety on June 3, 2013 and June 11, 2013, respectively. JX 20; JX 26.
There is no evidence that any negotiation of these claims was initiated by the
IBWC after these claims were received from Magnus in the fall of 2012. There is
also no evidence that the IBWC entered into negotiations with Magnus regarding
the embankment fill claim, the riprap claim, or the slope change credit after
Modification 007 issued, leaving the slope change credit open for further
negotiation. Even after Magnus submitted a revised slope change credit proposal
on July 19, 2013, JX 32, the IBWC continued to avoid any negotiation of the slope
change credit amount.

As Mr. Owaidat explained at trial, the initial slope change credit proposal
from Magnus did not represent the actual cost savings to Magnus from the slope
change which corrected the levee footprint in the IBWC’s original defective levee
design. It was simply a piece of a larger negotiation. There was additional work
caused by the slope change, and “[a]ll that cost that [Magnus] incurred was not
included in that . . . initial [$]466,000 credit.” Owaidat Tr. at 150. According to
Mr. Owaidat, the global settlement Magnus hoped to achieve allowed them to “eat
that $466,000,” because Magnus expected that the IBWC would, in return, pay

18
/ Mr. Owaidat signed the modifications on April 25, 2013, whereas Mr. Delgado signed
the modifications on April 26, 2013.

32
Magnus the amount “owed for riprap and the embankment [fill], too.” Id. When
the global settlement failed, Magnus reviewed its costs for implementing the slope
change and reduced the multiplier for each cubic yard of imported fill from
$23/CY to $1.25/CY in its proposed slope change credit. JX 32, at 3. The
reduction of the quantity of imported embankment fill associated with the slope
change, 23,841 CY, remained the same.

The court finds Mr. Owaidat’s testimony which explained the difference
between plaintiff’s initial credit proposal and its second credit proposal to be
persuasive. The original $466,092 figure did not truly reflect the cost savings that
Magnus experienced when it implemented the IBWC’s request that the defective
levee design be corrected to a landside ratio of 2.5:1 for approximately one-third
of the length of the levee project. Thus, the court must weigh the parties’ evidence
of the actual cost and actual savings flowing from the slope change to Magnus. It
is clear to the court that the use of a multiplier of $23/CY for the reduction of
23,841 CY of imported embankment fill, when the landside slope of the levee was
changed, does not account for the actual costs to Magnus of the changed work.

2. Mr. Wooten’s Analysis Ignores Additional Costs of Work
Performed by Magnus to Implement the Slope Change

At trial, the government’s expert, Mr. Wooten, explained why he believed
$23/CY to be the most accurate measure of Magnus’s savings due to the levee
slope change in Modification 004.19 Wooten Tr. at 2111-13. In accordance with
the court’s understanding of Mr. Wooten’s expert opinion on this issue, there
appear to be three underpinnings to that opinion. First, $23/CY was, in Mr.
Wooten’s opinion, well established as an accurate measure of Magnus’s typical
cost of imported embankment fill. Id. Second, Mr. Wooten found that Magnus’s
description of the incurred costs of changing the levee slope to be less than
“compelling” because of the level of documentation that was provided. Id. at
2113. Finally, Mr. Wooten opined, in just a few words, that the cost impact of the

19
/ Mr. Wooten also disagreed with Magnus as to the reduction in embankment fill
caused by the slope change. Whereas Magnus calculated that there would be a reduction of
23,841 CY, Mr. Wooten’s analysis posited that there would be a reduction of only 16,691 CY.
Wooten Tr. at 2111. The cubic yards reduction calculated by Mr. Wooten is not especially
relevant, in light of the court’s analysis of the $23/CY multiplier dispute, and will not be
discussed further in this opinion.

33
work that Magnus had to perform to change the levee’s footprint would be no
more than the cost to place the original amount of embankment fill. Id. at 2112.

The court notes that Mr. Wooten’s analysis suffers from two fundamental
flaws. First, as stated in his expert report, Mr. Wooten’s confidence in the $23/CY
figure is based solely on the fact that it is “consistent” with unit costs in Magnus’s
change order requests and in Magnus’s levee proposals. JX 139, at 40. In other
words, Mr. Wooten adopts $23/CY as the multiplier for the slope change credit
simply because in other contexts that is the cost that Magnus charges, or attempts
to charge, the project owner. However, as Mr. Owaidat explained at trial, the
components of the cost of placing one cubic yard of imported embankment fill on
the levee, captured in the $23/CY multiplier, are not necessarily the same as the
realized cost savings of not placing one cubic yard of imported embankment fill
upon the levee. Owaidat Tr. at 159-60, 315-16, 353.

The court found Mr. Owaidat’s testimony in this regard much more on
point, and more persuasive. Mr. Wooten’s testimony on this topic was superficial
and his impression that ‘pre-slope change required work’ and ‘post-slope change
required work’ would more or less be equal in cost appeared to be an unexplained
assumption rather than the product of experience in levee construction. Weighing
the testimony provided by Mr. Owaidat and Mr. Wooten, the court found Mr.
Owaidat to be more persuasive and more credible. The court finds that $23/CY
was not a proper multiplier to account for the cost savings to Magnus of the slope
change.

