Northrop Grumman Corp. v. United States

OPINION

MILLER, Judge.

This contract action, before the court after trial, juxtaposes the military’s evolving requirements and a contractor’s over-ambitious assessment of its capabilities to meet them. In the circumstances the contractor questions the military’s choice of a fixed-price incentive contract and the mushrooming of labor hours expended in responding to fluid requirements. The military defends the choice of contract type, disputes the charge of illegality, and blames the contractor for spending $34 million on a $22 million contract. The court concludes that Congress precluded this type of contract during three years of its performance, but that damages shall be determined under the contract. Plaintiff is entitled to an award on some of its claims; with respect to constructive changes, which dominated trial, plaintiff has failed to establish that the Government ordered most of the constructive changes and, even if so, to prove its damages with the requisite certainty-

FACTS

In the mid-1980s, the military identified a need to upgrade its Vietnam-era Tactical Air Command Central (“TACC”). This objective to advance the command and control of Marine Corps operations gave birth to the Advanced Tactical Air Command Central (the “ATACC”). From this nascent concept, the Navy and the Marine Corps commenced the development of the ATACC, the subject matter of the instant case. 1

The ATACC was to be a set of four modular shelters that could be transported onto the battlefield to provide local command and control. Each shelter was to house sufficient hardware (including desktop terminals, operator consoles, and communications equipment) and software (including software for various military communications protocols, message generation, and database management) for the Marine Corps operators to plan and implement airborne strikes. This portable command and control center was to replace the TACC, which contained outmoded equipment and software and was housed in an inflatable bubble.

*27 On February 7,1986, the Government prepared the Software Baseline Estimate. It estimated the lines of code (“LOC”) to be developed by the eventual ATACC contractor to be between 52,200 and 121,200. The estimate concluded that a total of 182,000 to 240,000 LOC would be required. The difference between the two estimates entailed code furnished by the Government or already in existence.

On November 17, 1986, United States Navy Space and Naval Warfare Systems Command (“SPAWAR”) finalized the ATACC Acquisition Plan 86-16 (the “Acquisition Plan”). The Acquisition Plan calls for, among other items, a standardized Navy computer — the AN/UYK-14/43/44 — which can use the CMS-2 compiler, Tactical Digital Information Link (“TADIL”) 2 software to be government-furnished information (“GFI”), and developmental items (“DI”) to be mainly software in the information-management area of the ATACC program. The Acquisition Plan labels the software risk as “moderate and manageable.”

In August 1986 SPAWAR opened the ATACC request-for-proposal (“RFP”) library at Calculon Corporation, a government contractor providing support for the ATACC program. The library contained almost all of the information required to bid on the RFP; some limited information related to tracking capabilities was classified and not in the library. Grumman Data Systems, Inc. (“GDS”), became interested in the project. GDS was a division of Grumman Aerospace Corporation (“Grumman”). (Northrop Corporation acquired Grumman on May 18,1994, forming Northrop Grumman Corporation (“plaintiff”)). The types of documents that GDS personnel could have reviewed (or copied) at the library included the first draft Statement of Work (“SOW”), operational documents, TACC documents, military standards (“MIL-STD”), and Data Item Descriptions (“DIDs”). GDS used the Calculon library, copied a complete Marine Tactical System (“MTS”) protocol and encountered no banders to review of all the documents in the library. At approximately this time, SPA-WAR held a pre-RFP industry conference for the ATACC program. Before SPAWAR released the ATACC RFP, GDS sent several representatives to SPAWAR to identify the Marine Corps’s needs regarding the ATACC program.

SPAWAR issued the ATACC solicitation on April 30, 1987. Two months later the Marine Corps completed the MTS message specification.

GDS composed a proposal team that included, among others: Richard F. McLean, the ATACC Software Manager; Joseph A. Cotellessa, the Manager of the Battle Management Subsystem for the ATACC; Dr. Joseph H. Kullbaek, Senior Systems Architect; Harold LaWare, Vice President of Technical Operations for GDS; and William T. Bonner, Engineering Manager. Dr. Stuart A. Steele, Vice President of GDS, was responsible for technical solutions, costing, staffing, and personnel for the program.

To generate an LOC estimate, Mr. Cotellessa used the Constructive Cost Model (“COCOMO”), a widely accepted estimating tool. COCOMO is a top-down tool that generates an estimate of man-months of labor based on projected LOC. Because it is a modeling tool, COCOMO must be calibrated properly, usually by use of past results. Dr. Steele testified that Mr. Cotellessa had someone calibrate COCOMO based on three past projects. Dr. Steele believed the LOC estimate generated by COCOMO was reasonable. Mr. Cotellessa supervised the estimates of all GDS software proposed for the ATACC. Mr. Cotellessa used the ATACC specification to generate an architecture. Then, he used the lowest level requirements to determine how many LOC of existing products needed to be modified. For new software Mr. Cotellessa constructed from bottom up a structure to estimate the LOC needed for all new items by asking members of each project group within GDS what they considered their portion of the ATACC software development would require. COCOMO resulted in a more pessimistic schedule than *28 the bottom-up model. GDS used the COCO-MO estimate when it made its proposal because COCOMO was able to be segregated into skill areas.

No confidence interval was assigned to either estimate. Dr. Steele testified that he did not usually assign confidence intervals to LOC estimates.

Concurrent with the generation of its proposal, plaintiff undertook risk assessments regarding the ATACC project. Mr. LaWare personally evaluated the risk and concluded that it was very low because of the amount of non-developmental items (“NDI”) that GDS proposed for the project.

On August 20, 1987, SPAWAR finalized the Source Selection Plan (the “SSP”). Four days later GDS submitted its proposal. GDS proposed an ATACC based predominantly on NDI hardware and software. The GDS NDI software had been developed earlier for other government programs, such as Commander in Chief' Display Support System, Maritime Defense Zone, and the Ocean Surveillance Information System Baseline Upgrade.

After it submitted its proposal, but before submitting its best and final offer (“BAFO”), GDS, during April 1988, demonstrated its ATACC concept to the Marine Corps and SPAWAR. The RFP permitted demonstrations, and GDS seized upon this opportunity to market its concept. In attendance at the demonstrations were senior GDS personnel and ATACC team members, as well as high-ranking Marine Corps and SPAWAR personnel. GDS treated its guests to an almost complete functioning system and a videotape that demonstrated GDS’s mock-up. Mr. McLean oversaw the demonstrations. Mr. La-Ware testified that this demonstration was a departure point from which to tailor to the Marine Corps’s needs. The live-test demonstration included NDI software and some DI software. GDS continued to demonstrate its mock-up on numerous other occasions to others in the military. For the mock-up GDS wrote the code in Fortran, which was not permissible for the finished product; however, Mr. McLean thought that GDS had three to four weeks to assemble the demonstration and knew that this was insufficient time to generate a demonstration in Ada, which was the programming language called for by the specification. GDS actually had four months to generate the mock-up, which Mr. McLean testified would have been sufficient for him to develop an Ada-based mock-up. Although GDS used a non-developmental Fortran version of Air Tasking Order (“ATO”) software that would later need to be replaced by a developmental Ada software package, ATO generation was demonstrated to obtain customer feedback. Mr. McLean testified that government feedback indicated satisfaction with GDS and that GDS met the requirements. According to Mr. McLean, this feedback on the demonstration was the key to GDS’s understanding of the requirements and its relationship to the Marine Corps’s needs in the future.

John F. Williams, Jr., now an employee of Logicon, which is a subsidiary of plaintiff, joined Columbia Research Corporation (“CRC”) in February 1988 after two-and-one-half-decades in the Marine Corps. His role with CRC was to provide support to Marine Corps Systems Command (“MARCORSYSCOM”). CRC in general was to assist the ATACC program manager, who at various times was positioned in Marine Corps Headquarters (Lt. Col. Lou C. Consagra and Mr. George Georgeadis), Marine Corps Research, Development and Acquisition Command (“MCRDAC”) (Mr. Georgeadis), and SPA-WAR (Lt. Col. James T. Ware). CRC monitored cost and schedule and tracked requirements of the specification.

Mr. Williams developed a requirements traceability matrix from software that assigned a number to each requirement to track each and to assess fulfillment of each. Although not part of CRC’s contract, Mr. Williams recommended use of the matrix, and the Marine Corps agreed to it. After contract award Mr. Williams provided GDS with the matrix. GDS developed a similar matrix of its own using other software.

Before contract award Mr. Williams wrote an independent verification and validation (“IV & V”) plan for prospective IV & V contractors. CRC was intended to be involved in IV & V, but SPAWAR awarded an *29 IV & V contract before MARCORSYSCOM went into operation.

On March 29, 1988, Maj. Janice P. Guy, the Developmental Project Officer for the ATACC, sent a letter to Lt. Col. Consagra discussing her assessment of the software risk. She noted that “[wjhile the processing of textual (character oriented) data is not new, the incorporation of an automated capability into a tactical system, in support of [Joint Interoperability of Tactical Command and Control Systems (“JINTACCS”)] character oriented message exchange is of concern.”

Before BAFO submission, GDS answered questions posed by SPAWAR. With Mr. McLean as a participant, GDS answered an Ada sample problem. Ada was required for all Computer Software Configuration Items (“CSCIs”) — software items that make up the software architecture of a program — that were more than 25 percent new or modified. Ada is a high-order, or powerful, language, representing a consolidation of other extant languages — Fortran, Cobalt, Pascal. GDS personnel possessed limited knowledge of Ada, and in his LOC estimate Mr. Cotellessa modeled the inefficiencies in COCOMO, penalizing GDS for its inexperience through an effort-adjustment factor for language experience.

To arrive at its own BAFO, GDS needed to “scrub” its own proposal to eliminate unnecessary costs and expenses. Mr. LaWare undertook this task. On May 31, 1988, GDS requested BAFOs from its subcontractors, like Aircraft Systems Division (“ASD”), a sister division to GDS. On June 15, 1988, ASD submitted its BAFO to GDS for the shelters for the ATACC. ASD’s BAFO for the prototype was $6,079,680.00, including a 10.8 percent profit, a price well in excess of the $4,350,000.00 BAFO that GDS wanted from ASD. In addition to reductions to the shelter costs, GDS secured reductions from other subcontractors — including, among others, Digital Equipment Corp., Genisco, and SCI — and made reductions to its own costs, although no documentation of these reductions was introduced into evidence.

On June 6,1988, the Revised System Specification for the ATACC, ELEX-T-620A, and the ATACC SOW were issued. On June 9, 1988, SPAWAR requested BAFOs from bidders adjudged technically competent. BAFOs were to include formal incorporations of the May 2, 1988 answers to questions. BAFOs were not to include exceptions to the requirements, terms, or conditions of the RFP; according to the June 9, 1999 call for BAFOs, “[a]ny exception taken may render your offer unacceptable.” (Emphasis added.) BAFOs were due to SPAWAR by June 24, 1988.

On June 24, 1988, GDS submitted its BAFO on which it performed another LOC estimate. GDS estimated that 218,000 LOC would be necessary for its proposed ATACC. In its BAFO, GDS took no exception to the RFP, the ATACC SOW, or the ATACC contract. GDS’s BAFO contained a target price of $23,267,207.00 and an identical ceiling price. This target price was a $3,198,706.00 reduction from GDS’s proposal price. GDS’s BAFO included copies of its May 2, 1988 responses to questions regarding cost and revisions to its proposal.

In addition to GDS, LTV Sierra/Singer submitted a BAFO to be evaluated according to the SSP. The SSP called for a Contract Award Review Panel, which was divided into technical and cost evaluation boards. The SSP, dated April 20, 1987, covered the cost side. No one from any of the Marine Corps Air Wings was involved in the cost evaluation. Maj. Bedar of Marine Corps Tactical Systems Support Activity (“MCTSSA”) was a member of the Cost Evaluation Board. The Technical Evaluation Board (the “TEB”), composed of Maj. Guy, Maj. Bedar, Col. Robert Speights, and Col. Louis L. Simpleman, scored and provided comments on GDS’s BAFO. On June 28,1988, the TEB issued its ATACC Final Technical Evaluation, which included revised technical scores. It concluded that GDS proposed acceptable functional and technical approaches. Two days later, on June 30, SPAWAR issued the final recommendation of award of the ATACC contract to GDS because GDS submitted “the lowest priced proposal, had the highest overall weighted score, and [its] technical approach was judged lower risk in the critical area of software engineering.”

*30 On July 6, 1988, SPAWAR awarded the contract to GDS because GDS offered a single-contractor approach as opposed to LTV Sierra/Singer’s two-contractor effort, GDS’s proposed ATACC could be applied to other tactical applications, and LTV Sierra/Singer’s proposal had higher technical risk. A bid protest ensued. GDS was not permitted to revise its BAFO before the signing of the awarded contract, and it was not until December 14, 1988, that a contract between SPAWAR and GDS was signed. The contract called for delivery of the ATACC prototype for operational testing within 27 months.

Mr. Williams of CRC drafted a Program Management Plan (“PMP”), dated August 1, 1988, as a guide to the steps that the program should follow. Mr. Williams has no knowledge of whether the PMP was implemented, but assumes that it received at least some kind of approval. He used the Marine Corps System Acquisition Management Model (“MCSAMM”), a computer database that tracks milestones. CRC communicated monthly reports that showed the status of each deadline and milestone. Although Mr. Williams received the follow-up questions, he did not recall specifics or whether Lt. Col. Ware asked follow-up questions. The schedule generated for the ATACC was optimistic, especially because MCSAMM had forecast an overrun of a year or longer. Mr. Williams had to go back and compress dates in MCSAMM, and GDS needed to compress its own schedule to match. No hard copy of the MCSAMM report, which filled two walls, was ever filed with the Government’s Program Management Office (“PMO”).

In January 1989 the parties held a post-award conference. Lt. Col. Ware was SPA-WAR’s Program Manager for ATACC, and this conference was his first involvement with the ATACC program. While at SPAWAR, Lt. Col. Ware communicated with the contracting officer at least once per week. At this point GDS raised the issue of satisfying the hardware quality requirements of MIL-Q-9858A (“9858A”), which was not applicable to commercial off-the-shelf equipment (“COTS equipment”). During the next two months, GDS and SPAWAR engaged in a number of guidance conferences on ATACC requirements.

From award until July 1990, Mr. LaWare was the ATACC Program Manager for GDS. Two to three times per week during the first six months of the ATACC program, he met with Lt. Col. Ware to discuss schedules and progress. Formal meetings were generally large, while informal meetings were small.

Gerald E. Glinka, Director of Finance and Business Management for Logicon, GDS’s current appellation, started on the ATACC program in January 1989. He held the overall responsibility for business operations. Three functional groups reported to him: contracts, subcontracts and acquisition, and program planning and control. Mr. Glinka reported to the program manager and to business operations in Grumman’s Bethpage, New York, office.

Mr. McLean was appointed Software Manager. He possessed familiarity with a range of programming languages, including Fortran, Pascal, PL/1, and various assembler languages. Mr. McLean received praise from witnesses for his programming abilities, but suffered criticism regarding his management skills.

Mr. Bonner assumed the duties of Engineering Manager on the ATACC program after award until April 1990. He reported to Mr. LaWare. Messrs. Cotellessa, McLean, Richard T. Cartwright, Jr., Shelter Systems Manager, Andrew Sullivan, Communications Systems Manager, and Lawrence Gibbey, Integrated Logistics Support (“ILS”) Manager, reported to Mr. Bonner.

During January or February 1989, Capt. Charles M. Iaquinto became the Marine Corps in-plant representative, a position he held until September or October 1991. Capt. Iaquinto’s duties included ensuring that deliverables were timely delivered, functioning as a sounding board for users — the Fleet Marine Force (the “FMF”) — and serving as the operational point of contact for GDS. He reported to Lt. Col. Ware. Although Capt. Iaquinto reviewed the generic request that the Marine Corps issued to start the ATACC program, he never reviewed GDS’s proposal and did not recall the exchanged questions *31 and answers, nor did he supervise the IV & V contractor, Texel & Co. (“Texel”). As the interface between the PMO and the FMF, Capt. Iaquinto addressed such issues as the man-machine interface (the “MMI”) and hardware concerns. The FMF never asked him to influence GDS, but it did express to him its preferences for the ATACC.

On March 15, 1989, Defense Contract Administrative Services (“DCAS”) released its Quality Assurance Representative’s (“QAR’s”) Contract Data Package Recommendation/Deficieney Report. In this report DCAS indicated that 9858A was not applicable to NDI. On March 20, 1989, Mr. LaWare developed briefing charts, comparing GDS’s and ASD’s costs for the shelter effort. They indicate that GDS took the position that it was required to deliver unnecessary data and that the Marine Corps did “not understand how to support commercial NDI.” On March 24, 1989, GDS released a Cost/Schedule Status Report (“C/SSR”) for January 28, 1989, to February 24, 1989. The C/SSR reflects that $4,044,000.00 had been deposited in Undistributed Budget. On that same day, GDS also submitted a Contractor’s Progress, Status, and Management Report (“CPSMR”) for February 10, 1989, to March 9, 1989. The CPSMR indicates that a vendor had been selected for the shelter subsystem during the time period.

