# Chapman Law Firm, LPA v. United States

> United States Court of Federal Claims · November 25, 2013 · 113 Fed. Cl. 555

URL: https://www.frixlaw.com/law-library/cases/7218487

## Case

- **Full name:** CHAPMAN LAW FIRM, LPA v. UNITED STATES
- **Court:** United States Court of Federal Claims
- **Decided:** November 25, 2013
- **Citations:** 113 Fed. Cl. 555; 2013 U.S. Claims LEXIS 1872; 2013 WL 6247439
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Horn
- **Judges:** Horn
- **Cited by:** 8 later opinions in the Frix Law Library

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## Opinion text

OPINION
HORN, J.
Plaintiff, Chapman Law Firm, LPA, asserts three claims 1 against defendant arising from plaintiffs contract with the Department of Housing and Urban Development (HUD) to provide management and marketing services for single-family homes in Ohio and Michigan. Plaintiff seeks compensation for: (1) costs that plaintiff incurred during two stop work order periods issued in response to bid protests filed at the United States Government Accountability Office (GAO), (2) costs that plaintiff incurred as a result of constructive changes to the parties’ contract, and (3) what appear to be lost profits resulting from defendant’s alleged bad faith failure to exercise the first option year to the parties’ contract. In response, defendant asserts a counterclaim under the False Claims Act, 31 U.S.C. § 3729 (2006), as well as a number of affirmative defenses. Defendant maintains that plaintiff violated the False Claims Act by submitting thirteen invoices 2 to the HUD contracting officer, as well as a certified claim, impliedly representing that plaintiff had used licensed inspectors to conduct wood-destroying organisms (WDO) inspections of homes in HUD’s inventory, although plaintiff had inspected homes with unlicensed inspectors, and that plaintiff had conducted WDO and routine inspections of homes in the inventory, although the inspections allegedly never occurred. 3 Defendant *560 also argues that plaintiffs claims should be barred, in whole or in part, under the doctrines of material breach of contract, unclean hands, offset, and failure to mitigate damages, as well as under the Special Plea in Fraud statute, 28 U.S.C. § 2514 (2006). 4 Plaintiff asserts that defendant’s counterclaim is barred by defendant’s “own breach of contract,” estoppel, accord and satisfaction, and “own lack of reliance on any statement made by CLF.” 5 Tidal was held in two phases, as a result of plaintiffs belated and rolling production of documents, which is described below.
FINDINGS OF FACT
Stop Work Order Periods
On September 30, 2005, HUD awarded Contract No. C-PHI-00958 (the contract) to plaintiff for the management and marketing of single family homes in Ohio and Michigan. Following a bid protest to the contract award, see Greenleaf Constr. Co., B293105.18, B-293105.19, 06 CPD ¶ 19, 2006 WL 249626 (Comp. Gen. Jan. 17, 2006), 6 the original contract was replaced in its entirety by Modification 0003, 7 which was issued on December 19, 2006, and became effective on January 1, 2007. 8 The contract, as amended, was an indefinite quantity, fixed-unit-rate contract with a total estimated value of $34,745,000.00 for the base period of the contract. Plaintiff was compensated under the contract for each service that it provided to HUD with respect to properties that HUD transferred to plaintiffs inventory. 9 Under the contract, as amended, plaintiff was to provide management and marketing services for the HUD Homeownership Center “Philadelphia B,” which corresponded geographically to the states of Ohio and Michigan.
The base period of the contract, as amended, was from January 1, 2007 to December 31, 2007. The contract provided for a transition period, which included a “Start Up” phase, in which plaintiff was to prepare to perform the contract by establishing infrastructure and hiring personnel, as well as a “Ramp Up” phase, in which plaintiff was to receive properties in its inventory until the date on which plaintiff was responsible for fully performing the contract. The contract also included four option years with the potential to extend the contract to December 31, 2011. If defendant intended to extend *561 the contract, defendant was required to give plaintiff a preliminary notice at least sixty days before the contract’s expiration, followed by a formal notice at least thirty days before the contract’s expiration. See FAR 52.217-9 (2000). The contract, as amended, explicitly stated, however, that “[t]he preliminary notice does not commit the Government to an extension.”
Although plaintiff was to begin performance of the original contract on October 1, 2005, a bid protest was filed at the GAO to contest the award of the contract to plaintiff. As a result, the contracting officer stayed plaintiffs performance of the original contract on October 7, 2005. On January 17, 2006, the GAO issued a decision on the bid protest, finding that plaintiff had made material changes to its proposal during the course of the procurement, that a potential conflict of interest was created by Frank Chapman’s ownership of plaintiff, his status as plaintiffs Chief Executive Officer, and receipt of a portion of the profits derived from Lakeside Title, which was HUD’s closing agent for the state of Ohio, and which Frank Chapman had owned prior to the award of the contract to plaintiff. See Greenleaf Constr. Co., B-293105.18, B-293105.19, 06 CPD ¶ 19. On April 19, 2006, the contracting officer terminated the original contract pursuant to Modification 0001. Although HUD reissued the solicitation, 10 plaintiff filed a bid protest at the Court of Federal Claims, see Chapman Law Firm Co. v. United States, 71 Fed.Cl. 124 , and the contract with plaintiff was reinstated on June 12, 2006, pursuant to Modification 0002, prior to the completion of the new procurement. Plaintiff submitted a revised proposal on July 13, 2006, which stated that plaintiff did not require the “transition time of up to six months,” which was provided in the solicitation, because plaintiff did not “require” a transition period and was “prepared to start immediately.” Plaintiff submitted a second, revised proposal on November 7, 2006, once again indicating that plaintiff remained “ready, willing and able to immediately commence performance of these services as set forth in the prior and current Requests for Proposals.” 11
The contracting officer issued Modification 0003 on December 19, 2006, which replaced the original contract in its entirety, effectively resolving the new solicitation in plaintiffs favor. Under Modification 0003, plaintiffs performance of the contract was to begin on January 1, 2007. A second bid protest, however, was filed with the GAO on December 29, 2006 by Greenleaf Construction Company, Inc. See Greenleaf Constr. Co., B-293105.21, B-293105.22, B-293105.23, 07 CPD ¶ 84, 2007 WL 1364623 (Comp. Gen. Apr. 4, 2007). As a result, the contracting officer once again stayed plaintiffs performance of the contract on January 3, 2007.
On January 3, 2007, while the second bid protest was pending, plaintiff sent the contracting officer a request for an equitable adjustment relating to the first stop work order period in the amount of $1,884,097.65. Plaintiff asserted entitlement to $385,455.48 in rent for the first stop work order period, which included a third of the cost of utilities for the building in which plaintiffs offices were located. Although not noted in plaintiffs request for equitable adjustment, the building in which plaintiffs offices were located was owned by 925 Keynote Circle Corporation, a separate company owned by Frank Chapman, plaintiffs Chief Executive Officer. Plaintiff also asserted entitlement to $245,632.79 for wages paid to its employees. Plaintiff separately asserted entitlement to *562 compensation for “wages which were simply not paid and where the parties agreed to take less money and seek later reimbursement from HUD,” including $119,604.97 for the services of Derek Gasiorowski, who was plaintiffs Quality Control Supervisor and Inspections Supervisor during plaintiffs performance of the contract at issue in this case, $80,000.00 for the services of Justin Smith 12 during plaintiffs performance of the contract, $50,000.00 for the services of John Goss, plaintiffs Vice President of Operations and Contract Compliance during plaintiffs performance of the contract, as well as a technology specialist for plaintiff, and $437,500.00 for the services of Frank Chapman. In addition, plaintiff asserted entitlement to compensation for its “reoccurring expenses,” such as payments made for telephone lines and office supplies. Plaintiff separately asserted entitlement to compensation for payments made through Frank Chapman’s credit card and a checking account in the amount of $320,152.54, which included costs related to maintaining cellular phones and the purchase of gas and supplies by plaintiffs employees. Plaintiff also sought fifteen percent of what it viewed to be recoverable expenses relating to the stop work order period, which plaintiff characterized as “[p]rofit[s].”
In support of its a request for equitable adjustment relating to the first stop work order period, plaintiff submitted four charts delineating expenses that plaintiff allegedly incurred during the first stop work order period, including rent payments, payroll, payments made via check and electronic transfer, and payments made through Frank Chapman’s credit card. Plaintiffs supporting documentation also included modified versions of the two charts relating to the payments made via cheek and electronic transfer and payments made on Frank Chapman’s credit card, which highlighted the expenses that plaintiff believed were related to the first stop work order period. Plaintiff asserted entitlement to reimbursement for lease payments related to two luxury vehicles, lease payments for a number of other vehicles, and train tickets. Plaintiff also asserted entitlement to the cost of maintaining legal liability insurance for plaintiff, the cost of maintaining a permanent seat license for the Cleveland Browns sports team, and costs associated with “Career Builder.” In addition, plaintiff asserted entitlement to reimbursement for the services of an accountant who helped plaintiff prepare its request for equitable adjustment relating to the first stop work order period.
The supporting documentation for plaintiffs request for equitable adjustment relating to the first stop work order period also included a copy of the lease between plaintiff and 925 Keynote Circle Corporation, which Frank Chapman signed as President of 925 Keynote Circle Corporation, and Dzenana Kajtezovic signed as “Secretary” of plaintiff. Moreover, the supporting documentation included account statements from plaintiffs utility providers, payroll documentation maintained by a third party, with canceled cheeks to demonstrate payment, as well as billing statements and other documentation, including electronic receipts of payment relating to the cost of maintaining insurance, with only partial evidence of payment, workers’ compensation, and telecommunication services. In addition, plaintiff included an account statement for charges made on Frank Chapman’s credit card. One of the documents included in plaintiffs supporting documentation indicates that plaintiff appears to have requested reimbursement for the cost of terminating telecommunication services provided to “CLF Real Estate Services,” which appeal’s to be a separate company from plaintiff, Chapman Law Firm, LPA.
*563 On January 18, 2007, the HUD contracting officer, Maureen Musilli, responded to plaintiffs request for equitable adjustment relating to the first stop work order period. The contracting officer explained that, to be recoverable under the Federal Acquisition Regulation (FAR), claimed costs must be both allocable to the parties’ contract and reasonable. The contracting officer indicated that, because “Chapman Law Firm existed prior to the award of C-PHI-00958 (the contract) and has other business interests besides this HUD contract,” HUD would only reimburse plaintiff a portion of the cost of its rent and utilities, as well as a portion of plaintiffs payroll expenses. The contracting officer indicated that HUD only would pay a portion of salaries actually paid, rather than the reduction in the salaries of plaintiffs employees with the promise of later reimbursement, and noted that Frank Chapman’s salary of $350,000.00 per year was “quite excessive and unreasonable.” The contracting officer informed plaintiff that it had not submitted evidence that the other expenses to which plaintiff asserted entitlement for reimbursement were allocable to the HUD contract, and that travel expenses were not necessary during a stop work order period. Although the contracting officer did not challenge plaintiffs assertion that it was entitled to a percentage of its expenses as profits, she indicated that plaintiff needed “to reduce the profit percentage drastically.”
On April 19, 2007, plaintiffs current attorney of record, in his role as outside counsel for plaintiff, responded to the contracting officer’s January 18, 2007 letter. Plaintiffs counsel maintained that all of plaintiffs costs were allocable to the contract because plaintiff was forced to refrain from taking on other work during the first stop work order period due to the nature of its previous bankruptcy and personal injury practice. Plaintiffs counsel also stated that plaintiff “was not generating income during the stop work period and was surviving on capital contributed by Mr. Chapman from his personal resources.” With respect to Frank Chapman’s salary, plaintiffs counsel stated: “I do not see how you can assert that a salary of $350,000 is not reasonable for the Chief Executive Officer managing at least $25 million in contracts per year.” In addition, plaintiffs counsel amended plaintiffs request for equitable adjustment relating to the first stop work order period to include an additional claim for “$300,000 in income” that Frank Chapman lost as a result of his divestment from Lakeside Title “at the direction of the Government.” 13 The April 19, 2007 letter to the contracting officer also included Frank Chapman’s certification of plaintiffs first stop work order claim pursuant to the Contract Disputes Act. See 41 U.S.C. § 605 (c)(1) (2006).
