Environmental Chemical Corporation

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of - )

)

Environmental Chemical Corporation ) ASBCA Nos. 59280, 60760

)

Under Contract No. FA8903-06-D-8511 )

APPEARANCES FOR THE APPELLANT: R. Dale Holmes, Esq.

Cohen Seglias Pallas Greenhall & Furman PC

Philadelphia, PA

Michael A. Richard, Esq.

Obermayer Rebmann Maxwell & Hippel LLP

Philadelphia, PA

APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrant, Esq.

Deputy Chief Trial Attorney

Lori R. Shapiro, Esq.

Trial Attorney

OPINION BY ADMINISTRATIVE JUDGE THRASHER

These appeals arise from the installation, removal, and replacement of internal

wiring while performing a contract to construct two headquarters buildings in

Afghanistan. Environmental Chemical Company (ECC) asserted two claims: a claim

for the removal and replacement of the internal wiring in the two buildings (ASBCA

No. 59280) and a related compensable delay claim (ASBCA No. 60607). Both claims

were appealed, having been denied in their entirety by final decisions of Air Force

Contract Officers (CO). The Board heard these appeals on the record per Board Rule

11. Both entitlement and quantum are before us.

Background: The Record

The record consists of 566 exhibits or Rule 4 documents 1, filings in response to

an Order on Proof of Costs, the government’s testimony from four witnesses by sworn

1

The government filed several different R4 files, with various titles, during these

appeals. All references to the government R4 file will refer to the last R4 file

submitted to the Board on January 5, 2018 and is cited as R4, tab __.

Additionally, any reference to the R4 supplement filed on March 15, 2021 by

ECC will be cited as app. supp. R4, tab __.

affidavits filed with appellants brief 2, and an expert report on ECC’s delay claim. The

record does not include a government brief, testimony from government witnesses or

testimony from a government expert witness. The government did not file its initial

brief and supporting affidavits within the time specified in the Board’s June 28, 2021

Order, which were due no later than July 2, 2021. This due date was the result of two

previously unopposed time extensions granted by the Board. The government did not

file its brief. Instead, on July 3, 2021, the government filed seven supporting

declarations/affidavits and a Defense Contract Audit Agency (DCAA) Audit Report,

but not its brief, and requested a one-day extension to file its brief on July 4, 2021 (Bd.

corr. ltr. dtd. July 3, 2021). The government did not file its brief on July 4th and on

July 6, 2021 again requested another time extension till July 8, 2021 (Bd. corr. ltr. dtd.

July 6, 2021).

On July 6, 2021, appellant responded opposing the government’s requests

arguing it had been prejudiced by the delay in that the government had gained an

advantage by the additional time to work on its brief and requesting that we deny

another extension of time to file its brief and that the government’s filed sworn

statements/affidavits be rejected (Bd. corr. ltr. dtd. July 6, 2021).

On July 7, 2021, we denied the government’s request for a time extension and

ordered the government to show cause why we should not grant appellant’s request

that we reject the government’s already filed sworn statements/affidavits (Bd. corr.

Show Cause-Board Order dtd. July 7, 2021). Instead of responding to our order, on

July 9, 2021 the government withdrew its already filed statements/affidavits and

waived submittal of briefs stating in its response,

the government respectfully withdraws its request that the

statements/affidavits submitted on July 3 be accepted by

the Board as part of the record. The government’s defense

to the subject appeals will rely upon the Rule 11 record

presently before the Board establishing that Appellant has

failed to satisfy its burden to prove the certified claims

(Gov’t R4, tabs 37 [ECC’s Removal and Replacement

claim] and 116 [ECC’s Delay claim]) in the subject

appeals, including the threshold question of law whether

there was a constructive change to the contract

requirements.

(Bd. corr. ltr. dtd. July 9, 2021)

2

These attached witnesses’ sworn statements are entered into evidence and designated

as: Exhibit 1, Mr. Scott A. Hayward; Exhibit 2, Mr. Dan Turek; Exhibit 3,

Mr. Ivan Leung; and, Exhibit 4, Mr. Mark Serabian.

2

FINDINGS OF FACT

ASBCA No. 59280

Project Background

1. The U.S. Air Force awarded Contract No. FA8903-06-D-8511 (the

Contract), to ECC on April 12, 2006. The Contract was a Multiple Award Task Order

Contract for Heavy Engineering Repair and Construction. (R4, tab 41) The contract

delegated contract administration responsibility for providing management control

over the contract to the Center for Engineering and the Environment (AFCEE) 3 (id.).

On February 26, 2010, AFCEE awarded Task Order No. 0056 (TO 56) to ECC in the

amount of $13,900,466, for the design and construction of two Headquarters

Buildings: Camp Bastion and Brigade HQ Phase I COB Tombstone II (R4, tab 21

at 2). The project was accepted for beneficial occupancy as of October 12, 2011, and

$429,906 in liquidated damages were assessed (R4, tabs 486, 39 at 3-4, 487).

3. Most AFCEE employees were not located in Afghanistan, including the COs

responsible for administration of TO 56. However, AFCEE did have TO 56

Contracting Officer Representative (COR) positions in Afghanistan that were

frequently occupied by U.S. Air Force active duty engineering officers. AFCEE

contracted out many of its contract administration activities performed on the ground

in Afghanistan and AECOM Technology Company (AECOM) 4, a construction

management firm, performed contract oversight responsibilities on TO 56. AECOM

employees were referred to as Title II employees. (App. br. at ex. 4, aff. of M.

Serabian ¶ 3-4, 8)

Relevant Contract Provisions: Electrical Requirements

4. These appeals involve the question of whether there was a constructive

change related to installation of and subsequent removal and replacement of the

internal electrical wiring (cable) 5 in the two buildings under construction. The dispute

arises out of the parties’ disagreement over whether the wire met the contract

requirements of the 2008 National Electric Code (NEC), specifically NEC § 110.3. 6

3

AFCEE has since been renamed the Air Force Center for Engineering and

Environment (AFCEC).

4

AECOM as of 2015 is now AECOM Engineering Company.

5

The terms wiring and cable are often used interchangeably in this context.

6

The NEC is a set of standards published by the National Fire Protection Association

(NFPA) for the safe installation of electrical wiring and equipment. The NEC is

approved by the American National Standards Institute (ANSI) as ANSI NFPA

3

Contract Provisions Requiring Compliance with the NEC

5. Various contract provisions addressed the applicability of NEC standards to

the electrical cable to be installed. Relevant here, TO 56, Modification 01 contained

provisions related to electrical requirements in Appendix A1 (04 January 2010), ¶

3.1.7, Electrical, ¶ l. This provision requires design and construction of the power

distribution system consistent with National Electric Code (NEC) and Unified

Facilities Criteria (UFC) standards (R4, tab 10 at 48). Also, the Statement of

Requirements, subpart 3.1.7, Distribution, stated that “[a]ll electrical installation shall

be in accordance with the latest version of NEC and UFC standards.” (R4, tab 15 at

40) We find that the 2008 version of the NEC was the latest version at time of award.

6. The contract also included specialized clauses for the Joint Contracting

Command Iraq/Afghanistan (JCC-I/A), some of which also addressed the standards for

electrical cable. In particular, JCC-I/A clause 952.225-0013, Contractor Health and

Safety (FEB 2010), directed contractors to “comply with all National Electrical Code

(NEC 2008), Specifications as outlined, and MIL Standards and Regulations” (R4, tab

10 at 207). Although not mandatory, the contract also included JCC-I/A clause

952.236-0001, Electrical and Structural Building Standards for Construction Projects,

which required compliance with the NEC and other standards “when it is reasonable to

do so with available materials,” stating, “[A]s dictated by the Unified Facilities Criteria

(UFC) the contract shall meet: . . . (2) 2008 National Electrical Code (NEC)” (R4, tab 10

at 208-09).

Application of NEC 110.3; ‘Listed’ and ‘Labeled’

7. This dispute arises from the discrete requirements set out in NEC § 110.3,

Examination, Identification, Installation, and Use of Equipment, (2008) that provides:

(A) Examination. In judging equipment, considerations

such as the following shall be evaluated:

(1) Suitability for installation and use in conformity

with the provisions of this Code

FPN: Suitability of equipment use may be

identified by a description marked on or provided

with a product to identify the suitability of the

product for a specific purpose, environment, or

70. While the NEC is not itself a U.S. law, its use is commonly mandated by

state and local law.

4

application. Suitability of equipment may be

evidenced by listing or labeling.

(R4, tab 60 at 36) (emphasis added in last paragraph) We find that the basic NEC

110.3 requirements for labeling or marking are not restricted to a label or mark on the

wire itself but may also be provided with the product.

Laboratory Listing

8. NEC 110.3 creates a system by which a contractor may rely upon electrical

testing laboratories to determine if equipment is suitable for certain purposes. Such

laboratories “list” equipment that they have tested and determined to be suitable. The

NEC provides that “if the equipment has been listed by a qualified electrical testing

laboratory,” then “factory-installed internal wiring . . . need not be inspected at the

time of installation.” (R4, tab 47 at 1) In other words, one may rely upon that listing

to conclude that the internal wiring and construction of the equipment is suitable for

certain purposes and need not be additionally inspected at the time of installation

(other than to verify that the equipment was not damaged or altered).