On March 27, 1989, members of the FMF, prospective users of the ATACC, visited GDS for a three-day briefing and demonstration. These Marines desired additional software and some different functionalities. They also expressed conflicting opinions about the ATACC concept. Also in March, William E. Fravel, Jr., of Texel, the IV & V contractor for the ATACC program, debriefed GDS personnel about GDS’s answer to the solicitation’s Ada test problem. At approximately this time, GDS moved its ATACC operations to its permanent facility in Springfield, Virginia.

The Program Review, designed to keep the Marine Corps as user abreast of the progress of the ATACC program, occurred three months into performance. During the Program Review, Lt. Col. Ware approved the format and content of the Systems Requirements Review (the “SRR”) The participants in the Program Review discussed the high NDI content in GDS’s approach to the ATACC. SPAWAR’s documentation requirements for military quality and testing could not be satisfied by GDS’s proposed approach.

Before the SRR, GDS was preparing the Software Development Plan (the “SDP”), the System/Segment Design Document (the “S/ SDD”), and other documents. Mr. Bonner was satisfied with the level of staffing. If there were staff shortages, GDS brought personnel in from other parts of Grumman— ASD, for example. GDS had not planned to write code at this time; rather, the plan was to defer code writing until the Critical Design Review (the “CDR”). GDS, according to Mr. Bonner, was not behind schedule, but was experiencing the same start-up issues as any big project — a temporary building, temporary equipment, and addition of staff.

From April 4 to April 6, 1989, GDS and SPAWAR scheduled the SRR, a meeting at which each party could share substantive feedback on how it was actually approaching the ATACC. The SRR’s purpose was to assure each party’s understanding and to make needed adjustments. The SRR was scheduled early in the program, so that the program could be defined clearly to prevent ongoing refinements that are deleterious for software development. GDS did not understand this as an evolution of Contract Line Item Number 0001 (“CLIN 0001”), the prototype, but proceeded on the basis that any evolution would occur through other CLINs after the prototype was completed. In advance of the SRR, GDS provided a proposed agenda. Maj. Theodore J. Dunn, SPAWAR’s ATACC Acquisition Manager, considered the agenda to be unsatisfactory because it failed to contain sufficient substance. Maj. Dunn relayed such dissatisfaction to Mr. Bonner. After some communication between Maj. Dunn and Mr. Bonner, Maj. Dunn conveyed his dissatisfaction with the SRR agenda to Lt. Col. Ware. The latter raised the issue with Mr. Bonner, who said that GDS would modify the SRR agenda.

Mr. Bonner worked on documents and briefings for the SRR. He was responsible *32 for all but a few minutes of the technical presentation. His intention was to present the preliminary design and other requirements to a very detailed level. The SOW required the presentation of the Preliminary System/Segment Design Document (the “PS/SDD”), although it was not a deliverable at the SRR, that is, GDS was not required to supply it to the Government at this time. Mr. Cotellessa testified that Maj. Dunn cross-checked MIL-STD-1521B with GDS’s planned level of detail. Maj. Dunn told Mr. Cotellessa to scale back the detail on the PS/SDD. Maj. Dunn and Mr. Cotellessa walked through the standard and the agenda together. The S/SDD was required 60 days before the System Design Review (the “SDR”), which was to occur more than two months after the SRR. The SDR for hardware was scheduled for July 17; for software, August 16. The Software Development Plan (the “SDP”) was not deliverable at SRR. The Software Quality Program Plan (the “SQPP”) also was not deliverable at the SRR, or so Mr. Bonner believed.

On April 20, 1989, GDS submitted its C/SSR for February 25, 1989, to March 31, 1989. The C/SSR reflects a zero balance in the Undistributed Budget and distributions of the previously undistributed funds to various cost accounts. One week later CRC transmitted comments on GDS’s SPD to the Marine Corps Program Office. These comments included those of MCTSSA, BoozAllen and Hamilton, Inc., and CRC. The Program Officer transmitted these comments to GDS on May 24, 1989. On April 28, 1989, CRC provided the PMO with comments on the C/SSR for March and supplied a Cost Appraisal System (“CAPPS”) report that indicates a projected cost overran. These monthly reports communicated to the Marine Corps those items that were late, missed, or impacted the critical path. The CAPPS report differs from the MCSAMM report. MCSAMM used all the deliverables in the SOW, while CAPPS used data from GDS’s C/SSRs. Mr. Williams did not know what the PMO did with CRC’s monthly CAPPS reports.

At the second SRR, from May 2 to May 4, 1989, the Marine Corps indicated a desire to change the ATACC workstation design. The Marine Corps wanted five desktop terminals (“DTTs”) instead of two DTTs and three operator consoles (“OCs”). This SRR marks the birth of Engineering Change Proposal No. 1 (“ECP1”), discussed more fully below.

Cheryl A. DiMaio, a government contracting officer, twice had responsibilities for the ATACC. After contract award, the ATACC contract was assigned to her as a Contract Specialist under SPAWAR. She retained the contract until June or July of 1989. In November 1990, she assumed duties of Contracting Officer for the contract under MCRDAC. She had no pre-contract duties on the ATACC program. As Contracting Officer she reported to Floyd Donald Monaco, who was a Supervisory Contracting Officer at SPAWAR. Diane C. Thornewell, an employee at SPAWAR since 1976, became the ATACC Contracting Officer three to six months after award of the contract. She was a contracting officer on five to six projects at that time. Her immediate supervisor also was Mr. Monaco. She continued as the Contracting Officer until November 1990.

Ms. DiMaio assumed the contracting officer position when the ATACC program was transferred from SPAWAR and Ms. Thornewell to MCRDAC. Lt. Col. Ware became Assistant Program Manager of ATACC for MCRDAC. While at MCRDAC, he was responsible to the Program Manager, Col. Keith Stivers, for management of ATACC development. In June 1989 Maj. Dunn retired from the Marine Corps and left the ATACC program.

Lt. Col. Ware played his cards close to his vest. He excluded people from meetings and held government-only meetings, according to Mr. Williams, the CRC support person. However, he never prevented Mr. Williams from attending a meeting. Lt. Col. Ware was a “one-man band” to some degree. Mr. Williams had no personal knowledge of Lt. Col. Ware barring MCTSSA from any meetings. Lt. Col. Ware threatened to cut CRC funds and hindered Mr. Williams somewhat in his duties, but Mr. Williams worked around him.

On June 22, 1989, GDS submitted its May 1989 C/SSR. This C/SSR projected a nega *33 tive cost variance upon completion of the ATACC program. One day later GDS submitted a CPSMR, which shows a schedule impact because of ECP1.

On September 8, 1989, GDS submitted the SRSs for non-TADIL communications, bit-message processing, character-message processing, system control, and TADIL communications. Ten days later Modification P00011 incorporated ECP1 into the ATACC contract. GDS submitted additional SRSs for decision support and ATO generation on September 29,1989.

From October 17 to October 19 and October 23 to October 26, 1989, GDS and the Government engaged in the System Design Review (“SDR”). In late 1989 GDS personnel met with personnel of Eagle Technologies, the government contractor assisting in the development of MTS, to discuss MTS. At this point, Joseph H. Matusic, a former Marine Captain whom GDS retained to act as a functional expert, first appreciated the problems with utilizing MTS and JINTACGS in the same system. Mr. Matusic was a particularly straightforward witness, who criticized both GDS and the Government’s actions.

On February 26, 1990, GDS submitted its first version of the Software Design Documents (the “SDDs”). This submission occurred before the Marine Corps approved the SRSs. In March 1990 GDS and the Marine Corps engaged in the Preliminary Software Design Review (“PSDR”) for the SDD and the Software Architecture Specification (the “SAS”).

On June 12, 1990, GDS delivered its third version of the S/SDD. On July 23, 1990, GDS delivered its version 3A of the S/SDD.

On July 18, 1990, Mr. McLean wrote a memorandum to Henry Jenkins, GDS’s Engineering Manager. In this memorandum, Mr. McLean laments errors in the original costing of the proposal, reductions in software engineering labor, and additional unplanned effort. During August 1990 Cyberchron, GDS’s contractor for ruggedized workstations, failed to deliver those workstations in a timely manner.

During September 1990 GDS began writing software code and performing unit testing. On October 2, 1990, the Marine Corps declared that GDS deliverables, such as C/SSRs, would be handled by the PMO’s in-plant representative. “As per conversation today between Capt. Iaquinto and GDS Contracts, this is to notify your office that all SPAWAR CDRL Deliverables will be handled by the In-House Representative for distribution.”

During November 1990 Mr. Cotellessa started to focus primarily on CLIN 0013, the Joint Tactical Information Distribution System (“JTIDS”). On November 13,1990, procurement authority for the ATACC was transferred from SPAWAR to MCRDAC, and Ms. DiMaio assumed the role of Contracting Officer from Ms. Thornewell. This shift signaled the final transfer of authority from the Navy to the Marine Corps. Edward J. Stolark, Ms. DiMaio’s superior, first became aware of software development problems related to the ATACC program at approximately this time.

During January 1991 GDS experienced software development delays due to Cyberchron’s non-delivery of ruggedized workstations. During March 1991 Arthur Fritzson, eventually GDS’s ATACC Software Manager, and other Grumman software managers from its Bethpage, New York, office visited GDS’s ATACC facility for interviews and debriefings. By April 3, 1991, GDS estimated the number of code “statements” in the ATACC system as of March 8, 1991, at 310,564. On April 19, 1991, the System/Segment Design Review was held.

During May 1991 Mr. McLean left the ATACC Software Manager position. Although he attempted to portray his departure in neutral or positive terms, the undertone of GDS’s dissatisfaction was revealed by other witnesses. Two months later Mr. Fritzson assumed the position as ATACC Software Manager. On July 11, 1991, Ms. DiMaio met with GDS personnel to discuss progress in software development and GDS’s ability to deliver the ATACC in December 1991. As a result of this meeting, Ms. DiMaio notified Mr. Stolark, MARCORSYSCOM’s Director of Contracts, by e-mail that GDS was expending its own resources to *34 accelerate and to overcome schedule slippages.

An ASD team arrived at GDS’s ATACC site on July 22, 1991, to audit the ATACC program. Nine days later GDS submitted its C/SSR for May 25 to June 28, 1991, and its CPSMR. The C/SSR recounts a $9,832,000.00 overrun. GDS declared a commitment to schedule reduction through overtime and additional resources. The Field Demonstration System (the “FDS”) was rescheduled for November 1991.

In September 1991 prospective ATACC users from the FMF attended training at GDS’s Springfield, Virginia, facility in preparation for the FDS to be held at Camp Pendleton, California, in November. The Marines criticized the ATO procedures, and GDS undertook to re-write the MMI for ATO mission planning procedures. The FDS was held in November, as scheduled.

Joseph Bonsignore, Jr., then a Marine Corps major, started as a software engineer for the MCRDAC on the ATACC in late 1991. He later became in-plant representative for MCRDAC. He was a software engineer until January 1994 when he was promoted to Program Manager, a position that he held until June 1994. Lt. Col. Ware and he were the only in-plant MCRDAC representatives while Mr. Bonsignore was stationed at GDS.

During February 1992 GDS held its Production Readiness Review.

On June 25, 1992, Ms. DiMaio sent an email to Mr. Stolark, the Director of Contracts. She advised that GDS was meeting the specification, for the most part, but that some areas were problems, though not major problems. Mr. Stolark recalled neither this position nor the opposite being reported to him. The e-mail indicates a few areas where the specification was unachievable. Mr. Stolark did not recall this and indicated that he was not a technical person and could not evaluate such an assertion. Ms. DiMaio noted that GDS had made remarkable progress since January 1992. She recounted that Col. Stivers impressed upon GDS the need to go to Operation, Test and Evaluation (“OT & E”) by December: If GDS were to fall off schedule, funds would be in jeopardy. Mr. Stolark agreed with the schedule, but had no opinion as to whether it was tight.

During July 1992 Lt. Col. Ware retired from the Marine Corps. Lt. Col. Thomas L. Dempsey assumed the role of Assistant Program Manager, succeeding Lt. Col. Ware. During August 1992 GDS shipped the ATACC for Initial Operation, Test and Evaluation (“IOT & E”).

In October 1992 GDS placed Adm. Robert Owens (Ret.) in the position of ATACC program director. He reported to A1 Piccarrelli in Bethpage, New York, and Mr. Piccarrelli reported to the president of GDS, Bob Meyers. It was Adm. Owens’s understanding that the ATACC had not done as well as expected and that he was to provide more senior management. He was aware that the ATACC was about two years behind schedule and that there had been much labor poured in with no funding. By this time most of the ATACC personnel had moved over to the TAU TEN project, but there still were approximately 20 employees working on the ATACC. Adm. Owens’s job was to keep the relationship with the Marine Corps on an even keel, and he was successful to some degree.

On November 12, 1992, the ATACC was put through Field Installation and Acceptance Testing. One week later Lt. Col. Dempsey signed the DD250 Material Inspection and Receiving Report, accepting delivery of the ATACC prototype. The DD250 indicates that the unit price for the prototype of $1,369,242.76 was “[sjubject to adjustments for outstanding modifications.”

From January to May 1993, IOT & E was conducted. The MTS message system was not tested during this time. The Marine Corps requested a Rough Order of Magnitude (a “ROM”) from GDS on August 13, 1993, for the removal of MTS from the ATACC system. Adm. Owens sent an April 15, 1993 letter to the Marine Corps regarding IOT & E. The letter reflects a positive relationship with the Marine Corps.

On August 23, 1993, GDS and the Marine Corps entered Modification P00076 for Mission Support Upgrades. GDS, according to *35 Adm. Owens, also understood that the Marine Corps expected ongoing improvements before production.

On May 18, 1994, Northrop Corporation acquired Grumman, including the GDS subsidiary. The acquisition formed plaintiff.

The ATACC did not go into production. This disappointed Mr. Williams of CRC, who could not recall the date on which he became aware of the production decision. In Mr. Williams’s opinion, two factors contributed to the decision not to produce: first, the advent of CTAPS, an Air Force program that accomplished similar functions; second, the negative comments of the Second Marine Corps Air Wing Control Group, which expressed a desire not to be stationed in “buses,” as the shelters were known.

Plaintiff engaged in internal discussions about whether to file a claim. Adm. Owens was involved in plaintiffs filing of its claim under the Contract Disputes Act of 1978, 41 U.S.C.A. §§ 601-613 (West 1987 & Supp. 2000). As part of plaintiffs procedure, a prospective claim would go through a series of “sign offs,” a process whereby those involved could assent to or dissent from the claim. Adm. Owens formally expressed the opinion that the claim should not be filed. When he sent his dissent, plaintiff was seeking new work from the Marine Corps. His concern was not technical or legal; rather, it was a fear of making the Marine Corps upset with plaintiff. His dissent was not well received by those above him, and he experienced a softening of support for his continued services, although he left on amicable terms. Mr. Matusic, who played a role in the identifying issues for the claim, was under the impression that, before Northrop Corporation acquired Grumman, Grumman, GDS’s parent corporation, had written off the claim, which he characterized as differences of opinions between the lawyers and the workers and as a great deal of hindsight by plaintiff. Mr. Matusic also testified that plaintiff was holding the claim for the production decision. On August 23,1995, plaintiff filed its ATACC claim with the contracting officer. The instant litigation ensued.

Plaintiffs April 11, 1997 complaint, advanced eight counts for which it sought recovery. These counts include: breach of contract due to extra work, breach of contract due to delays and acceleration, breach of the duty to cooperate, breach of contract based on superior knowledge, breach of contract based on cardinal change, estoppel and waiver, illegal contract based on appropriations restrictions, and mutual mistake. By the date of trial, plaintiff was advancing fewer claims, including breach because of extra work, breach of the duty to cooperate, superior knowledge, illegal contract type, and unilateral and mutual mistake. Other lines of argument appear to have been abandoned or were resolved before trial. Plaintiff seeks reformation, damages in the amount of $14,162,409.00 plus interest, or other relief the court deems just and proper.

DISCUSSION

I. Whether formation of the ATACC contract was flawed

1. Appropriations restrictions for FY 1990 to FY 1992

1) Liability

In Count VII plaintiff asserts that the Navy funded the contract in violation of various Department of Defense (“DoD”) appropriation acts that required a risk determination for certain fixed-price contracts from FY 1988 to FY 1992. Defendant counters that the contract was not subject to a risk determination for any fiscal year.