The GAO denied the second bid protest on April 4, 2007. See Greenleaf Constr. Co., B-293105.21, B-293105.22, B-293105.23, 07 CPD ¶ 84. The contracting officer sent Frank Chapman an email on April 6, 2007, asking whether he was ready to begin performance, to which Frank Chapman responded: “I am ready on the 16th. Everyone has either started or starts on Wednesday. The key people know their duties and irreparable harm will occur to my reputation if this is not the start date.” On April 13, 2007, the contracting officer issued Modification 0006, 14 which established April 16, 2007 as “the day that all new acquisitions, conveyances, custodiáis, pre-conveyance approvals and pending mortgagee requests will be transferred to Chapman Law Firm from MCB [Miehaelson, Connor, and Boul, Inc., the prior contractor],” and June 30, 2007 as “the first day of full performance for Chapman Law Firm.” Modification 0006, which was signed by both parties, stated that “HUD and Chapman Law Firm agree to formalize the transition schedule ... at no additional cost to either *564 party____” Modification 0006 also noted, however, that “[t]his modification does not effect [sic] the contractor’s right to submit a claim pursuant to FAR 52.233(b) due to the stop work order, issued January 3, 2007 and lifted April 12, 2007, or any prior stop work order.”
On May 7, 2007, after beginning its performance of the contract, plaintiff sent the contracting officer a request for equitable adjustment in the amount of “$768,898.35” 15 relating to the second stop work order period, which began on January 3, 2007 and ended on April 12, 2007. Plaintiff claimed entitlement to compensation for its rent in the amount of $103,933.84, expenses paid through two checking accounts in the amounts of $2,757.84 and $305,157.84, respectively, and expenses paid through Frank Chapman’s credit card, which plaintiff now referred to as a “corporate” card, in the amount of $6,713.87. Plaintiff also claimed entitlement to wages that were not paid “where parties agreed to take less money” in the amounts of $20,000.00 for Mr. Gasiorowski, $10,000.00 for Mr. Smith, $12,500.00 for Mr. Goss, $20,000.00 for William Barrett, who was described as a “CPA,” and $109,283.00 for Frank Chapman. In addition, plaintiff claimed entitlement to a “reasonable profit” of fifteen percent of plaintiffs expenses. Plaintiff also referred to a claim, which it “reserved” pending the amendment of the contract, for $1,200,00.00 arising from a loss of incentive fees that plaintiff believed it would suffer given that the second bid protest abbreviated the performance period of the contract.
Although the copy of the request for equitable adjustment related to the second stop work order period that appears in the record, prepared by both parties, the record does not include plaintiffs supporting documentation, a portion of the supporting documentation for the second request for equitable adjustment appears to have been included in a report issued by the Defense Contract Audit Agency (DCAA), which is described below. Plaintiff included invoices for consulting services, as well as included invoices from Mr. Goss’ separate technology company, although plaintiff claimed entitlement to Mr. Goss’ salary as a separate item in its second request for equitable adjustment and the invoices are billed to “CLF Real Estate Services,” rather than to plaintiff. Plaintiffs request for equitable adjustment for the second stop work order period also appears to have included copies of Frank Chapman’s credit card billing statements, which were addressed to Frank Chapman of “FRANK H CHAPMAN CO” and which indicated that Frank Chapman’s account was shared with his wife Ann Chapman. In addition, plaintiffs request for equitable adjustment for the second stop work order period appears to have included utility payment summaries, cheeking and electronic account statements and documentation, third-party payroll statements, evidence of 925 Keynote Circle Corporation’s ownership of the offices in which plaintiff was located, a copy of plaintiffs lease with 925 Keynote Circle Corporation, charts apparently created to delineate plaintiffs monthly rent for the second stop work order period, and invoices and documentation relating to the services of Mr. Barrett.
The DCAA audited plaintiffs claims relating to the first stop work order period and the second stop work order period and issued reports on plaintiffs claims for each stop work order period on March 3, 2008 and March 19, 2008, respectively. The DCAA’s reports concluded that plaintiffs requests for equitable adjustments did not represent “an acceptable basis for negotiation of a fair and reasonable price adjustment” and noted that plaintiff “did not have factual and verifiable cost or pricing data supporting a number of the proposed amounts.” The reports questioned a portion of plaintiffs claimed rent, payroll expenses, and check and electronic transfer payments, as well as the entirety of the cost of plaintiffs utilities and the foregone salary of plaintiffs key employees. The March 19, 2008 report for the second stop work order period also questioned rent payments made outside the second stop work order period. The reports also questioned the costs of plaintiffs utilities because the *565 supporting documentation submitted to the contracting officer indicated that 925 Keynote Circle Corporation, rather than plaintiff, paid for the cost of plaintiffs utilities. In addition, the reports questioned plaintiffs payroll expenses to the extent that they were incurred outside the stop work order periods, as well as payroll expenses that plaintiff had not minimized “in accordance with the stop work order,” highlighting that Mr. Smith received a pay raise during the stop work order periods and that plaintiff had made payments to Mr. Gasiorowski and Jeff A Swiecicki, a real estate broker for plaintiff, although both were not added to the payroll until after the first stop work order period began. In addition, the reports questioned the salaries owed to plaintiffs key employees based on plaintiffs failure to provide the DCAA with signed employment agreements. The reports further questioned whether a number of charges were allowable, including the lease payments on luxury vehicles and the permanent seat license for the Cleveland Browns sports team. Although the reports recognized that the costs associated with the contract were “properly classified to permit application of the proposed profit percentage to the total proposed costs,” the reports noted that plaintiff did not provide a profit rate in the proposals that it submitted in response to the solicitation.
Plaintiffs counsel, and current attorney of record, responded to the DCAA’s findings, arguing in part that the DCAA auditor had failed to consider the full amount of space leased by plaintiff, the cost of capital invested into plaintiffs offices, that plaintiff was responsible for reimbursing 925 Keynote Circle Corporation for the cost of utilities, that the services of Mr. Goss and Mr. Barrett were “exclusively related to performing work related to the contract,” and that plaintiffs costs only had to be incurred, rather than paid in order to be recoverable under the contract. Plaintiffs counsel included a market survey to support the “reasonableness” of Frank Chapman’s salary. Plaintiffs counsel conceded, however, that plaintiff had requested reimbursement for rent obligations outside the second stop work order period. Plaintiffs counsel ultimately sent the contracting officer a letter on December 9, 2008, indicating that plaintiff intended to treat her failure to respond to plaintiffs stop work order claims as a deemed denial of plaintiffs claims under the Contract Disputes Act. The contracting officer issued a final decision denying a portion of plaintiffs stop work order claims on February 3, 2009. Plaintiff filed its original complaint on December 28, 2009. Defendant filed its Answer to the original complaint on April 12,2010.
Plaintiffs Performance of the Contract
Plaintiff performed the contract while simultaneously negotiating its stop work order claims. Although the contract provided that plaintiff would not begin receiving property conveyances until the sixty-first day “after the effective date of the contract,” plaintiff and the contracting officer mutually agreed to modify the “Ramp Up”'phase of the contract to establish April 16, 2007 as the “day that all new acquisitions, conveyances, custodiáis, pre-conveyance approvals and pending mortgagee requests will be transferred to Chapman Law Firm” from plaintiffs predecessor. Although plaintiff alleges in its Third Amended Complaint that, “without any prior warning, CLF was instructed to commence performance immediately” on April 15, 2007, plaintiff had been negotiating a performance schedule with HUD and HUD had rejected plaintiffs proposal to allow it to seek an equitable adjustment for the shortened “Ramp Up” phase because, as contemporaneously highlighted by HUD, plaintiff had indicated that it was “ready to go and there would be no need to wait any longer.”
Soon after beginning performance of the contract, plaintiffs employees encountered difficulties obtaining access to HUD’s Single Family Acquired Asset Management System (SAMS), which was a database that HUD used to track data related to each property in plaintiffs inventory. Under the parties’ contract, plaintiff was required to “input property related data into SAMS no later than two (2) business days following the date the information is obtained.” The contract also required defendant to provide plaintiff with access to SAMS to facilitate plaintiffs performance under the contract. Although the contract did not provide a timeframe in which defendant was to provide plaintiff with *566 SAMS access, the contracting officer testified that plaintiff “could not effectively perform the contract” without SAMS access because plaintiffs employees were required to have SAMS access in order to determine whether a property had been assigned to plaintiff. In addition, Frank Chapman testified that SAMS access was required for plaintiff to inform HUD that it had performed the work required by the parties’ contract.
In order to obtain SAMS access, plaintiffs employees and subcontractors were required to “undergo a background investigation” and HUD’s obligation to provide SAMS access was “[sjubject to any necessary security clearances.” Specifically, the contract provided the following with respect to SAMS access:
As a condition'of obtaining access, Contractor employees requiring access to SAMS and/or other HUD systems shall submit to the GTR [Government Technical Representative] an original and one copy of completed Standard Form 85P, Questionnaire for Public Trust Positions, Option Form 306 and 21-D258 Finger Print Chart. Contractor staff may be required to provide other background information as deemed appropriate for the requested security access level.
The record indicates that, at the end of March 2007, prior to the GAO’s decision on the second bid protest, Frank Chapman and Mr. Goss had been working with HUD personnel to ensure that plaintiffs employees would be able to access SAMS at the start of contract performance. 16 Frank Chapman informed the contracting officer that, of “the tasks associated with the ‘rampup’ period,” SAMS access was “thecritical [sic] path.” Frank Chapman indicated to the contracting officer, however, that he expected that plaintiff would obtain SAMS access a day prior to the start of its performance.
While simultaneously attempting to obtain SAMS access for its employees by following the procedures described in the parties’ contract, plaintiff tried to pursue alternative means of obtaining SAMS access. Plaintiffs management inquired as to whether a number of individuals who previously had been granted SAMS access could use their previous access to forego the application process. After the contracting officer informed plaintiffs management that the individuals no longer had SAMS access, plaintiffs management inquired as to whether their SAMS access could be reactivated. In addition to attempting to obtain SAMS access for plaintiffs employees, Frank Chapman sought to obtain SAMS access from individuals working for other contractors. On March 29, 2007, Frank Chapman forwarded to the contracting officer a proposal from Cityside Management (Cityside) and indicated that he was seeking proposals from Home Source, both of which were management and marketing contractors. Frank Chapman had previously informed the contracting officer that he was seeking proposals from other contractors to assist plaintiff with obtaining SAMS access and that he “could keep everyone honest and go with the lower bid.” Frank Chapman testified that the HUD contracting officer had asked plaintiff to obtain a quote from Cityside. The record indicates, however, that, by February 13, 2007, and prior to the date of contract performance, Frank Chapman already had an agreement with Cityside to contract with at least one Cityside employee for consulting services to assist plaintiff in performing the contract, although Frank Chapman gave conflicting testimony as to whether the employee ever provided plaintiff with consulting services. Additionally, Frank Chapman indicated that he separately negotiated with Cityside for plaintiffs use of the employee’s SAMS access. The HUD contracting officer testified that she did not ask Frank Chapman to inquire as to whether plaintiff could obtain SAMS access through other contractors, and that she did not tell Frank Chapman at that time that defendant, would pay the costs plaintiff incurred in obtaining SAMS access through other contractors, although she admitted that she knew Frank Chapman was attempting to obtain SAMS access at the time.
*567 Upon reviewing Citysides proposal, the contracting officer informed Frank Chapman that she thought the proposed price for SAMS access was too high. Specifically, the contracting officer told Frank Chapman: “That is a lot of money for simple data entry---- lam having Housing folks take a look at this, but my initial reaction is the proposal is too high.” The contracting officer subsequently informed Frank Chapman that she had asked a contract specialist to “cheek the GSA [Government Services Administration] website for hourly rates for data entry and also to see if we can get the Service Contract Act wage rates from the Department of Labor.” In addition, the contracting officer stated:
If I can get labor rates from similar HUD contracts, I’ll provide you with that data, also. The travel costs, per diem, rental car, etc. are really escalating the cost of the proposal also. We don’t pay over the Gov’t rates for travel, and does everyone need their own rental car? Geez.
In response to the contracting officer’s reference to “the GSA website,” Frank Chapman stated: “I read the law on GSA rates. What do I need to take advantage of these rates. The regulation spoke of a letter from the CO [contracting officer]. Have you done this in the past?” The record reflects that the contracting officer ultimately provided Frank Chapman with standard rates to compare to Cityside’s proposal. Frank Chapman testified that he interpreted his communications with the contracting officer as an indication that the contracting officer approved of his negotiations with Cityside. Frank Chapman also testified that the contracting officer “specifically told me to gain services to get SAMS and that she’d reimburse me for it later,” although he subsequently stated that he did not “have an agreement from her to pay it.” At trial, the contracting officer confirmed that she “never said don’t pay anything,” but maintained that the question of whether plaintiff should pay to obtain SAMS access from a third-party contractor “never came up in conversation.” The contracting officer testified that she forwarded pricing information in order to “help Frank Chapman in any way that I could.”