9. The NEC defines “Listed” as a material included on a list published by an

organization concerned with the evaluation of products that maintain periodic

inspection of production of listed materials and that the listed product meets

appropriate designated standards, or has been tested and found suitable for a specified

purpose (R4, tab 60 at 32). An example is Underwriters Laboratories (UL) that is the

United States organization that typically lists products it has evaluated (app. br. at ex.

2, aff. of D. Turek 7 ¶ 20).

Product Labeled

10. Equipment manufacturers may choose to “Label” their products to indicate

that a component has been listed by a testing laboratory. A label “indicates compliance

with appropriate standards or performance in a specified manner.” (R4, tab 46 at 1)

The NEC defines “Labeled” as material “to which has been attached a label, symbol, or

other identifying mark of an organization that is acceptable to the authority having

7

Mr. Turek testified he has over thirty years of experience working for both

government and the construction industry. From 2003-2008, Mr. Turek was an

AFCEE senior division chief in San Antonio, Texas where he led the AFCEE

Iraq and Afghanistan reconstruction programs from 2005-2007 and was

intimately familiar with the technical content of the TOs and what AFCEE

required of its contractors. He left AFCEE in 2008 to again work in the private

sector. Since 2013 he has held various positions within ECC related to

oversight of construction projects. (App. br. at ex. 2, aff. of D. Turek ¶ 2)

5

jurisdiction and concerned with product evaluation, that maintains periodic inspection

of production of labeled equipment or materials.” (R4, tab 60 at 32) We find that

Labeling is not restricted to a stamp on the wire itself. Labeling for United States

products is done by Underwriters laboratory (UL) 8; a marking of “CE” denotes labeling

by a European Union laboratory 9; and a “TSE” label denotes products tested by the

Turkish Standards Institute 10. (App. br. at ex. 2, aff. of D. Turek ¶¶ 18, 20)

Implementation of NEC Requirements in the Field

11. The NEC did not designate the testing laboratories that were qualified to

perform tests for every project. Rather, it stated that the “authority having

jurisdiction” (AHJ) would determine the testing laboratories from which it would

accept listings (R4, tab 46 at 1). An AHJ is “[a]n organization, office, or individual

responsible for enforcing the requirements of a code or standard, or for approving

equipment, materials, an installation, or a procedure.” The NEC cautions that the AHJ

is defined “in a broad manner,” and that an AHJ may be a “federal, state, local or other

regional department or individual,” or it may be “the property owner . . . commanding

officer or departmental official” (R4, tab 60 at 28).

Task Force Power - AHJ in Afghanistan

12. During the 2003-2009 time frame 18 military personnel died as a result of

electrical mishaps in Iraq. These tragic deaths necessarily raised concerns by the

8

Underwriters Laboratories (UL) listing involves a process where an independent

laboratory in the United States, UL tests and then “lists” products that pass the

UL testing process. UL listed products typically have a marking or labelling on

the product designating the UL listing. (R4, tab 60 at 32; app. br. at ex. 2, aff.

of D.Turek ¶ 20)

9

Under a process established by the European Union, products are tested and then

certified with a Conformitée Européenne (CE) marking indicating that the

product has been assessed by the manufacturer and deemed to meet EU safety,

health, and environmental protection requirements. The product’s manufacturer

bears sole responsibility for declaring conformity with all requirements before

affixing the CE mark to its product. (App. br. at ex. 1, aff. of S. Hayward ¶ 28)

10

In Turkey, third-party certification is done by a nationally established institute, e.g.,

the Turkish Standards Institute (“TSE”), which provides certification of Turkish

products. When products meet the requirements of the TSE, the TSE label is

provided on that product, either through a label on the packaging, or in other

instances, TSE is stamped on the actual product. (R4, tab 76 at 7, 9, 11; app. br.

at ex. 2, aff. of D. Turek ¶¶ 18, 20, 21; app. br. at ex. 1, aff. of S. Hayward,

¶¶ 11-14) TSE is also member of the International Electro Technical

Commission (IEC) (app. supp. R4, tab 30).

6

relatives of the deceased and eventually Congress called for an investigation and

answers for why these tragic deaths occurred and what fixes were necessary. The DoD

Inspector General conducted an investigation from August 2008 –March 2009 on the

deaths in Iraq (R4, tab 162 at 8), as well as another Report which was issued July 24,

2009 regarding an Assessment of Electrical Safety in Afghanistan. The Afghanistan

report identified numerous problems with electrical safety in the Afghanistan theatre

and made recommendations to address those problems (R4 tab 161 at 5, Report

No. SPO-2009-005).

13. In October of 2008 Task Force Protecting Our Warfighters and Electrical

Resources (T F Power) was established by Combined Joint Task Force – 101 (CJTF-

101) to “prevent the loss of life and government property through immediate and long-

term measures that will significantly reduce the number of electrical and fire incidents

throughout the combined/joint operations area.” (R4, tab 161 at 18) Thereafter, on

August 3, 2010, T F Power was appointed the Authority Having Jurisdiction (AHJ)

over electrical codes for all US Military Bases in the Islamic Republic of Afghanistan.

Relevant to this appeal, T F Power became the authority to promulgate rules for

implementing NEC 110.3 in Afghanistan. (App. supp. R4, tab 4 at 4, 14) By August

3, 2010 its policy for electrical components in Afghanistan, required:

Marking, Listing, Labeling

All electrical components shall have either credentials:

1. The CE marking certifies that a product has met EU

consumer safety, health or environmental requirements.

2. Listed / labeled and display the marking of a Nationally

Recognized Testing Laboratory (NRTL) such as

Underwriters Laboratory (UL).

3. Items or electrical equipment without marking / listing /

labeling shall not be used.

4. Testing Laboratories within IRoA that are without

National Recognition may submit credentials to the AHJ

for review and consideration.

5. Electrical equipment may be field tested to a recognized

and commonly applicable performance and safety

standard. Testing methods as well as the credentials of the

7

testing service must be submitted to the AHJ for review

and consideration. 11

(App. br. at ex. 1, aff. of S. Hayward 12 ¶ 27; app. supp. R4, tab 4 at 6) T F Power

recognized two types of credentials: the CE marking (European Union marking) or

Listed / labeled and displaying the marking of a Nationally Recognized Testing

Laboratory (NRTL) such as Underwriters Laboratory (UL). Of note, this policy still

did not restrict listing to a particular laboratory but instead retained the term

“Nationally Recognized Testing Laboratory”. (Id.) However, on September 16, 2010,

United States Armed Forces – Afghanistan (USFOR-A) issued an Electrical Policy:

Laboratory Symbol Guide that restricted the definition of a qualifying NRTL to certain

specified laboratories:

USFOR-A ELECTRICAL POLICY: LABORATORY

SYMBOL GUIDE . . . .

The accepted laboratories as of 16 Sep 10 with the

following limitations:

1. All electrical products shall be In(sic)

accordance with USFOR-A Electrical Policy.

2. Items or electrical equipment without marking /

listing / labeling or not meeting the product standard

shall not be used.

3. The symbol on the device is not enough. It is the

purchaser’s responsibility to make certain:

a. The laboratory is fully accredited for the

location of test, product tested and test

applied. Refer to the following for additional

information:

11

TO 56 also references UFC 3-501-01, Electrical Engineering, providing that

“Underwriters Laboratories (UL) or third-party certification is required for all

basic equipment.” (R4, tab 164 at 65, ¶ 2-1)

12

Between September 2009 and December 2012, Mr. Hayward was ECC Senior

Program manager for Northern Afghanistan, headquartered in Kabul. He

managed the AFCEE and USACE projects, which were primarily located in

Northern Afghanistan but also managed some projects in Southern Afghanistan

and often conferred with ECC program managers for Southern projects

regarding common issues. (App. br. at ex. 1, aff. of S. Hayward ¶ 5)

8

i. The Laboratory website as listed

below.

ii. For United Stated[sic] the

Nationally Recognized Testing Labs

(NTRL) as listed by the US

Department of Labor OSHA

www.osha.gov

iii. For the European Union as listed

by website below.

(R4, tab 166 at 1) The record includes a copy of the specified CE mark qualified

NRTLs but does not include the United States list on the OSHA website during this

time period. 13

14. TO 56 restricts mandatory regulatory updates to the date the TO was

awarded, February 26, 2010. The contract statement of work at Attachment 1 (January

2010) at § 2.0 provides:

The Contractor shall identify, comply with and ensure that

its personnel and its subcontractors and subcontractor

personnel at all tiers obey all applicable federal, state, and

local statutes; DoD/Air Force/host nation instructions,

manuals, handbooks, regulations, guidance, and policy

letters, International Building Code (IBC), Unified Facility

Criteria (UFC), National Fire Protection Association

(NFPA), National Electrical Code (NEC); Afghanistan

federal, provincial, and local Statutes; ARCENT and Air

Force/Army/Afghanistan Instructions, Manuals,

Handbooks, Regulations, Guidance, and Policy Letters;

Executive Orders (EOs), Afghanistan Construction

Standards, Central Command orders and directives

applicable to personnel in Afghanistan, including but not

limited to USCENTCOM, North Atlantic Treaty

Organization (NATO), International Security Assistance

Force (ISAF) fragmentary orders, instructions and

directives; and include all changes and amendments in

effect on the date of issuance of this TO unless specific

13

We attempted to independently search for the specific 2010 U.S. laboratories but

were unable to find the list.