Second, and more importantly, Mr. Wooten conceded that his analysis of the
slope change credit dispute did not depend at all on the description of the
inefficiencies and additional costs provided by Magnus in its second credit
proposal, JX 32. Wooten Tr. at 2265-70. In other words, when Mr. Wooten
analyzed the slope change and the effect of the slope change on costs Magnus
experienced in the affected sections of the levee, he attached no specific cost
impact to any of the increased costs detailed in Magnus’s letter of July 19, 2013.
See JX 32. Mr. Wooten’s expert opinion in this case assumed that the slope
change impacts on Magnus’s restoration work had zero cost, and that the $23/CY
figure needed no downward adjustment to account for additional work or
inefficiencies. Wooten Tr. at 2265-67 (stating that the construction of a 200-foot
transition section on the recently-constructed levee would have been “paid” by the

34
$23/CY multiplier incorporated in his analysis). Mr. Wooten’s testimony in this
regard was not persuasive because it ignored effects of the slope change that other
witnesses appropriately took into account.

Mr. Owaidat testified that the inefficiencies and additional work occasioned
by the slope change significantly reduced the cost savings that Magnus might have
otherwise realized from a reduction in the quantity of the embankment fill required
for the levee. Owaidat Tr. at 153-58. Mr. Owaidat stated that each of the
increased costs mentioned in JX 32 was supported by project documents. Id. at
154. Mr. Sills, plaintiff’s expert, testified that design changes such as the slope
change from 3:1 to 2.5:1 on the landside of the affected sections of the levee
would be expected to create inefficiencies and additional costs due to a more
complex sequence of construction activities. Sills Tr. at 2495-2500. Because Mr.
Wooten’s analysis ignored the cost impacts of a levee slope change affecting
approximately one-third of the levee, his contention that the $23/CY multiplier
adequately captured the cost savings that Magnus would reap from the slope
change must be rejected.

3. Magnus Provided Adequate Information to Support its
Second Credit Proposal and Was Not Asked for Additional
Information

In its July 19, 2013 letter, Magnus provided a detailed analysis of the cost
impacts of the slope change on the levee restoration project. JX 32. This analysis
was divided into four separate discussions of distinct sections of the levee where
the slope change not only reduced imported embankment fill quantities but also
engendered numerous changes to the expected flow of work in these sections. At
trial, Mr. Owaidat expounded on several of the cost impacts that were described in
this letter. His testimony in this regard was credible and was entirely unrebutted
by testimony from the government’s witnesses. Owaidat Tr. at 153-58, 316-22,
353. The court notes that Magnus’s second credit proposal was more detailed than
its first credit proposal, a proposal for the slope change credit which was accepted
by the IBWC and incorporated by modification of the contract, JX 30, in the exact
dollar amount proposed by Magnus. Compare JX 32 with JX 29.

As a proposal for the negotiation of the slope change credit, the court finds
no deficiencies or inadequacies in Magnus’s proposed slope change credit of

35
$35,036. The government argues, however, that plaintiff cannot prevail in the
slope change credit dispute because Magnus’s credit proposal lacked a detailed
quantification of each of the cost impacts described in its July 19, 2013 letter.
Def.’s Br. at 59 (asserting that Magnus’s credit proposal was not adequately
quantified and instead was simply Mr. Owaidat’s “subjective view of the
equities” of the slope change necessitated by the IBWC’s defective levee design).
The government’s position on this issue is not supported by the trial record.

The only party to the contract that proposed a detailed, quantified slope
change credit proposal was Magnus. There was no rebuttal or detailed counter-
proposal from the IBWC, nor was there any attempt by the IBWC to request
supporting documentation from Magnus to further quantify Magnus’s $35,036
credit proposal. Indeed, every witness at trial stated that there was no evidence
that the IBWC attempted to negotiate the slope change credit amount once
Magnus submitted its credit proposal on July 19, 2013, despite the requirement in
Modification 004 that the parties negotiate the amount of the credit. JX 104, at 1.
Magnus fulfilled its obligations under the contract with its proposal for a slope
change credit of $35,036.

4. The $35,036 Slope Change Credit Has Been Proved to a
Reasonable Certainty

As discussed supra, the court finds that a multiplier of $23/CY was not a
representative figure that could be used to calculate the slope change credit. When
that $23/CY multiplier is eliminated, the government has no counter-argument to
the analysis presented in Magnus’s July 19, 2013 letter which proposed a slope
change credit of $35,036. Nor is there anything in the trial record which shows
that the IBWC performed an analysis of the cost impacts of the slope change that
gave any weight to the inefficiencies and additional costs that Magnus
experienced due to the slope change.