On April 10, 2007, six days before plaintiff was to begin performance of the contract, Mr. Goss inquired as to whether plaintiff could obtain “emergency access approval to SAMS” and HUD’s other databases. On April 13, 2007, Frank Chapman informed Clifford Kellett, the government technical representative and the primary point of contact for plaintiff during contract performance, and defendant’s designated government representative at trial, that plaintiff had retained Lionel Hotard, a Cityside employee, to obtain access to SAMS. With the understanding that plaintiff had hired Mr. Hotard as a contractor, 17 Mr. Kellett requested that HUD personnel meet the “urgent requirement” of modifying Mr. Hotard’s access to allow him to view Ohio and Michigan properties, which was accomplished on April 16, 2007. The record indicates that plaintiff ultimately hired six consultants with SAMS access, although Frank Chapman testified that plaintiff required eight to fifteen employees with SAMS access to track the status of properties assigned to plaintiff.
On April 23, 2007, while plaintiff continued its efforts to obtain other sources of SAMS access, including contracting with a second employee from Home Source, Mr. Kellett informed Frank Chapman, with apparent reference to applications for access, that “[t]he SAMS/SFIS [Single Family Insurance System] process can not [sic] be sped up any faster than its currently working,” and that he was “[assuming workers like Lionel Hotard (with active access to SAMS and SFIS) is an effective method of gaining access.... ” One week later, on April 30, 2007, Mr. Goss informed Mr. Kellett that HUD had returned to plaintiff applications for SAMS access, apparently as a result of errors in the applications. Although plaintiff had been performing the contract for two weeks, Mr. Goss also informed Mr. Kellett: “No one employee in our office still has SAMS and SFIS access.
*568 We are still relying on consultants for access.” In reply, Mr. Kellett stated:
The SAMS/SFIS access is imperative. We had 361 homes in PB [Philadelphia B area which corresponded geographically to Ohio and Michigan] inventory this morning and all in step 1. They need to me [sic] moving on and this can’t be done without SAMS as well as SFIS status.
CLF needs to implement contingency measures to cover the lapse of SAMS and SFIS access. In reality, you are operating in Emergency Circumstances.... Let me know what alternative are [sic] being sought and implemented. Otherwise, performance is aversely [sic] affected.
Following this exchange, it appears based on the record before the court, that a number of plaintiffs employees had SAMS access by May 31, 2007, notwithstanding plaintiffs claim that defendant did not provide plaintiff with SAMS access for the first ninety days of contract performance.
While plaintiffs management was attempting to gain SAMS access for plaintiffs employees, a number of disputes arose between the parties. On April 30, 2007, soon after plaintiff began performance of the contract, plaintiff requested that HUD transfer into plaintiffs inventory “35 homes which were transferred out of our inventory and into MCB’s [Michaelson Connor and Boul, Inc.’s] inventory after we completed approximately 100k of work.” Frank Chapman represented to the contracting officer that plaintiff “cleaned these homes, ordered appraisals, quality control inspections, and lawn care.” Frank Chapman also informed the contracting officer that plaintiff performed work on each of the thirty-five homes at the direction of Mr. Kellett. Frank Chapman asked the contracting officer to either: (1) return the transferred homes to plaintiffs inventory, (2) compensate plaintiff for $96,150.00 “representing our contractual fees,” or (3) reimburse plaintiff for the costs it had incurred in providing services to the properties, which Frank Chapman estimated to be $110,250.00. Frank Chapman also stated: “In order to clarify, I do not want these funds, I simply want to rely upon the statements and representations made to me by HUD which in turn would result in placing these homes back into my inventory and allowing me to bill for them on May 1st.” On May 1, 2007, the day after Frank Chapman had made his request, HUD transferred the thirty-five properties back into plaintiffs inventory. Mr. Kellett testified that plaintiff was paid a management fee under the contract for each of the properties transferred back to plaintiff, which is consistent with the parties’ stipulation that defendant paid all of the invoices that plaintiff submitted to HUD. Mr. Kellett also testified that HUD records did not show that plaintiff had actually conducted any work on the thirty-five properties that had been transferred out of plaintiffs inventory. 18 HUD’s contemporaneous records, however, noted that plaintiffs EMS did not contain initial property inspection reports for eleven of the thirty-five properties transferred back to plaintiff, indicating that plaintiffs employees had never visited the properties.
Athough occurring later in plaintiffs performance of the contract, a similar dispute arose regarding plaintiffs entitlement to marketing fees. On October 30, 2007, Frank Chapman asserted that plaintiff was entitled to a marketing fee for properties that were in the process of being sold, but, according to Frank Chapman, had been inaccurately labeled as closed when transferred into plaintiffs inventory. Frank Chapman maintained that plaintiff was entitled to a marketing fee if a home was transferred into plaintiffs inventory while it was under contract, but before closing. According to Mr. Kellett, forty-five homes were transferred to plaintiff after they had been closed because the prior contractor had failed to note the properties’ closing on SAMS. Athough Frank Chap *569 man contemporaneously claimed that plaintiff had settled the forty-five homes, Frank Chapman admitted, under oath, during trial, that at least one of the forty-fives homes was settled by the prior contractor. 19 The record, however, indicates that all but one 20 of the forty-five homes were settled by the pri- or contractor before the properties were transferred into plaintiffs inventory. Notwithstanding that the prior contractor settled the majority of the properties at issue, Frank Chapman maintained during trial that plaintiff was still entitled to a marketing fee once the properties entered plaintiffs inventory regardless of whether the prior contractor had settled the property. In contrast, Mi’. Kellett testified that, “because these properties had not been updated by MCB [Michael-son, Connor & Boul] from step 8, waiting for sale, into step 9, sold, over that one day period, it was my decision that it was not a fair cost for the government and it wasn’t a fair cost to pay the Chapman Law Firm for doing nothing.” 21
Aside from fee disputes, from the beginning of the contract there was continual friction between the parties over plaintiffs obligations under the contract. The parties’ contract provided that plaintiff was to “obtain and process for payment by HUD all applicable real estate tax bills and special tax assessments on all HUD-owned properties.” The contract also provided that plaintiff was responsible for “penalties or interest charges incurred by HUD as a result of late payment of property taxes.” Although plaintiff was generally responsible for the costs it incurred in performing the contract, the contract provided that plaintiff was entitled to reimbursement for pass-through expenses, which included expenses such as the cost of evicting “Adverse Occupants,” utility costs, the cost of “treatment and repair of infestation or damage caused by wood destroying organisms,” and the cost of demolishing a home.
On May 1, 2007, Mr. Kellett forwarded HUD’s Financial Control Manual to plaintiff. HUD’s Financial Control Manual described “the minimum documentary evidence required of each type of Payment Request Transmittal” that plaintiff submitted to HUD, which included requests for the payment of taxes and other pass-through expenses. In addition to providing an original tax bill or assessment, which was required by the parties’ contract, the Financial Control Manual required plaintiff to submit, with each tax transmittal, a specified form and documentation of any penalties or interest that had been incurred. Consistent with the parties’ contract, the Financial Control Manual also directed that all invoices submitted to HUD include a FHA case number “for each property for which payment is being requested.” Frank Chapman and Ms. Kajtezovic, plaintiffs Office Co-Manager and Closings Supervisor, testified that they were not aware of the Financial Control Manual’s existence until May 1, 2007, the date on which Mr. Kellett forwarded the Financial Control manual to plaintiff. According to Frank Chapman, the Financial Control Manual’s requirements “added a whole other level to the number of people that we needed in order to track taxes, utilities, all these items, and get them paid.” Frank Chapman testified that the Financial Control Manual required plaintiff to submit additional documentation with each tax bill that plaintiff submitted to HUD. Frank Chapman maintained that plaintiff was required to hire “between four and six” new employees to comply with the Financial Control Manual.
*570 Plaintiff encountered difficulties in the transmittal of tax assessments to HUD, which were reviewed by HUD’s payment contractor, The McConnell Group. Under the parties’ contract, plaintiff was required to submit, with each tax transmittal, a specific form, as well as the tax bills or special assessments “or evidence of the obligation to the HOC [Home Ownership Center]” fifteen business days before a tax was due. As noted above, plaintiff was responsible for any penalties or interest incurred as a result of late payment. A dispute arose between the parties, however, over whether plaintiff was responsible for writing a “FHA [Federal Housing Administration] case number” on the tax bills submitted to HUD. Carmella Harrigan, a government technical monitor, explained HUD’s position to Frank Chapman on September 19, 2007:
All bills and invoices that are paid by the Department must have the address and FHA Case number on them which is the way that we track our properties. Since a FHA case number is an internal identification for HUD, they are not normally reference [sic] on regular bills (subcontractors will place them on their invoice [sic] on request) so they need to be written by your staff. G.4B states “All invoices must include the FHA case number and property address for each property for which payment is being requested.” This information is being provided for payment. Therefore, the case number must be included. It is not difficult. All that CLF needs to do is to write the case number on the item.
In response to Frank Chapman’s suggestion that a reviewer for The McConnell Group could “have simply written an [sic] FHA number” on plaintiffs submission, Ms. Harrigan stated:
TMG [The McConnell Group] is required to review the transmittal not to complete it. Documents can not [sic] be altered when being reviewed and approved. Therefore, the McConnell Group is not permitted to add information____ It is CLF’s responsibility to submit transmittals and the supplemental documentation in an acceptable manner. If it is not, the deficiencies are made known to CLF and will need to be corrected by CLF.
An internal HUD email indicates that HUD personnel interpreted the dispute over tax transmittals to be the result of plaintiff’s inexperience. The record indicates that The McConnell Group personnel had complained to HUD that the McConnell Group’s compensation, which was contingent on the successful processing of plaintiffs transmittals, had been diminished by a number of delays caused by plaintiff. Plaintiff continued to encounter difficulties with its tax transmittals as late as December 27, 2007, four days before the base period of the contract expired.
Ms. Kajtezovic testified that plaintiff properly prepared the tax transmittals pursuant to the Financial Control Manual. Ms. Kajtezovic also testified that The McConnell Group did not review plaintiffs tax transmittals in the time prescribed by The McConnell Group’s contract with HUD and that a number of tax transmittals were lost after plaintiff had submitted them. Plaintiff contemporaneously argued that The McConnell Group was responsible for delays in processing plaintiffs tax transmittals and that the penalties and interest incurred as a result of processing delays was the responsibility of HUD, rather than of the plaintiff. On December 30, 2007, a day before the base period of the contract expired, Ms. Kajtezovic sent the contracting officer a letter continuing to take issue with what plaintiff perceived to be “the continued lack of contractual performance by HUD and/or The McConnell Group.”
Plaintiff also contemporaneously asserted that HUD’s interpretation of the Financial Control Manual or misunderstanding of facts imposed additional costs on plaintiff other than those associated with tax transmittals. HUD personnel charged plaintiff with refusing to pay penalties assessed as a result of the late payment of utility bills. Plaintiff maintained, however, that the mortgagees, rather than plaintiff, were responsible for utility bills that plaintiff refused to pay. HUD personnel also charged plaintiff with not seeking approval before demanding that lenders pay particular costs, which plaintiff *571 denied. Plaintiff maintained that HUD required plaintiff to create property condition reports for properties that were transferred from a previous contractor’s inventory even though, according to plaintiff, HUD had directed plaintiff not to create property condition reports for such properties. The parties also disagreed over the requirements for appraisals and even disagreed as to whether date stamps were required for particular documents. The relationship between plaintiffs employees and HUD personnel during contract performance is best encapsulated by the following assertion of plaintiffs counsel and current attorney of record to the contracting officer on November 5, 2007:
I have monitored your technical representative’s (Cliff Kellett’s) interactions with CLF over the last two months and frankly I am amazed at Mr. Kellett’s inability to consistently adhere to the terms of the contract and his failure to properly represent your interests. For example, the brouhaha over payment of local taxes and utilities and Mr. Kellett’s failure to correctly comply with the contract and HUD’s regulations on that issue is a major case in point.
The current correspondence from the GTR [government technical representative] is more of the same____ We all want and expect robust interaction between contractor and Government representative(s), but Mr. Kellett is consistently wrong either on the facts or the requirements of the Contract. Additionally, Mr. Kellett immediately goes to DEF CON 5 when he is confused about something, cannot confirm something, or cannot understand how to find the information he needs. For example, just this weekend, Mr. Chapman forwarded me an email trail where Mr. Kellett could not confirm the FHA approved status of an appraiser identified by CLF. His message to Mr. Chapman was in the nature of having identified a man in the harem and we needed to execute the infidel immediately. In actuality it turns out the appraiser was fully approved and the problem was that Mr. Kellett had failed to properly access the HUD database on this point.