9

relief is sought by the Contractor in writing and granted by

the Contracting Officer (CO).

(R4, tab 10 at 19-20 § 2.0) (emphasis added) T F Power’s promulgations of regulatory

implementation of NEC 110.3 were never incorporated contractually into TO 56’s

requirements. There were only three modifications to TO 56, none of which changed

the implementation of NEC 110.3 at time of award. The first modification, effective

June 7, 2010, incorporated some changes to the statement of work but there was no

change to the above language at § 2.0. (R4, tab 15 at 11) Modification 2 did not

involve the statement of work and was effective on November 30, 2010 (R4, tab 21

at 1). Modification 3 was effective on November 28, 2011 but also did not make any

changes to the above language at § 2.0. (R4, tab 27 at 1)

Inspection and Approval Requirements

15. TO Attachment 3 (Statement of Work Appendix A1, Statement of

Requirements), Paragraph 4.0 Submittals, required submission of all materials and

equipment to the Title II inspector (inspector) and COR for review and acceptance

(R4, tab 10 at 51-52). Additionally, this section directs that, “[T]he Contractor shall

submit the following to COR and Title II for review and approval: . . . Equipment,

Fixture, Finishing, and Hardware Submittals: The Contractor shall submit equipment,

fixture, finishing, and hardware submittals to the COR and Title II to review and

approve or disapprove within seven business days.” (Id. at 52).

16. Requests for approval of equipment and materials were usually

accomplished by submittal of a Material Approval Submittal form that identified the

relevant specification reference in the TO, a description of the material, and any

supporting documents such as photos, etc. to the submittal register (see, e.g., R4, tab

39 at 32-33). The submittal register list is 40 pages long, includes many items such as

electrical equipment, and is very detailed. Although TO 56, Attachment 23 (Appendix

C4, Submittal Register), indicates that all material construction submittals are to be

submitted for government approval, it does not specifically list electrical wiring (app.

br. at ex. 1, aff. of S. Hayward ¶ 20; R4, tab 10 at 149-50 § 26 20 00).

17. TO 56 also included Paragraph 5, Section E, Inspection and Acceptance,

which provided that inspections and acceptance (including the pre-final) would be

performed by the COR in accordance with: FEDERAL ACQUISITION

REGULATION (FAR) 52.246-01, CONTRACTOR INSPECTION REQUIREMENTS

(APR 1984), FAR 52.246-12, INSPECTION OF CONSTRUCTION (AUG 1996) and

PKV-E001, ISPECTION OF CONTSTRUCTION (AUG1996) (Deviation)

(MAR2003) (R4, tab 10 at 3-4).

10

18. TO 56 SORS paragraph 8.0 states that “[t]he quality of all materials used

on site will be verified by the Title II inspector and a recommendation to accept or

reject the materials will be transmitted to the CO or COR. The CO or COR will be the

final decision authority. Recommended criteria for the Contractor to follow include

any recognized and current UFC standards.” (R4, Tab 10 ¶ 8 at 60) (emphasis added).

ECC Use of Vatan Electrical Wire - COR Approval

19. ECC decided to use a wire manufactured by a Turkish company, Vatan.

Mr. Hayward testified that the use of Vatan wire was prevalent on projects in

Afghanistan and that ECC previously submitted Vatan wire on both AFCEE and

United States Army Corps of Engineers (USACE) task orders and contracts, including

task orders under this contract. (App. br. at ex. 1, aff. of S Hayward ¶ 44) Mr. Turek

also testified that “Vatan wire and cable was widely used and approved at Camp

Bastion/Leatherneck on other AFCEE task order/contracts and was listed on an

AFCEE ’pre-approval’ list of materials for this contract” (app. br. at ex. 2, aff. of D.

Turek ¶ 20).

20. AFCEE published a Recommended Materials List Afghanistan, in 2008

and an updated list in February 2010. Both these lists recommended Vatan wires,

among others, as pre-approved for AFCEE projects. Although there were Vatan

electrical cables listed on theses pre-approved lists, the specific cable ECC proposed,

TS 9758, was not one of the pre-approved cables. (R4, tab 76 at 35; app. supp. R4, tab

13 at 1)

ECC Seeks Guidance from the CO

21. Before ECC submitted its interior wiring for approval in early September

2010, some of their other electrical submittals were rejected by the Title II inspectors

and CORs for not being listed/labeled. ECC argued that such rejections were contrary

to the requirement of the contract; specifically that not all electrical materials were

required to be listed/labeled. This issue continued back and forth until ECC forwarded

a letter to the CO (Toscano) on September 22, 2010, requesting interpretation of the

contract requirements regarding the listing and labeling of electrical equipment (R4, tab

343 at 3-6). On September 29, 2010, CO (Toscano) responded that the contract

required ECC to:

provide electrical materials that are listed /labeled by either

Underwriters Laboratory (where specified) or other third

party testing certification laboratories for all basic

electrical equipment. . . . . After reviewing ECC’s request

for interpretation I believe this to be a material

procurement issue and believe it is within the scope of the

11

contract for ECC to provide electrical materials that are

listed/labeled.

(R4, tab 374 at 2)

22. AECOM’s daily Title II report of November 11, 2010 notes an ECC

deficiency stating under significant events, “[m]aterials being used for installation of

interior wiring which do not meet project specifications.” And references specification

“Division 26 Section 26 20 00 Part 2 Product.” (App. supp. R4, tab 12) Although

electrical wiring is not listed on the Contract Submittal Register, the specification cited

refers to the Contract Submittal Register for electrical items (R4, tab 10 at 149-50).

That same day, the new COR (Cpt. Jorge Lopez) sent an email to ECC (Greg Ross and

Roger Stokes) and copied ECOM personnel (Mark Serabian and Ray Gillette) stating

he understood that ECC was already pulling 14 electric cable that was not UL or third

party listed. Additionally, he stated:

I believe we have gone through this path before. My

understanding is that electrical material requirements calls

[sic] for materials to be listed by third party certification

agency (or UL). This has been communicated several

times including from the CO. Materials not meeting these

requirement [sic] will be deemed deficient and should be

requested to be removed from site.

(R4, tab 350 at 2)

23. An on-site meeting was held the next day, November 12, 2010, between

ECC management, QC representatives, and the COR (Cpt. Lopez). (App. br. at ex. 4,

aff. of M. Serabian ¶ 11) 15 Although Mr. Serabian now works for ECC, in November

2010, he was employed in Southern Afghanistan by AECOM, an AFCEE support

contractor responsible for performing Title II inspections (id. at ¶ 4). Mr. Serabian

testified that Ray Gillette was the AECOM employee assigned full-time as the Title II

QA manager for TO 56 but on or about November 12, 2010, Ray Gillette was out of

the country of Afghanistan on R & R, and he was assigned to fill in for Mr. Gillette on

the date of the meeting (id. at ¶¶ 9-10). Mr. Serabian also testified that one of the

14

The term “pulling wire” is an industry term for installing the wire.

15

Mr. Serabian is currently an ECC employee. In 2010, he was an AECOM employee

responsible for oversight of AFCEE contracts in Southern Afghanistan. Part of

his duties during November 2010, included performing Title II duties services

for AFCEE’s various construction projects being performed in the region,

including TO 56 located at Camp Bastion. (App. br. at ex. 4, aff. of M.

Serabian ¶¶ 1, 3-5)

12

topics discussed was approval of ECC’s intended interior electrical wire cable for the

TO 56 project (id. ¶ 12; app supp. R4, tab 12).

24. ECC did not submit their proposed internal wire through the formal

submittal process but instead presented a sample of the wire to the COR during the

meeting. The cable proposed for approval was manufactured by a Turkish company,

Vatan. (App. br. at ex. 4, aff. of M. Serabian ¶ 13; app. supp. R4, tab 27). During the

meeting, ECC asserted that Vatan was listed on the AFCEE pre-approve list. COR

Lopez examined the Vatan electrical cable and informed ECC that the Vatan electrical

cable was acceptable for them to use on the project (app. supp. R4, tabs 12, 27; app.

br. at ex. 4, aff. of M. Serabian ¶ 14). 16

25. Later that evening, the COR sent an email to Mr. Albert Kellner (AFCEE)

concerning their previous discussion about ECC’s wire deficiency informing him that

the issue had been fixed and the “subject electrical wire is third party listed.”

Additionally, in that same email, the COR also addressed the issue of ECC not

submitting the wire through the contract submittal process. COR Lopez in discussing

approval of the wire stated “the issue was not having the proper data sheet on site

when our QA asked for it . . . . For some reason wiring was not required to be a

submittal according to specifications for this project. I believe that this was an

oversight in our documentation.” (R4, tab 350 at 1) We find that ECC was required to

submit their proposed wire to the Title II inspector and COR for approval but was not

required to submit a formal submittal request.