In its December 20, 1999 order on partial summary judgment, the court ruled that section 8085 of the FY 1989 DoD appropriation act, Pub.L. No. 100-463, § 8085 , 102 Stat. 2270 , 2270-32 (1988), amended by Pub.L. No. 100-526, § 105 , 102 Stat. 2623 , 2625 (1988), applied only to firm fixed-price contracts. See Order filed Dec. 20, 1999, at 5. As a consequence, if an FY 1989 contract were a firm fixed-price contract, the Under Secretary of Defense for Acquisition (“USD(A)”) was required to make a risk determination. The court also ruled that the contract at issue is not a firm fixed-price contract. See id. at 11 . The lack of a risk determination before award therefore did not render the *36 contract illegal. 3 The court, however, left open the question of whether later appropriations restrictions required the USD(A) to perform risk determinations on earlier awarded, ongoing contracts.

Plaintiff argues that the Government funded the contract incrementally from FY 1990 to FY 1992 in violation of each fiscal year’s appropriations legislation that required risk determinations for “fixed price-type contracts.” Defendant responds that the appropriations restriction has been interpreted to exclude incremental funding of contracts entered into and initially funded in a prior fiscal year.

For FY 1990 to FY 1992, Congress reiterated the requirement for risk determination by the USD(A) first inserted into FY 1988 DoD appropriations. See Pub.L. No. 100-102, 101 Stat. 1329 (1987). Specifically, the appropriations mandated, “None of the funds provided for the Department of Defense in this Act may be obligated or expended for fixed price-type contracts in excess of $10,000,000 for the development of a major system or subsystem unless the Under Secretary of Defense for Acquisition determines, in writing, that program risk has been reduced to the extent that realistic pricing can occur .... ” Pub.L. No. 102-172, § 8037 , 105 Stat. 1150 , 1179 (1991); Pub.L. No. 101-511, § 8038 , 104 Stat. 1856 , 1882-83 (1990); Pub.L. No. 101-165, § 9048 , 103 Stat. 1112 , 1139 (1989). These fiscal-year appropriations, however, modified the FY 1989 appropriation’s language and again used FY 1988’s “fixed price-type contracts” language. Although what qualifies as “fixed price-type contracts” may be open to interpretation, the Federal Circuit has placed all fixed-price incentive contracts within the sphere of “fixed price-type contracts.” See AT &T v. United States, 177 F.3d 1368, 1373 (Fed.Cir.1999) (en banc) (holding that FY 1988 limitation on fixed price-type contracts applies to fixed-price incentive contract awarded in FY 1988).

AT & T resolves a related question that the parties ask this court to answer. The Federal Circuit rejected the Government’s argument that, because not all of the funds used for the contract at issue were appropriated in FY 1988, the FY 1988 prohibition did not apply. See id. The court looked at the “starting” point of the contract and held that “[t]he multi-year funding does not excuse the Defense Department from compliance with § 8118” at the time of award. Id. In other words, the initial risk determination might suffice to cover the “out years” of a multiyear contract. This implies, although does not explicitly state, that application of the risk determination requirement should occur only attendant to award of the contract and not in each subsequent fiscal year. 4

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984), sets forth a two-step test to be used in evaluating the lawfulness of an agency’s interpretation and implementation of a statutory mandate. The first question in the Chevron analysis is “whether Congress has directly spoken to the precise question at issue.” Id. at 842 , 104 S.Ct. 2778 . “If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Id. at 842-43 , 104 S.Ct. 2778 . If, however, “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843 , 104 S.Ct. 2778 (footnote omitted).

*37 Step two of Chevron is brought on by one of two scenarios — statutory silence as to the “specific issue” or ambiguity. When the plain language of a statute leads to absurd consequences, see, e.g., AT & T, 177 F.3d at 1383 (Plager, J., dissenting) (criticizing majority’s application of absurd-results standard as too lenient), or to results not in concert with Congress’s policy, see Neptune Mut. Assoc, v. United States, 862 F.2d 1546, 1549 (Fed.Cir.1988), the statute is deemed ambiguous. See Green v. Bock Laundry Mach. Co., 490 U.S. 504, 510-11 , 109 S.Ct. 1981 , 104 L.Ed.2d 557 (1989). In order to resolve ambiguity, the court can utilize a number of resources, if available, including legislative history. See Chevron, 467 U.S. at 842-43 , 104 S.Ct. 2778 ; Princess Cruises, Inc. v. United States, 201 F.3d 1352, 1359 (Fed.Cir.2000). Step two of Chevron admonishes the court to defer to the agency’s construction of the statute as a permissible construction when it “reflects a plausible construction of the plain language of the statute and does not otherwise conflict with Congress’ express intent.” Rust v. Sullivan, 500 U.S. 173, 184 , 111 S.Ct. 1759 , 114 L.Ed.2d 233 (1991); see also Torrington Co. v. United States, 82 F.3d 1039, 1044 (Fed. Cir.1996).

Defendant asserts that ambiguities inhere in the legislation at issue because of both statutory silence as to its application to incremental funding and absurd consequences that plaintiffs reading would yield. On the narrow issue of whether incrementally funded contracts are covered by appropriations restrictions, the statutes are silent. If plaintiffs reading were accurate, defendant postulates that the DoD would have been required to terminate or to suspend, until risk determinations could be performed, certain fixed-price incentive contracts that were lawfully awarded during FY 1989 and received funding in the FY 1990 appropriations. Such a result, defendant argues, is inconsistent with the acts’ purpose because it would have resulted in harm to the very contractors the acts were designed to protect.

Defendant would have the court move to step two of Chevron based on silence and the absurd result. Here, the legislative history is mixed. Favoring defendant’s reading of the appropriations acts’ restrictions are a conference report, a Senate report, and an authorization act. In its conference report accompanying the FY 1988 appropriations, which contains the risk determination prerequisite, the House conference noted: “The language requires the Under Secretary of Defense for Acquisition to make determinations in writing concerning program risk pri- or to awarding a fixed-price type development contract ----” H.R. Conf. Rep. No. 100-198, at 623 (1988). A Senate report noted that the FY 1989 restriction should not call into question “the propriety of an otherwise valid contract,” S.Rep. No. 100-326, at 105 (1988), that is, a contract that was entered validly in another year should not be made invalid merely because of the appropriations restrictions. Defendant highlights that Congress reiterated that risk assessment was pre-award in the FY 1989 authorization act. See Pub.L. No. 100-456, § 807 , 102 Stat.1918, 2011 (1988) (stating that a risk determination must be performed before contract “may be awarded”).

The DoD interpreted the FY 1988 appropriations act, which included language similar in all relevant respects to those restrictions currently at issue, as applying only before the DoD awarded a contract and not requiring annual risk determinations for contracts covered by the restriction in the appropriations act. On February 11, 1988, after the passage of the FY 1988 appropriations, the USD(A), Dr. Robert Costello, charged with performing the risk determination, issued a memorandum announcing the DoD’s interpretation of section 8118. Dr. Costello stated that a risk determination “is not required for incremental funding with FY 1988 monies of a development contract already awarded using funds from a previous fiscal year.” The DoD reenforced this reading when it promulgated DFAR § 235.006, which also indicates a need to perform risk determinations only prior to award and not during each year of a multi-year development contract. See 48 C.F.R. (DFAR) § 235.006 (1989).

The courts charge Congress with presumptive awareness of administrative interpretations of legislation. See Lorillard v. *38 Pons, 434 U.S. 575, 580 , 98 S.Ct. 866 , 55 L.Ed.2d 40 (1978). When Congress fails “to revise or repeal [an] agency’s interpretation,” its inaction provides “persuasive evidence that the interpretation is the one intended by Congress.” NLRB v. Bell Aerospace Co., 416 U.S. 267, 274 , 94 S.Ct. 1757 , 40 L.Ed.2d 134 (1974). Because Congress did nothing more than enact substantially identical legislation for the appropriations cycles after Dr. Costello’s interpretation, this judicial presumption supports the conclusion that Congress intended these appropriations restrictions to apply only prior to the awarding of development contracts and not to incrementally funded contracts of a previous fiscal year to be funded in a given fiscal year. Indeed, although this presumption is occasionally criticized, the House Appropriations Committee and the Senate Armed Services Committee performed reviews of the DoD’s policy in June 1988 and May 1988, respectively. See H.R.Rep. No. 100-681, at 147-49 (1988); S.Rep. No. 100-326, at 104-06 (1988).

Plaintiff culls documents from the legislative history and the DoD’s records to argue that the statutes apply to incrementally funded contracts, and that therefore the DOD’s interpretation is unreasonable. Plaintiff points to statements by government officials that support a different reading of the conference report than that offered by defendant. Plaintiff suggests that the conference report’s language is not exclusive, i.e., that it does not delimit the entire scope of the restriction. The conference report appears to be open to both parties’ readings. Plaintiff counters defendant’s reliance on section 807 of the FY 1989 authorization with the passage of the FY 1989 appropriations, Pub.L. No. 100-463, § 8085 , 102 Stat. 2270 , 2270-32 (1988), amended by Pub.L. No. 100-526, § 105 , 102 Stat. 2623 , 2625 (1988). Section 8085 of the FY 1989 appropriations does not contain the same apparent limitation of risk determinations to the pre-award context.

Plaintiff proffers two DoD interpretations of the scope of the risk determinations required by the appropriation acts. Prior to passage of section 8118, Deputy Secretary of Defense William H. Taft, IV, sent letters dated December 14,1987, to the Chairmen of both the Senate and House Appropriations Committees. Each of Deputy Secretary Taft’s letters included an enclosure that reads:

[S]everal changes need to be made in this provision to render it workable. First, this provision overlooks the fact that, due to incremental funding, RDT & E funds appropriated in FY 1988 (or subsequent years) may be obligated on long-term fixed-price development contracts awarded in prior fiscal years. As the provision now reads, in such cases the Department would still be required to make a written determination for such appropriations to be obligated for contracts awarded in prior years.

After passage of the appropriations, DoD’s Assistant General Counsel (Logistics) Dennis H. Trosch discussed incremental funding in a memorandum dated December 23, 1987: “Accordingly, I am providing you with this ‘heads up’ because of the potential impact on the Department (the language appears to cover FY 88 incremental funding of existing contracts, which may be imminent) and so you can plan for making appropriate reviews so that you can make the required determination.”

The court is unwilling to accord Deputy Secretary Taft’s letter the weight that plaintiff requests. Far from an official interpretation of a statute, Deputy Secretary Taft’s letter is a lobbying letter. It is an effort to entice Congress to change its course. Assistant General Counsel Trosch’s letter, too, is of less import than plaintiff attaches to it. Assistant General Counsel Trosch acknowledges that “[w]e do not have the final printed copies of the legislation” and only posits a “potential impact” because “the language appears to cover ... incremental funding.” By no means could Assistant General Counsel Trosch’s letter be construed as the DoD’s interpretation. Further, the District of Columbia Circuit Court has indicated that the duty to interpret an act rests with the official identified in the act as the one to administer the act. See California Co. v. Udall, 296 F.2d 384, 388 (D.C.Cir.1961) (“An administrative official charged with the duty of administering a specific statute has a duty to determine as an initial and administrative matter *39 the meanings of the terms in that statute.”) Thus, Dr. Costello’s interpretation transcends the two offered by plaintiff.

Finally, plaintiff argues that risk determinations that the USD(A) made regarding other incrementally funded contracts for FY 1988 demonstrate either that defendant’s current interpretation of the DoD policy is erroneous or that the DoD did not have a consistent policy entitled to deference under Chevron . The DoD performed several risk determinations for contracts similar to the contract at issue in this case. No evidence was offered to indicate the magnitude of these determinations when compared to the total number of similar contracts. 5

If the funding restrictions applicable during FY 1990 to FY 1992 that require risk determinations were ambiguous in their scope, the court would have no difficulty ruling that Dr. Costello’s interpretation, recorded in his memorandum and reiterated in DFAR § 235.006, is reasonable and therefore entitled to deference. However, the court does not progress beyond step one of Chevron because no ambiguity is present. Neither of defendant’s arguments on this score persuades the court. The statutes themselves are silent only in their breadth. They do not cover the specific issue of incremental funding because they cover all funding. The appropriations unambiguously read: “None of the funds provided for the Department of Defense in this Act may be obligated or expended for fixed price-type contracts in excess of $10,000,000 for the development of a major system or subsystem unless the Under Secretary of Defense for Acquisition determines, in writing, that program risk has been reduced to the extent that realistic pricing can occur ....”

Moreover, defendant’s argument about absurd results does not withstand scrutiny. The mere enactment of the restriction would not lead to absurd results, i.e., termination of contracts. The DoD could forestall termination by performing risk determinations before the appropriated money is obligated or expended on those covered contracts. The DoD apparently did perform some similar risk determinations for incrementally funded contracts without termination. Assistant General Counsel Trosch’s letter, although of limited import, advances this understanding and does not predict immediate termination of contracts. Congress may have been silent in the face of an agency interpretation in contravention of an unambiguous statute, but a court does not have that luxury. See FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32 , 102 S.Ct. 38 , 70 L.Ed.2d 23 (1981) (“[T]he courts are the final authorities on issues of statutory construction. They must reject administrative constructions of the statute ... that are inconsistent with the statutory mandate .... ”); AT & T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 1355 (Fed.Cir.1999) (“In matters of statutory interpretation, it is [a] court’s responsibility independently to determine what the law is.”). By failing to make risk determinations for the incremental funding of the ATACC contract for FY 1990 to FY 1992, the DoD violated the statutory prerequisites for the funding of this fixed-price incentive contract.

2) Remedy

After determining that the contract at issue in AT & T was not void, the Federal Circuit remanded the issue of damages to the Court of Federal Claims. Although the decision on remand has not been issued, the Federal Circuit identified three possible remedies: “When a contract or a provision thereof is in violation of law but has been fully performed, the courts have variously sustained the contract, reformed it to correct the illegal term, or allowed recovery under an implied contract theory ____” AT & T, 177 F.3d at 1376 . The Federal Circuit, however, was cautious in its remand:

Although the parties discuss possible remedies, the issue of what relief may be available to AT & T is not before us, for the Court of Federal Claims did not con *40 sider AT & T’s claims on the premise that the underlying contract was not void. We have not considered this issue, and express no view thereon.

Id. at 1377 . Plaintiff utilizes AT & T as the basis for its request that the court either allow recovery under an implied contract theory or reform the contract.

i) Implied contract

Plaintiff relies upon AT & T’s citation of Urban Data Systems, Inc. v. United States, 699 F.2d 1147 (Fed.Cir.1983), for the proposition that “reimbursement on a quantum valebant basis for the reasonable value in the marketplace of the supplies and concomitant services.” Id. at 1154 (citing Cities Serv. Gas Co. v. United States, 205 Ct.Cl. 16, 32 , 500 F.2d 448, 457 (1974)). Initially, it should be noted that AT & T only used Urban Data Systems for the modest proposition that a price term contrary to law did not render a fully performed contract invalid. See AT & T, 177 F.3d at 1376 . In Urban Data Systems, plaintiff appealed a determination by an agency board of contract appeals that two of plaintiffs contracts were “void ab initio because the price adjustment clauses” contained therein violated 41 U.S.C. § 254 (b) (1976), a statutory prohibition against the use of “cost-plus-a-percentage-of-eost” provisions. 699 F.2d at 1150 . The board ruled that, upon presentation to the contracting officer, plaintiff was entitled to recovery on a quantum valebant basis because performance had been completed. The Federal Circuit held that because “the Government bargained for, agreed to pay for, and accepted the supplies delivered by [plaintiff],” quantum valebant recovery was appropriate given that the only illegality in the contract was the price term. Id. at 1154 .

Plaintiffs reliance upon Urban Data Systems is misplaced. Urban Data Systems, a 17-year-old case, must be distinguished based on the grounds of recovery that are currently available in the Court of Federal Claims. 6 In Mega Construction Co. v. United States, 29 Fed.Cl. 396 (1993), the court discussed the differences between the authority of the Federal Circuit and that of the Court of Federal Claims to issue equitable remedies. The court in Mega Construction Co. held:

Because the Court of Appeals for the Federal Circuit is a court created under Article III of the Constitution of the United States, its exercise of equitable powers, such as in [United States v.] Amdahl[, 786 F.2d 387 (Fed.Cir.1986) ], is within its jurisdictional mandate. However, [the Court of Federal Claims] is an Article I court with specific jurisdiction granted by the Congress that must be strictly construed. See United States v. John C. Grimberg Co., 702 F.2d 1362, 1372-74 (Fed.Cir.1983). This court is statutorily devoid of equitable jurisdiction in this area of the law and, thus may not provide redress for contracts implied-in-law. See 28 U.S.C. § 1491 (a)(1); [United States v.] Mitchell, 463 U.S. [206, 218, 103 S.Ct. 2961 , 77 L.Ed.2d 580 (1983)]; Merritt [v. United States,] 267 U.S. [338, 341, 45 S.Ct. 278 , 69 L.Ed. 643 (1925) ].