Throughout plaintiffs performance of the contract, Mr. Kellett raised deficiencies in plaintiffs Electronic Management System (EMS), which, similar to SAMS, contained data relating to each property in plaintiffs inventory. Under the parties’ contract, plaintiff was required to ensure that its EMS was functional within forty-five days of the effective date of the parties’ contract, which corresponded to May 31, 2007. Mr. Kellett repeatedly informed plaintiff, however, that deficiencies in plaintiffs EMS did not allow HUD to monitor plaintiffs performance of the contract. As late as November 14, 2007, almost seven months after contract performance began, plaintiff continued to acknowledge, and address, deficiencies in plaintiffs EMS.
In addition, HUD continued to identify other deficiencies in plaintiffs performance of the contract during a number of site visits to plaintiffs offices conducted by various HUD personnel, including Mr. Kellett. Although plaintiff received an adequate review from HUD’s May 2007 site visit, HUD’s September 2007 site visit concluded that plaintiffs management of the properties in its inventory was “very poor.” The September 2007 site visit also concluded that plaintiff was “not securing accurate FHA appraisals” and that plaintiff had submitted requests for reimbursement before paying pass-through expenses. Mr. Kellett also found in September 2007 that plaintiff had not obtained timely appraisals of at least one property. Subsequently, HUD’s November 2007 site visit continued to find that plaintiff was not adequately inspecting and cleaning homes in its inventory, that plaintiffs files “were incomplete, lacking crucial information, and did not reflect a well managed effort,” and that plaintiff had “again demonstrated a very high risk in property preservation and protection.” As a result, plaintiffs formal “scorecards,” kept by HUD, consistently indicated that plaintiff had performed at an “unacceptable level,” and HUD issued a number of deficient performance letters to plaintiff. Although plaintiff challenged some of the deficiencies identified by defendant, such as that plaintiff was not seeking approval before demanding that lenders pay particular costs, plaintiff received an overall “unacceptable” *572 score for July, August, September, November, and December 2007, as well as January, February, and March 2008. October 2007 was the only month identified to the court in which plaintiff received an overall score above “unacceptable.”
Inspections
During plaintiffs performance of the contract, HUD also charged that plaintiff was not conducting termite inspections in accordance with Section 5.3.9 of the contract between the parties. Section 5.3.9 of the parties’ contract required plaintiff to obtain, prior to listing, a “termite and Wood Destroying Organism (WDO) inspection” on all homes located in a Termite Probability Zone, which included all of Ohio and part of Michigan, except for vacant lots and homes scheduled to be demolished. Section 5.3.9.1 of the parties’ contract required plaintiff to obtain at closing a “termite/WDO clearance letter,” “if requested by the purchaser” for properties that plaintiff was required to inspect under Section 5.3.9. Section 5.1.8 of the parties’ contract also required plaintiff to comply with all federal, state, and local laws and regulations in performing the contract, which included laws and regulations relating to termite inspections. Under Ohio law, a “[w]ood-destroying insect diagnostic inspection” must be conducted by a licensed inspector. Ohio law defines a “wood-destroying insect diagnostic inspection” as “the examination of a structure at the request of any party involved in a contemplated real estate transaction to determine if wood destroying insects are present in the structure, if there is evidence they either are or have been present in the structure, or the presence of any visible damage to the structure caused by wood-destroying insects.” See Ohio Admin. Code § 901:5-11-01(N)(12).
The record indicates that plaintiff made efforts to try to have its inspectors licensed to conduct termite inspections under Ohio law. Plaintiffs internal correspondence indicates that, before plaintiff began performance of the contract, plaintiff planned to require that its inspectors obtain a termite inspection license within thirty days of employment and that plaintiff planned to use the National Pest Management Association’s form (NPMA-33), which is required under Ohio law, to track WDO inspections. On March 20, 2007, Mr. Gasiorowski informed Frank Chapman that plaintiff needed to run advertisements for inspectors in order to ensure that the inspectors had time to obtain licenses before plaintiff began performance of the contract. The record demonstrates that during contract performance plaintiff reduced the salary of any inspector who had not received a termite inspection license and fired at least one inspector because he was unable to obtain a termite inspection license. The record also indicates that plaintiff obtained a company termite inspection license on October 11,2007.
The proposal that plaintiff submitted in response to the solicitation for the parties’ contract indicated that plaintiff budgeted for an inspection prior to listing as well as an inspection within thirty days of closing if the first inspection was no longer valid. Plaintiffs Property Management Plan indicated that its inspectors would “[rjemove bug infestations” during routine inspections of the properties in plaintiffs inventory. In addition, Plaintiffs Property Management Plan indicated that plaintiff would “subcontract with WDO inspectors to provide inspections and abatement in TPZ’s [Termite Probability Zones] and will provide clearance letters at closing if requested by the purchaser,” which plaintiff reiterated in its Quality Control Plan also submitted in response to the solicitation.
After conducting the September 2007 site visit, Mr. Kellett circulated an internal HUD memorandum indicating that he “confirmed that CLF has not performed any termite inspections as required by [Section] 5.3.9 of the contract” or any form of “termite inspections.” Internal HUD correspondence also indicates that Mr. Kellett reached the conclusion that there had “been no Termite and Wood destroying Organism inspections performed on properties under CLF care” after interacting with plaintiffs employees during HUD’s September 2007 site visit. On October 11, 2007, Mr. Kellett informed plaintiff of his discovery during the September 2007 site visit that no reports relating to WDO inspections were found on plaintiffs EMS. Mr. Kellett also indicated that plaintiff had not *573 sought reimbursement for the cost of termite remediation, to which it was entitled under the parties’ contract, also indicating that plaintiff had not “performed substantive termite inspections as required by [Section] 5.3.9 of the contract.” In response, plaintiff sent Mr. Kellett two letters, the first explaining that its inspectors were licensed, that “CLF inspectors will conduct a termite inspection during each initial Bi-Monthly Inspection,” 22 and the second explaining that “the termite inspections are being added to EMS.” Plaintiff also admitted that it had not incurred any costs in termite remediation: “The requests for reimbursement as a pass through expense or termite treatment or repair with [sic] be forthcoming when any such findings occur.”
After receiving plaintiffs response, Mr. Kellett informed Mr. Goss, on October 18, 2007, that plaintiffs EMS only contained fourteen termite inspection reports. Mr. Kellett asked Mr. Goss for a timeframe in which “the remaining” inspection reports would be uploaded. In response, Frank Chapman sent the following message to Mr. Goss: “Get this done. We are supposed to be licensed.” Mr. Goss then informed Mr. Kellett that plaintiffs “termite specialist” would be uploading termite inspection reports onto plaintiffs EMS and that Mr. Kellett “should start seeing 100’s of these being added per day.” At the same time, Mr. Smith asked plaintiffs internet and technology subcontractor to confirm whether plaintiffs “listing program” automatically published termite inspections to the public listing associated with each property upon being uploaded to plaintiffs EMS.
Although at trial Mr. Goss often claimed to lack recollection of critical events, and appeared to have other instances of convenient memory, Mr. Goss testified that plaintiff was required to upload a large number of termite inspection reports to its EMS. Mr. Goss testified that plaintiffs inspectors uploaded the results of an inspection to plaintiffs EMS by answering questions on a personal digital assistant (PDA) as they conducted inspections. Mr. Goss testified, however, that data entered into a PDA would not always be uploaded to the EMS. With regard to termite inspection reports in particular, Mr. Goss testified that the data being entered by inspectors during initial and routine inspections, during which plaintiff maintains inspectors conducted WDO inspections under Section 5.3.9 of the parties’ contract, was not being “exposed into a separate report” on plaintiffs EMS. Mr. Goss indicated that the data entered by each inspector ultimately had to undergo a “batch process” whereby data “in a raw format” residing on plaintiffs EMS would be entered into relevant fields in a separately generated report. Mr. Goss contemporaneously explained to Mr. Kellett, and likewise testified at trial, that part of the data that was generated on inspectors PDAs was the date on which an inspection was conducted.
On November 1, 2007, after Frank Chapman informed Mr. Goss that “we are jeopardizing our continued HUD existence with items such as BMIs and Termites,” Mr. Goss informed Frank Chapman that the data residing on plaintiffs EMS had been used to generate termite inspection reports in a “batch process.” The record indicates that plaintiffs technology subcontractor performed the “Mass Deployment” of termite inspection reports. Over the span of a few hours, plaintiff generated 8,900 termite inspection reports, although the automatic generation of reports resulted in some “failed surveys.” Similar to Mr. Goss, Alex Papadimoulis, 23 the President of plaintiffs technolo *574 gy subcontractor, testified that the each report was populated from data on plaintiffs EMS. Specifically, Mr. Papadimoulis testified: “The way it was set up there wasn’t ‘a’ report that we could pull data from. There was [sic] properties associated with vendors which had work orders. We generated the reports from work orders.” Mr. Papadimoulis also testified that the data entered into the reports originated from routine inspections. The internal correspondence of plaintiffs technology subcontractor indicates that an electronic folder containing “survey zips that get sent from pda” was associated with the generation of termite inspection reports.
Plaintiff ultimately uploaded the termite inspection reports on its EMS, as well as on a website accessible by the public. As a result, the Ohio Department of Agriculture began an investigation into plaintiffs inspection practices after receiving a call from Robert Richter, an inspector who conducted routine inspections for plaintiff, indicating that plaintiff was not properly conducting termite inspections and that plaintiff was conducting a “physically impossible” number of inspections per day. Ohio Department of Agriculture personnel visited plaintiffs offices on December 11, 2007 and interviewed Frank Chapman, Mr. Smith, and Mr. Goss. The Ohio Department of Agriculture issued a report on January 2, 2008, stating in part:
The Chapman company officials explained the firms [sic] WDI [wood-destroying insect] inspection procedure as follows:
• Inspectors perform an initial inspection on a property and can inspect a home every six months or so depending upon when the property is sold.
• The inspection performed is a general inspection per HUD requirements and is not specifically a WDI inspection.
• The inspectors utilize a PDA to complete HUD inspection forms. When the inspector completes the form on the PDA, the PDA automatically completes a WDI NPMA-33 form. The inspection information is electronically sent to the firm’s office and it is placed on the firm’s website----
The firm’s representatives were asked if the inspectors are performing a WDI inspection per the departments [sic] laws and regulations, i.e., for a real estate transaction. The representatives stated that to date of the inspection they have not performed a WDI inspection for a real estate transaction. They further explained that the firm thought that they were providing a service to potential buyers by placing the NPMA-33 form on their website.
Frank Chapman also provided a letter to the Ohio Department of Agriculture on December 11, 2007, which stated:
The termite inspection forms on our website were generated by inspectors during routine bi-monthly inspections of properties in our inventory____ Our company inspectors were licensed under Ohio law in order to fulfill possible requests by property buyers using FHA financing who wish to request a free inspection. When and if any such inspections are received they will be performed in accordance with State laws and regulations on Form MPMA-33 [sic],
Ohio Department of Agriculture personnel informed plaintiff that it could not provide NPMA-33 forms to the public for inspections that did not constitute a “WDI inspection” under Ohio law. In response, plaintiff removed the NPMA-33 forms from its website.
On the same day that Frank Chapman provided a letter to the Ohio Department of Agriculture, December 11, 2007, Mr. Kellett received a complaint from Mr. Richter. Mr. Richter confirmed at trial that he informed Mr. Kellett of what he had informed the Ohio Department of Agriculture: “Chapman is in *575 putting termite inspections into EMS without inspectors either visiting homes or performing inspections.” Mr. Richter also informed Mr. Kellett that he believed a termite inspection report was generated on plaintiffs EMS when he answered a single question on his PDA relating to whether a termite inspection was required. Mr. Richter also testified that a negative response to the question, or the selection of “N/A,” would generate a termite report that indicated there was no evidence of a termite infestation. The record reflects only that a small number of termite inspection reports generated during plaintiffs performance of the contract indicated that there was “visible evidence of wood destroying insects.” After plaintiff completed performance of the contract, the successor contractors in Michigan and Ohio also noted the absence of evidence of termite infestations in plaintiffs records, and one of plaintiffs successors requested an equitable adjustment after it felt the need to conduct additional WDO inspections.