Thus, the only viable analysis of the slope change credit before the court is
the one presented in JX 32 and the testimony of Mr. Owaidat and Mr. Sills which
buttressed that analysis. The court is persuaded that JX 32 contains credible
information and a calculation of the slope change credit that accurately reflect the
impacts of the slope change on Magnus’s restoration work on the levee. The
preponderance of the evidence, both documentary and as provided in oral

36
testimony, shows that the government is due $35,036 as a credit for the slope
change. The court finds that “substantial evidence” supports the figure of $35,036
for the slope change credit, and that Magnus has proved its claim to a “reasonable
certainty.” Precision Pine & Timber, Inc. v. United States, 596 F.3d 817, 832-33
(Fed. Cir. 2010) (Precision Pine).

5. Judgment for Plaintiff on the Slope Change Credit but No
Interest under the CDA

Applying the $35,036 slope change credit to the retained sum of $466,092,
the IBWC must release the balance of the retainage to Magnus, in the sum of
$431,056. Thus, the contract balance, in the amount $431,056, is due Magnus and
the government takes nothing on its counterclaim for a $383,893 slope change
credit. However, because Magnus only appealed a government claim for the slope
change credit and did not submit a claim of its own on this topic to the contracting
officer, no interest under the CDA can be awarded Magnus for the judgment
amount of $431,056 related to the slope change credit. E.g., Sun Eagle Corp. v.
United States, 23 Cl. Ct. 465, 482 (1991); Z.A.N. Co. v. United States, 6 Cl. Ct.
298, 304 n.13 (1984); Ruhnau Evans Ruhnau Assocs. v. United States, 3 Cl. Ct.
217, 218 (1983); Southwest Marine, Inc., DOTCAB No. 1666, 96-1 B.C.A.
¶ 28212 (Feb. 15, 1996). In other words, the CDA awards interest on successful
contractor claims denied by a contracting officer, not on successful appeals of
government claims. See 41 U.S.C. § 7109 (noting that interest begins to run “for
the period beginning with the date the contracting officer receives the contractor’s
claim”) (emphasis added).

III. Riprap Claim

The levee restoration contract between the IBWC and Magnus, as modified,
was not a typical sealed-bid government contract for a construction project. As
noted supra, parts of the solicitation, and then the contract, were pieced together
from prior IBWC levees by an inexperienced designer suffering from a serious
cognitive impairment. The contract incorporated inaccurate information regarding
the existing levee, and inadequate information, both as to the estimated quantities
of materials that would be needed to complete the restoration, and as to subsurface
conditions. The solicitation package was hastily and radically amended just a few
days before bids were due. The IBWC awarded the contract, despite its

37
knowledge that this contract was based on a solicitation which was an inadequate
foundation upon which a reasonable, informed bid could be prepared, and even
though serious defects in the levee design materials were known to the agency at
that time.

As the IBWC began to supervise the levee restoration project in 2011,
termination of the contract was recommended by the technical experts at the
IBWC as the most reasonable course of action, given the deficiencies in the
materials prepared for this project. Duran Tr. at 724-26. In retrospect, Magnus’s
president stated that he regrets having bid on the project. Owaidat Tr. at 2359.
Magnus overcame significant deficiencies in the levee design to successfully
restore the levee, and, in return, the IBWC refused to negotiate any equitable
adjustment for cost overruns that Magnus experienced in the quantities of riprap
and embankment fill placed on the levee. See Owaidat Tr. at 148 (stating that the
IBWC “used [Magnus] to solve all the problems, to fix all [the IBWC’s] design
defects, get the levee job done, and now [the IBWC was] going to take [Magnus]
to the cleaners”). There were so many problems in the administration of this
contract that it is difficult to select the legal theory which most aptly addresses
plaintiff’s requests for equitable adjustments for cost overruns in embankment fill
and riprap.

For the riprap claim, most of the parties’ focus is on the changes made to the
contract in response to the matrix document. At that point in the project, faced
with a seriously flawed contract which was recommended for termination, the
IBWC’s contracting officer chose to accept Magnus’s offer to bring the levee
restoration project to a successful conclusion. In doing so, negotiations were
entered into that involved the following benchmarks: (1) the matrix document,
generated by the IBWC, indicating that additional work needed to be performed to
complete the project; (2) a new survey which informed Magnus and the IBWC as
to the contours of the existing levee; (3) cost proposals from Magnus as to
embankment fill and riprap work required by the matrix; and (4) questions from
the IBWC and answers from Magnus as to any remaining grey areas that needed to
be addressed as the project was being reconstituted through Modifications 001,
002 and 003.

Although the parties have considered whether the riprap claim could be
analyzed and resolved by other legal theories, the court limits its analysis to the

38
one legal theory which appears most pertinent – the constructive change doctrine.
The riprap dispute is fundamentally a question of how the levee restoration
contract was changed by the parties in response to the matrix and the new survey
of the existing levee. In choosing the rubric, constructive change, the court
acknowledges that plaintiff’s riprap claim is not a typical constructive change
claim. Therein, a contractor alleges that an agency official, not the contracting
officer, orders additional, out-of-scope work during the course of contract
performance, but the contracting officer does not account for that additional work
in the formal modifications (and price) of the contract. See, e.g., Design & Prod.,
Inc. v. United States, 18 Cl. Ct. 168, 205-08 (1989) (considering but rejecting a
claim for work outside the scope of the contract that was requested during the
course of performance by someone other than the contracting officer). The
constructive change claim for additional riprap in this case, in contrast, demands a
close examination of the meaning and scope of Modifications 001 and 003. This
is a rather unusual type of constructive change claim, for which no analogous
precedent has been cited by the parties.20