29 Fed.Cl. at 472 ; see also AT & T v. United States, 124 F.3d 1471, 1479 (Fed.Cir. 1997) (noting that Court of Federal Claims generally lacks the power to grant remedies based in equity), rev’d en banc on other grounds, 177 F.3d 1368 (Fed.Cir.1999); City of El Centro v. United States, 922 F.2d 816, 820-24 (Fed.Cir.1990) (construing Court of Federal Claims jurisdiction over implied-in-fact contracts in contrast to implied-in-law contracts), cert. denied, 501 U.S. 1230 , 111 S.Ct. 2851 , 115 L.Ed.2d 1019 (1991); Wainwright Realty Co. v. United States, 28 Fed. Cl. 425, 426 (1993) (noting that Court of Federal Claims lacks jurisdiction over claims of unjust enrichment). The Federal Circuit implicitly ratified the holding in Mega Con *41 struction Co. in its decision in Trauma Service Group v. United States, 104 F.3d 1321 (Fed.Cir.1997) The Federal Circuit held: “[I]mplied-in-law contract scenarios are beyond the purview of the Tucker Act” and therefore not remediable in the Court of Federal Claims. Id. at 1327 ; see also Hercules, Inc. v. United States, 516 U.S. 417, 423 , 116 S.Ct. 981 , 134 L.Ed.2d 47 (1996) (noting that Court has “repeatedly held that [Court of Federal Claims] jurisdiction [does not extend] to claims on contracts implied in law”).

An implied-in-fact contract fact also provides no ground upon which plaintiff can stake its claim for recovery. An implied-in-fact contract arises when all of the elements of an express contract are present, except a written document. See Atlas Corp. v. United States, 895 F.2d 745, 754 (Fed.Cir.1990). “The existence of an express contract precludes the existence of an implied contract dealing with the same subject----” Id. (citing ITT Fed. Support Servs. v. United States, 209 Ct.Cl. 157 , 168 n. 12, 531 F.2d 522 , 528 n. 12 (1976)). The parties to the present litigation entered an express contract on the exact subject that is the topic of this case. AT & T held that even if the contract were illegal, it would not be void ab initio. Thus, the ATACC contract precludes the existence of an implied-in-fact contract that merits quantum valebant recovery.

If the Federal Circuit were to have used the phrase “an implied contract theory” improvidently and were to have intended to impart another meaning, the court is unable to decipher what that other “implied contract theory” is. Therefore, although the Federal Circuit intimated that quantum valebant recovery for an implied contract may be available, such is not the case given the statutory limitations placed upon this Article I court,

ii) Reformation

Plaintiff beseeches this court to reform the contract as an alternative remedy to enforcement of an implied contract. In an oversimplification, plaintiff claims that “[generally, there are only two types of government contracts: fixed-price contracts and cost-reimbursement contracts.” Plfs Br. filed Dec. 2, 1999, at 20. Plaintiff argues for reformation to a cost-reimbursement contract.

The remedy of reformation is a narrow one, bringing a contract into conformity with “the true agreement of the parties on which there was a meeting of the minds.” American President Lines, Ltd. v. United States, 821 F.2d 1571, 1582 (Fed.Cir. 1987). Reformation is not intended to be a means by which a court injects itself into the contracting process to create the contract that it determines is best for the situation. See Atlas, 895 F.2d at 749 (noting that courts have “no authority to write contracts, or contract clauses, for the United States by means of reformation where there has been no agreement”) (citing American President Lines, 821 F.2d at 1582 ).

Although plaintiff cites no cases other than AT & T for its argument that reformation cures the illegality, AT & T itself provides two such cases, LaBarge Products, Inc. v. West, 46 F.3d 1547 (Fed.Cir.1995), and Beta Systems, Inc. v. United States, 838 F.2d 1179 (Fed.Cir.1988) — cases upon which plaintiff relies in its argument for reformation because of violation of the FAR. See Plfs Br. filed Dec. 2,1999, at 24.

In LaBarge the Federal Circuit denied relief to the contractor, but held that a “claim for reformation of the ... contract [by the Armed Services Board of Contract Appeals (the “ASBCA”)] is supported by a valid legal theory based on illegal government conduct.” 46 F.3d at 1556 . The contractor was the low bidder on an Army contract for the manufacture of pipe couplings. The Army procurement officer met with the contractor to indicate that he was going to request BAFOs. The contractor responded that it would offer a BAFO that contained a reduction from $38.50 per coupling to a price in the low $30.00 range. Someone involved in the procurement notified the contractor’s main competitor for the coupling contract of the amount that the contractor intended to bid. Although the competitor’s bid in its BAFO was lower for the first year, the contractor’s bid was lower over the life of the contract and was accepted by the Army. The disappointed bidder filed a bid protest in which it revealed that the contractor’s BAFO range *42 had been disclosed. The contractor joined the protest. After the protest was denied, the contractor performed at its BAFO price. The contractor thereafter sought reformation of the contract by the ASBCA in order to recover the difference between its initial bid and its BAFO bid. The contractor alleged violation of the prohibition against auctioning techniques contained in FAR § 15.610(d) (1984). When the ASBCA denied recovery, the contractor appealed to the Federal Circuit.

The Federal Circuit in LaBarge relied upon two cases from the United States Court of Claims — CRF-A Joint Venture of Cemco, Inc. and R.F. Communications, Inc. v. United States, 224 Ct.Cl. 312, 324-26 , 624 F.2d 1054, 1061-62 (1980), and Applied Devices Corp. v. United States, 219 Ct.Cl. 109, 119-20 , 591 F.2d 635, 640-41 (1979) — as binding precedent that jurisdiction was present to award reformation in the face of a contract illegality. See LaBarge, 46 F.3d at 1552 . In CRF-A Joint Venture, the Court of Claims considered whether the contracting officer’s unlawful demand that the contractor refurbish eight first-article radios to production quality amounted to an exercise of further production options. The contract called for the contractor to manufacture a total of 362 production units, including refurbished first-article units. In contravention of the competitive-bidding regulations, the contracting officer told the contractor that the eight refurbished units were in addition to the 362 production units. The contractor produced the extra units and received no additional compensation. The court ruled that such an order, though illegal and without authority, could be the grounds for reformation because the order of additional units harmonized with the production option that the parties had included in their contract. See CRF-A Joint Venture, 224 Ct.Cl. at 325-26 , 624 F.2d at 1061-62 . In Applied Devices the Court of Claims remanded to the trial division an appeal from an ASBCA ruling that denied reformation. 7 The Court of Claims held that the failure of the Government to meet the Armed Services Procurement Regulations (the “ASPR”) requirement for a “reasonable and realistic estimate of labor learning [] and other nonrecurring costs for computation of the ‘cancellation ceiling’ ” warranted reformation. 219 Ct.Cl. at 118 , 591 F.2d at 639 . Although not explicit in the court’s reasoning, it can be inferred that the court granted reformation because the parties would not have entered the contract with an illegal price term, but, rather, intended to incorporate a cancellation ceiling that complied with the law, ie., one that reflected “the nonrecurring initial costs in a realistic manner as ASPR l-322.2(d) and (e) required.” Id. at 114 , 591 F.2d at 637 .

In Beta Systems, on appeal from a summary judgment decision, the Federal Circuit considered the parties’ erroneous selection of a specific statistical index by which to adjust the contract price under an Economic Price Adjustment (“EPA”) clause. To comply with contracting regulations, the parties attempted to select an index that would “‘bear a logical relationship to the type of contract costs being measured,’ ” or approximate changes in material costs. Beta Sys., 838 F.2d at 1185 (quoting DAR § 3-404.3(c)(3)c.5 (1981)). When the material costs fluctuated and the EPA clause did not keep pace, the contractor sued. Because neither party would have intended to use an index that, from the contractor’s point of view, would have frustrated its economic expectations and, from the Government’s view, would have been illegal, the court ruled that “reformation is appropriate” if the facts on remand were to indicate that the contract violated the DAR and the EPA clause did not approximate the economic changes affecting the contract. Id. at 1186.

LaBarge, Applied Devices, and Beta Systems are not apposite to the case at bar. The primary distinction is that the alleged illegality in each case that gave rise to the possibility of reformation involved pricing. 8 *43 In LaBarge the court considered reformation that would increase the price term to that proposed by the contractor before the call for BAFOs. Such a reformation could be appropriate if the higher price were what the parties intended in the absence of the allegedly illegal behavior by the Government. In Applied Devices the court permitted reformation to correct the erroneous and illegal selection of a cancellation ceiling. The parties, which possessed the requisite intent to contract, would not have selected a cancellation ceding that would have voided their contract. In Beta Systems there appeared to be an intention on the part of both parties to enter a contract different from that which they actually formed, that is, they mistakenly chose the specific EPA clause.

Reformation to a cost-reimbursement contract brings additional difficulties. First, the cost-reimbursement contract that plaintiff seeks would itself present problems of legality. Second, reformation of the contract to cure the illegality would create a most unusual contract.

As a threshold matter, federal government contracts must meet the requirements of federal law and the FAR. See FAR § 1.602-l(b) (1999) (“No contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met.”). Failure of a contracting officer .to follow these requirements may create the predicate for a claim. For example, 10 U.S.C. § 2306 (c) (1988) (repealed 1994), required that no cost-type contracts could be awarded without agency head certification that no lower cost alternatives were available. The FAR incorporated this restriction, as well. See FAR § 16.301-3(c) (1988).

In the instant case, the Secretary of Defense did not make any determination that no lower cost alternatives were available. Reformation to a cost-type contract, then, would bring about the same deficiency about which plaintiff complains in the instant action. The court is unwilling to trade one illegality for another, even when plaintiff asks for it.

Athough awkwardness is not a criterion for reformation, plaintiffs plea for reformation because of the illegality during FY 1990 to FY 1992 would have an unusual effect. For FY 1989, the contract would remain a fixed-price incentive contract. For FY 1990 to FY 1992, the contract would be reformed to be a cost-type contract. For FY 1993 to completion of the contract, it would revert to a fixed-price incentive contract. This result gives the court pause. It also further suggests that this arrangement would not reflect the intent of the parties.

Reformation of the ATACC contract is not appi'opriate. The instant dispute does not fit the mold of a contract for which reformation is an acceptable remedy. Moreover, reformation would not solve the illegality, but rather would create a different illegality,

iii) Enforcement as written

According to AT & T, one option remains to the court: enforcement as written. Plaintiff contends that such a result would be inappropriate because the appropriations restrictions “were promulgated precisely to avoid the result in this ease — costly overruns incurred by a contractor performing high-risk development work for a fixed price.” Plfs Br. filed Dec. 2, 1999, at 18.

Enforcement as written, regardless of the illegality, brings no unjust result. See, e.g., LaBarge Prods., 46 F.3d at 1556 ; Trilon Educ. Corp. v. United States, 217 Ct.Cl. 266, 273-74 , 578 F.2d 1356, 1360 (1978) (citing cases), cited in AT & T, 177 F.3d at 1376 . Athough GDS was exposed to a number of risks, GDS was cognizant of the risks, as evidenced by the risk assessments that it performed before entering the contract. GDS, a sophisticated government contractor, had available to it all the information necessary to bid on the ATACC contract. Using this information, GDS determined that the risks were low.

The Marine Corps may have exacerbated the problems of performance through con *44 structive changes, a lack of cooperation, or deficiencies within the specification and the contract; nonetheless, such problems do not go to the underlying issue of whether a risk determination was made according to the appropriations restrictions, and are better addressed on a case-by-case basis, rather than by awarding plaintiff full recovery. The full cost recovery plaintiff seeks under this theory of recovery would bring a windfall to which it is not entitled.

The Federal Circuit’s caution in AT & T, that it “ha[d] not considered” “what relief may be available,” 177 F.3d at 1377 , raises the possibility that, of the three forms of relief that the court indicated might be available, any one actually might be unavailable. This court’s authority is circumscribed in that it cannot grant the equitable relief sought because, as an Article I court, it lacks the requisite judicial power. Reformation is also unavailing because no evidence suggests that the parties intended to enter a cost-type contract. Accordingly, the court enforces the ATACC contract as written. Plaintiff is not entitled to recovery on the allegation of contract illegality related to appropriations restrictions for FY 1990 to FY 1992.

2. Regulatory restrictions on contract type

Plaintiff challenges the award of the contract as violative of the applicable regulatory requirements for the “selection of] a firm-fixed-price contract.” Plfs Br. filed Dec. 2,1999, at 21. For this alleged violation of the regulations, plaintiff seeks either recovery in quantum valebant or reformation of the contract to a cost-reimbursement contract. Defendant counters by arguing that the contract at issue is a fixed-price incentive contract. As a fixed-price incentive contract, defendant contends, the ATACC contract was not subject to the stricter requirements for the selection of a firm fixed-price contract.

In a December 20, 1999 order, the court ruled that the ATACC contract was awarded as a fixed-price incentive contract, not a firm fixed-price contract or a de facto firm fixed-price contract as plaintiff argues. See Order filed Dec. 20, 1999, at 10-11 (noting that “[t]he contract does not contain the essential element of a firm fixed-price contract” and “is a fixed-price incentive contract”). Plaintiffs arguments based on the regulatory requirements of firm fixed-price contracts are misplaced; however, the court considers whether the applicable regulations for fixed-price incentive contracts were satisfied by the Navy prior to selection of the contract type.

Part 16 of the FAR “prescribes policies and procedures and provides guidance for selecting a contract type appropriate to the circumstances of the acquisition.” FAR § 16.000. For fixed-price incentive contracts, the FAR directs:

(b) Application. A fixed-price incentive contract is appropriate when—

(1) A firm-fixed-price contract is not suitable;

(2) The nature of the supplies or services being acquired and other circumstances of the acquisition are such that the contractor’s assumption of a degree of cost responsibility will provide a positive profit incentive for effective cost control and performance; and

(3) If the contract also includes incentives on technical performance and/or delivery, the performance requirements provide a reasonable opportunity for the incentive to have a meaningful impact on the contractor’s management of the work.

FAR § 16.403(b). While the application portion of the section 16.403 provides a broad range of scenarios in which a fixed-price incentive contract might be appropriate, selection of fixed-price incentive contracts is further limited.

(e) Limitations. A fixed-price incentive contract may be used only when a determination and findings has been executed, in accordance with agency procedures, showing that (1) this contract type is likely to be less costly than any other type or (2) it is impractical to obtain supplies or services of the kind or quality required without the use of this contract type.

FAR § 16.403(c) (citations omitted).

FAR § 16.403-1 governs the procedures and criteria that the Navy would have had to satisfy to award the contract. It provides:

*45 (b) Application. A fixed-price incentive (firm target) contract is appropriate when the parties can negotiate at the outset a firm target cost, target profit, and profit adjustment formula that will provide a fair and reasonable incentive and a ceiling that provides for the contractor to assume an appropriate share of the risk. When the contractor assumes a considerable or major share of the cost responsibility under the adjustment formula, the target profit should reflect this responsibility.

(c) Limitations. This contract type may be used only when—

(1) The contractor’s accounting system is adequate for providing data to support negotiation of final cost and incentive price revision;

(2) Adequate cost or pricing information for establishing reasonable firm targets is available at the time of initial contract negotiation; and

(3) The determination and findings required by 16.403(c) has been signed.

The parties do not dispute the satisfaction of FAR § 16.403(b), which offers the widest range of contracts that may be appropriately let as fixed-price incentive contracts. They do not even dispute that the appropriate findings were made under FAR § 16.403(c). Although other criteria must be satisfied under FAR § 16.403-l(b) and (c), the parties focus on the availability of adequate cost or pricing information. Plaintiff also challenges whether the Government was required by the FAR to ensure a reasonable apportionment of the contract risk. In addition to directly countering these arguments, defendant makes the fallacious argument that “agency determinations and findings in support of a selection of contract type are ‘final’ and unreviewable by courts.” Defs Br. filed Dec. 13,1999, at 20. 9

1) Adequate cost and, pricing information

Although not expressly speaking to risk, the requirement that adequate cost and pricing information be available at the time of initial contract negotiations does implicate risk as a factor. Adequate cost and pricing information cannot mean an absence of risk, for such is an impossibility. All contracts contain some element of risk. The existence of risk cannot preclude the existence of adequate cost and pricing information. Risk is but one component of adequate cost and pricing information, ie., cost and price are functions of risk. The greater the risk of an endeavor, the greater the price charged for undertaking that endeavor. Therefore, even high-risk contracts may contain adequate cost and pricing information to permit the contractor and the Government to arrive at firm targets.