Routine Inspections
During plaintiffs performance, HUD also charged plaintiff with failing to conduct routine inspections of the properties in plaintiffs inventory, which were required under the parties’ contract. Plaintiffs Property Management Plan obligated plaintiff to conduct routine inspections every fifteen days for the majority of properties in plaintiffs inventory. Routine inspectors were to note whether there were any “health and/or safety hazards” present at a property. Under the parties’ contract, plaintiff also was responsible for any damage resulting from a “failure to inspect or secure [a] property.”
Mr. Kellett raised discrepancies in plaintiffs routine inspection reports in October 2007. On October 15, 2007, Britt Chapman, Frank Chapman’s cousin who also worked for plaintiff, requested that HUD pay for an air-conditioning unit and a heating unit that were stolen from a property located at Perkins Street in Saginaw, Michigan while the final approval of the sale of the property was pending. Although he initially approved the payment for a new air-conditioning unit, Mr. Kellett rescinded his approval after discovering that all of the routine inspection reports associated with the Perkins Street property indicated that the home never contained an air-conditioning unit. Among a number of deficiencies in plaintiffs reporting of inspections, Mr. Kellett noted that, according to plaintiffs EMS, nearly all of the routine inspection reports associated with the Perkins Street property had been replaced. In response, Frank Chapman informed Mr. Kellett that the questions he had raised were “computer training questions” and asserted that HUD personnel had failed to “recognize” the routine inspection reports associated with the property. In reply, Mr. Kellett stated that he did not mean to imply a “failure on CLF’s part,” but that he was seeking clarification as to why almost every routine inspection report associated with the Perkins Street property was replaced on plaintiffs EMS. Although Frank Chapman answered other questions raised by Mr. Kellett, the record does not indicate that Frank Chapman responded to Mr. Kellett’s specific concern regarding routine inspections of the Perkins Street property.
Subsequently, plaintiffs failure to conduct routine inspections became a point of contention between the parties. On October 24, 2007, Mr. Gasiorowski requested that HUD approve the eviction of adverse occupants from a home located at Ferris Street in Detroit, Michigan. After Mr. Kellett approved the eviction, another HUD employee pointed out that plaintiffs EMS only contained routine inspection reports evidencing two routine inspections over a five month period. Although plaintiff committed to conducting routine inspections every fifteen days, the only two documented inspections of the Ferris Street property occurred on May 28, 2007 and October 23, 2007, the day before Mr. Gasiorowski’s request to HUD, respectively. Mr. Kellett informed plaintiffs management: “On the surface, this shows that the home has not been inspected on a routine basis and I am concerned that this has led to adverse occupants.” Frank Chapman admitted that that plaintiffs inspectors had only conducted two routine inspections. Notwithstanding his admission, Frank Chapman maintained that two “exterior inspections” had been conducted by “the lawn crews.” Frank Chapman assured Mr. Kellett that *576 plaintiff had ordered more inspection trucks and informed Mr. Kellett that plaintiff had been required to “keep replacing inner city Detroit inspectors who quit b/c they fear for their lives.” Mr. Kellett informed Frank Chapman that, although he “appreciated the actions being put in place,” he was “extremely disappointed that the actions are the direct result of HUD monitoring.” Mr. Kellett also once again highlighted his observation that plaintiff had not conducted nine scheduled inspections over the course of over four months. In response, Frank Chapman stated: “I believe that the addition of eight additional inspectors is a positive move to address any of your concerns and frankly there is nothing else that can truly be done to combat this criminal act on our side but for adding more inspectors and accounting for turnover due to work conditions.” Mr. Kellett, however, dismissed Frank Chapman’s response as attempting to “sway the discussion” away from the fact that “CLF did not demonstrate preservation and protection of this home for over three months, which led to an adverse occupancy.”
Six days later, on October 30, 2007, Lana Vacha, a HUD official from the local HUD field office, informed plaintiff that she had received a complaint that the windows and doors of the Ferris Street property had been vandalized, that the property had been “open since June,” and that, although maintenance crews had visited the property to mow the lawn, no one had reported the vandalism. Frank Chapman informed Ms. Vacha that “there were not any problems” reported when the property was “last inspected,” which was contradicted by Mr. Gasiorowski’s October 24, 2007 eviction request. On November 2, 2007, after Ms. Vacha reported additional complaints and indicated that she would “drive by” the Ferris Street property, Frank Chapman represented that plaintiffs employees had inspected the property twice since receiving Ms. Vaeha’s initial communication and that an employee would return to the property on the morning of November 3, 2007. On November 4, 2007, Ms. Vacha indicated that she had discovered that the Ferris Street property had burned down after visiting the property on the afternoon of November 3, 2007. In response, Frank Chapman asked Terry Blackley, plaintiffs Vice President of Contract Compliance and Property Maintenance/Preservation during contract performance, to send Ms. Vacha “an email with the inspections and cures” and stated: “THERE WAS NOT A FIRE!” (emphasis in original). Over three months later, on February 12, 2008, Ms. Vacha informed Frank Chapman that she had received a report that “now there really was a fire in this property and it remains unsecured.” After visiting the property, Whitney Dutton, one of plaintiffs quality control employees, confirmed: “Definite fire damage.”
On November 7, 2007, Britt Chapman informed Mr. Gasiorowski that an inspection of a home located at Trenton Street in Detroit, Michigan, which was conducted on November 6, 2007, indicated that the Trenton Street property was a “total loss” as the result of a fire. Britt Chapman noted that the “last Bi Monthly” had been conducted on August 30, 2007 and asked Mr. Gasiorowski to “obtain the report from the Fire Department and access [sic] the situation so we can inform HUD.” Two incident reports in the record indicate that a small fire had occurred at the Trenton Street property on September 19, 2007 and that a second, larger fire had occurred on September 20, 2007. On November 19, 2007, Mr. Gasiorowski requested that HUD approve the demolition of the Trenton Street property. After reviewing plaintiffs request, another HUD employee indicated to Mr. Kellett that plaintiffs EMS did not contain routine inspection reports for the months of July, September, and October 2007. The employee noted that “[s]everal” of the routine inspection reports on plaintiffs system were “duplicates,” without explaining whether the reports were identical or merely had some overlapping information. In addition, the employee noted: “There is an inspection for the month of October but it was for [l]awn maintenance.” The employee also indicated that plaintiff had uploaded an inspection report corresponding to an inspection for November 19, 2007, the same day as Mr. Gasiorowski’s request to HUD, and after Mr. Kellett had told plaintiff that he would not approve the demolition of the Trenton Street property without documentation that *577 plaintiff had properly maintained the home. Mr. Kellett ultimately approved the demolition, but directed plaintiffs management to submit evidence that plaintiff had properly maintained the Trenton Street property.
On the same day that Mr. Gasiorowski had requested that HUD approve the demolition of the Trenton Street property, Frank Chapman sent the following email to Mr. Goss and Mr. Dutton:
THIS IS IMPORTANT. YOU GO THROUGH AND CREATE THE BI MONTLIES [sic] BASED UPON ALL THE EVENTS THAT OCCURRED. LAWN CARE, APPRAISAL, DEREK’S INSPECTIONS.
JOHN MAKE SURE DEREK COMPLETES PCRS 24 AND JUST DOES NOT STOP IN! HE DOES THIS AND IT SCREWS US.
HUD WILL CONTINUE TO DO THIS AND I ABSOLUTELY WILL NOT PAY FOR THESE HOMES. THE PROGRAM WILL HELP AND THE INCREASED WORKERS WILL HELP.
(capitalization in original). Mr. Goss responded the next day by asking whether Frank Chapman wanted Mr. Goss “to add Bi-Monthlies to this particular ease” because HUD had a “thumbprint of all the documents,” noting that “adding them at this point might cause more harm than good.”
Although HUD personnel had indicated that plaintiffs EMS did not contain routine inspection reports for the months of July, September, and October 2007, plaintiff subsequently uploaded hand-written, routine inspection reports for the Trenton Street property, indicating that routine inspections had occurred on September 14, 2007 and October 13, 2007. Athough two fires had occurred at the Trenton Street property on September 19 and September 20, 2007, respectively, the September 28 and October 13, 2007 routine inspection reports were almost identical to the September 14, 2007 routine inspection report. 25 Notwithstanding the occurrence of two fires, all three routine inspection reports indicated that the roof looked “okay,” the windows were secured, the property’s interi- or appearance looked “good,” there were no “major cracks in foundation or exterior walls,” there was no “major structural damage,” there was no evidence of vandalism, and “emergency or preventive maintenance repairs” were not required. In contrast, the November 6, 2007 inspection report, which led Mr. Gasiorowski to make a demolition request, included photographs showing that the entire second story of the Trenton Street property had been destroyed and that the roof was no longer present.
On November 13, 2007, less than two weeks after Ms. Vacha had initially informed Frank Chapman that the Ferris Street property had burned down, Mr. Kellett asked plaintiff to explain why a home located at East Dale Avenue in Muskegon, Michigan had not been listed for sale since May 16, 2007, and that the last time plaintiffs employees had interacted with the property was on September 7, 2007. Frank Chapman asked Mr. Smith to respond to Mr. Kellett’s inquiry, indicating that Mr. Smith should first demonstrate to Frank Chapman that there was no “mortgagee neglect,” that the lawn was cut, and that plaintiffs inspectors had “been out there twice per month.” Upon reviewing the files associated with the East Dale Avenue property, Mr. Smith informed Frank Chapman that a work order was placed for lawn services on June 5, 2013, but was canceled on July 30, 2013, and that there were “only a few irregular BMIs.” Mr. Smith asked Mr. Chapman whether plaintiff had “anything to demonstrate we have done BMIs or cut lawns?” Ater receiving Mr. Smith’s response, Frank Chapman directed his employees to look at invoices to determine when the lawn had been cut and to “fill out BMIs and put them in the system for those dates.” Frank Chapman directed Car *578 rie Sampson, one of plaintiffs property preservation employees, to fill out “BMIs” with the information provided by the lawn care service provider for lawn care visits that occurred in August and September 2007 and to call the lawn care service provider to “make sure a OK.”
Ms. Sampson provided plaintiffs management with routine inspection reports containing data that corresponded to lawn care visits. The routine inspection reports indicated that inspections had occurred in August, September, and October 2007, and represented that an interior inspection of the property had occurred. The routine inspection reports also included specific details relating to the East Dale Avenue property, such as an indication that the property contained a heating unit and a water heater, that there was no structural damage to the property, and that no emergency repairs were necessary. The reports were filled out by hand and contained the same signature. 26 On November 14, 2007, Mr. Smith sent an email addressed to Mr. Kellett to another HUD employee representing that lawn care services and routine inspections had occurred on the same relevant days in August, September, and October, 2007. The record indicates that plaintiff conflated lawn care visits with routine inspections, although lawn care personnel were not directed or trained to conduct interior inspections of the properties in plaintiffs inventory.
Following HUD’s inquiries with respect to the East Dale Avenue and Trenton Street properties, plaintiffs management evidenced concern throughout December 2007 about requesting HUD approval of any action taken at a number of properties because of the lack of documentation that routine inspections had occurred. On December 6, 2007, Mr. Gasiorowski informed Frank Chapman that plaintiffs EMS contained only three routine inspection reports for a property located at Chester Street in Detroit, Michigan, which had been transferred into plaintiffs inventory almost four months before, on August 14, 2007. Although the property was adversely occupied, Mr. Gasiorowski stated that he did not want to ask Mr. Kellett to approve an eviction because Mr. Kellett would “want CLF to pay for it due to Lack of Bi-monthlies.” On December 11, 2007, Mr. Gasiorowski identified two additional properties in Michigan that were adversely occupied, but subject to “inconsistent BMI’s.” Also on December 11, 2007, Mr. Smith indicated to plaintiffs management that he wanted to request that HUD authorize a “price drop” for a fourth property, but was concerned that HUD would ask for evidence of routine inspections, which plaintiff had not conducted since October 2007. In response to these concerns, Frank Chapman indicated that a “new system” would change the number of routine inspection reports associated with a property.