A. Constructive Change Doctrine

Some constructive change claims are, at bottom, disputes over the scope of
the work specified in the contract documents. See, e.g., Miller Elevator Co. v.
United States, 30 Fed. Cl. 662, 678 (1994) (describing these constructive change
claims as “disputes over contract interpretation during performance”) (citations
omitted). The contractor typically argues that it has performed work outside the
scope of the contract terms, at the request of the government, and that the contract

20
/ Plaintiff merely cited a passage from a case which generally sets forth the elements of
a constructive change claim. Pl.’s Br. at 57 (citing Winter v. Cath-dr/Balti Joint Venture, 497
F.3d 1339, 1344 (Fed. Cir. 2007)). Defendant’s post-trial brief totally ignored constructive
change caselaw, which is somewhat surprising given that the constructive change theory of
recovery for plaintiff’s riprap claim was explicitly addressed in Magnus II. 2016 WL 3960447,
at *6-7. In defendant’s reply brief, the government cites one case discussing the constructive
change doctrine in support of its arguments regarding plaintiff’s embankment fill claim, Def.’s
Reply at 9 (citing Calfon Constr. Inc. v. United States, 17 Cl. Ct. 171, 177 (1989)), and another
case discussing the constructive change theory in support of the government’s arguments against
plaintiff’s riprap claim, id. at 28 (citing Info. Sys. & Networks, Corp. v. United States, 81 Fed. Cl.
740, 747 (2008)). The facts in the cases cited by the parties are not analogous to the facts
underlying Magnus’s riprap claim, and are of little to no use in the analysis required here.

39
price must be augmented by an equitable adjustment. See, e.g., Metric Constr. Co.
v. United States, 81 Fed. Cl. 804, 826-27 (2008) (finding merit in a claim for an
equitable adjustment where additional work, outside the scope of the contract, was
performed by the contractor). A successful constructive change claim of this type
must show that the work performed was outside of the scope of the contract and
that the government caused the work to be performed:

A constructive change entails two base components, the
change component and the order or fault component.
The “change” component describes work outside of the
scope of the contract, while the “order/fault” component
describes the reason that the contractor performed the
work. Thus, if the Government either expressly or
impliedly ordered work outside the scope of the contract,
or if the Government otherwise caused the contractor to
incur additional work, a constructive change arises for
that work performed outside of the scope of the contract.

Miller Elevator, 30 Fed. Cl. at 678 (citations omitted); see Int’l Data Prods. Corp.
v. United States, 492 F.3d 1317, 1325 (Fed. Cir. 2007) (“A constructive change
occurs where a contractor performs work beyond the contract requirements
without a formal order, either by an informal order or due to the fault of the
Government.” (citing Miller Elevator, 30 Fed. Cl. at 678)). The court begins its
analysis of plaintiff’s riprap claim by first examining the “change element,” before
turning to the “government order/fault element.”

B. Change Element

There appears to be little dispute that the contract signed by the parties in
December of 2010 called for the importation of a certain amount of new riprap for
the restoration of the levee, and the placement of this new riprap in specified
sections of the levee. See JX 1, at 53. The estimate for this riprap was for 17,500
CY, based on four specific areas of riprap of varying size (from 26,116 square feet
to 98,864 square feet) multiplied by a depth of 1.5 feet. Id. The “typical cross-
section” contract drawings only identify two areas of riprap placement on the
riverside of the levee, from STAs 117 to 123, and from STAs 157 to 176. JX 109,
at 36. The contract plans show two additional “new” riprap placement areas, from

40
STAs 69 to 89, and from STAs 186 to 206. Id. at 15-17, 25-27. Thus, reading
these contract documents together, Magnus was required to import new riprap and
place four sections of new riprap on the levee, from STAs 69 to 89, 117 to 123,
157 to 176, and 186 to 206. This is the original contract riprap work, which is not
included in Magnus’s riprap claim, because there were virtually no cost overruns
in this category of riprap work. See JX 24, at 1, 17.

Once the IBWC decided that the contract needed to be revised pursuant to a
new survey of the existing levee, the matrix document informed Magnus that it
would be required to “remove and replace existing riprap” per the contract’s
“typical cross-sections,” JX 6, at 2, and then purported to identify, in tabular form,
the sections of the levee which required this additional “riprap replacement” work,
id. at 2-4. The matrix document acknowledged, however, that its tabular list of
“riprap replacement” sections overlapped with the original “new riprap” work
sections set forth in the original contract. See id. at 2 (“Some areas identified in
the table are duplicates of areas already designated as needing [riprap] work.”).
Thus, the table of riprap sections identified in the matrix was a mix of original
contract work and additional matrix-related work, with no readily-discernible
demarcation between original and additional riprap work. The matrix also
contained the instruction that “[e]xisting riprap must meet the required
specifications to be used on the levee.” Id. Reading all of the instructions
regarding riprap in the matrix together, along with the original contract’s “new
riprap” placement instructions, as well as the contract plans’ depictions of the
locations of new and existing riprap on the levee, the court construes the matrix to
constitute a pathway for Magnus to re-assess the riprap work required to complete
the levee restoration, and to make a cost proposal as to work it would perform in
addition to the “new riprap” work included in its fixed-price proposal accepted by
the IBWC in December 2010.