Before settling on the fixed-price incentive contract, according to Mr. Monaco, Director of Contracts at SPAWAR, all contract types were considered. Calculon performed a risk analysis, concluding that the risks were “moderate and manageable.” SPAWAR prepared the Acquisition Plan, which contains the rationale for the selection of a fixed-price incentive contract. The Acquisition Plan lists three factors for contract choice, including “[u]se of non-developmental hardware,” “[ejxistence of data link software which will be provided as GFI to the ATACC developer,” and “[sjoftware to be developed is primarily an information management type subsystem.” Mr. Monaco did not recall other assumptions that entered into the contract selection rationale.

Mr. Monaco, who played a significant role in drafting the Acquisition Plan, testified that SPAWAR approved the Acquisition Plan on July 11, 1986. At that time Col. Robert J. Speights was the Program Manager; Adm. Clark, Commander of SPAWAR. Through his conversation with Robert Meyers, branch head in the PMO, Mr. Monaco believed that the ATACC program would integrate already existent components.

*46 The use of NDI was a basic assumption of the Acquisition Plan. In its description of the program, the Acquisition Plan indicates: “Hardware development will be eliminated and a replacement for the present system fielded by, to the maximum extent possible, integrating military specification or militarized items of hardware already in service use. In order to facilitate this acquisition strategy, the maximum possible use will be made of applicable existing software.” If there were a substantial pull-back in the amount of NDI, Mr. Monaco would have reconsidered the fixed-price contract type.

On August 24, 1987, GDS submitted its ATACC proposal, which contained a risk assessment as directed by the solicitation. In paragraph 3.2.1.9.2, the proposal reads, in part, “The preliminary risk assessment for ATACC has been performed during the proposal preparation phase. Each of the preliminary risks have [sic] been identified and categorized according to the requirements dictated in the proposal preparation instructions.” In figure 3-52, “Preliminary Risk Assessment,” GDS identified the risks for system performance, hardware, shelter weight, LSD projector mount, and soft ware — including Ada experience and the integration of NDI and new Ada software — as “low.” GDS rated as low-to-medium the risk associated with stress tests and the availability of resources. GDS provided a rationale for each of its assessments. Mr. Bonner reviewed this assessment before it was submitted to the Government. Dr. Evans characterized this risk assessment as “not formal.”

On March 29, 1988, Maj. Guy submitted to Lt. Col. Consagra a risk assessment for the ATACC program as of that date. The letter indicates low risk in the following software areas: operating system, data reduction, training support, and development support. It further recounts moderate risks in the following software areas: tactical data link program, data base management system, decision support system, graphics display, and test support. The overall software risk is labeled moderate. Maj. Guy testified that high-risk programs are not likely to be contracted as fixed-price type. For moderate risk projects, the Government would provide assistance if asked. In this case the Government hired an IV & V contractor and engaged in software support activity through MCTSSA.

Before submitting its BAFO on June 24, 1988, GDS made no changes to its risk assessment.

On June 30, 1988, the Contract Award Review Panel recommended award of the ATACC contract to GDS because it “submitted the lowest priced proposal, had the highest overall weighted score, and their [sic] technical approach was judged lower risk in the critical area of software engineering.” The final decision to award contract to GDS occurred on July 6, 1988. Mr. Monaco could not recall whether the Government did a cost analysis. He considered the Business Clearance Memorandum, dated November 29, 1988, all the findings that he needed to make. Mr. Monaco testified that there was no need to make any of the determinations required for a firm fixed-price contract. .

Dr. Rowland G. Evans, plaintiffs computer software expert, testified principally by videotaped deposition at length about the deficiencies in the evaluation of the ATACC and the subsequent additions to the ATACC program. According to Dr. Evans, Calculon only analyzed a small part of the software functions contained in the specification. Those parts that were not assessed were high or very high risk software development efforts. In addition, four major changes were made to the specification between Calculon’s analysis and award of the contract, as the requirements evolved from June 1986 to April 1987.

First, MTS was added to the ATACC prototype. The Acquisition Plan did not include MTS. When performing its risk assessment, Calculon had considered the possible downstream addition of MTS after the prototype phase. In actuality, MTS was added on August 8, 1986, to the specification without a risk assessment, and no evidence exists that the Calculon risk assessment was updated. Because CLIN 007 covered the MTS message test, the inference can be made, as Dr. Evans surmised, that MTS could not have *47 been fully implemented previously because GDS was developing the test software.

Second, according to Dr. Evans, automatic processing and automatic/automated generation were added after Calculon’s risk assessment. These elements involve a more complex software process and are higher risk. Dr. Evans described the Acquisition Plan as providing a semi-automated, man-in-the-loop system, whereas the specification called for a fully automatic system. The data exchange changed from computer assisted to fully automatic. ATO generation changed from computer assisted to fully automatic.

Third, the deletion of the required use of AN/UYK-14/43/44, a standard military specification computer used by the Navy, increased program risk. Commercial hardware that was available at the time rendered the AN/UYK-14/43/44 no longer competitive, so the bidders were better off from a hardware perspective using non-standard computers. This, however, made the software more problematic because none of the commercial computers available was able to support a standard Navy compiler, CMS-2. Pre-existing TACC TADIL code could not be re-used. Thus, although GDS could not re-use CMS-2 code, the Calculon evaluation included the reuse of code. Re-use of code reduces risk proportionally. Dr. Evans testified that the Government amended the procurement to allow a bid that included NDI in areas other than the old TACC NDI. This change occurred in August 1987.

Fourth, the addition of the Ada requirement increased the risk associated with the ATACC contract. The decision to use Ada was made in March 1987. The advantages of Ada are that the software produced is more easily read by programmers and the coding process is less error prone. Ada, however, raises translation issues for existing software. No translator existed that could cap-toe the Ada structure, so a software programmer would have been required to do a full top-down development. GDS would have had to develop new software for TADIL A and B, NATO Link 1, TRACK database; would have had to use real-time language responses; and would have used a bit-oriented as opposed to character-oriented language that stores information in a binary system of ones and zeros which is not readable by humans.

While the two changes affecting TADIL were substantial, GDS lowered its price after the addition of TADIL. To ascertain whether GDS considered the impact, Dr. Evans suggested that one needed to look to the LOC estimates and man-months labor estimates. Dr. Evans added man-months through COCOMO to his estimate. GDS, which used COCOMO as well, did not add more time for the TADIL effort. Dr. Evans concluded then that GDS did not have a chance to evaluate TADIL software.

Dr. Evans took issue with Maj. Guy’s March 1988 software risk assessment, also testifying that he found no evidence that this report was ever considered in the approval process. His main objection was with Maj. Guy’s averaging of risk to generate one single valuation of risk.» According to Dr. Evans, averaging is notorious for hiding risk. He would have expected the Government’s risk analysis to be segregated by risk element: Instead of an average of the program risk factoring all elements together, Dr. Evans’s ideal report would declare that the program was one without high risk.

Although all four changes highlighted by Dr. Evans did occur after the Calculon risk assessment, it does not necessarily follow that adequate cost and pricing information was unavailable. Indeed, no argument is made that GDS was unaware of the requirements brought about by the changes. Dr. Evans did testify that the TADIL software issue brought about by the removal of the requirement to use AN/UYK-14/43/44 and the addition of the Ada computer language occurred too close to submission of BAFO for GDS to evaluate its impact; nonetheless, GDS still was aware of the change before its BAFO submission.

Contrary to plaintiffs implication that the adequate cost or pricing information for establishing reasonable firm targets must be available at the time of the selection of contract type, the regulation only requires that this information be “available at the time of initial contract negotiation.” FAR § 16.403- *48 1(c). The regulations recognize that the processes of developing a program, selecting a contract type, and awarding a contract are fluid. Although a process of negotiation, in the traditional sense, is not present here, BAFOs serve the role of negotiations because they are the mechanism by which the Government and contractors arrive at a price more acceptable to both than the initial proposal.

By the BAFO submission date, GDS was aware of all of the elements that were required in the contract, the SOW, and the specification. GDS generated its cost and pricing based on the information available to it. No testimony or other evidence presented demonstrated that at the time of BAFO, or any other time prior to commencement of the contract, GDS was even the slightest bit concerned about whether it possessed adequate cost and pricing information. Indeed, between its proposal and BAFO, GDS was afforded the opportunity to adjust its price, in part, based on the modifications to the program that occurred since the solicitation. GDS chose to lower its price. Adequate cost and pricing information may not have been available for what the ATACC ultimately developed into based on putative constructive changes, but those damages are best left resolved on a case-by-case basis and not through quantum valebant or reformation.

2) Reasonable apportionment of the risks

Although the regulations appear to be oriented toward protecting the public fisc, by requiring “the contractor to assume an appropriate share of the risk,” FAR § 16.403-1(b), they also require “reasonable contractor risk,” FAR § 16.103(a), which focuses on the level of the risk from the perspective of the contractor. The court therefore rejects defendant’s argument that the FAR should be viewed solely from the Government’s perspective.

As its terms indicate, “appropriate share of the risk,” more than the existence of adequate cost and pricing information, turns on whether the parties assessed and shared the risks. Throughout the development of the ATACC program, at least three risk assessments were performed. Prior to the completion of the Acquisition Plan, Calculon examined the risks associated with the program and determined that overall risk was “moderate and manageable.” GDS itself, knowing the full scope of the program, informed the Government that its evaluation showed low and low-to-medium risk. Before contract award, Maj. Guy undertook a risk assessment and concluded that the overall software risk was moderate. Based on what each party perceived at the time, the fixed-price incentive contract selected apportioned this risk appropriately.

An incentive contract, even one in which the ceiling price and target price are identical as in the ATACC contract, apportions risk. FAR § 16.403-l(a) reads: ‘When the contractor completes performance, the parties negotiate the final cost, and the final price is established by applying the [profit adjustment] formula. When the final cost is less than the target cost, application of the formula results in a final profit greater than the target profit .... ” The profit adjustment formula the parties selected was a 50/50 formula. GDS bore the risk of costs exceeding the ceiling price. GDS, however, also could have reaped benefits greater than the target profit. The contract type placed the Government in the position of possibly having to pay GDS a greater profit than it had expected to pay. In other words, there is “not a profit ceiling or floor” in a fixed-price incentive contract. FAR § 16.403-l(a). This profit flexibility demonstrates a reasonable apportionment of the risks associated with the contract. If, as all parties concurred before performance, the risks were low to moderate, GDS could have been well positioned to reap profits in excess of the target profit. The Government, too, because of the fixed-price incentive contract, was well positioned to have a ceiling on its potential liability.

Based on these risk assessments prior to award, the court determines that risk to GDS was reasonable and appropriate at the time of award based on the contract type and the nature of the program. After award, the program may have evolved such that risk levels fluctuated, but the inquiry into risk ends with the award of the contract.

*49 Plaintiff failed to prove that at the time of contracting the parties did not possess adequate cost and pricing information or that the risk was not reasonably apportioned. Even if the court were to find a violation of the applicable FAR sections, the remedies of quantum valebant and, to a degree, reformation carry the same infirmities as previous discussed. The court’s jurisdiction does not extend to granting quantum valebant recovery. The court could not reform the contract as in LaBarge, Beta Systems, and Applied Devices to have it reflect the actual agreement of the parties at the time of contracting.

3) FAR Part 35 and DoD Directive 5000.1

Plaintiff raises two additional arguments based on procurement regulations. First, plaintiff asserts that FAR § 35.006 applies to the contract selection and was violated by the DoD. Second, plaintiff alleges that DoD Directive 5000.1 was violated by selection of a fixed-price incentive contract.

On April 13, 1988, the Secretary of the Navy issued SECNAV Instruction 4210.6A, outlining acquisition policy for the Navy and Marine Corps. In paragraph 5.b, SECNAV Instruction 4210.6A explains, “Contracting officers shall adhere to the principles on choice of contract type expressed in Part 35 of the FAR.” At trial Mr. Monaco, SPAWAR’s Director of Contracts, testified:

Q: Let me ask you more specifically. Was it your understanding at the time that the SECNAV instructions were applicable to the ATACC procurement?

A: Well, it would be applicable to all procurements, yes.

Q: So whatever provisions would be otherwise applicable under the SECNAV would apply to the ATACC contracts?

A: Yes.

Q: Without being specific about those instructions. And the answer is yes to that?

A: Yes.

Based on the SECNAV Instruction and Mr. Monaco’s testimony, plaintiff asks the court to consider selection of contract type under FAR Part 35.

FAR § 35.006 (1988), provides:

(a) In [research and development (“R & D”) ] acquisitions, the precise specifications necessary for sealed bidding are generally not available, thus making negotiation necessary. However, the use of negotiation in R & D contracting does not change the obligation to comply with Part 6.

(b) Selecting the appropriate contract type is the responsibility of the contracting officer. However, because of the importance of technical considerations in R & D, the choice of contract type should be made after obtaining the recommendations of technical personnel. Although the Government ordinarily prefers fixed-price arrangements in contracting, this preference applies in R & D contracting only to the extent that goals, objectives, specifications, and cost estimates are sufficient to permit such a preference. The precision with which the goals, performance objectives, and specifications for the work can be defined will largely determine the type of contract employed. The contract type must be selected to fit the work required.

(c) Because the absence of precise specifications and difficulties in estimating costs with accuracy (resulting in a lack of confidence in cost estimates) normally precludes using fixed-price contracting for R & D, the use of cost-reimbursement contracts is usually appropriate (see Subpart 16.3). The nature of development work often requires a cost-reimbursement completion arrangement (see 16.306(d)). When the use of cost and performance incentives is desirable and practicable, fixed-price incentive and cost-plus-incentive-fee contracts should be considered in that order of preference.

(d) When levels of effort can be specified in advance, a short-duration fixed-price contract may be useful for developing system design concepts, resolving potential problems, and reducing Government risks. Fixed-price contracting may also be used in minor projects when the objectives of the research are well defined and there is sufficient confidence in the *50 cost estímate for price negotiations. (See 16.207.)

(e) Projects having production requirements as a follow-on to R & D efforts normally should progress from cost-reimbursement contracts to fixed-price contracts as designs become more firmly established, risks 'are reduced, and production tooling, equipment, and processes are developed and proven. When possible, a final commitment to undertake specific product development and testing should be avoided until (1) preliminary exploration and studies have indicated a high degree of probability that development is feasible and (2) the Government has determined both its minimum requirements and desired objectives for product performance and schedule completion.

Although listed as an issue for trial, see Joint Statement of Issues of Fact and Law, filed Dec. 15, 1999, at 3, plaintiff offered no evidence at trial or in its briefs before trial that SECNAV Instruction 4210.6A applied to the ATACC program, that the DoD violated FAR § 35.006, or even that FAR § 35.006 applies to the ATACC contract. SECNAV Instruction 4210.6A “applies to all programs that will result in a Full Scale Engineering Development (FSED) acquisition phase and which are expected to transition to production.” Nor did plaintiff develop a record on what FSED acquisition signifies, let alone evidence that the ATACC program fits such a description. 10 In fact, plaintiffs counsel asked Mr. Monaco to answer the question about apphcábility “[without being specific about those instructions.”

In addition, plaintiff has not demonstrated that the ATACC program falls within the ambit of Part 35.

The primary purpose of contracted R & D programs is to advance scientific and technical knowledge and apply that knowledge to the extent necessary to achieve agency and national goals. Unlike contracts for supplies and services, most R & D contracts are directed toward objectives for which the work or methods cannot be precisely described in advance.

FAR § 35.002. The language of FAR § 35.006(c) is not mandatory: Fixed-price contracts are “normally preclude[d];” “the use of cost-reimbursement contracts is usually appropriate;” and “[w]hen the use of cost and performance incentives is desirable and practicable, fixed-price incentive ... contracts should be considered.” For these reasons plaintiff has failed to satisfy its burden on this claim.

DoD Directive 5000.1, effective between September 23, 1987 and February 23, 1991, provides, in pertinent part:

[T]he following are to be considered in developing appropriate strategies tailored to meet the unique circumstances of individual programs.

a. During the initial phases of development, studies shall be conducted to identify trade-offs between cost and performance requirements, assess technological risk, and identify the cost drivers and producibility factors associated with using new or immature technologies.

b. Commensurate with risk, such approaches as developing separate alternatives in high-risk areas; using early funding to design-in reliability and support characteristics; reducing lead time through concurrency; using competitive prototyping of critical components; combining acquisition phases and making use of evolutionary acquisition procedures; and combining developmental and operational test and evaluation shall be considered and adopted when appropriate____

f. Whenever possible and appropriate, consideration should be given to maximizing the use of “off-the-shelf’ commercial products and the streamlining of military *51 specifications so that only those military specifications that are directly relevant to the item(s) being produced are applied.

g. Contract type shall be consistent with all program characteristics including risk. Fixed price contracts are normally not appropriate for research and development phases. For such efforts, a cost-reimbursable contract is preferable because it permits an equitable and sensible allocation of program risk between the contracting parties.

DoD Directive 5000.1, at 5-6 (Sept. 1, 1987) The only evidence adduced at trial on the issue of DoD Directive 5000.1 includes the following exchange between plaintiffs counsel and Mr. Monaco.