On December 17, 2007, one of plaintiffs employees requested that HUD approve the eviction of an adverse occupant living at a home located at Mount Elliott Avenue in Flint, Michigan. In contrast to the East Dale Avenue and Trenton Street properties, Plaintiffs EMS indicated that routine inspections of the Mount Elliott Avenue property had occurred at regular intervals in October, November, and December 2007. After discovering that “[fjour of the alleged BMI’s were lacking photo evidence,” however, Mr. Kellett reviewed the routine inspection reports associated with the Mount Elliot Avenue property and discovered that, according to the properties of the “.pdf’ files associated with each report, the routine inspection reports representing that inspections had been conducted on October 25, November 15, and November 30, 2007 were all created within fifteen minutes of plaintiffs December 17, 2007 eviction request. 27 Mr. Goss had previ *579 ously informed Mr. Kellett that routine inspection reports were generally uploaded to plaintiff’s EMS within twenty-four hours of an inspection. Mr. Kellett informed other HUD personnel that his findings, therefore, indicated “that the EMS system was modified to show a more favorable inspection cycle based on the previous denials to pay for the eviction when CLF [Chapman Law Firm, LPA] is not inspecting our homes as required.” Specifically, Mr. Kellett stated in part:
My review shows that many of the alleged inspection documents on the EMS were actually created the morning of the Adverse Occupancy request for pass through from CLF. This indicates to me that the EMS system was modified to show a more favorable inspection cycle based on the previous denials to pay for the eviction when CLF is not inspecting our homes as required.
Plaintiff’s internal correspondence supported Mr. Kellett’s conclusion, indicating that, as late as January 14, 2008, plaintiffs employees recognized that plaintiff had not met its obligation to conduct routine inspections of a number of properties in plaintiffs inventory.
On December 20, 2007, Mr. Kellett informed plaintiffs management that he had spoken to Kelly Few, one of plaintiffs human resources employees, to inquire as to how many inspectors plaintiff had employed. According to Mr. Kellett, Ms. New represented that plaintiff employed twenty-eight inspectors. Although he admitted that he never verified the number of inspectors that plaintiff employed following his conversation with Ms. Few, Mr. Kellett contemporaneously asserted that, given the size of plaintiffs inventory, there was “no way” that plaintiff could conduct routine inspections of properties at the frequency required by the parties’ contract with twenty-eight inspectors. Specifically, Mr. Kellett stated: “The evidence of having only 28 inspectors demonstrates a lack of manpower to support the scope of work required.” In response to Mr. Kellett’s allegations, Frank Chapman informed Mr. Kellett that he was “wrong and that was not what Kelly told you.” Frank Chapman represented that plaintiff had employed thirty-six inspectors. Mr. Goss had informed Frank Chapman that Ms. New had represented that plaintiff employed twenty-seven inspectors a day before Frank Chapman made this representation.
On January 17, 2008, HUD personnel asked plaintiffs management to address an “adverse occupancy situation” at the same Chester Street property in Detroit, Michigan that Mr. Gasiorowski had identified as adversely occupied on December 6, 2007. Without indicating that he had known the property was adversely occupied for over a month, Mr. Gasiorowski indicated to HUD personnel that he had “£j]ust visited” the property to confirm that it was adversely occupied, noting that the home “was reported ‘occupied’ on the last BMI.” On January 25, 2008, Mr. Kellett authorized plaintiff to proceed with the eviction of the adverse occupant, but stated that he would not approve the reimbursement of the expenses plaintiff incurred in the eviction process because plaintiff was “liable for damages to all acquired properties due to failure to inspect or secure____” Mr. Kellett explained that the “last valid inspection prior to the adverse occupancy appears to be October 17th,” corresponding to the three routine inspections that Mr. Gasiorowski had internally identified on December 6, 2007. Mr. Kellett noted that after October 17, 2007, there were “four questionable inspections that were all created on January 9th, but posted with prior dates resembling a more responsive inspection cycle.” Similar to his findings with respect to the Mount Elliott Avenue property in Flint, Michigan, Mr. Kellett noted that, although the routine inspection reports associated with the Chester Street property generally included photographs, the reports corresponding to November and December 2007 did not contain photographic evidence that routine inspections had occurred.
After realizing that Mr. Kellett was reviewing the properties of the “.pdf’ files as *580 sociated with each routine inspection report to determine when the file was created, Frank Chapman sent the following email to Mr. Goss: “I am working very hard to keep everyone employed and then this happens. This is bad. You told everyone that he could not see that date. What happened?” Mr. Goss informed plaintiffs technology subcontractor that HUD had “figured out that they can look at the Metadata of the documents to get the created time and date,” noting that “[t]his is a huge problem,” and asking whether the subcontractor had “any ideas of what we can do to suppress that information.” Mr. Goss informed Frank Chapman that the subcontractor could alter the creation dates for all of the “.pdf’ files associated with plaintiffs routine inspection reports, as well as the creation dates of the “.pdf’ files that plaintiff created in the future. In response to Mr. Goss’ proposal, Frank Chapman directed Mr. Goss to “[w]ipe them ALL! ASAP.” (emphasis in original). Mr. Goss informed plaintiffs technology subcontractor to “[pjroceed with all,” to which the subcontractor replied: “we’re on it! Won’t get to it until Monday though ... I assume GTR isn’t poking around over the weekend?”
On February 4, 2008, after discovering that plaintiff had altered the creation dates of the “.pdf’ files associated with routine inspection reports, Mr. Kellett sent Frank Chapman the following email:
Frank, HUD requires real-time access to all property related information — per our contract. I’ve discussed with you and John Goss in the past about the validity of the EMS documents, to include the requirement for date stamping on EMS data. One check and balance method that I have had to employ was the ereation/modification date of your EMS documents. I clearly shared that with you on January 25th, on questionable BMI data. Seven days later, I find all documents I review on the EMS (including previously viewed) have a creation date of 1/1/2000. Has CLF changed the creation dates of documents in the EMS?
Frank Chapman forwarded Mr. Kellett’s email to plaintiffs current attorney of record, 28 explaining that “Kellett looked up a [sic] adobe pdf creation date and called us out,” and that plaintiff had “wiped all pdf creation dates to stop him from this practice in the future.” Frank Chapman informed plaintiffs counsel that he wanted to respond to Mr. Kellett’s inquiry by stating: “ T don’t know what you are talking about.’” In a separate email, Frank Chapman proposed informing Mr. Kellett that he was “confused” and that “[t]he dates in EMS are true and accurate dates.” In addition, Frank Chapman proposed the following:
As we have demonstrated on numerous occasions you have previously misrepresented dates and the character of inspections to manipulate the scoring of our contract and we will not tolerate your self serving behavior. In fact, you have without a doubt ignored the GPS [global positioning system] 29 and date stamps and fabricated lies which then manufactured to equate to failing grades. CLF will not tolerate this behavior.
Notwithstanding the tone of Frank Chapman’s proposed response, Frank Chapman also informed plaintiffs counsel:
I don’t think elaborating is such a good idea b/c John [Goss] and his people put in inspections which were not in EMS and the creation date of the pdf was opened which did not match our EMS date. John is an idiot! Anyway, getting into the specifics only makes us look bad.
In response, plaintiffs counsel stated:
OK I did not realize that the substance was problematic. I thought John was keeping things straight. By all means if the specifics are not good do not include them. *581 Related to this, I have been making assumptions about the future claims litigation based on the strength of the data in the EMS. Are we going to have a problem with that evidence?
The record does not reflect that Frank Chapman responded to counsel’s question. After discussing potential responses with plaintiffs counsel, Frank Chapman ultimately informed Mr. Kellett on February 4, 2008 that the creation dates of the “.pdf’ files associated with routine inspections had been changed “in order to avoid any possible confusion on the part of HUD employees” and that the creation dates of the “.pdf’ files were “not accurate.”
Concern that plaintiff was not adequately performing the contract ultimately led HUD to not exercise the first option year to the parties’ contract. On December 28, 2007, soon after Mr. Kellett had informed other HUD personnel of his suspicion that plaintiff had modified its routine inspection reports “to show a more favorable inspection cycle,” HUD notified plaintiff of its decision not to exercise the first option year to the parties’ contract. After plaintiffs contract expired by its own terms on December 31, 2007, plaintiff performed under the “Transition Out” phase of the parties’ contract until May 14, 2008. Internal HUD correspondence indicates that HUD personnel decided not to exercise the option year to the parties’ contract on or near December 20, 2007. A memorandum written by Cheryl Walker, the Director of the Real Estate Owned Division at the Philadelphia Homeownership Center, which handled Michigan and Ohio, stated that an exercise of the first option year to the parties’ contract “indicates unacceptable levels of risk to the Department due to various aspects of the contract management that the contractor is unable and/or unwilling to successfully perform.” Ms. Walker also stated:
The risks to HUD posed by the non-compliance issues include but are not limited to: financial loss from improperly valued appraisals, financial loss from lower prices for poorly maintained properties, improper payment of property related expenses, exposure to increased expenses from evictions due to non-secured properties, local government concerns over unsightly properties, increased administrative burden to respond to complaints, and potential liens against title for unpaid vendor property maintenance services.
Although Ms. Walker recognized that “other contractors have needed improvement in the past after the first six months of performance,” she maintained that “CLF’s very extensive performance deficiencies are well documented____”
Ms. Walker also identified four “layers of risk” associated with exercising the option year to the parties’ contract: plaintiffs deficient performance in managing the properties in its inventory, plaintiffs “less than responsible business practices” relating to its interaction with outside vendors and its payment of fees and taxes, the size and importance of the area that plaintiff was managing, and “an emerging pattern of CLF false or questionable reporting.” With respect to the fourth “layer of risk,” Ms. Walker stated, in part:
HUD suspicions about a CLF report as to a sudden increase of 8900 termite inspections shortly after informing HUD that its staff was in training for inspection certifications, were validated when CLF was only able to produce three staff termite inspection licenses and no signed inspection forms and when 7 of 9 homes visited by HUD did not have an inspector sign in on days CLF reported that inspections occurred____ [Ajfter HUD ascertained that a home for which inspection reports had never been filed was being occupied illegally, CLF suddenly found reports of inspections that had not been previously entered.
By letter dated April 8, 2009, following the end of the parties’ relationship, plaintiff sent the contracting officer a claim certified under the Contract Disputes Act, 41 U.S.C. § 605 (e)(1), alleging that HUD had effected a number of constructive changes to the parties’ contract, that HUD had stolen plaintiffs trade secrets in allowing third parties to access plaintiffs EMS, 30 and that HUD had *582 failed to exercise the first option year to the parties’ contract in bad faith. With respect to plaintiffs allegation regarding constructive changes, plaintiff claimed entitlement to compensation for: (1) defendant’s failure to provide plaintiff with SAMS access for the first ninety days of contract performance, (2) homes that were assigned to plaintiff but credited to another contractor, (3) homes that were assigned to plaintiff but transferred to another contractor, (4) modifications to HUD’s Financial Control Manual, (5) claim preparation costs, (6) a modification to the parties’ contract requiring homes to be held off the market for a period of time, (7) unpaid management and marketing incentive fees resulting from HUD’s imposition of additional requirements, and (8) reimbursement of recordation fees imposed by local governments. The contracting officer did not issue a final decision on plaintiff’s April 8, 2009 claim.
Litigation
Plaintiff ultimately filed its complaint in the above-captioned ease in this court on December 28, 2009. After adding and subsequently removing additional claims, plaintiff filed its Third Amended Complaint on January 25, 2013. Plaintiffs Third Amended Complaint asserts four claims against defendant, which miiTor plaintiffs stop work order claims and plaintiffs April 8, 2009 submission to the contracting officer, although plaintiff did withdraw the claim of the alleged theft of plaintiffs trade secrets claim on July 31, 2013.
While the above-captioned ease was pending, HUD notified Frank Chapman on February 23, 2010, that he had been proposed for debarment because he “participated in, had knowledge of, or reason to know of the improper conduct of CLF,” and that plaintiffs conduct was imputable to him “pursuant to 2 C.F.R. § 180.630 (b),” which allows for the imputation of the “fraudulent, criminal, or other improper conduct of any organization to an individual.” See 2 C.F.R. § 180.630 (b) (2010). The proposed debarment alleged that plaintiff had failed to obtain WDO inspections as required by the parties’ contract, noting that deficiencies in plaintiffs performance of the contract were imputable to Frank Chapman. The proposed debarment also charged that plaintiff had produced over 500 inspection reports that indicated plaintiff had used a licensed inspector to conduct each inspection when the inspections were not conducted by a licensed inspector. In addition, the proposed debarment highlighted that a number of inspectors allegedly conducted over thirty WDO inspections in a single day in multiple towns throughout the state of Ohio. The proposed debarment also highlighted that, although plaintiff received a commission for marketing the properties in its inventory, plaintiff was listed as the inspecting company on the NPMA-33 forms it used to track WDO inspections, which stated that the inspecting company had no financial interest in the property being inspected. The proposed debarment further alleged that plaintiff failed to properly obtain appraisals and that plaintiff failed to maintain the homes in its inventory. In addition, the proposed debarment alleged that plaintiff submitted a request for equitable adjustment relating to the first stop work order period for expenses “that were clearly outside the scope of expenses needed to remain ready to perform the Contract.”