To ground its analysis of plaintiff’s riprap claim in an adequate factual
foundation, the court first reviews the contemporary documentary evidence
provided by the contract plans and the table of levee sections in the matrix, as well
as the summary of levee riprap work presented in plaintiff’s riprap claim. These
documents provide a station by station factual foundation for the parties’
arguments. The court will then discuss the matrix-related negotiations entered
into by the parties, which include both the cost proposals proffered by Magnus,
and Magnus’s answers to the IBWC’s questions about those proposals. This

41
documentary evidence supports plaintiff’s view that there were three categories of
riprap work performed by Magnus: the original “new riprap” work; the additional
riprap work offered by Magnus in response to the matrix; and a third category of
existing riprap replacement work, the quantity of which would be determined on a
case-by-case basis. Witness testimony at trial, while not at all uniform on this
issue, also supports plaintiff’s view of this dispute.

1. Contract Documents Showing Existing and New Riprap
Locations

The court experienced some difficulties with its inquiry into the contract
documents that establish the factual foundation for plaintiff’s riprap claim. First,
as noted supra, there is an almost universal acknowledgment that the plans for the
levee were significantly flawed. Second, neither party elicited witness testimony
as to the content and meaning of the levee plans. Third, the reproduction of the
levee plans in the trial exhibits is difficult to read.21 Nonetheless, because the
parties hotly dispute the changes to the riprap work triggered by the matrix, the
court will attempt to discern what information the levee plans provided regarding
the locations of existing riprap, and the locations for new riprap, on the levee.

As noted above, the contract plans showed that new riprap would be placed
from STAs 69 to 89, 117 to 123, 157 to 176, and 186 to 206. Existing riprap
appears to be shown in the contract plans from STAs 123 to 126, 176 to 186, and
206 to 223. JX 109, at 20, 24-25, 27-28. Thus, the court concludes that there
were three sections of existing riprap, STAs 123 to 126, 176 to 186, and 206 to
223, that appear to be the subject of the matrix and its discussion of the removal
and replacement of existing riprap. JX 6, at 2. The court observes, however, that
these sections of the levee identified on the plans might not have perfectly
captured the locations of existing riprap on the levee that were encountered by
Magnus’s crews.

2. Matrix Table of Riprap Work Contrasted with Existing
and New Riprap Locations Shown on the Contract Plans

21
/ For example, the legend for the plans contained two separate design symbols for the
graphic representation of “existing rip-rap” and for “proposed rip-rap,” but these two symbols, as
copied for the trial exhibits, are indistinguishable. JX 109, at 2.

42
When the table of riprap locations in the matrix is compared with all of the
existing and new riprap locations in the contract plans, the matrix is largely, but
not perfectly, consistent with the contract plans as to riprap work locations on the
levee. The levee from STAs 69 to 89 is again listed as a riprap area, for example,
but a new portion of the levee, from STAs 89 to 117, which according to the
contract plans had neither new nor existing riprap, was now designated as
requiring riprap work. JX 6, at 2-3. This portion of the levee can only be
described as “additional riprap” work not contemplated in the original contract.

There is one other portion of the levee that had neither existing nor new
riprap on the contract plans, from STAs 126 to 145, which, pursuant to its listing
in the matrix, also must be considered to have required “additional riprap” work.
JX 6, at 3. Thus, the matrix addressed two additional portions of the levee (STAs
89 to 117 and 126 to 145) as requiring riprap work, under the rubric of replacing
existing riprap, even though the contract plans showed no existing riprap in these
locations. A separate category of riprap work – removing and replacing existing
riprap – can also be viewed as having been included within the matrix table in
those locations where existing riprap was indicated on the contract plans: STAs
123 to 126, 176 to 186, and 206 to 223. The court notes that the riprap work
location information contained in the matrix was hardly a model of clarity because
three different types of riprap work were lumped together, with no apparent
division between them (new riprap, replacement of existing riprap, and additional
riprap in areas where the contract plans indicated there was no existing riprap).