Q: Are you also familiar with DOD directives?

A: Yes.

Q: Are you familiar with DOD directive 500[0].l?

A: Yes, I am.

Q: And again, just basically, do you recall what the substance of that directive is?

A: It was — 5000.1 and 5000.2 were DOD procedures regarding major systems acquisitions and the process thereof. It spelled out the whole program process.

Q: During the time that you were the sole selection authority on the ATACC program, was it your understanding that you were required to follow DOD directive 5000.1 in relation to the ATACC contract?

A: I guess I don’t know the answer to that because 5000.1 and 5000.2 were for major systems. And there was — again, there is a definition of what a major system was. And I don’t know at this time or even back then if we really called ATACC a major system, or whether it met those thresholds. And often, when you do have major systems, too, for whatever reason, you may not follow that exact process. You may take another path. There is exceptions to everything.

Q: Well, whether or not ATACC fell within one of the exceptions, was 5000.1, 5000.2 otherwise applicable? In other words, what I am saying is—

A: I think the answer is no.

Q: —in applying it, your point is that the ATACC contract may not have met all of the criteria for 5000.1, 5000.2. But my question is, putting that concern aside, are those directives otherwise applicable? In other words, do you have to go through the analysis to determine whether or not the ATACC contract falls within one of the exceptions?

A: Yes. I think you need to make a determination whether it applies or doesn’t apply. It is very complicated. It requires effort from lots of people with different functions.

DOD Directive 5000.1 only requires “consider[ation]” of certain factors “in developing appropriate strategies tailored to meet the unique circumstances of individual programs.” When asked if he went through the analysis required in DoD Directive 5000.1, Mr. Monaco answered, ‘Yes.” Plaintiff undertook no direct inquiry of the factors that were to be “considered” when developing the procurement strategy. The testimony of Mr. Monaco does not suffice to establish that DoD Directive 5000.1 was violated in the selection of a fixed-price incentive contract for the ATACC program. In addition, that the factors are to be considered does not elevate those factors to the level of government obligation. The obligation under DoD Directive 5000.1 was to consider the factors, not necessarily to adopt them as part of the procurement strategy. Plaintiff is not entitled to recover on this claim because of its failure to meet its burden of proof.

Plaintiff has failed to satisfy its burden with regard to its allegations that the Government violated regulatory provisions— FAR Part 16, FAR Part 35, and DoD Directive 5000.1 — that may govern the award of fixed-price incentive contracts.

3. Superior knowledge

Plaintiff asserts that the Government possessed superior knowledge, and did not disclose, that the contract would require significant development and was unsuited for the contract type. Because the court has determined that the selection of the contract type *52 was appropriate, plaintiffs superior knowledge claim related to contract type cannot succeed and will not be considered further. Plaintiffs claim of superior knowledge relating to the compatibility of MTS and JINTACCS are addressed in a later section.

To be entitled to recover under a claim of superior knowledge, plaintiff must demonstrate that

(1) [it] undertook] to perform without vital knowledge of a fact that affect[ed] performance costs or duration, (2) the government was aware the contractor had no knowledge of and had no reason to obtain such information, (3) any contract specification supplied misled the contractor, or did not put it on notice to inquire, and (4) the government failed to provide the relevant information.

American Ship Bldg. Co. v. United States, 228 Ct.Cl. 220, 225 , 654 F.2d 75, 78 (1981); see also Helene Curtis Indus., Inc. v. United States, 160 Ct.Cl. 437 , 442, 312 F.2d 774, 777 (1963).

Plaintiffs allegations of superior knowledge about the amount of development necessary to complete the ATACC fail to satisfy the criteria for a superior knowledge claim. First, GDS did not undertake performance without vital knowledge as to a fact that affected performance duration or cost. The potential level of effort required by GDS’s solution is not a fact. GDS’s proposal contained business and technical projections that are far from “facts.” Even if the potential amount of development were a fact, GDS did not perform without this vital knowledge. GDS was granted full access to the Calculon library, engaged in a number of meetings with Navy and Marine Corps personnel about the ATACC program, and engaged in significant effort to identify how it could satisfy the contract requirements.

Second, the Government did not know, nor should it have known, that GDS was lacking information as to the nature of the contract. GDS was judged technically competent prior to being selected as the ATACC contractor and demonstrated an understanding of the requirements for the ATACC. GDS personnel, like Mr. McLean, even believed that the ATACC contract was within GDS’s ken. When a sophisticated contractor's concept is adjudged technically competent and that contractor projects an air of competency with regard to what was required for performance, the Government cannot be held accountable for constructive knowledge of a lack of information about the nature of the contract.

Third, the Government did not fail to provide relevant information about the degree of development that the contract would require. Although plaintiff contends, and demonstrated, that the Government was slow to respond to some Action Items, no record was made of the Government’s failure to provide information about the contract before performance. Indeed, the Government provided a panoply of documents to assist potential bidders in determining whether they possessed the wherewithal to develop the ATACC. Each prospective bidder was able to develop its own approach to the performance specification for the ATACC. It was each prospective bidder’s choice to determine the degree of development that it wanted to do within the framework of the greatest extent of NDI.

Plaintiff has failed to prove its allegation of superior knowledge as to the developmental nature of the contract.

4. Mutual mistake

A party alleging mutual mistake must prove that 1) both parties were mistaken in their belief regarding a fact existing at the time of contracting; 2) the mistaken belief must have constituted a basic assumption on which the contract was made; 3) the mistake must have had a material effect on the bargain; and 4) the contract must not have placed the risk of mistake on the party that is seeking relief. See Atlas Corp., 895 F.2d at 750 . Defendant only challenges the first and fourth elements of plaintiffs burden. The court therefore considers only whether the parties were mistaken in their belief regarding a fact existing at the time of contract and whether the contract placed the risk of mistake on GDS.

*53 1) Belief regarding a fact

Relying on Gould, Inc. v. United States, 935 F.2d 1271 (Fed.Cir.1991), and National Presto Industries, Inc. v. United States, 167 Ct.Cl. 749 , 338 F.2d 99 (1964), cert. denied, 380 U.S. 962 , 85 S.Ct. 1105 , 14 L.Ed.2d 153 (1965), plaintiff asserts that the non-developmental nature of the contract was a fact. Defendant counters that the amount of development needed to complete the contract was not a fact, but implicated business or technical judgment.

In Gould the contractor sought relief from added expenses by way of reformation of a contract to manufacture tactical radios for the Navy. Unable to perform on the contract without completely redesigning the radios, the contractor alleged that the significant additional expenses incurred in redesigning the radios were due to a mutual mistake as to the amount of design and development that the contract would require. The trial court dismissed the contractor’s claim, reasoning that a settlement agreement between the parties precluded the contractor from pursuing its reformation claim, and that, in the alternative, the contractor had failed to state a claim. See Gould, Inc. v. United States, 19 Cl.Ct. 257, 263-64, 269 (1990), vacated and remanded on other grounds, 935 F.2d 1271 (Fed.Cir.1991). Without discussion as to the merits of the contractor’s claim, the Federal Circuit assessed only the Claims Court’s ruling on which party bore the risk of the mistake, when it held that the conclusory mistake allegations survive a motion to dismiss. See Gould, 935 F.2d at 1276 .

The procedural posture and the context of Gould mitigate the weight that plaintiff places on it. Not only did the Federal Circuit not consider the merits, but in assessing the ability of the allegation to survive a motion to dismiss, the Federal Circuit only evaluated the Claims Court’s ruling that the contractor had failed to state a claim because of assumption of the risk.

Plaintiff cites National Presto Industries for the proposition that a mistake of fact may exist where neither party was aware of additional steps needed to complete the contract. That case involved a contract for the production of munitions shells by two distinct hot forging methods. The parties contemplated the use a particular machine, which had been employed in the less sophisticated of the two methods, to be used in the newer, more efficient method. Due to the newer method’s greater efficiency, the Government deemed use of one of the machines unnecessary. The contractor soon discovered that such an additional step in the manufacturing process was necessary and brought suit to recover damages for additional expenses incurred under a mutual mistake theory. The Court of Claims found mutual mistake when neither party to the contract was aware that an additional step in the manufacturing process, use of turning equipment, was needed to generate the finished product. See 167 Ct.Cl. at 761 , 338 F.2d at 107 .

Since the Court of Claims decision in National Presto Industries, the holding has undergone a clarification and narrowing. Just three years after National Presto Industries, the Court of Claims distinguished the decision on the grounds that the parties “mutually agreed to the exclusion of certain equipment later found to be indispensable.” Natus Corp. v. United States, 178 Ct.Cl. 1, 13 , 371 F.2d 450, 458 (1967). Seizing on the concept of “joint enterprise,” the Court of Claims reiterated the narrower reading of National Presto Industries. Foster Wheeler Corp. v. United States, 206 Ct.Cl. 533, 557-58 , 513 F.2d 588, 601-02 (1975) (“The chief consideration which led the court to find mutual mistake in National Presto Industries ... was a ‘mutual agreement’ of the parties prior to award of the contract, such that the court viewed the project as a ‘joint enterprise.’ ”)

In Dairyland Power Cooperative v. United States, 16 F.3d 1197 (Fed.Cir.1994), the Federal Circuit held that the parties’ erroneous belief as to future business climate cannot constitute an existing fact at the time of contracting. Dairyland Power involved the construction of a nuclear power plant by the Atomic Energy Commission (the “AEC”), the operation of which would be contracted to Dairyland Power, a public utility. Pursuant to the parties’ contract for such services, the AEC offered to sell the power plant to Dairy-land Power after several years of perfor *54 manee on the contract. The parties agreed to a transfer of the property for the nominal sum of one dollar. Due to changes in the laws governing disposal of nuclear waste, Dairyland Power incurred $97 million in expenses to store the waste. Dairyland Power later sought recision of the contract of sale because of the lack of availability of commercial processing for nuclear waste. In ruling that Dairyland Power was not able to satisfy the first element of mutual mistake, the court noted that the party seeking reformation must demonstrate that the parties held an erroneous belief as to an existing fact. See id. at 1202 . The change in business climate, which neither party could foresee, did not amount to a fact at the time of contracting. “ ‘A party’s prediction or judgment as to events to occur in the future, even if erroneous, is not a “mistake” as that word is defined [under the doctrine of mutual mistake of fact].’ ” Id. at 1203 (quoting Restatement (Second) of Contracts, § 151 cmt. A (1981 )). 11

Although Dairyland Power is not exactly on point, it is sufficiently analogous to support a conclusion that a projection about the non-developmental nature of the contract is not an “existing fact.” Dairyland Power cites a number of federal circuit court cases, including United States v. Southwestern Electric Cooperative, Inc., 869 F.2d 310 (7th Cir.1989), and United States v. Garland, 122 F.2d 118 (4th Cir.), cert. denied, 314 U.S. 685 , 62 S.Ct. 189 , 86 L.Ed. 548 (1941), for the proposition that predictions and judgments do not qualify as existing facts for a claim of mutual mistake. The court in Southwestern Electric Cooperative held that “mistake[s] about future costs of construction” pose a “fatal difficulty” for. a claim of mutual mistake because “the doctrine of mutual mistake does not cover an erroneous ‘prediction or judgment as to events to occur in the future.’” 869 F.2d at 314 (quoting Restatement (Second) of Contracts § 151a) In Garland the court prescribed:

In determining whether there has been a mutual mistake of fact, we must examine the facts as they existed at the time of the agreement for the cash-surrender of the policy. A mutual mistake in prophecy or opinion may not be taken as a ground for rescission where such mistake becomes evident through the passage of time. What is today only a conjecture, an opinion, or a guess, might by tomorrow, through the exercise of hind-sight, be regarded then as an absolute fact.

122 F.2d at 122 (citation omitted). Plaintiffs claim for mutual mistake suffers the difficulties highlighted in Southwestern Electric Cooperative and Garland .

The Government did not warrant that GDS could perform the ATACC contract based on 70% NDI — that is, it did not engage in a joint enterprise with GDS by expressly excluding or including NDI. The projection was a business and technical judgment held solely by GDS. Indeed, GDS made a number of predictions about the amount of NDI it would use if awarded the ATACC contract. These predictions — as evidenced by, among other evidence, GDS’s demonstration video (more than 65%), GDS’s proposal (“approximately 60%”), and Mr. LaWare’s testimony (60-70%) — ranged from 60-70%. That GDS had less than a firm idea of the extent of development necessary to manufacture its vision of the ATACC suggests that the developmental nature of the contract is not an “existing fact,” as much as it is a prediction. Because the performance specification allowed GDS to choose its design to satisfy the specification and because the amount of effort or development that would be needed to complete that design was a projection, and not a fact existing at the time of contracting, plaintiff cannot sustain a claim for mutual mistake with regard to the non-developmental nature of the contract. Accordingly, recovery based on mutual mistake is not appropriate.

2) Risk bearing

Although mistake readily may be apparent with respect to the second and third *55 elements, the fourth element, assumption of the risk, thwarts plaintiffs claim. A party bears the risk of mistake when 1) the risk is allocated to it by agreement of the parties; 2) it is aware, at the time the contract is made, that it has only limited knowledge with respect to the facts to which the mistake relates, but treats its limited knowledge as sufficient; or 3) the risk is allocated to it by the court on the ground that it is reasonable in the circumstances to do so. In the instant matter, the risk of mistake was allocated to GDS through the selection of a fixed-price incentive contract.

Plaintiff relies upon four cases— Gould; Bowen-McLaughlin-York Co. v. United States, 813 F.2d 1221 (Fed.Cir.1987); National Presto Industries; and Walsh v. United States, 121 Ct.Cl. 546 , 102 F.Supp. 589 (1952) — for the proposition that “[i]t is well settled that the mere fact that a contract was ‘fixed price’ does not shift the risk of all cost overruns to the contractor.” Plfs Br. filed Dec. 2,1999, at 33. Defendant counters with four cases — Yankee Atomic Electric Co. v. United States, 112 F.3d 1569 (Fed.Cir. 1997); United States v. Spearin, 248 U.S. 132 , 54 Ct.Cl. 187 , 39 S.Ct. 59 , 63 L.Ed. 166 (1918); Dalton v. Cessna Aircraft Co., 98 F.3d 1298 (Fed.Cir.1996); and Cleveland Telecommunications Carp. v. United States, 39 Fed.Cl. 649 (1997) — that advance its position that “a fixed price contract, by its nature, assigns the risks of unexpected performance costs to the contractor.” Defs Br. filed Dec. 13, 1999, at 36. This seemingly intractable conflict is resolved by a review of the individual cases.

In Bowen-McLaughlin-York, the Claims Court held that the contract was a fixed-price contract in which the contractor bore its own risk, disposing of the claim of mutual mistake. See Bowen-McLaughlin-Yoi'k Co. v. United States, 10 Cl.Ct. 223, 226 (1986). Relying on Southwest Welding & Manufacturing Co. v. United States, 179 Ct.Cl. 39, 52 , 373 F.2d 982, 989-91 (1967), the Federal Circuit rejected this characterization:

[T]he Southwest Welding court founded its ruling on the underlying fact that both the Government and the contractor intended that the latter be compensated on the basis of its actual costs----

The case is the same here. When the original letter contract was turned into a price redeterminable agreement it became a cost-reimbursable contract.

Bowen-McLaughlin-York, 813 F.2d at 1222 .

In National Presto Industries, the Court of Claims examined mutual mistake related to a fixed-price contract under which the Government paid for the machinery that the contractor used in the manufacture of the munitions shells for which the contract set a fixed price. When faced with a question “[t]he answer [to which was] not easy,” the court ruled that the contractor did not bear the consequences of the mutual mistake. National Presto Indus., 167 Ct.Cl. at 764 , 338 F.2d at 109 . The answer was not easy because of the nature of the contract.

Plaintiffs acceptance of a fixed-price contract, instead of some form of cost-plus arrangement or research-and-development contract could suggest the allocation to it of all uncovered risks. But in this case that solution would be too facile for a risk connected so directly with the equipment to be used. Since the Government was to pay for the machines, in the area of equipment the agreement was at least as close to a cost contract as to a fixed-price one---- It should not be said, in all the circumstances, that the agreed fixed-price included the full risk that the contract could not be effectively performed without turning equipment. Our best judgment is that the specific risk as to the cost of proving that fact was not distributed, explicitly or implicitly, by the arrangement the parties made.

Id. at 765-66 , 338 F.2d at 109-10 (footnote omitted).