On June 24, 2010, after HUD had initiated debarment proceedings against Frank Chapman, defendant amended its Answer to assert a counterclaim in this court against plaintiff under the False Claims Act, as well as an affirmative defense under the Special Plea in Fraud statute. Defendant originally alleged that plaintiff had conducted WDO inspections with unlicensed inspectors and that plaintiff had not conducted WDO inspections as represented to HUD. On January 18, 2012, the court denied defendant’s motion for partial summary judgment on the issue of whether Section 5.3.9 of the parties’ contract and Ohio law required plaintiff to use licensed inspectors to conduct WDO inspections. The court accepted plaintiff’s interpretation of Section 5.3.9 of the contract, which the court noted was consistent with the Ohio Department of Agriculture's apparent interpretation of Ohio law. Based on the *583 court’s decision, and the lack of persuasive evidence submitted by defendant in support of its motion for partial summary judgment, the court dismissed defendant’s allegation that plaintiff had conducted unlicensed inspections and struck the relevant portions of defendant’s Answer. At a status conference subsequent to the decision, the court and the parties agreed on a discovery schedule. The court subsequently set a trial date for September 10, 2012.
On August 17, 2012, the court was informed, for the first time, of the numerous difficulties the parties had encountered related to discovery. 31 The difficulties arose when defendant moved to reopen discovery only after a second attorney was assigned to the above-captioned case. Although discovery was scheduled to close on July 11, 2012, defendant represented that plaintiff had produced over five million pages of documents to defendant on July 6, 2012. Defendant maintained that plaintiffs July 6, 2012 production was plaintiffs “first and only document production” in response to a discovery request that defendant had issued on April 10, 2012.
Plaintiff maintained that it had adequately responded to defendant’s April 10, 2012 discovery request because it had sent a response to defendant on May 25, 2012, indicating that plaintiff had previously produced responsive documents to defendant in the bid protest proceedings described above. In addition, plaintiff noted that it had informed defendant that “CLF does not have access to the requested information as it is contained on a third party server access to which is controlled by John Goss.” Plaintiff represented that “Mr. Goss has been asked to provide access to said database but to date Mr. Goss has not responded to CLF’s requests.” In addition, plaintiff explained that it had belatedly produced documents to defendant on July 6, 2012 because plaintiffs counsel had determined after the deposition of Frank Chapman on June 7, 2012 “that a number of responsive documents including electronic mails received or generated by Mr. Chapman resided on his personal laptop” and that Mr. Chapman “had an electronic back up of his companies [sic] Electronic Monitoring [sic] System (‘EMS’).”
Defendant offered no explanation for its counsel of record’s failure to timely raise what defendant perceived to be deficiencies in plaintiffs May 25, 2012 response to defendant’s April 10, 2012 discovery request. In addition, during the deposition of Frank Chapman, plaintiffs counsel repeatedly stated that plaintiff would only produce documents in its possession, which did not include internal correspondence that Frank Chapman had not received, plaintiffs employment records, and documents relating to plaintiffs routine inspections. Specifically, plaintiffs counsel directed defendant’s counsel to obtain responsive documents from Mr. Goss, who was no longer associated with plaintiff. At his deposition, Mr. Goss informed defendant’s counsel that he did not have access to any documents that were responsive to defendant’s discovery request because he had overwritten the information contained on hard drives he had retained after ending his employment relationship with plaintiff. Mr. Goss also indicated that he had confirmed with the company that maintained plaintiffs email server that the server had been dismantled. It became clear, however, that defendant’s discovery request had not been fully complied with by plaintiff, well in advance of August 17, 2012, the first time the court was made aware of the inadequate production.
Despite defendant’s failure to timely challenge plaintiffs nonresponsive conduct during discovery, the court stayed the September 10, 2012 trial date and ordered plaintiff to produce missing documents that defendant had identified. On October 1, 2012, plaintiff produced additional emails from Frank Chapman’s personal laptop computer. On October 15, 2012 and November 9, 2012 respectively, plaintiff produced documents relating to vehicle leases and a line of credit that plaintiff had obtained. Plaintiff admitted that its May 25, 2012 response to defen *584 dant’s discovery request was “inadequate because the Plaintiff did not consider the possibility of using the extensive electronic mail messages resident on Mr. Chapman’s laptop,” but plaintiff continued to maintain that it did not have access to additional, responsive documents following its latest production of documents. Plaintiffs counsel revealed during a status conference on November 26, 2012, however, that he possessed emails from Mr. Chapman’s personal laptop computer, of which was still in Mr. Chapman’s possession, which he had not produced to defendant because he did not believe the emails were responsive to defendant’s discovery request.
Plaintiffs counsel subsequently informed the court that he had again reviewed the additional emails and had “determined, in good faith, that some of the electronic mails contain relevant, responsive information,” which he produced to defendant. Plaintiffs counsel also inadvertently, without having reviewed them, according to plaintiffs counsel, conveyed to and produced to defendant 500 pages of invoices from plaintiffs subcontractors, three handheld devices and a hard drive from a separate computer that Frank Chapman owned prior to 2007. On December 14, 2012, plaintiffs counsel and Frank Chapman, as representative of plaintiff, once again confirmed in affidavits submitted to the court that, other than the files contained on plaintiffs email server, which plaintiff alleges was destroyed by the server’s custodian, neither plaintiffs counsel nor Frank Chapman were “aware of any documents or material in whatever form” in either plaintiffs counsel’s or Frank Chapman’s possession “that relate to the award or performance of the Contract at issue here that have not been disclosed to the Government.”
Notwithstanding the dismantling of plaintiffs email server, and plaintiffs continual, rolling production of documents responsive to defendant’s April 10, 2012 discovery request, plaintiffs counsel represented to the court that he had verbally issued a litigation hold to Frank Chapman during a conversation that took place after plaintiff finished performance of the contract and the transition out in the summer or late spring of 2008. At the court’s direction, plaintiffs counsel subsequently elaborated, stating that he “repeatedly discussed with Frank Chapman the need to maintain the Plaintiffs records” in relation to the demands of plaintiffs counsel for information relating to the bid protests discussed above. Plaintiffs counsel asserted that “specific discussions of the need to maintain records concerning CLF’s performance would have occurred in April 2007, November 2007, and May 2008” during meetings between Frank Chapman and plaintiffs counsel. In response to the court’s inquiry as to whether plaintiffs counsel had issued a litigation hold to any of plaintiffs other employees, plaintiffs counsel stated: “I understood that Mr. Chapman controlled all of that information, so I believed that communicating with him was sufficient.” Plaintiffs counsel admitted he had never issued any written litigation hold to plaintiff, Frank Chapman, or any other Chapman Law Firm, LPA employees.
After receiving plaintiffs belated production of documents, defendant filed a motion for reconsideration of the court’s January 18, 2012 decision dismissing defendant’s allegation that plaintiff conducted unlicensed inspections. Defendant maintained that the documents produced by plaintiff demonstrated that plaintiffs “contemporaneous interpretation of the contract language was consistent with the Government’s interpretation, and that both parties interpreted the contract to require Ohio State licensed inspectors to conduct the WDO inspections under Section 5.3.9 of the contract.” Defendant also asserted that the court “did not review or consider any extrinsic evidence” regarding plaintiffs contemporaneous interpretation of the contract in applying the doctrine of contra proferentem against defendant. Notwithstanding the fact that “defendant did not present the court with any evidence to contradict plaintiffs articulations of its contemporaneous intent” in support of its earlier motion for partial summary judgment, and that plaintiff had presented evidence of its contemporaneous intent in opposition to defendant’s motion for partial summary judgment, the court granted defendant’s motion for reconsideration on December 21, 2012 because defendant did not have “a full oppor *585 tunity to present evidence of plaintiffs contemporaneous intent” as a result of plaintiffs deficient responses to defendant’s requests for production. The court concluded that defendant should be given an opportunity to present evidence relating to plaintiffs contemporaneous intent at trial.
DISCUSSION
I. Special Plea in Fraud
Due to the potential forfeiture of plaintiffs claims under the Special Plea in Fraud statute, the court addresses defendant’s counterclaim and affirmative defenses before addressing plaintiffs stop work order, constructive change, and lost profits/bad faith claims. Defendant maintains that plaintiff “engaged in a series of fraudulent schemes” to deceive HUD into thinking that plaintiff had performed WDO inspections and routine inspections as requii’ed by the parties’ contract. Defendant admits that plaintiff performed a number of inspections, but alleges that plaintiff failed to perform “nearly all” of the WDO inspections it was required to conduct or “countless” routine inspections. According to defendant, plaintiff generated a large number of termite inspection reports for homes “that never received a termite inspection, much less a termite inspection on the dates and by the inspectors listed in the reports.” Defendant also asserts that plaintiff generated “false” routine inspection reports and modified the creation dates of the “.pdf’ files associated with the routine inspection reports after HUD discovered evidence of their falsification.
Although plaintiff was paid a fixed property management fee for providing services to each home in its inventory, defendant maintains that after plaintiff had “falsified” inspection reports, that invoices plaintiff submitted to HUD “contained the implicit representation that CLF had performed the property management work for assigned homes as called for by the contract.” Specifically, defendant highlights that the contract provided that defendant would pay plaintiff “full compensation for all work required, performed and accepted under this contract____” Plaintiff received a fixed fee for meeting a number of requirements under the contract, including: (1) obtaining a WDO inspection for properties in Termite Probability Zones prior to listing, (2) providing a “current termite/WDO clearance letter at closing if requested by the purchaser” of a property in a Termite Probability Zone, and (3) conducting routine inspections pursuant to plaintiff’s Property Management Plan, in which plaintiff indicated that it would conduct routine inspections of most properties in its inventory every fifteen days. In addition, although HUD was obligated to reimburse plaintiff for approved evictions and demolitions, the contract provided that plaintiff was “liable for damages to all acquired properties due to failure to inspect or secure [a] property.” Defendant asserts that, “[ejlearly, payment was contingent on performance of the contract work” that plaintiff failed to perform.
The Special Plea in Fraud statute provides:
A claim against the United States shall be forfeited to the United States by any person who corruptly practices or attempts to practice any fraud against the United States in the proof, statement, establishment, or allowance thereof.
In such cases the United States Court of Federal Claims shall specifically find such fraud or attempt and render judgment of forfeiture.
28 U.S.C. § 2514 . Under the statute, “the government must ‘establish by clear and convincing evidence that the contractor knew that its submitted claims were false, and that it intended to defraud the government by submitting those claims.’ ” Daewoo Eng’g & Constr. Co. v. United States, 557 F.3d 1332, 1341 (Fed.Cir.) (quoting Commercial Contractors, Inc. v. United States, 154 F.3d 1357, 1362 (Fed.Cir.), reh’g denied (Fed.Cir.1998)), reh’g and reh’g en banc denied (Fed.Cir.), cert. denied, 558 U.S. 990 , 130 S.Ct. 490 , 175 L.Ed.2d 346 (2009); accord Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374, 1379 (Fed.Cir.2001). Mere negligence, inconsistency, or discrepancies are not actionable under the Special Plea in Fraud statute. See Daewoo Eng’g & Constr. Co. v. United States, 73 Fed.Cl. 547, 584 (2006), aff'd, 557 *586 F.3d 1332 (Fed.Cir.), reh’g and reh’g en banc denied (Fed.Cir.), cert. denied, 558 U.S. 990 , 130 S.Ct. 490 , 175 L.Ed.2d 346 (2009); Veridyne Corp. v. United States, 105 Fed.Cl. 769, 801 (2012); Grand Acadian, Inc. v. United States, 105 Fed.Cl. 447, 458 (“ ‘Proof of negligence or ineptitude does not meet the standard of clear and convincing evidence; rather, “[a]n intent to deceive the Government must be proved.” ’ ” (bracket in original) (quoting Alcatec, LLC v. United States, 100 Fed.Cl. 502, 517 (2011) (quoting Miller v. United States, 213 Ct.Cl. 59, 68 , 550 F.2d 17, 22 (1977)), aff'd, 471 Fed.Appx. 899 (Fed.Cir. 2012))), appeal dismissed (Fed.Cir.2012). The United States Court of Appeals for the Federal Circuit has described the clear and convincing evidence standard as follows:
“A requirement of proof by clear and convincing evidence imposes a heavier burden upon a litigant than that imposed by requiring proof by preponderant evidence but a somewhat lighter burden than that imposed by requiring proof beyond a reasonable doubt. Clear and convincing evidence has been described as evidence which produces in the mind of the trier of fact an abiding conviction that the truth of a factual contention is ‘highly probable.’”