3. The Three Categories of Riprap Work in the Matrix are
Reproduced in Plaintiff’s Riprap Claim Table

When Magnus submitted its riprap claim to the contracting officer, its table
of riprap work locations was divided into three categories of riprap work, much as
the table in the matrix contained three categories of riprap work. JX 24, at 17.
For the original contract work, the “new riprap” placement contemplated in
Magnus’s fixed-price bid, the locations exactly match the locations in the contract
plans and in the matrix: STAs 69 to 89, 117 to 123, 157 to 176, and 186 to 206.
Id. For “additional riprap” work included in the matrix, specifically the riprap
work where neither new nor existing riprap was shown on the contract plans,
Magnus’s locations match, within a few stations, the locations shown in the

43
matrix: STAs 89 to 117 and 126 to 145.22 Id. This category of riprap work is
described by Magnus as the work proposed by Magnus in response to the matrix
that was captured in its cost proposal incorporated, at least in part, in
Modifications 001 and 003. Id. Finally, the table of riprap work in Magnus’s
riprap claim contains a third category of riprap work, the “Replace Existing
Riprap” category, whose locations match, within a couple of stations, the locations
of existing riprap shown on the contract plans and in the matrix: STAs 123 to 126,
176 to 186, and 206 to 223.23

To perhaps oversimplify the dispute, plaintiff’s position is that its cost
proposal in response to the matrix set forth the volume of riprap needed for the
work required from STAs 89 to 117 and 126 to 145, the “additional riprap”
locations not present in the original contract documents. From this perspective,
the existing riprap replacement work for STAs 123 to 126, 176 to 186, and 206 to
223, where existing riprap was shown on the contract plans, was a separate
category of riprap work which the price adjustments of Modifications 001 and 003
did not include. The government’s position appears to be that the base contract
and Modifications 001 and 003 included all of the riprap work required to
complete the levee – the “new riprap,” the “additional riprap” work and the
existing riprap replacement work. See Def.’s Br. at 53, 56 (arguing that the base
contract and the matrix negotiations required Magnus to include in its lump sum
cost proposal the price that would complete the “removal and replacement of
existing riprap” on the levee). The court turns to its review of the evidence
submitted at trial which goes to the agreement of the parties regarding the
replacement of existing riprap on the levee.

4. Magnus’s Riprap Cost Proposal

After Magnus obtained the new survey of the levee, it submitted a riprap
cost proposal to the IBWC. Magnus’s initial riprap proposal in response to the
matrix estimated the quantity of additional riprap to be 9570 CY, at a cost of
$75/CY, for a total riprap price of $717,750 for Modifications 001 and 003. JX

22
/ According to the table in Magnus’s riprap claim, one portion of this additional riprap
work was performed from STAs 126 to 138, not from STAs 126 to 145.
23
/ According to the table in Magnus’s riprap claim, one portion of this riprap
replacement work was performed from STAs 206 to 225, not from STAs 206 to 223.

44
10, at 1. The IBWC required the proposal to be split into two parts, apparently for
budgetary purposes, so that the riprap costs could be divided into Reach 1
(upstream) and Reach 2 (downstream) on the levee. JX 11, at 1. Magnus
performed this division of its riprap cost proposal, but the total quantity of riprap,
and the total cost of the riprap placement, remained the same. Id. at 2-3.

The court observes that Magnus’s riprap cost proposal, in its estimate of the
quantity of additional riprap required, was quite modest, when compared to the
17,500 CY estimate of riprap needed for the original, “new riprap” contract work.
For purposes of illustration, if the court were to compare the approximate number
of stations involved in original riprap work (65), with the number of stations
involved in both “additional riprap” work as well as existing riprap replacement
work (more than 70), one might have surmised that Magnus’s cost proposal for
Modifications 001 and 003 would have been for more than 17,500 CY, not 9570
CY, if the government’s view of the comprehensiveness of Magnus’s riprap cost
proposal were correct. But if Magnus was estimating, as plaintiff contends, just
the cost of “additional riprap” in its cost proposal, which involved approximately
40 stations, the 9570 CY figure is much closer to the percentage of 17,500 CY
required for only the additional riprap work.24 Based on the quantities of riprap
estimated by Magnus in its cost proposal for Modifications 001 and 003,
plaintiff’s view of the limited nature of Magnus’s riprap cost proposal is more
plausible.

5. Magnus’s Answers to the IBWC’s Questions

An integral part of Magnus’s riprap cost proposal was its answer to the
IBWC’s question as to a grey area in the project going forward: “How will
additional materials be addressed?” JX 11, at 4. Before analyzing this crucial
issue, the court notes, first, that this grey area, as regards riprap, had its genesis in
the defective contract documents produced by the IBWC. The additional survey
of the levee and the matrix negotiations could easily have been avoided if the
IBWC had produced an adequate design from which the levee could have been

24
/ The 40/65 ratio, when applied to 17,500 CY, is 10,769 CY. After the levee was
completed, the quantity of “additional riprap” placed on the levee was measured by Magnus to be
10,715 CY, exceeding Magnus’s lower projection of 9570 CY by an amount that Magnus did not
include in its riprap claim. JX 24, at 1, 17.

45
built in the first instance.

Instead, the parties met to discuss the problems with the IBWC’s design, as
described supra, and agreed to negotiate additional work to restore the levee
properly. As part of this negotiation, the meeting notes from April 21, 2011 show
that the IBWC was tasked with “differentiat[ing] between work that was included
with[in] the current scope [of the contract] and the additional proposed work
shown in the [matrix document].” JX 7, at 3. There is no evidence that any such
differentiation of old vs. supplemental work was ever provided to Magnus by the
IBWC. Moore Tr. at 1175-76; Sallas Tr. at 1626-27. On these facts, the IBWC
utterly failed to provide any guidance to Magnus as to the distinction between
original riprap work on the levee, and the two categories of supplemental riprap
work (“additional riprap” and existing riprap replacement). Thus, not only had the
IBWC created the situation requiring negotiations for supplemental riprap work on
the levee, it further compounded the problem by failing to differentiate between
original and supplemental riprap work to assist in those negotiations.