26. COR Lopez’s acceptance of the Vatan electrical wire was also documented

in the daily Title II report that same day prepared by AECOM’s representative

Sanjay Kumar. The entry on that date noted, “Meeting between AFCEE, Title II and

ECC QCM held to discuss materials being used for installation of interior wiring which

do not meet project specifications. Materials were accepted by COR.” (App. supp. R4,

tab 12; app. br. ex.4, aff. of M. Serabian ¶ 15)

27. Likewise, later on December 16, 2010, the COR again confirmed his

decision to approve the Vatan electric cable via email. COR Lopez stated to the

ECC’s Project Manager at the time, Greg Ross, “So these are the same cables we

discussed on site that other time… If so I already closed that chapter. On site it was

shown it was third party listed.” (App. supp. R4, tab 27) Further, the government

confirmed the Vatan electrical cable was CE marked. In response to a question from

AECOM, Wayne McDermott, contacted Vatan directly asking if the wire ECC was

installing met the requirements to receive the CE mark. A Vatan representative confirmed

16

Although Mr. Serabian was the acting Title II inspector during this meeting due to

Mr. Gillette’s absence, there is no record or testimony from Mr. Serabian as to

his advice to the COR, if any, during this meeting.

13

on December 22, 2010 that, in addition to the TSE marking on its wire, its wire also

qualified for a CE marking. (App. br. at ex. 1, aff. of S. Hayward ¶ 40; R4, tab 22.)

28. Thereafter, via email on December 23, 2010, ECC Project Manager Greg

Ross confirmed to COR Lopez that the Vatan electrical cable was also CE compliant.

The email provided catalogue data on Vatan wire and cables, including the interior

wire being installed inside buildings. That wire was PVC insulated non-sheathed

single core cables with copper conductor HO7V-U, 450/750 V, TS 9758, HD 21.3,

S3/VDE 0281. The data sheet for that wire included ISO, <HAR>, TSE, and CE

marks. (App. br. at ex. 1, aff. of S. Hayward ¶¶ 28, 39; R4, tab 361) In response to the

December 23rd Ross email, AECOM Wayne McDermott stated on December 23, 2010

“Got your message. I sent an e-mail to Vatan yesterday evening. See attached.

Concur that the wiring should meet spec, but notice in the reply that it says ‘with CE

Marking.’” (App. br. at ex. 1, aff. of S. Hayward ¶ 41; R4, tabs 360; 361 at 4)

29. We find that COR Lopez and AECOM representative Mr. McDermott

conducted their due diligence and found that ECC’s proposed Vatan cable was listed

by a Nationally Recognized Testing Laboratory (NRTL) TSE (i.e. “third party listed”)

and CE compliant. We also find that COR Lopez had authority under the contract to

approve ECC’s proposed Vatan wiring and did so.

ECC Orders Wire and Proceeds to Install

30. After the COR’s approval on November 12, 2010, ECC proceeded to order

the electrical cable from Vatan, and obtained delivery to the project site at Camp

Bastion, in southern Afghanistan. Upon receiving delivery of the Vatan electrical

cable, ECC commenced installation of the electrical cable on the project. (App. br.

at ex. 2, aff. of D. Turek ¶ 7) Mr. Turek testified that according to project records,

installation started on December 3, 2010 and continued through April of 2011 (app.

supp. R4, tab 26 at 970; app. br. at ex. 1, aff. D. Turek ¶ 7).

AECOM Continues to Question the Use of Vatan Wire

Task Force Power Report

31. After the November 12, 2010 approval by the COR, ECC continued to

install the wiring on the project but had to respond to various inquiries from AECOM

representatives and AFCEE contracting officials about the Vatan electrical cable being

installed (app. br.at ex. 2, aff. of D. Turek ¶ 8). Perhaps one of the most important

events was when T F Power inspected the electrical aspect of the project and issued a

report on January 29, 2011 (R4, tab 365 at 1). Among the nine other cited

deficiencies, it found that the Vatan interior wire ECC had installed, (4 mm2, HO7V-U,

TS 9758) was “not recognizable as labeled and listed per NEC 110.3.” (Id. at 1, item 6).

14

Each finding (deficiency) was accompanied by a photo. Although difficult to discern some

details, the initial photo shows Vatan wire cable packaging captioned with “Wire type is not

recognizable as labelled and listed per NEC 110.3” (id.). There is also an enlarged

version of the same photo included in the report that clearly shows the packaging is

Vatan manufactured, it is the cable (wire) installed by ECC, TS 9758, dated

01/29/2011, and displays TSE markings on the packaging (R4, tab 365 at 3). Although the

wire packaging clearly displays the TSE symbol, it does not display the CE mark.

Additionally, there is an attached copy of a page from the Vatan’s catalogue that

references 450/750 V TS 9758 wire and at the bottom of that same page displays the

TSE and CE marks (R4, tab 365 at 4). However, T F Power report did not address

these facts.

32. ECC received a copy of the report on January 29, 2011. ECC’s project

manager responded to the COR on February 16, 2011, addressing the Task Force’s

findings related to the wire, “NEC 110.3 covers examination, identification,

installation, and use of equipment. It is unclear how this section is applicable to wire

installed in the building” (R4, tab 84 at 2-3).

Questioning Continues

33. The government ignored the COR’s approval of the wire and the

questioning continued into March 2011. The Title II inspector Gillette emailed ECC’s

project manager on March 30, 2011, that he had inspected some power cables staged

onsite for intended use and did not observe any marking or listing as required by NEC

110.3. Furthermore, he stated Title II would not recommend the materials for usage

on the project. (R4, tab 65 at 1) It is uncertain whether the cables referenced are the

interior wires at issue. ECC responded to Gillette by asking him to identify the

specific cables referenced stating, “[we] have some that we are using and others that

are scrap. We have a new shipment of cables on the way for the distribution system”

(R4, tab 381 at 1).

34. ECC continued to install the wiring but AFCEE representatives continued

to pursue the Vatan electrical cable issue despite the COR’s approval. The minutes

from the April 18, 2011 on-site meeting between ECC and AFCEE representatives,

including then COR Cpt. Melvin, reflect that ECC was now seeking tests of the Vatan

cable to demonstrate compliance with applicable standards. The state the electrical

distribution cable may be replaced: “Electrical cables were minutes sent to a CE

certified lab for testing. Because of the critical nature of this item, if ECC does not

hear back from the lab in 1-2 days then the cable will be reordered and replaced.” The

results of any lab results, if there were any, are not in the record. Additionally, no

explicit order for removal is mentioned in the minutes. (R4, tab 94 at 2)

15

35. Additionally, the record is devoid of any evidence of government

contracting officials, either COs or CORs, explicitly revoking the earlier November

12, 2010 approval of the Vatan electrical cable, or any direction to ECC to stop

installing the approved Vatan electrical cable. Mr. Turek testified that the government

did not provided such direction, “until on or about May 9, 2011 or May 11, 2011”. He

further testified that during the May 9th meeting the project COR “made clear that the

Vatan electrical cable was a deficiency that would have to be corrected through

removal and replacement”, which was then followed by a Contracting Officer

Performance Deficiency Letter on May 11, 2011 (app. br. ex. 2, aff. of D. Turek, ¶¶ 9 -

11). The May 9, 2011 meeting minutes are ambiguous at best on this point. The

meeting minutes do not indicate Mr. Turek was an attendee nor do they indicate a

direct order to replace the cable; they only state, “Electrical Distribution Cable – will

be replaced. Order placed. Delivery date pending based on shipping company ETA –

approximately 2 weeks, - May 18th.” (R4, tab 87 at 3)

36. On May 11, 2011, the CO (Rendon) issued a Performance Deficiency

Letter (PDL), requesting ECC submit a Corrective Action Plan (CAP) by May 18,

2011 (R4, tab 394 at 2 ¶ 8). Included among the alleged performance deficiencies, was

use of “unlisted wires.” The PDL asserts that electrical deficiencies were noted by

Title II and Task Force Power since November 2010, and have yet to be addressed.

The PDL further states that “Contracting Officer, Mr. Santiago Toscano . . .

determined that all electrical material is to be listed.” (Id. at 1 ¶ 2).

ECC Removes Vatan Wiring and Orders UL Listed Materials

37. As soon as possible after receiving the PDL on May 11, 2011, ECC moved

to implement the corrective actions, including removal of all Vatan electrical cables

that had been installed and ECC’s Quality Control Report shows removal was

completed on May 20, 2011 (app. supp. R4, tab 26 at 1771). Additionally, ECC

immediately ordered the UL listed materials necessary to replace the Vatan wire.

These materials were not readily available in Afghanistan and had to be air shipped

into Camp Bastion from the United States. This ordering and delivery of UL listed

electrical cable took time to execute. ECC also immediately negotiated a lump sum

subcontract modification with METAG, a Turkish subcontractor, who performed the

removal of the Vatan electrical cable and the installation of the UL listed electrical

cable. (App. br. at ex. 2, aff. of D. Turek, ¶¶ 23-27) By the time AFCEE sent its

May 11, 2011 PDL, over 80% of the electrical cable work had been completed using

the Vatan product (id. at ¶ 22; app. supp. R4 tab 26 at 970, 1540).