Am-Pro Prot. Agency, Inc. v. United States, 281 F.3d 1234, 1240 (Fed.Cir.2002) (quoting Price v. Symsek, 988 F.2d 1187, 1191 (Fed.Cir.1993)) (emphasis in original); see also Hernandez, Kroone & Assocs., Inc. v. United States, 110 Fed.Cl. 496, 525 (2013) (citing Am-Pro Prot. Agency, Inc. v. United States, 281 F.3d at 1239-40 (other citation omitted)).
“The court may ... consider circumstantial evidence in making its determination.” Alcatec, LLC v. United States, 100 Fed.Cl. at 517 (citing Kamen Soap Prods. Co. v. United States, 129 Ct.Cl. 619, 642 , 124 F.Supp. 608 , 620 (1954)). With respect to the court’s analysis of circumstantial evidence to demonstrate clear and convincing evidence of fraud, the United States Court of Claims explained:
About the only way a just conclusion can be reached is by placing the questioned documents and statements alongside well-known and established facts____ One cause produces an effect, and that effect in turn becomes a cause.... It is difficult, therefore, to make up a story that is not part of this one continuous design____ [A] made-up story will not fit into the scheme of events, because it is not a part of it. It will not, therefore, stand close examination. One made-up story calls for another and the last fabrication will not tally with the next fact.
Kamen Soap Prods. Co. v. United States, 129 Ct.Cl. at 642 , 124 F.Supp. at 620 .
Once fraud is established, “the court has no discretion to turn a blind eye to an attempt, whether successful or not, to commit fraud in the statement of a claim against the United States.” Am. Heritage Bancorp v. United States, 61 Fed.Cl. 376, 385 (2004). Forfeiture under the Special Plea in Fraud statute “carnes no monetary penalties other than the forfeiture itself.” Daewoo Eng’g & Constr. Co. v. United States, 73 Fed.Cl. at 584 . Although the Special Plea in Fraud Statute does not require the court to render a judgment of forfeiture when a contractor practices fraud against the government “in some other unrelated transaction,” when a contractor commits fraud “in regard to the very contract upon which the suit is brought, this court does not have the right to divide the contract and allow recovery on part of it.” Little v. United States, 138 Ct.Cl. 773, 778 , 152 F.Supp. 84, 88 (1957). The claims that a contractor asserts in court, therefore, may be forfeited as long as the fraudulent conduct that serves as the basis for the forfeiture is related to the contract from which the claims are derived. See Daff v. United States, 31 Fed.Cl. 682, 697 (1994) (“Although ... fraud does not have to occur in the court proceeding itself, it plainly has to be relevant to the present assertion of a claim in court, arising out of the same transaction or contract.” (citing Little v. United States, 138 Ct.Cl. at 778 , 152 F.Supp. at 87-88 )), aff 'd, 78 F.3d 1566 (Fed.Cir.1996); see also Veridyne Corp. v. United States, 105 Fed.Cl. at 806 (“A plaintiffs claim will be forfeited under 28 U.S.C. § 2514 even if only part of its claims is [sic] false.” (citing Daewoo Eng’g & Constr. Co. v. United States, 557 F.3d at 1341 )); Barren Island Marina, Inc. v. United States, 44 Fed.Cl. 252, 256 (1999) (“Based on the Little case, there is no *587 question that all claims arising under the contract are subject to forfeiture.”), appeal dismissed, 54 Fed.Appx. 329 (Fed.Cir.), and recons, granted and order vacated by, 57 Fed.Appx. 427 (Fed.Cir.2003). A fraudulent invoice submitted to a contracting officer during the performance of the same contract that is the subject of a contractor’s claims, therefore, may result in the forfeiture of the contractor’s claims under the Special Plea in Fraud statute. See Tyger Constr. Co. v. United States, 28 Fed.Cl. 35, 61 (1993) (“The statute does not specify where such claims must be presented in order to invoke the statute. Claims for payment before a contracting officer are as subject to ‘proof, statement, establishment, or allowance’ as are claims before the Court of Federal Claims.”); see also Jerman v. United States, 96 Ct.Cl. 540, 552 (1942).
Although discussing liability under the False Claims Act, which does not have the intent requirement of the Special Plea in Fraud statute, a number of decisions in the United States Court of Federal Claims have reasoned that “an implied representation on an invoice that work has been completed pursuant to the contract requirements may constitute a false claim for payment.” See BMY Combat Sys. Div. of Harsco Carp. v. United States, 38 Fed.Cl. 109, 125 (1997) (citing Ab-Tech Constr., Inc. v. United States, 31 Fed.Cl. 429, 433-34 (1994) (“The withholding of such information — information critical to the decision to pay — is the essence of a false claim.”), aff'd, 57 F.3d 1084 (Fed.Cir.1995); Daff v. United States, 31 Fed.Cl. at 695). But see United States ex. rel. Stewart & Stevenson Servs., Inc., 305 F.Supp.2d 694, 700 (S.D.Tex.2004) (noting that an invoice must indicate “that the contractor has disclosed deficiencies or nonconformance areas” when, in reality, “the contractor submits the invoice without disclosing a material deficiency or area of nonconformance” in order for an invoice with an implied representation to serve as the basis for liability under the False Claims Act). Similarly, under the Special Plea in Fraud statute, an implied representation on an invoice that work has been completed pursuant to a contract may demonstrate fraud, necessitating the forfeiture of claims arising from the same contract. Cf. Jerman v. United States, 96 Ct.Cl. at 552 (holding that the submission of a fraudulent invoice constituted a claim under an earlier version of the Special Plea in Fraud statute); Daff v. United States, 31 Fed.Cl. at 697 (finding that the submission of invoices for work that did not comply with the terms of the parties’ contract constituted clear and convincing evidence that the “requests for payment were made with an intent to deceive the government”). Because plaintiff submitted invoices to defendant asserting entitlement to payment for work performed in the management of the homes in plaintiffs inventory, which impliedly represented that plaintiff had performed the work required by the parties’ contract, the claims that plaintiff asserts before the court, which arise from the same contract, should be forfeited under the Special Plea in Fraud statute if the court finds clear and convincing evidence that plaintiff intended to deceive HUD into thinking that plaintiff had performed the work entitling plaintiff to payment under the parties’ contract. See 28 U.S.C. § 2514 .
A. WDO Inspections
Of the multiple “fraudulent schemes” that defendant alleges were perpetrated by plaintiff, defendant focuses on its allegation that plaintiff failed to conduct WDO inspections with licensed inspectors, which, according to defendant, was required by the parties’ contract and the routine inspections, discussed below. Section 5.3.9 of the parties’ contract required plaintiff to obtain a “termite and Wood Destroying Organisms (WDO) inspection” of all properties located in a Termite Probability Zone prior to listing, except for vacant lots and homes scheduled to be demolished. Section 5.3.9.1 of the parties’ contract required plaintiff, “if requested by the purchaser,” to obtain a “termite/WDO clearance letter” at closing for properties that plaintiff was required to inspect under Section 5.3.9. Although the parties’ contract does not state whether plaintiff was required to employ licensed inspectors to conduct WDO inspections, Section 5.1.8 of the parties’ contract required plaintiff to comply with all federal, state, and local laws and regulations in its performance of the contract. Under Ohio *588 law, a “wood-destroying insect diagnostic inspection” must be conducted by a licensed inspector. See Ohio Rev.Code § 921.01(F), (K) (2007); Ohio Rev.Code § 921.06(A)(1)(e); Ohio Rev.Code § 921.24(B) (2007); Ohio Admin. Code 901 :6-11-08 (2007)(A)(4). A “wood-destroying insect diagnostic inspection” is defined as “the examination of a structure at the request of any party involved in a contemplated real estate transaction to determine if wood destroying insects are present in the structure, if there is evidence they either are or have been present in the structure, or the presence of any visible damage to the structure caused by wood-destroying insects and the generation of a written report of the findings of the examination.” See Ohio Admin. Code § 901:5 — 11— 01(N)(12) (2007).
Defendant contends that plaintiff was required to employ licensed inspectors to conduct WDO inspections because “[t]he termite inspections required under CLF’s management and marketing contract were requested by a party (HUD) involved in a ‘contemplated real estate transaction.’ ” Defendant highlights that the purpose of the parties’ contract was to “sell the homes that CLF was assigned, with HUD as the ‘seller’ of each assigned property and CLF acting as HUD’s agent----” Defendant also emphasizes that Ohio law required plaintiff to employ licensed inspectors to conduct “ ‘contemplated real estate transactions,’ not only real estate transactions in which there is an identified buyer,” indicating that plaintiff was required to employ licensed inspectors to conduct WDO inspections before a home was listed for sale, (emphasis in original). In addition, defendant contends that plaintiffs management contemporaneously interpreted the contract to require plaintiff to employ licensed inspectors. Defendant notes that Marla Webb, who defendant characterizes as “the primary author of the CLF proposal accepted by HUD,” 32 testified that she intended for plaintiff to use licensed inspectors to conduct WDO inspections. Defendant also points out that plaintiffs internal correspondence indicates that plaintiff made efforts to ensure that its inspectors were licensed.
In response, plaintiff contends that it was not required to employ licensed inspectors to conduct WDO inspections of the Ohio properties under Section 5.3.9 of the parties’ contract, which occurred prior to listing a property for sale, because “there is no real estate transaction in Ohio until there is a buyer and a seller.” Plaintiff concedes that it was required to employ licensed inspectors to conduct inspections under Section 5.3.9.1 of the parties’ contract, which were performed at the request of a buyer or lender, but maintains that WDO inspections conducted under Section 5.3.9.1 were distinct from WDO inspections conducted under Section 5.3.9. Plaintiff maintains that its obligation under Section 5.3.9 of the parties’ contract was satisfied when plaintiffs inspectors looked “for the presence of WDOs” during the initial and routine inspections of each property, as well as when each property was appraised. According to plaintiff, a general inspection or appraisal of a property qualified as a “termite and WDO inspection” under Section 5.3.9 of the parties’ contract. Plaintiff argues that “[t]he Government’s contentions are based on its misinterpretation of the Contract and its reading into the Contract requirements that are not there.”
As indicated above, the court already has determined that the phrase a “party involved in a contemplated real estate transaction” is ambiguous. See Chapman Law Firm, LPA v. United States, 103 Fed.Cl. at 43-44. The court previously resolved this ambiguity in favor of plaintiffs interpretation of the contract after noting that plaintiff presented its contemporaneous interpretation of the contract to the Ohio Department of Agriculture in December 2007. See id. at 46. Subsequently, after plaintiff belatedly produced a large number of responsive documents in close proximity to trial, the court reconsidered its earlier decision to the extent that defendant would be allowed to introduce *589 evidence to demonstrate that plaintiff did not contemporaneously interpret the parties’ contract to inquire plaintiff to employ licensed inspectors only when conducting inspections under Section 5.3.9.1. 33
Based in part on defendant’s failure during trial to account for ambiguity in the terms “WDO inspection” and “termite inspection,” and counter plaintiffs intent, defendant has failed to successfully challenge the evidence that originally led the court to conclude that plaintiff contemporaneously interpreted the contract in a manner consistent with the court’s prior opinion or introduce new evidence to undermine plaintiffs previous position. Defendant highlights that plaintiff made efforts to ensure that its inspectors were licensed to conduct termite inspections before it began performance of the contract and continued to promote its inspectors to obtain termite inspection licenses. Defendant also notes that plaintiffs internal correspondence indicates that it sought to hire licensed inspectors, implemented a salary structure that encouraged inspectors to become licensed, and even made efforts to ensure that its key employees were licensed to conduct termite inspections. In addition, defendant argues that evidence that plaintiff intended to use the NPMA-33 form before beginning performance of the contract indicates that plaintiff understood that its inspectors were required to complete the NPMA33 form prescribed by Ohio law when conducting WDO inspections. See Ohio Admin. Code. § 901:5-11-13(B) (2013).
Although plaintiff made some efforts to ensure that its inspectors were licensed may suggest to some that plaintiff did not interpret the parties’ contract to provide for two types of WDO inspections, the record indicates that plaintiffs efforts also could be consistent with plaintiffs interpretation of the contract. Frank Chapman explained that plaintiff required its inspections to be licensed because plaintiff intended to use the same inspectors that were conducting WDO inspections under Section 5.3.9 of the parties’ contract to conduct W

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/7218487. Public record. Not legal advice.