Having been cast into this informational vacuum, Magnus prepared a riprap
cost proposal for an additional 9570 CY of riprap protection on the levee. In
response, the IBWC noted the fact that a new survey of the existing levee had been
conducted and had several comments and concerns about Magnus’s cost proposal
in response to the matrix document. JX 11, at 1. The full text of the most relevant
question for the riprap dispute is as follows:

How will additional materials be addressed? Import vs
reuse of existing material on site that meets project
specifications. (Please explain how credit to IBWC for
the existing rip rap will be provided)

Id.

It is important to note that the IBWC had not, as promised, provided any
guidance to Magnus as to the differentiation between original contract riprap work
and matrix-related riprap work. Magnus replied:

The existing riprap will be handled on a case by case
basis, due to the fact that it has not been confirmed

46
whether a portion or all of the riprap will meet the
project specifications. Should the existing riprap meet
the project specifications the material will need to be
processed, screened, sized, and replaced on the slopes as
specified within the contract documents. Additionally,
waste, debris, and unsuitable materials will have to be
removed from the site to the []IBWC designated
location. Upon determining the cost to process the
existing materials as noted (but not limited to), the cost
for importing riprap will be deducted from the applicable
unit price.

JX 12, at 3.

The IBWC’s question, and the answer provided by Magnus to that question,
are not, when viewed in isolation, crystal clear. The evidence shows, however,
that Magnus had already submitted its riprap cost proposal for 9570 CY. JX 10, at
1. In that context, it is most logical to assume that the IBWC, in its response to
Magnus’s proposal, was seeking assurance as to “additional materials,” JX 11, at
1, beyond 9570 CY of riprap. Magnus’s answer to that question was that “existing
riprap will be handled on a case by case basis.” JX 12, at 3. In the court’s view,
the documentary evidence strongly supports the logical inference that Magnus was
suggesting that the parties defer the pricing of the third category of riprap work,
i.e., the replacement of existing riprap, until a station-by-station evaluation of the
existing riprap could determine whether some of this existing riprap could be re-
used.

6. The IBWC Received Supporting Documentation for
Magnus’s Riprap Cost Proposal Which Addressed
“Additional Riprap” Areas, not Existing Riprap Areas

By all accounts, the IBWC never sought clarification of Magnus’s proposal
for a “case by case” treatment of the replacement of existing riprap. Nonetheless,
after receiving Magnus’s cost proposal for $717,750 and the clarification that
existing riprap replacement quantities would be addressed on a case-by-case basis,
the IBWC solicited and received a station-by-station breakdown of Magnus’s
proposed volume of 9570 CY of riprap to be placed on the levee as a result of the

47
matrix negotiations. This volume breakdown table, JX 13, confirms that Magnus
included in its cost proposal the “additional riprap” areas, not the existing riprap
areas, on the levee. Magnus’s volume breakdown table addressed the costs of the
placement of riprap only where the levee design plans showed no existing riprap,
i.e., from STAs 89 to 117 and 126 to 145. JX 13, at 3-5.

The extensive areas of existing riprap shown on the levee design plans, i.e.,
STAs 123 to 126, 176 to 186, and 206 to 223, were not included in Magnus’s
riprap cost proposal.25 Thus, all of the contemporaneous documentation provided
to the IBWC by Magnus during the matrix negotiations informed the IBWC that
Magnus was not including a price for the replacement of existing riprap in its cost
proposal of $717,750. In the context of the IBWC’s failure to differentiate
between original and matrix-related riprap work, and considering that Magnus had
presented the IBWC with a detailed riprap cost proposal whose sole focus was on
the areas of the levee that were shown on the contract plans as having no existing
riprap, the replacement of existing riprap was proposed by Magnus to be resolved
on an ongoing, case-by-case basis, with a price to be determined at a later date. If
there was any lack of clarity as to this proposal regarding the case-by-case
determination of the costs of replacing existing riprap, it was clearly the fault of
the IBWC. Magnus had addressed the topic in its written communications, but
Magnus’s communications elicited no questions or comments, written or oral,
from the IBWC.

7. Witness Testimony as to the Negotiation of Existing Riprap
Replacement Work

The court relies primarily on the documentary evidence of the matrix
negotiations to discern the scope of the riprap work included in and paid for by
Modifications 001 and 003. Witnesses for plaintiff and witnesses for defendant
were somewhat divided on their interpretations of the phrase “existing riprap will
be handled on a case by case basis.” JX 12, at 3. Mr. Duran testified that he

25
/ Two or three additional stations, STAs 224 to 226, were included in Magnus’s riprap
cost proposal which were later also included, mistakenly, in Magnus’s riprap claim under the
“Replace Existing Riprap” category. JX 13, at 6; JX 24, at 17; Douglas Tr. at 433-35. The
double-counting of these stations has been removed from Magnus’s finalized riprap claim.
Sallas Tr. at 1695-98; Pl.’s Br. at 21.