In Walsh the court found mutual mistake as to the labor rates that would be applicable during contract performance of a fixed-price contract. Without a discussion of assumption of the risk, the court ruled, “because of their mutual ignorance of a material existing fact, they made a writing which they would not have made but for that ignorance; that if they had been aware of the actual fact, they would have negotiated and contracted on that *56 basis.” Walsh, 102 F.Supp. at 591 . A survey of the 20 Court of Claims cases on mutual mistake issued from 1945 to the end of 1952 fails to reveal whether assumption of the risk was an element of mutual mistake at the time of Walsh . Indeed, a perusal of federal cases between 1945 and the end of 1952 provides only one case that discusses assumption of the risk with regard to mutual mistake of fact. In Ricketts v. Pennsylvania Railroad Co., 153 F.2d 757 (2d Cir.1946), Judge Frank, concurring, wrote:

Two approaches have been suggested which diverge from that of Williston and the Restatement but which perhaps come closer to the realities of business experience. (1) The first utilizes the concept of an “assumption of risk”: The parties to a contract, it is said, are presumed to undertake the risk that the facts upon the basis of which they entered into the contract might, within a certain margin, prove to be non-existent; accordingly, one who is mistaken about any such fact should not, absent a deliberate assumption by him of that risk, be held for more than the actual expenses caused by his conduct. Otherwise, the other party will receive a windfall to which he is not entitled.

Id. at 766-67 (Frank, J., concurring) (footnote omitted). This concurrence implies, if not states, that assumption of the risk may not have been an element of mutual mistake at the time of the Walsh decision.

In Gould the Federal Circuit considered the Claims Court’s dismissal of the complaint for failure to state a claim. As discussed above, a fixed-price contract was let for the construction of tactical radios for the Navy. The development of the tactical radios allegedly involved more design work than the parties had anticipated. The Federal Circuit rejected the Claims Court’s rationale that plaintiff failed to state a mutual mistake claim because a fixed-price contract places the risk on the contractor. See Gould, 935 F.2d at 1276 . Based on the wording of the complaint, the Federal Circuit concluded only that “a claim of mutual mistake was adequately pled.” Id. (citations omitted). The Federal Circuit did not consider the merits of the position that a fixed-price contract does not automatically place the risk on the contractor.

Plaintiffs well-settled rule appears to be not so well settled. Bowen-McLaughlin-York and National Presto Industries contain fixed-price contracts more akin to cost-reimbursement contracts; this apparently was determinative in each case. Walsh was decided under a different legal standard, one that did not include an element that evaluated assumption of the risk. Gould’s procedural posture prevents illumination of the merits of the claim that fixed-price contracts do not shift the risk to the contractor.

By contrast, defendant offers several recent cases that support its position on fixed-price contracts and assumption of the risk. In Yankee Atomic Electric, the Federal Circuit, while discussing the unmistakability doctrine, noted that both the Supreme Court and the Court of Claims had adopted the position that fixed-price contracts shift the risk to the contractor. See 112 F.3d at 1578-79 . In Spearin the Court held, “Where one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered.” 248 U.S. at 136 , 39 S.Ct. 59 . In ITT Arctic Services, Inc. v. United States, 207 Ct.Cl. 743 , 524 F.2d 680 (1975), the Court of Claims allocated the risk thusly: “[T]he contractor in a fixed-price contract assumes the risk of unexpected costs. In firm fixed-price contracts, risks fall on the contractor, and the contractor takes account of this through his prices.” Id. at 763 , 524 F.2d at 691 (quoting McNamara Construction of Manitoba, Ltd. v. United States, 206 Ct.Cl. 1, 8 , 509 F.2d 1166, 1169-70 (1975)) (citations omitted). The Federal Circuit, in Cessna Aircraft Co., stated: “Because fixed-price contracts do not contain a method for varying the price of the contract in the event of unforeseen circumstances, they assign the risk to the contractor that the actual cost of performance will be higher than the price of the contract.” 98 F.3d at 1305 . Although resolving summary judgment related to a firm fixed-price contract on different grounds, the court in Cleveland Telecommunications noted that “[although few recent *57 cases have dealt with claims for recompense under fixed-price contracts, the United States Court of Claims has ‘consistently held that the contractor in a fixed-price contract assumes the risk of unexpected costs.’ ” 39 Fed.Cl. at 653 (quoting ITT Arctic Servs., 207 Ct.Cl. at 763 , 524 F.2d at 691 ).

The analysis of the risk bearing is the same, even though the contracts at issue in the cases cited by defendant are fixed-price, as opposed to fixed-price incentive. In Cessna Aircraft, the Federal Circuit noted that fixed-price contracts contain no method for varying the price. While the same is not trae in a fixed-price incentive contract because the price can be below the ceiling in the event of efficient performance, fixed-price incentive contracts do place a maximum limit on government liability. The maximum limit on government liability is the variance about which the court in Cessna Aircraft was writing. The risk placed on the Government through a fixed-price incentive contract is that the contractor will perform below the target cost and the Government will have to pay a higher profit to the contractor.

By agreement GDS bore the risk of additional development costs and effort. The contract was a fixed-price incentive contract that capped the Government’s liability. In such circumstances reformation is not warranted because such would not bring the agreement in accord with the parties’ intentions, which in the instant case were that GDS would bear the risks of cost overruns.

4. Appropriate remedy

Because plaintiff is not entitled to relief for regulatory violations due to the selection of a fixed-price incentive contract, for superior knowledge as to the developmental nature of the contract, or for mutual mistake as to the developmental nature of the contract, the court need not consider the appropriate remedy. The court found liability for failure to adhere to appropriations restrictions and ruled that the appropriate remedy was enforcement of the contract as written.

II. Whether Engineering Change Proposal No. 1 is limited to $2 million

The Marine Corps’s desire for greater capability and more requirements after the SRRs of April and May 1989 gave rise to ECP1, a significant change to the ATACC. On July 10, 1989, SPAWAR issued Modification P0007, Task Directive No. 1, to GDS, requesting that GDS prepare an initial version of ECP1. Messrs. Michael A. Tomasulo, Glinka, and Steven J. Hanlon, GDS’s Deputy Director of Business Operations, GDS’s Business Manager, and GDS’s Senior Contracts Administrator, respectively, agreed that GDS should get interim funding to get the job started, and then quote the exact price. On July 25, 1989, GDS submitted Task 13A, the technical proposal for the workstation improvement. The Marine Corps rejected this proposal because of its $8-million price. GDS continued to develop its ECP1 proposal.

At its most basic, ECPl’s purpose was to upgrade the computers in the ATACC and to enhance the software. The proposal called for the replacement of three OCs manufactured by Genisco with three DTTs, for a total of five DTTs. DTTs are more powerful and versatile than OCs. With five DTTs the system had to be connected with a LAN/Ethernet, the decision support processor had to be replaced, and NDI technology had to be upgraded for the support of multiple, concurrently updated windows. This upgrade required the addition of GDS-developed DSX, a multiple-window environment, which also would perform some decision support. GDS was required to develop a new distribution architecture in which each DTT did its own individual work, as opposed to the OCs, which relied on another computer to perform the bulk of their work. CSCI changes also were made.

On August 17, 1989, GDS submitted a revised proposal for ECP1. This proposal reduced the price by increasing the threshold for percentage of NDI code modification that would trigger the requirement to re-write code in Ada, by downscoping the functionality that would be added by the changes in ECP1, and by reducing the hours required and recalculating the labor rates. Concurrently, GDS provided a ROM, which provided less detail than an informal proposal, estimating that ECP1 would cost approximately $2.5 million. At this time, according to Mr. *58 Glinka, GDS and Lt. Col. Ware agreed that the best way to proceed was to secure funding for ECP1 to commence and to negotiate and definitize the price at a later time. Lt. Col. Ware wanted to move quickly and indicated that GDS could accept a verbal confirmation from the contracting officer so long as the contracting officer followed up in writing.

SPAWAR Contracting Officer Thornewell authorized GDS to undertake Technical Directive 03 and to design an approach for ECP1. To expedite ECP1, Lt. Col. Ware wrote an August 23, 1989 memorandum to SPAWAR detailing his Request for Urgent Procurement. The urgency stemmed from the need to avoid a cost impact on the ATACC prototype caused by developing software for the OCs that were to be replaced. Lt. Col. Ware requested SPAWAR to authorize GDS to proceed immediately. He indicated a price up to $2 million and the determination of a fair and reasonable price would be her decision. Box 22 of Ware’s memorandum records $2 million as the estimated net total cost, which is a cost and not a price amount. The second page of the attached modification contains the limitation of government liability, which is a price figure based on the first paragraph on page two of the attached modification. Two days later GDS sent a letter to Ms. Thornewell to confirm a telephone call directing GDS to commence with ECP1. The August 25, 1989 letter indicates that the modification to be drafted by SPAWAR was to be “a proceed and quote” with a not-to-exceed (“NTE”) of $2 million. Ms. Thornewell acknowledged receipt of this letter by signature and struck through “unilateral” and replaced it with “bilateral.” GDS commenced work based on the letter from Ms. Thornewell. Ms. Thornewell testified that when she signed the acknowledgment she did not know what “proceed and quote” meant. 12

On September 8, 1989, Ms. Thornewell issued a post facto authorization for performance of Technical Directive 03 for the modifications to the ATACC workstations. The authorization indicates that “[q]uestion of a technical nature may be directed to Lt. Col. James Ware.” Ten days later, SPAWAR issued the ECP1 modification, Modification P00011. As of the drafting of ECP1, Ms. Thornewell had not received a proposal from GDS and assumed that GDS included profit when it gave an NTE price. Mr. Tomasulo signed Modification P00011 on September 13, 1989.

Modification P00011 projected a definitization date of November 30, 1989, based on adequate submissions by GDS. Modification P00011 contains an incorrect changes clause, which applies to cost reimbursement contracts, of which the ATACC contract is not one, and which is of no moment in the instant litigation.

On September 25, 1989, the Government acknowledged that the ECP1 redirection had adversely impacted the schedule. Lt. Col. Ware agreed to relief from a C/SSR.

On January 17, 1990, the contracting officer sent a letter to GDS to notify it that subcontractor termination costs caused by ECP1 would be part of costs for definitization of ECP1. GDS reasonably took this notice to mean that definitization would exceed $2 million. On February 5, 1990, GDS submitted its first ECP1 cost proposal, prepared by Mr. Tomasulo. The cost proposal contains a target cost increase of $2,571,438.00, a target price increase of $3,179,119.00, and a ceiling price increase of $3,589,898.00. Termination costs were not contained in the February 1990 proposal because GDS had yet to discuss termination with subcontractors and obtain proposals from them. Mr. Glinka expected that total costs would be at least $2.5 million, plus termination costs. GDS personnel were of the opinion that GDS had an agreement to submit its vendor termination costs under a separate cover at a later date. At this point in time, Ms. Thornewell *59 believed that GDS could not be paid more than $2 million. She did not recall whether she notified GDS of her position when she received the February 1990 proposal in excess of $2 million. Ms. Thornewell gave no weight to the notion that GDS’s estimate of more than $2 million in costs signified that GDS would be paid any excess more than $2 million.

On July 30,1990, GDS sent a letter to Ms. Thornewell giving notice that GDS will have expended 85% of the funding for ECP1 by the end of August 1990. GDS requested additional funding in the amount of $1,589,898.00 to complete ECP1. Ms. Thornewell telephoned Mr. Hanlon to tell him that Modification P00011 was NTE $2 million. GDS thus received its first notice that the Government believed that Modification P00011 contained an absolute maximum of $2 million. It was not Mr. Tomasulo’s understanding that the modification had a maximum price. Mr. Tomasulo, who had worked for the Defense Contract Audit Agency (the “DCAA”) previously, testified that DCAA had used “proceed and quote” in the manner that GDS had interpreted the term.

Mr. Glinka sent a copy of GDS’s request for additional funding to Mr. Tomasulo, which they discussed. Mr. Glinka first worked with Ms. Thornewell to resolve the differences. He was unsuccessful, so Mr. Tomasulo met with Ann Johnson, Ms. Thornewell’s superior. GDS was rebuffed at this meeting, as well, although the Government did request an updated proposal at this time. Ms. Thornewell also took the position that an audit was required. She viewed it as her affirmative responsibility to find that GDS spent the $2 million. If GDS’s costs actually had exceeded $2 million, she intended to settle at $2 million.

To ascertain whether GDS spent $2 million, Ms. Thornewell requested that Defense Contract Administrative Services (“DCAS”) audit the proposal. Ms. Thornewell testified that it was typical to receive proposals in excess of an NTE because contractors want the Government to settle exactly at NTE prices. Ms. Thornewell had to request the audit at least three times due to DCAS non-responsiveness to her requests.

On October 1, 1990, Mr. Tomasulo met with Ms. Thornewell and Lt. Col. Ware to discuss GDS’s position that ECP1 was “proceed and quote.” Mr. Tomasulo documented this meeting with an October 22, 1990 letter to Ms. Johnson. Ms. Johnson responded that there appeared to be misunderstanding on both sides, that the parties should look at contract mistakes under the FAR, and that the contract was to be transferred to MCRDAC, where Mr. Stolark, MARCOR-SYSCOM Director of Contracts, might be able to offer changes through mistakes in contract. Mr. Tomasulo’s letter also discussed DCAA’s rejection of the February 1990 information from GDS as not in conformity with the FAR.

Ms. DiMaio, who assumed contracting officer duties from Ms. Thornewell when the contract was reassigned to MCRDAC, responded to Mr. Tomasulo on January 31, 1991. She notes that she reviewed the ECP1 issue, restates what she believes GDS’s position to be, and indicates that no definitization has yet occurred. 13 She submitted the letter to the legal department for review. The letter requests a re-submission of a revised cost proposal because others submitted to date had not been qualifying proposals. As of the date of the letter, Ms. DiMaio was aware that in July 1990 GDS indicated that it was nearing the $2 million NTE. Ms. DiMaio’s letter had the purpose of notifying GDS. that the $2 million was an absolute ceiling. She testified that the Government did not agree to a cost proposal that exceeded $2 million. SPAWAR and MCRDAC attorneys had indicated to her that the NTE price was an absolute ceiling.

Some time after the issuance of her January 31, 1991 letter, Ms. DiMaio made handwritten notes on it about Modification P00011. These notes reflect “lessons learned.” These include greater clarity of the 50% limitation of liability, more specificity indicating that the modification is for changed work only, a requirement for segre *60 gation of costs, the use of the correct changes clause, greater specificity for the NTE clause, and a desire for a proposal more suitable to negotiations. Ms. DiMaio maintained that these deficiencies did not undermine the validity of the modification, but only suggest that it could have been drafted better. Nonetheless, in her characteristically straightforward fashion, Ms. DiMaio identified exactly the vulnerabilities in the government-drafted modification.

On March 22, 1991, GDS submitted a revised ECP1 proposal in four volumes and a subcontractor termination proposal. The ECP1 proposal contained an SF1411 that requests a target cost increase of $3, 251,-379.00, a target price increase of $3,910,-431.00, and a ceiling price increase of $4,550,-166.00, The proposal also included estimated actual costs for labor and materials. GDS was able to segregate material costs and track them as actual costs. GDS presented its methodology for calculating estimated actual costs and its cost rationale. The proposal also contained an SF1435 settlement proposal for vendor termination costs in the amount of $509,470.00. This submission marks the first time that GDS raised vendor termination cost with the Government. GDS indicated that ECP1 and the vendor termination proposal could be reviewed and negotiated independently of each other. GDS received no response to the vendor termination proposal. In April 1991, GDS submitted additional documentation to the Government. No negotiation schedule was set.

On January 29, 1992, Mr. Glinka prepared and sent to Ms. DiMaio estimated actual costs for ECP1 in response to Ms. DiMaio’s request for actual costs. Mr. Glinka used the same methodology to generate these numbers as the earlier GDS numbers. No objection was made to the submission. Ms. DiMaio requested actual hours for ECP1 and ECP3. On February 21, 1992, GDS submitted estimated actual hours incurred for ECP1 to Ms. DiMaio. For actual costs GDS restated the proposal numbers.

On July 30, 1992, Ms. DiMaio completed the Business Clearance for Definitization of ECP1. She noted “the recommendation received from the ATACC program office (C2AC) basically consisted of total concurrence with the ECP costs, without exception.” Although Ms. DiMaio was unable to recollect the source of her information, the Business Clearance acknowledged that GDS was in an overrun position by approximately $14 million, and that “a fair amount of this overrun could be attributed to the massive design change imposed by ECP # 1.” Ms. DiMaio described the change as “massive,” not based on the technical nature of the change, but on its dollar value. The Business Clearance notes that the GDS’s position of $3,910,431.00 is above the NTE price in Modification P00011. She viewed any amount beyond the $2 million as irrelevant. It was possible, according to Ms. DiMaio, that GDS actually was entitled to less than $2 million. Price data were needed to show that GDS at least was entitled to the $2-million ceiling price. Ms. DiMaio recounted her multiple efforts to obtain an audit of ECP1. Finally, she recommended that the Government reopen negotiations if GDS filed a successful claim.