Liquidated Damages

38. On August 5, 2011, CO Renden issued a notice of forbearance to ECC,

stating the government intended to assess liquidated damages (LDs) at a rate of $6,369

16

each day of unexcused delay after August 7, 2011 until the work was completed or

accepted pursuant to the contract (R4, tab 101 at 2). By October 24, 2011, AFCEE

calculated the LDs for 69 days at $429,906 (R4, tab 103). ECC’s REA and subsequent

Claim challenged the ultimate assessment of $436,276.50 (R4, tab 30 at 3; R4, tab 37

at 1).

ECC’s Request for Equitable Adjustment (REA), Claim and the Government’s

Contracting Officer’s Final Decision (COFD)

39. On June 12, 2012, ECC filed an REA in the amount of $1,138,669 for the

removal and replacement of Vatan electrical cables that were previously approved by

the COR. The REA also challenged the government’s position on accessing

$436,276.50 in liquidated damages given the delays alleged to have resulted from the

government’s order. (R4, tab 30 at 3) The government denied ECC’s REA on July 17,

2013 and thereafter, on September 6, 2013, ECC converted its REA to a certified claim

(R4, tabs 35, 37).

40. A COFD was issued on February 19, 2014 denying ECC’s claim in its

entirety (R4, tab 39). Additionally, the CO found that the contract required liquidated

damages be assessed for each day ECC failed to complete the work by the

construction/field completion date. The CO also went on to conclude that because

ECC did not meet the specifications of the contract it did not meet the construction

completion date and therefore liquidated damages should be assessed until the date of

acceptance (id. at 3-4). Thereafter, ECC timely filed a notice of appeal to the Board on

April 28, 2014, that was docketed as ASBCA No. 59280.

ADDITIONAL FINDINGS OF FACT

DELAY CLAIM, ASBCA No. 60760

41. ECC submitted a certified delay claim on April 19, 2016 seeking

$916,840.82 for a compensable contract extension of 114 days of delay for the period

between July 31, 2011 and November 21, 2011 (R4, tab 520). The government issued

a COFD denying ECC’s claim in its entirety on August 1, 2016 (R4, tab 533 at 6).

Thereafter, ECC timely appealed the COFD and their claim was docketed as ASBCA

No. 60760.

17

ECC’s Expert Delay Report

42. ECC submitted an expert report on ECC’s delay claim dated January 8,

2021 (app. supp. R4, tab 8). 17 The ECC Expert Delay Report (ECC Delay Report) was

authored by Ms. Trudie Ward, an ECC employee (id). We reviewed Ms. Ward’s

qualifications and find her qualified to be an expert in construction contract delay

analysis. 18 Ms. Ward employed the Time Impact Analysis (TIA) method and

concluded that ECC was delayed 168 calendar days between May 30, 2011 and

November 14, 2011, as a result of direction from the government to remove the Vatan

wire and that ECC is entitled to a compensable time extension of 114 calendar days for

the delay period between July 31, 2011 and November 21, 2011 (app. supp. R4, tab 8

at 5, 9, 22).

43. Her review was based upon review of five time periods during the project:

(1) The approved baseline: This is the original

government schedule approved by the government on May

13, 2010. This schedule projected a project completion

date of November 29, 2010 with zero calendar days of

float. (App. supp. R4, tab 8 at 13 at ¶¶ 6.1.1.)

(2) April 2011 Progress – Original schedule: This

schedule is the last approved contemporaneous schedule

immediately prior to the impact period being analyzed.

The schedule forecasted a project completion date of July

11, 2011 with 81 calendar days of float. Validation of

contract dates and actual start and finish dates was

conducted between the schedule, Daily Quality Control

Reports, Title II Reports and the contract period of

performance. This validation identified needed revisions

to this schedule in order to provide an accurate calculation

of project impacts. 19 After review, the original 81 calendar

days of float reported was found to be incorrect because it

was projected from utilizing an incorrect contract

completion constraint date of September 30, 2011. (App.

supp. R4, tab 8 at 14, ¶¶ 6.2.2)

17

This report replaced a Time Impact Analysis, dated April 2016, submitted with

ECC’s claim on April 19, 2016 (R4, tab 520 at 3).

18

Ms. Ward’s qualifications summary can be found at app. supp. R4, tab 8 at 23 and

her curriculum vitae at app. supp. R4, tab 9 at 1-8.

19

These corrections are defined in section 6.3.2 of the report at 15.

18

(3) April 2011 Progress – Corrected: This schedule

represents the corrected version of the last approved

contemporaneous schedule prior to the impacts analyzed in

the Report. The corrected 20 schedule projected a

completion date of June 26, 2011 with 34 calendar days of

float. (R4, tab 8 at 15 ¶¶ 6.3.1)

(4) Vatan Wire-Fragnet Schedule: the purpose of this

schedule was to model the impact of removing and

replacing the Vatan wire in the two buildings. Ms. Ward

took identified impact activities and added them into the

Fragnet -1 schedule (see, table at app. supp. R4, tab 8 at 18

¶¶ 6.4.2). After the addition of the identified impact

activities, “the original electric activities were progressed

using the actual completion dates reported within the Title

II Daily Reports.” (App. supp. R4, tab 8 at19) 21

(5) The As-built Schedule November 21, 2011: The As-

Built Schedule shows a final project completion date of

November 21, 2011, this is 114 calendar days beyond the

Construction/Field Date (FPoP) of July 30, 2011.

Additionally, the As-Built schedule identified a 20-day

performance gain to the project completion date. (App. supp.

R4, tab 8 at 20)

The Critical Path of FRAGNET-1

44. Below are Ms. Ward’s conclusions regarding the critical path: 22

The critical path of Schedule FRAG-1 started with

AFCEC’s issuance of a Performance Deficiency Letter

directing ECC to replace the existing Vatan wire with UL

20

The specific corrections are identified/discussed in section 6.3.2. at 15-16.

21

The actual four progressed activities are displayed in the table at app. supp. R4, tab

8 at 19 ¶¶ 6.4.2.).

22

This specifically addresses the critical path (longest path) at the relevant time of the

contract change till contract completion. The critical path for each to the

previous time periods are found at: – Approved Baseline, (app. supp. R4, tab 8

at 13, ¶¶ 6.1.2); April 2011 Progress- Original, (app. supp. R4, tab 8 at 14, ¶¶

6.2.2); and, April 2011 Progress – Corrected (app. supp. R4, tab 8 at 17, ¶¶

6.3.3).

19

listed material (Exhibit 7) [May 11, 2011] took over the

critical path. [sic]

On 05/12/2011 the critical path became ECC procuring the

UL Approved wire and remained critical thru the

forecasted delivery date of 05/27/2011.

On 05/30/2011 the critical path becomes the installation of

the UL Approved wire and remained critical until complete

on 11/14/2011.

Punch out and inspections for both buildings follows

leading into commissioning of both buildings. On

11/29/2011 the correction of punch list deficiencies was

planned to complete initiating the pre-final inspection of

both buildings on 11/30/2011. Government acceptance

with final cleanup to be performed concurrently with

demobilization completing the project on 12/11/2011.

(App. sup. R4, tab 8 at 19, ¶¶ 6.4.3). In summary,

Ms. Ward’s analysis found the government’s actions

affected the activities on the critical path of the contractor’s

performance of the contract.

Overall Conclusions

45. Ms. Ward’s overall conclusions are:

The TIA [Time Impact Analysis] shows an impact of 168

calendar days due to the Government directing the removal

and replacement of the Vatan wire. The as-built schedule

shows a net delay of 114 calendar days of delay. ECC’s

efficiencies and mitigation efforts resulted in a 54 calendar

day gain to the project completion date.

Construction Project Contract Delay/ Project

Schedule Description Data Date Completion Completion Completion Gain Impact

Date Date Date (CD’s) (CD’s)

Approved Baseline 26-Feb-10 28-Nov-10 29-Nov-10 29-Nov-11 -

April 2011 Progress –

30-Apr-11 11-Jul-11 11-Jul-11 30-Sep-11 81 81

Original

April 2011 Progress –

30-Apr-11 25-Jun-11 26-Jun-11 30-Jul-11 (47) 34

Corrected

20

Vatan Wire – Fragnet

30-Apr-11 10-Dec-11 11-Dec-11 30-Jul-11 (168) (134)

Schedule

As-Built Schedule

21-Nov-11 14-Nov-11 21-Nov-11 30-Jul-11 20 (114)

11-21-2011

(R4, tab 8 at 21 ¶ 7.0)

46. Ms. Ward’s finding of 114 calendar days of project delay was based upon

the difference between the contractual required completion date July 30, 2011, and the

project completion identified on the As-built schedule, November 21, 2011. (App.

supp. R4, tab 8 at 22 ¶¶ 7.1)

The Government’s Non-Response

47. The government chose not to submit any testimony in response to Ms.

Ward’s expert report. Likewise, the government chose not submit a brief to advocate

its position. The only response in the record consists of two internal government

emails submitted in response to ECC’s response to the Board’s Order on Proof of

Costs. The two emails addressed the government’s response for an analysis of ECC’s

June of 2015 REA. (Bd. corr. ltr. dtd. November 19, 2020, Respondent’s Response to

ECC’s July 15, 2020 Statement of Costs at exs. 3-4) (hereinafter “Respondent’s

Response”) The first is an email review of Mr. Andrew Barboza dated June 18, 2015

and the second, another email response authored by Mr. Mathew Fitch dated June 24,

2015 (id.).