48
understood the “case by case” clarification provided by Magnus to refer solely to
the size of a credit to be offered to the IBWC as existing riprap was re-used in the
restored levee. Duran Tr. at 995-96. Mr. Moore also stated that he thought the
topic of this clarification involved a credit to the IBWC, but his recollection of the
surrounding circumstances was rather vague. Moore Tr. at 1195-1203. Mr.
Moore did agree with plaintiff’s counsel, however, that the “case by case”
proposal from Magnus was “pretty clear.” Id. at 1204. Mr. Delgado stated firmly
that Modifications 001 and 003 were lump-sum and did not include a “case by
case” component for the replacement of existing riprap, but Mr. Delgado also
conceded that he understood Magnus’s clarification to include a request for
increased payments to Magnus if the existing riprap proved to be unfit for re-use
on the levee. Delgado Tr. at 492, 518, 687.

There is no real dispute that the existing riprap on the levee was of poor
quality. Duran Tr. at 845-46; Sallas Tr. at 1659-60; Def.’s Reply at 27. The
amount of re-usable riprap was not easily determined, however. A preponderance
of trial evidence showed that both the depth of the layer of existing riprap, and the
fitness of existing riprap stone for re-use, were difficult to estimate until the
existing riprap was excavated and tested. Moore Tr. at 1148, 1178; Sallas Tr. at
1658-59; Louviere Tr. at 1752. Mr. Sallas persuasively explained that handling
the existing riprap re-use quantities on a case-by-case basis was the only rational
way for Magnus to respond to the IBWC’s request for a riprap cost proposal.26
Sallas Tr. at 1679-80. Mr. Sallas also testified that the task of estimating the
existing riprap replacement work was affected by Magnus’s understanding of
riprap locations on the levee; “typical cross-sections” describing the proper
construction of riprap armoring; and the IBWC’s failure to differentiate between
original riprap work and the riprap work added by the matrix. Id. at 1626-30.

8. Existing Riprap Replacement Work Outside of Scope of
Base Contract and Unpriced in Modifications 001 and 003

Based on the documentary evidence of the matrix negotiations, as well as

26
/ The IBWC’s solicitation also discussed existing riprap in one of its answers to bidder
questions, and noted that certain decisions about riprap work would be finalized during the
course of performance: “Observation of uniformity of the existing riprap as well as full coverage
shall be determined out in the field.” JX 1, at 65.

49
witness testimony on the subject of determining existing riprap replacement
quantities on a case-by-case basis, the court agrees with Mr. Sallas that existing
riprap replacement work was “above and beyond the matrix” work added to the
contract in Modifications 001 and 003. Sallas Tr. at 1630. The court also has
found that the original contract riprap placement work was limited to four specific
sections of the levee where new riprap was to be placed. Plaintiff’s riprap claim,
which is for 8101 CY of riprap needed to replace existing riprap on the levee, is
therefore for work which constitutes a change to the contract in terms of the
constructive change doctrine.27

The government’s defense to plaintiff’s riprap claim depends on at least
two false assumptions. First, defendant states that the replacement of all existing
riprap, if unusable, was included in the original contract’s lump-sum price. Def.’s
Br. at 52. But the solicitation, as amended by the IBWC’s answers to bidder
questions, does not support this interpretation of the contract. Estimated quantities
of imported riprap were drastically reduced to avoid the inclusion of existing
riprap volumes in the bidder’s calculations. JX 1, at 53. The contract plans show
four sections of new riprap placement, which match the indications on the relevant
“typical cross-sections” for riprap placement under the original contract. JX 109,
at 15-17, 19-20, 23-27, 36. Although the government contends otherwise, the
original contract’s riprap work was for these four sections of “new riprap”
placement.28 Cf. Def.’s Reply at 24 (conceding that the 17,500 CY riprap estimate
in the amended solicitation was for new riprap only).

27
/ It is somewhat ironic that the IBWC’s original estimate in the solicitation for the
riprap quantities required for this project, 32,000 CY, was far more accurate than the revised
estimate later provided to bidders. JX 109, at 8. The 32,000 CY figure was slashed almost in
half to eliminate possible double-counting of existing riprap. JX 1, at 53. Bidders were warned
that the revised riprap estimate could be off by as much as twenty percent. JX 1, at 67. If the
IBWC’s original riprap estimate, 32,000 CY, is increased by twenty percent, that figure is 38,400
CY. Magnus states that it placed a total amount of 36,378 CY of riprap on the levee, well within
a twenty percent variance from the original riprap estimate in the solicitation. JX 24, at 17.
28
/ When all of the answers to bidder questions regarding riprap are considered, along
with the levee plans and typical cross-sections, a rational bidder would have known that some
variation from the 17,500

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4200444. Public record. Not legal advice.