The third paragraph on page 14 of the Business Clearance projects the need for better numbers should GDS file and succeed on a claim. The Government would need a basis for its negotiating position. Ms. DiMaio was unsure how the Government would arrive at a negotiating position given the fact that the numbers she arrived at in the Business Clearance were “somewhat arbitrary.” This was the best number she could derive based on the data available to her. Ms. DiMaio requested actuals from GDS.

On November 19,1992, Lt. Col. Thomas L. Dempsey, Assistant Program Manager for Aviation Command and Control Systems, accepted delivery of the ATACC prototype, CLIN 0001, by signing a DD250, Material Inspection and Receiving Report. The DD250 indicated acceptance “[sjubject to adjustments for outstanding modifications.” According to Mr. Glinka’s testimony, GDS claimed its adjustments related to “costs for ECP-1 and any additional other outstanding costs.” Lt. Col. Dempsey was not familiar with ECP1, but believed it was still dragging on as of November 19,1992. *61 On February 3,1993, GDS — through a letter from Robert G. Nyberg, GDS’s Director of Contracts, to Ms. DiMaio — acknowledged receipt of, and took exception to signing, a draft modification for ECP1. In this letter GDS requested a meeting to discuss ECP1related issues. No meeting took place.

Negotiation and definitization never occurred for ECP1. The Government unilaterally definitized Modification P00011 for ECP1 at $2 million.

In its November 8, 1999 order granting defendant’s motion in limine, the court ruled that Modification P00011 has a stated NTE of $2 million, the final amount of which was to be definitized, but that plaintiff would be allowed to introduce evidence that the parties’ subsequent actions and writings bore a different interpretation. The court noted that even if Modification P00011 unambiguously were to state that the price for ECP1 was NTE $2 million, the documents appended to plaintiffs opposition called into question whether the Government treated Modification P00011 consistently, i.e., by entertaining a claim in a greater amount, by auditing it, and so forth.

From the parties’ briefing on the motion in limine, the court’s attention was focused on the use of “proceed and quote” and “NTE” in the Modification. During trial the court’s attention was focused more carefully on the incorporation of a limitation of liability clause that indicated that the NTE amount was not in excess of 50% of the total liability for the modification.

Modification P00011 contains FAR § 52.216-24, “Limitation of Government Liability,” and it indicates a ceiling of $2 million. Although this would seem to end the inquiry, FAR § 16.603-2, covering letter contracts explicates the use of FAR § 52.216-24 in letter contracts, like Modification P00011. FAR § 16.603-2 provides:

(a) A letter contract may be used when (1) the Government’s interests demand that the contractor be given a binding commitment so that work can start immediately and (2) negotiating a definitive contract is not possible in sufficient time to meet the requirement. However, a letter contract should be as complete and definite as feasible under the circumstances.

id) The maximum liability of the Government inserted in the clause at 52.216-24, Limitation of Government Liability, shall be the estimated amount necessary to cover the contractor’s requirements for funds before definitization. However, it shall not exceed 50 percent of the estimated cost of the definitive contract unless approved in advance by the official that authorized the letter contract.

The FAR envisions a process by which the contractor receives a sum of money that can cany the contractor through definitization, at which time additional funds would become available based on that definitization. The advanced money cannot exceed half of the projected total cost of the definitive contract. A letter contract containing FAR § 52.216-24 and advancing $2 million, therefore, accepts the possibility of, and may even require, a final definitive contract in excess of $4 million.

Defendant asserts that plaintiff is entitled to no more than the $2 million already paid to GDS for ECP1. First, defendant argues that the facial limitation, the NTE amount, restricts GDS’s entitlement to $2 million. Second, defendant contends that GDS knew that it was not receiving incremental funds because of its Corporate Work Authorization dated September 19, 1989, which indicates “N/A” for incremental funding. This latter argument is unpersuasive. The Corporate Work Authorization indicates “N/A” at the end of a line that reads, “INCREMENTAL FUNDING LIMIT THRU.” This reflects that the N/A applies to timing for use of the incremental funding, not whether the funding itself was actually incremental. Mr. Tomasulo and Mr. Bonner testified to as much.

Militating against defendant’s arguments is the language of Modification P00011, which indicates that the money advanced is projected to be less than half of the total amount needed for the contract modification. Even if the Modification were ambiguous, applying the general rule of contra proferentem, its terms would be construed against the drafter. See Metric Constructors, Inc. v. NASA, *62 169 F.3d 747, 751 (Fed.Cir.1999). The court sees no reason to give the modification a reading other than that provided by its plain meaning. 14 The Marine Corps’s unilateral definitization of the contract at $2 million was in error. Defendant is liable to plaintiff for the failure properly to definitize Modification P00011.

III. Constructive changes

For many of GDS’s shortcomings in performance on the contract, plaintiff points to government changes to either contract requirements or GDS’s planned performance. Plaintiff cast JINTACCS/MTS impossibility as the core government-caused change that increased the cost of performance beyond that set in the contract. In addition to the JINTACCS/MTS impossibility issue, plaintiff seeks to demonstrate liability for changes regarding 1) redocumentation of NDI software, 2) retesting of NDI software, 3) software design changes through CDRL reviews, 4) changes to ATO software, 5) TADIL changes, 6) changes directed through Action Items, 7) extra CDRL revisions, 8) defective reliability requirements, and 9) MIL-Q-9858A conflicts. Defendant offers manifold theories to deny plaintiff recovery on these changes.

As a threshold matter, to succeed on a constructive change claim, a contractor must demonstrate that it notified the Government that it perceived a given order as a change of the contract’s terms and that the person who ordered the change possessed the requisite authority. As a substantive matter, the contractor also must prove that the putative change is actually a change of the terms of the agreement and not merely a direction that a given deliverable fails to satisfy the requirement set forth in the performance specification.

Section I of the contract incorporates the Notification of Changes Clause, FAR § 52.243-7 (Apr.1984). Within 10 days of any government action that GDS considered to be a contract change, GDS was required to provide written notice to the contracting officer of

(1) The date, nature, and circumstances of the conduct regarded as a change;

(2) The name, function, and activity of each Government individual and Contractor official or employee involved in or knowledgeable about such conduct;

(3) The identification of any documents and the substance of any oral communication involved in such conduct;

(4) In the instance of alleged acceleration of scheduled performance or delivery, the basis upon which it arose;

(5) The particular elements of contract performance for which the Contractor may seek an equitable adjustment under this clause, including—

(i) What contract line items have been or many be affected by the alleged change;

(ii) What labor or materials or both have been or may be added, deleted, or wasted by the alleged change;

(in) To the extent practicable, what delay and disruption in the manner and sequence of performance and effect on continued performance have been or may be caused by the alleged change;

(iv) What adjustments to contract price, delivery schedule, and other provisions affected by the alleged change are estimated; and

(6) The Contractor’s estimate of the time by which the Government must respond to the Contractor’s notice to minimize cost, delay or disruption of performance.

FAR § 52.243-7(b). Although defendant argues for a strict application of the notice requirement, courts have been willing to excuse the failure to give notice under such a provision. See, e.g., Hoel-Steffen Constr. Co. v. United States, 197 Ct.Cl. 561, 573 , 456 F.2d 760, 767 (1972); Mega Constr., 29 Fed. Cl. at 444 . “The case law makes clear that while two distinct lines of authority exist, there is but one overriding legal principle: Written notice as to constructive changes *63 must be supplied by the contractor before such time that the Government would suffer if not apprised of the facts.” Calfon Constr., Inc. v. United States, 18 Cl.Ct. 426, 438 (1989), aff'd, 923 F.2d 872 (Fed.Cir.1990). “In some instances immediate notice from the contractor is of minimal benefit, and the Government suffers no prejudice from not having had written notice at the time the constructive change occurs.” Id. “On other facts lack of immediate notice seriously can prejudice government interests.” Id. at 439.

A contractor must demonstrate that the work that was beyond the scope of the contract “was not volunteered and was ordered by a government officer having the requisite authority.” Barrow Utils. & Elec. Coop., Inc. v. United States, 20 Cl.Ct. 113, 120 (1990) (citing Calfon Constr., 18 Cl.Ct. at 434 ). The Government is only liable for changes ordered by officials possessing actual authority. “[A] person with no actual authority may not gain actual authority through the court-made rule of implied actual authority.” California Sand & Gravel, Inc. v. United States, 22 Cl.Ct. 19, 27 (1990), aff'd, 937 F.2d 624 (Fed.Cir.1991). However, “in some circumstances, a person with some limited actual authority impliedly may have broader authority.” Id. The Federal Circuit has held such implied actual authority may arise when such authority is an “‘integral part of the duties assigned to a[g]overnment employee.’ ” H. Landau & Co. v. United States, 886 F.2d 322, 324 (Fed.Cir.1989) (quoting J. Cibinic & R. Nash, Formation of Government Contracts 43 (1982)). In California Sand & Gravel, the court held that “modifying a contract in no way can be considered an integral part of the duty of reviewing contractor compliance.” 22 Cl.Ct. at 27 . Further, implied actual authority may not inhere in a government employee when regulations preclude that employee from exercising contracting authority. See Roy v. United States, 38 Fed.Cl. 184, 189-91 (discussing Cruz-Pagan v. United States, 35 Fed.Cl. 59 (1996)), dismissed by 124 F.3d 224 (Fed.Cir.1997). Government program managers are precluded from directing additional work.

(a) Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not—

(1) Execute contract modifications;

(2) Act in such a manner as to cause the contractor to believe that they have authority to bind the Government; or

(3) Direct or encourage the contractor to perform work that should be the subject of a contract modification.

FAR § 43.102 (1988).

Before examining plaintiffs individual constructive change claims, the court considers defendant’s blanket challenges to plaintiffs claims. First, defendant contends that plaintiff failed to notify the contracting officer of alleged changes. Second, defendant asserts that those persons who were alleged to have directed changes — Lt. Col. Ware and members of the FMF — did not possess the requisite authority.

1. Notice

GDS, a sophisticated government contractor, was well aware of its contractual obligation to provide notice of changes to the contracting officer. Ray Helinski, a contract administrator with GDS, notified Messrs. Glinka, Bonner, and LaWare, GDS’s Business Manager, Engineering Manager, and Vice President of Technical Operations, respectively, of the “obligatpon]” to put the Government on notice of constructive changes. In a letter dated February 15, 1989, Mr. Helinski indicated that GDS should consider giving notice for the SRS issue. Lt. Col. Ware in person and in numerous letters attached to CDRL comments also indicated that GDS should provide notice to the contracting officer in the event that GDS perceived a change in the contract. Nevertheless, defendant’s argument that the lack of formal notice for each alleged change prevents recovery on each change claim is unpersuasive. Hoelr-Steffen cautions courts not to apply notice provisions “too technically and illiberally,” especially when the Government is charged with notice. 197 Ct.Cl. at 573 , 456 F.2d at 768 . Courts look to the amount of prejudice that failure to follow the procedure has inflicted upon the Govern *64 ment. As was noted in Calfon Construction, the two distinct lines of cases are harmonized only by considering the amount of prejudice suffered by the Government. See 18 Cl.Ct. at 438-39 . The prejudice inquiry requires an individualized, factual inquiry that is not best disposed of through the omnibus argument advanced by defendant. The court considers the prejudice caused by the failure to give formal notice in the discussion of each of the asserted constructive changes.

2. Authority

When Lt. Col. Ware joined SPAWAR and the ATACC program, Col. Simpleman instructed him not to change the ATACC contract or specification. From testimony and exhibits, it appears that Lt. Col. Ware attempted to alert others of his lack of authority. Lt. Col. Ware, who had a poor recollection of much of his activities as Program Manager, suffered no lapse of memory when he testified that he never represented that he had authority to change the contract. He thought he was very clear at meetings that he did not have authority. He recalled that, at the commencement of meetings, he would state that he lacked authority to change the contract. Lt. Col. Ware would announce that, if GDS perceived that he directed a change, it should contact the contracting officer. Maj. Dunn testified that Lt. Col. Ware never represented that he possessed the authority to change the contract. Mr. Matusic’s testimony was substantially similar to Lt. Col. Ware, ie., that Lt. Col. Ware began every formal meeting with a routine speech about how only the contracting officer could change the contract. Mr. Bonner testified that Lt. Col. Ware always announced at meetings that whatever occurred would not change the contract. Mr. Bonner, GDS’s Engineering Manager, further testified that Lt. Col. Ware may have told GDS to contact the contracting officer about putative changes. Numerous letters entered into evidence indicated that nothing represented in the letters should be construed as a change to the contract or the specification and that, if GDS were to believe otherwise, it should contact the contracting officer.

As the Program Manager, Lt. Col. Ware did not have contract authority. According to Maj. Dunn, Lt. Col. Ware’s authority was operational, that is, the “how” and not the “what” of performance. Lt. Col. Ware had a similar view, and Contracting Officer DiMaio believed that responsibility for the budget rested with Lt. Col. Ware.

Lt. Col. Ware provided the contracting officer technical advice as to the specification requirements, but he was not the contracting officer’s technical representative (the “COTR”). No COTR was appointed by the contracting office, and GDS took its technical issues to Lt. Col. Ware.

From the perspective of the two contracting officers, Lt. Col. Ware’s responsibilities were to review technical changes and decide whether they met the Marine Corps’s requirements from a technical perspective.. Contracting Officers Thornewell and DiMaio believed that Lt. Col. Ware, as Program Manager, had the responsibility of managing the day-to-day technical side of the ATACC project. Ms. DiMaio described him as the head of the ATACC program for all practical purposes. Both relied upon him for technical matters. He advised Ms. Thornewell whether submissions met the requirements. Ms. Thornewell always followed Lt. Col. Ware’s advice. Ms. DiMaio could not recall declining a request of Lt. Col. Ware. Both Ms. Thornewell and Ms. DiMaio relied upon him to review C/SSRs and other scheduling issues.

Ms. Thornewell relied upon Lt. Col. Ware to resolve conflicts within the specification, so long as he did not effect a change to the contract specification. If the resolution resulted in a change in the specification, the matter had to go through Ms. Thornewell’s office. If GDS took the position that it met a specification and Lt. Col. Ware thought otherwise, she would defer to Lt. Col. Ware. If GDS were to raise an issue with her, she would resolve it among Lt. Col. Ware, the legal department of MARCORSYSCOM, and herself.

Although Lt. Col. Ware provided technical input, the evidence does not support a finding that he was responsible for approving changes, nor that he exercised approval au *65 thority despite his limited mandate, save for a few isolated incidents. In an October 25, 1990 letter, Lt. Col. Ware, although he did not recall it, indicated to GDS that a “proposed specification change” was “acceptable.” The letter then requested that GDS submit an ECP to the Government. His office routinely reviewed technical issues and provided input. If acceptable to the PMO, the contracting officer would routinely approve.

According to Ms. Thornewell, Lt. Col. Ware could not grant schedule relief without obtaining consideration. He could grant informal relief as to a specific task, but not as to final delivery schedule. However, on at least one occasion, in a September 25, 1989 memorandum from Capt. Iaquinto in response to a September 21, 1989 letter from GDS, Lt. Col. Ware did grant relief from a C/SSR. Ms. Thornewell testified that she had not seen the grant of relief in this memorandum.

In a January 6, 1993 letter to Ms. DiMaio, GDS indicated that it was “fully aware that the Contracting Officer is responsible and the only authority to direct the performance of additional out of scope work,” and that it “did in fact proceed at [its own] risk” when performing out-of-scope work without contracting officer approval. Ms. DiMaio had registered her displeasure with GDS when it told her that Lt. Col. Ware authorized certain changes. Two or three times Ms. DiMaio registered her displeasure, and according to Mr. Glinka, GDS knew that it accepted the risk for some changes. On cross-examination Mr. Glinka testified:

Q: Now, this letter of yours from January of ’93 appears to refer to some software changes. Looking at the letter, do you have a general recollection of what this is all about?

A: Yes. The second paragraph on the first page says, “GDS and the government were in the final stages of DT & E when the need for the software change was discovered.” And they were — the system was out at site. DT & E is developmental test and evaluation.

And I got the phone call that, “There is a problem out here. We need to fix this. You know, the government is with us.” You know, and on and on and on. I took the risk myself. And I told them, “All right, fix it”, because we needed to get out of DT & E. “Fix it and, you know, I will talk to [Ms. DiMaio]. Is Jim Ware there with you?” ‘Yes.” “All right. Everything is fine out there?” ‘Yes.” “Okay, fine. Fix it”, which they did.

And then I notified Cheryl who was upset about it. And this is my response back to her about that issue.

Q: Okay. And just to finish the — not finish, but the third sentence of the first paragraph says, “As you also point out, authorization was not given by you. And, therefore, GDS did, in fact, proceed at risk.”

A: Yes.

Q: And that is your understanding—

A: Correct.

Q: I’m sorry. I’ve just got to finish my sentence. That is your understanding of what you just described?

A Yes. And to follow if I may, if Cheryl came back and s

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