48. We do not ascribe any weight to either of these documents. The government

does not provide any foundation identifying who these individual are or their credentials.

Furthermore, their analysis provides little, if any, relevant information. Their analysis is of

ECC’s REA some six years before ECC’s evidence, including Ms. Ward’s Report.

(Respondent’s Response exs. 3-4)

Summary

49. We find that ECC is entitled to 114 days of compensable delay

ADDITIONAL FINDINGS OF FACT

QUANTUM ASBCA Nos. 59280, 60760

21

BACKGROUND

Order on Proof of Costs

50. We issued an Order on Proof of Costs on May 22, 2020. ECC filed their

response to our Order on July 15, 2020 (Bd. corr. Appellant’s Response to Order on

Proof of Costs dtd. July 15, 2020). The response was a short narrative explaining the

materials submitted with reference to two Excel spreadsheets – one for the Remove

and Replacement claim (ASBCA No. 59280) and the Compensable Delay claim

(ASBCA No. 60760). The government’s response to ECC’s Response to the Order, on

the removal and replacement claim, includes a DCAA audit conducted on the costs

claimed (Respondent’s Response at ex. 2). No such audit was conducted on ECC’s

Compensable Delay claim. Instead, the government responded with two internal

government analyses dated June 18, 2015 of ECC’s REA and a May 2011 Impact

Analysis Schedule. (Respondent’s Response at exs. 3-4: see also, finding 48)

Testimony of Mr. Ivan Leung

51. Mr. Ivan Leung testified he was ECC’s Director of Project Controls and

supervised the project staff conducting the project controls for the project. He served

in this role for the entire period of performance of TO 56. (App. br. at ex. 3, aff. of I.

Leung ¶ 1) As Director of Project Controls, Mr. Leung was in charge of overseeing

the establishment of the Project cost tracking systems, including development of the

Work Breakdown Structure (WBS) for the Project. Mr. Leung was also the key ECC

Manager involved with setting up, maintaining, and administering ECC’s Corporate

Accounting, Project Controls, and Cost Tracking systems that were approved by

DCMA in 2011. (App. br. at ex. 3, aff. of I. Leung ¶ 2) He explained in detail how

ECC’s accumulated project costs were tracked on the TO 56 project and given a

unique project number. Additionally, he testified that the Statements of Costs for the

two TO 56 claims (app. supp. R4, tabs 18, 20.) were taken from ECC’s accounting

system and the direct costs in the Statements of Costs in support of the two claims are

the actual labor, materials, and subcontract costs are from ECC’s accounting system

and are supported by documents included in ECC’s Supplemental R4 filings. (App.

supp. R4, tabs 17, 32; app. br. at ex 3, aff. of I. Leung ¶ 5).

52. Mr. Leung also testified in detail regarding the specific areas of the two

costs claims. That testimony is addressed in those specific areas of the two quantum

claims below.

22

ADDITIONAL FINDINGS OF FACT

QUANTUM, ASBCA No. 59280

ECC’s Equitable Adjustment, Removal & Replacement Claim

53. On September 6, 2013, ECC filed a claim for reimbursement for removing

and replacing the Vatan cable with UL listed cable in the amount of $1,168,553 (R4,

tab 37). The CO denied ECC’s Claim in its entirety (R4, tab 39). EEC appealed the

denial which was docketed as ASBCA No. 59280 (R4, tab 40).

Replacement Claim: Defense Contract Audit Agency (DCAA) Audit Report

54. On September 18, 2015, DCAA issued Audit Report No.

4141-2015E17200002 Independent Audit Report on Environmental Chemical

Corporation’s (ECC) Contract Claim, dated September 6, 2013, Under Contract

No. FA8903-06-D-8511, Task Order 0056. 23 (hereinafter “Audit”). The Report’s

findings questioned $657,656 of the claimed $1,168,553. The auditors verified that all

claimed costs were incurred, but questioned some costs due to finding of noncompliance

with FAR 31.201-2, Allowability and FAR 31.201-4, Determining Allocability.

(Audit at 2)

55. The audit was divided into six elements: (1) Direct labor; (2) Applied

Indirect Labor Rates; (3) Subcontract Costs; (4) General and Administrative (G&A);

(5) Profit, and (6) REA Preparation Costs.

1. Direct Labor

56. Mr. Guy Simmons was responsible for the supervision of all the field work

associated with replacing all the cable. ECC’s claim includes $32,939 in direct labor

costs for Mr. Simmons. 24 Although the auditors took no exceptions to the labor rates,

and validated all the claimed costs were incurred, they questioned the $32,939 in

direct labor costs claimed. The auditors’ rationale was that they were unable to

determine if the labor costs were associated with the removal and reinstallation of

cable, therefore, they were not able to confirm whether or not the claimed labor

amounts were allocable to the subject claim. (Audit at 10 ¶ 2 a.)

23

This government audit was conducted in response to ECC’s July 15, 2020 Statement

of Costs and is found at Exhibit 2 of Respondent’s Response. In the interest of

brevity, this audit will be referenced as “Audit”.

24

ECC initially claimed $34,989 in direct labor costs but the auditors discovered

mathematical mistakes in the labor rates applied by ECC. ECC concurred in

their corrections (Audit at 11).

23

57. The auditor’s conclusions were based upon their review of a sample of

82 daily job site reports provided by ECC for the months of June, July and August of

2011 (Audit at 12). They noted the review disclosed that Mr. Simmons attended at

least five meetings 25 during July and August that appeared to be unrelated to the

removal and reinstallation of the cable. The auditors interpreted this to indicate that he

was managing other projects than the removal and reinstallation of cable. (Id).

58. ECC disagreed with the auditor’s findings, stating:

The second labor cost element in ECCI’s claim was for the

supervision of all the field work associated with replacing

all the wiring. A single supervisory individual’s time (Guy

Simmons) was included in the claim for the duration of the

field work. In spite of the fully supported actual cost

evidence associated with Mr. Simmons time, and in spite

of the fact that our contract requires all Subcontractor field

work be supervised by an ECC representative, DCAA has

questioned all of those costs as well.

All questioned direct costs described above also had

indirect markups applied and so the associated indirects for

the questioned direct costs were also questioned by DCAA.

(Audit at 26)

59. We find the auditors’ conclusions, questioning all direct labor costs

because of attending five meetings, to be speculative. Given the titles of these

meetings, Mr. Simmons’ attendance could have been to discuss the progress on his

portion of the project, i.e. when the replacement of wire would be completed so they

would have power to test and complete their part of the project or probably various

other possibilities. We just do not know: to guess at this would be mere speculation.

What we do know is that the auditors confirmed that all these costs were incurred and

that Mr. Simmons was responsible for overseeing the replacement of the wire (Audit

at 26 ¶ 3). Additionally, Mr. Leung testified to collecting these costs and that they

were directly incurred in furtherance of this claim (app. br. at ex 3, aff. of I. Leung ¶

5). This evidence was not opposed by the government. In the nature of a jury verdict

we find ECC is entitled to $32,939 in direct labor costs.

2. Indirect Labor Costs

25

July 2, 2011, Telecommunications Cabling; July 15, 2011, Security Systems

Installation; July 20, 2011, Fire stopping; August 06, 2011, DDC for HVAC

Installation; August 17, 2011, Testing, Adjusting & Balancing (Audit at 12).

24

60. ECC claimed indirect costs totaling $32,939 were based on applying the

2011 provisional billing rates (Fringe, Overhead, and G&A) to the claimed labor

amounts for the Senior Project Manager, Guy Simmons. The claimed indirect rates

were based upon ECC’s interim billing letter “Revised Provisional Billing Rates and

Cost of Money Factors for Calendar Year 2011.” (Audit at 13 ¶¶3 b, c). Mr. Leung

testified that from his review of ECC’s Rule 4 Supplement Tabs 24, 18, and 20, it is

clear that ECC used the appropriate DCAA approved fringe rates. (App. br. at ex 3,

aff. of I. Leung ¶ 6.) However, the auditors questioned the indirect costs in their

entirety as a result of being directly associated with their findings that questioned all

direct labor claimed (Audit at 3, 13 ¶ c.). Based upon our findings on ECC’s direct

labor claim, we reject the auditor’s findings.

61. Indirect costs include fringe benefits that are charged on direct labor costs

and those fringe costs are included in the Statement of Costs (app. supp. R4, tabs 18,

20). All fringe costs were prepared using the DCAA audit letter that established

ECC’s indirect cost rates for 2011 (app. supp. R4, tab 24; app. br. at ex. 3, aff. of I.

Leung ¶ 6). Our calculations, based upon our previous direct labor finding of

entitlement, are:

DIRECT LABOR (Mr. Simmons) & FRINGE, OVERHEAD, & G&A FINDINGS

DIRECT LABOR $32,939

2011 ECC Fringe - Non DBA Field (35.69%) $11,756

2011 Overhead-Engineering and Construction (E&C) (43.30%) $14,262

2011 G&A (8.70%) $2,865

TOTAL: $61,822

3. Subcontract Claims

62. The claimed subcontract costs of $899,920 represents the largest segment

of the overall claimed costs. Although the audit confirmed ECC’s claimed costs were

incurred it was unable to determine whether $538,955 of the total costs claimed were

allocable to the removal and reinstallation of cable claim (Audit at 14). The audit’s

findings were based upon review of invoices covering the period between May and

August 2011 from the four subcontractors that were contracted by ECC to complete

the work. The subcontractors listed in the claim are: (1) Metag; (2) Vega Services,

Inc.; (3) Kelly & Hayes Electrical Supply; and (4) DHL Express USA (id.).

(1) Metag

63. Mr. Leung testified that ECC negotiated modifications with its existing

subcontractor Metag for the removal and replacement of the Vatan cable and that those

25

modifications are reflected in the Rule 4 Record (app. br. at ex. 3, aff. of I. Leung

¶¶ 9-10; app. supp. R4, tabs 22-23). There were two modifications to the existing

subcontract, one for each building. The Camp Bastion modification was executed on

June 26, 2011 and Camp Leatherneck on August 22, 2011. (Id.)

64. ECC submitted five Metag invoices for the costs claimed (app. supp. R4, tab

32 at 49-56). The auditors traced the amounts billed on the five Metag invoices to the

amounts on ECC’s work authorizations and purchase orders for Metag, and did not find

any discrepancies. They also reviewed ECC’s work authorizations and purchase orders

to determine the scope of work to be performed by Metag. The auditor’s review

revealed that Purchase Order 344675, dated June 14, 2011, awarded the installation of

electrical, fire alarm, security access control, and non-secure communications for

building 2 to Metag. Therefore, ECC contracted with Metag to perform work in

addition to removal and reinstallation of wiring/cable. (Audit 16-17) The auditors

questioned all the claimed Metag costs on the basis they could not verify their

allocability, stating:

During our review of the Metag invoices, we noted the

description of the services billed was “TO 56 Electrical

Works.” This description is very general and does not

allow us to determine if the work billed is solely related to

the removal and reinstallation of wiring/cable. Hence, we

were unable to confirm ECC’s assertions, and we

questioned the $356,931 claimed cost for Metag.

(Audit at 17)

65. Mr. Leung testified that all of ECC’s subcontract invoices in support of this

claim were included in ECC’s Supplemental Rule 4 record at tab 32 (app. br. at ex. 3,

aff. of I. Leung ¶ 5). Our review of the five invoices included as evidence at that

location does include the invoice noted in the audit as the rationale for questioning all

of Metag costs, i.e. we are unable to locate a “Purchase Order 344675, dated June 14,

2011”. Additionally, it is obvious that the auditors did not have access to Mr. Leung’s

testimony or the fact that the agreement for Metag to perform the work to remove and

replace the electrical cable for both buildings was a modification to already existing

subcontracts for other work on the project (app. supp. R4, tabs 22-23). Given our

review of the evidence we find that ECC has proven its entitlement to the entire

claimed amount of $356,931.

(2) Vega Services Inc.

66. The auditors traced the Vega Service Inc. invoices to ECC’s work

authorizations and purchase orders for Vega, and did not find any discrepancies. They

26

also reviewed ECC’s work authorizations and purchase orders to determine the scope

of work to be performed by Vega Services Inc. Below are details of their specific

findings about the Vega Services scope of work:

ECC’s work authorizations for Vega named

VEGA.CSA.HERC.4502.056.WA01 awarded the

installation of electrical, fire alarm, security access control,

and non­secure communications for the Marine Brigade

Headquarters buildings at Camp Bastion and Camp

Leatherneck.

Work authorization

VEGA.CSA.HERC.4502.056.WA0l.MODl dated June 14,

2011, modified ECC’s contract with Vega Services Inc. to

de-scope its work. The modification de-scoped the work

from two buildings to one building.

(Audit at 17)

67. The auditors also reviewed the description of the work billed on Vega

Service’s invoices, and questioned $116,265 of the $133,567 claimed cost. The

descriptions on the Vega invoice related to the questioned costs are as follows:

Provide all labor and equipment required to complete the

required remaining installation for all Electrical Works

(interior and distribution) for the LCE and ACE Marine

Headquarters facilities...

Provide all labor and equipment required to complete all

testing, commissioning, and integration as required per

plans, specifications, and manufacturer’s instructions for

the Electrical Works (interior and distribution) remaining

for the LCE and ACE marine headquarters facilities.

Provide all labor and equipment required to complete all

required Power Generation Plant Cabling, controls,

terminations, etc. for the LCE and ACE Marine

Headquarters power generation facility (one facility) as

detailed in the design drawings... This includes all other

works that need to be completed to provide a fully

functional, code compliant power generation plant.

(Audit at 17-18)

27

68. Based upon these descriptions, the auditors were unable to confirm ECC’s

assertions. The auditors accepted the difference of $17,302 because the description of

the invoice was the following:

Provide all labor and equipment required to re-pull all

required Electrical Wiring for the LCE and ACE Marine

Headquarters facilities that was removed as part of Option

I and reinstall in accordance with the design drawing...

(Audit at 18). We agree and find ECC is entitled to $17,302.

(3) Kelly & Hayes Electrical Supply (K & H)

69. ECC claims $365,957 on behalf of K & H (Audit at 18). The auditors

traced the amounts billed on the ten Kelly & Hayes Electrical Supply invoices to the

amounts of ECC’s purchase orders for K & H, and did not find any discrepancies. All

invoices are found in the record (app. supp. R4, tab 32). Based on their review of

ECC’s Claim and the K & H invoices, they determined ECC purchased compliant wire

from Kelly & Hayes Electrical Supply for the TO 56 project in Afghanistan. As they

noted, ECC’s claim states “Our claim includes all subcontractor and material costs

for removing and replacing cable.” Thus, they reviewed the descriptions on the K &

H invoices to verify ECC’s claimed cost for electrical materials related only to the

purchase of compliant wire. (Audit at 18) Below are details of their review of the

invoices and specific findings:

• The description of items procured on invoice R00260 and

R00267 is for plastic tape, a hammer drive anchor, conduit

of different types, gloves, struts, adapters, connectors,

temporary lighting, and various other electrical materials.

• The description of items procured on invoice R00399 is for

aluminum service poles.

• The description of items procured on invoice R00352 is for

switch boxes.

• The description of items procured on invoice R00675 is for

circuit breakers, marking tape, outlet box brackets,

switches, couplings, adapters, and various other electrical

materials.

• The description of items procured on invoice R00772 is for

struts and open lighting.

28

• The description of items procured on invoice R00782 is for

NEMA 3 pole range, mounting panel for pole range, and

power distribution block.

(Audit at 19).

70. The auditors were unable to confirm ECC’s assertions based upon the

invoice descriptions. They accepted the difference of $316,008 because the

descriptions on invoices R11573, R99788, R99876, and for some items on invoice

R00675 (D-03c-4) were for electrical wire/cable (Audit at 19; app. supp. R4, tab 32

at 37-47). They also noted ECC purchased 399,700 feet of wire (Audit at 19).

71. We have reviewed the K & H invoices and concur with the auditors’

findings. Although the invoices questioned appear to possibly relate to electrical

installation of the cable, we have no direct proof that is the case. Therefore, we find

that ECC has met its burden of proof on entitlement to $316,008 of the $365,957

claimed in reimbursement for the purchase of cable from K & H.

(4) DHL Express USA

72. Mr. Leung and Mr. Turek testified it was necessary to air freight the

replacement UL listed materials to Afghanistan, and this was done using the available

air shipping company, DHL. Their air freight invoices for the UL listed electrical

cable are included in ECC’s claim. (App. supp. R4, tab 32 at 1-22; app. br. at ex 3,

aff. of I. Leung ¶ 10; app. br. at ex 2, aff. of D Turek ¶ 27) The auditors compared

three of the five DHL invoices to ECC’s purchase orders for DHL, and did not find

any discrepancies. ECC could not provide the auditors with purchase orders related to

two of the DHL invoices. (Audit at 19).

73. The auditors reviewed the descriptions on the DHL invoices and matched

the DHL invoices to the K & H invoices to verify ECC claimed shipping cost related

only to transporting compliant wire. They accepted the difference of $27,655 because

invoice RNH0000085114 states “ECC Cable to Bastion” and the shipment date

correlates to dates wire was purchased from Kelly & Hayes Electrical Supply.

However, they did question $15,810 of $43,465 claimed for DHL Express because they

could not find similar shipping references that correlate to the wire purchased in May

2011. (Audit at 19-20)

74. ECC disagreed with their audit findings (audit at 20 ¶ d; 26) Mr. Leung

testified that the R4 record contains the invoices for materials purchased to replace the

Vatan electrical cable and the invoices for ECC’s subcontractor, Metag, who removed

29

and replaced the Vatan electrical cable (app. br. at ex. 3, aff. of I. Leung ¶ 5). We

accept the auditor’s findings. ECC is entitled to $27,655.

(5) 2011 G&A (Applied to Subcontractors – 8.74 Percent)

75. Mr. Leung testified that the (G&A) rates are uniform across work

performed by ECC and that the G&A rates included in the Statement of Costs for ECC

on the TO 56 claims are those determined by the DCAA in their 2011 audit letter (app.

br. at ex 3, aff. of I. Leung ¶ 8; app. supp. R4, tab 1). ECC applied an 8.74% 2011

G&A Rate to the total amount of subcontract costs, as presented on ECC’s claim

submission. The auditors accepted the 8.74% number and applied it in their

calculations to the questioned subcontract costs. (Audit Ex. A, at 9, 22)

(6) Profit 11 Percent

76. The Statement of Costs for the two TO 56 claims contains a profit rate that

was calculated at 11% (app. supp. R4, tabs 18, 20). The 11% profit was calculated

using the Weighted Guidelines Application and the various risk factors are shown in

those calculations. The Weighted Guidelines Application is a common regulatory

calculation for profit appropriate on modifications (app. br. at ex. 3, aff. of I. Leung ¶

13).

77. The auditors did not offer an opinion or recommendation on the applied

11% since they considered it to be a matter of negotiation for the CO. We find the

11% profit claimed to be reasonable.

78. We find that total subcontract costs are as follows:

METAG $356,931

Vega Services Inc. $17,302

Kelly & Hayes Electrical $316,008

DHL $27,655

Total Subcontract Costs $717,896

2011 G & A, (8.74%) $62,744

Profit (11%) $78,968

Total Subcontract Costs $859, 608

(7) Claim for Request for Equitable Adjustment (REA) Preparation Costs

79. ECC claims $4,571 for ECC Contract Manager, Chris Cannon’s

preparation of ECC’s REA submitted on June 12, 2012 and denied on July 17, 2013.

This claim is based upon 33.5 claimed hours at $61.18 per hour plus applied indirect

30

costs and associated profit (Audit at 20 ¶ 5b). After reviewing ECC’s recorded costs

and related documentation the auditors found 12.5 hours were not supported by

employee time cards. This led the auditors to question $1,537 of the $4,118 (cost

minus profit) claimed, leaving a verified amount of $2,581in total costs. 26 The

auditors also verified that none of the claimed costs were incurred after July 17, 2013,

the date the government denied the REA, i.e., none of these claimed costs were

incurred in preparation of the resulting claim that followed on appeal. (Audit at 21 ¶¶

(3)(i), (ii)).

80. Although the audit verified a total cost of $2,581 that included fringe costs,

overhead engineering and construction (E&C), and G&A, the auditors maintained their

prior position of not addressing profit (Audit at 21, see cost calculation table). Based

upon our prior profit rate finding of 11%, we find that ECC is entitled to $283.91 in

profit on its REA preparation claim for a total amount of $2,865 (id.).

Summary of Remove and Replace Claim Quantum findings ASBCA No. 59280

81. We find that ECC is entitled to an equitable adjustment of $924,295 based

upon its claim in appeal ASBCA No. 59280. Below is a summary of our findings:

TOTAL DIRECT LABOR $61,822

TOTAL SUBCONTRACT COSTS $859,608

REA PREPERATION COSTS $2,865

TOTAL CLAIM AMOUNT $924,295

ADDITIONAL FINDINGS OF FACT

COMPENSABLE DELAY CLAIM - QUANTUM

ASBCA No. 60760

82. ECC submitted a delay claim on April 19, 2016 seeking $916,840.82 for a

compensable contract extension of 114 calendar days of delay for the period between

July 31, 2011 and November 21, 2011 (R4, tab 520). Our findings have established

entitlement to 114 calendar days of compensable delay (finding 49). Unlike the

Removal and Replacement claim above, the government did not submit a DCAA

Audit, expert report, or testimony.

26

The auditors originally questioned all of the proposed REA preparation costs. ECC

disagreed with their findings. After discussing the findings with ECC during an

exit conference, the auditors revised their questioned cost to reflect their current

position - only labor costs associated with labor hours unsupported by the

employee time cards. (Audit at 22 ¶¶ c, d)

31

Testimony on Preparation of Direct Labor Costs

83. Mr. Ivan Leung testified that he prepared the detailed cost calculations for

the delay claim (app. br. at ex. 3, aff. of I. Leung ¶ 6.). ECC maintained four Program

Management Offices (PMOs) within Afghanistan to support its various projects.

These PMO locations were Bastion, Kabul, Kandahar, and Bagram. The TO 56

project was supported by the Bastion PMO which included Program Management,

Accounting, Finance, Logistics, Procurement, and Administrative Staff. The labor

costs of these personnel along with their support costs (Lodging, Meals, Incidentals,

Office Equipment, Office Rent, etc.) were collected within the Bastion PMO costs on a

monthly basis. These costs were then allocated to each project that the Bastion PMO

supported (including TO 56) for any given month, using a percentage of Direct Labor

cost charged to the project by those working in the Bastion PMO. (Id. at ¶ 7; app.

supp. R4, tab 25).

Testimony on preparation of Extended Field Overhead/General Requirements

84. Mr. Leung testified that ECC’s costs for its General Requirements,

sometimes referred to as extended field overhead, were included in the delay claim and

the record is at app. supp. R4, tab 18. Mr. Leung also explained the methodology used

to capture these costs. ECC’s WBS captured time-related Labor and Other Direct

Costs (ODCs) for ECC’s General Requirements for the period of delay claimed in

2011. From these monthly costs, Mr. Leung extrapolated the daily cost for any given

month during that period. These daily costs were then applied to the specific number

of days for any given month where delay occurred. (App. br. at ex 3, aff. of I Leung ¶

11)

85. Attached to ECC’s claim were 888 pages of supporting cost data (R4, tab

520 at 20 – 908). The attached cost spreadsheets present the accounting data collected

by ECC’s government approved accounting system for the period between July 31,

2011 and November 21, 2011. ECC explains this costs data is divided into two

sections. The first section presents all labor costs. An index (id. at 21-22) of all the

labor costs is followed by the associated payroll evidence (id. at 24-90). The second

section presents all non-labor costs, also referred to as Other Direct Costs (ODCs) (id.

at 91-908). Pages 91 through 92 are a summary of ODC costs and pages 93-908 are

the supporting data for the ODC costs. The cost and pricing data for the ODCs is

organized by bookmarks. Each bookmark is labeled according to the line item

number shown in the Non Labor Cost Index. (R4, tab 520 at 91-92. The spreadsheets

also include a calculation for Fringe, Overhead, and G&A for labor costs (id. at 22-23)

and G&A for ODC (id. at 91-92).

86. Our findings establish ECC is entitled to $916,840 in compensable delay

costs. The summary below details the elements of our findings:

32

COMPENSABLE DELAY CLAIM COST SUMMARY

Direct Labor $251,682

Fringe $63,619

Overhead $139,205

Subtotal Total Labor $454,506

Subtotal Non Labor (ODCs) $388,643

G&A $73,691

Entitlement Total $916,840

87. Unlike the removal and replacement claim, the government did not submit

a DCCA audit in support of this compensable delay claim. In fact, the government did

not submit anything in opposition to this claim.

DECISION

ENTITLEMENT DECISION

ASBCA No. 59280

This appeal results from appellant’s installation of internal wiring during

construction of two buildings in Afghanistan. Appellant alleges that after installing

substantially all of the wiring, the government rejected the wiring and required

appellant to remove and replace the wiring at appellant’s expense. Appellant argues

that the government order to remove and replace the wire was a constructive change or

in the alternative was a waiver of requirements because of the government’s previous

approval of the initially installed wiring. (App. br. at 29) For appellant to demonstrate

a constructive change, the burden of proof is on appellant to show: (1) that it

performed work beyond the contract requirements, and (2) that the additional work

was ordered, expressly or impliedly, by the government. Bell/Heery v. United States,

739 F.3d 1324, 1335 (Fed. Cir. 2014). The parties agreed to have this appeal heard on

the record per Board Rule 11. These appeals present an unusual challenge because the

government has waived submittal of any briefs or any testimony in lieu of solely

relying upon the record to establish that appellant is unable to meet its burden.

Was Appellant’s Use of the Vatan Wire Rejected by the Government?

To prevail in its appeal, appellant must show that the authorized government

representative required or compelled the contractor to perform the work, and that

government personnel did not merely offer advice, comments during discussions,

suggestions, or opinion. See McElroy Mach. & Mfg. Co., ASBCA No. 46477, 99-1

BCA ¶ 30,185 at 149,358; Quality Plus Equip., Inc., ASBCA No. 46932, 96-2 BCA

33

¶ 28,595 at 142,759; Labarge, Inc., ASBCA 19845, 78-2 BCA ¶ 13,376. Appellant

argues in its brief that the government’s repeated rejections of the wire, within the

context of the financial imperatives involved, amounted to a constructive rejection of

the wire (app. br. at 34-35; 35 at n.2). We agree.

The record is devoid of any evidence that the government explicitly ordered

appellant to replace the wiring being installed and replace it with what the government

considered compliant wire (finding 35). Mr. Turek testified that the government did

provide such direction, “on or about May 9, 2011 or May 11, 2011”. He further

testified that during the May 9th meeting the project COR “made clear that the Vatan

electrical cable was a deficiency that would have to be corrected through removal and

replacement”, which was then followed by a Contracting Officer Performance

Deficiency Letter on May 11, 2011 (id.). Although Mr. Turek’s testimony is

unopposed by the government, our findings indicate the May 9,, 2011 meeting minutes

are ambiguous at best on this point. The meeting minutes do not indicate Mr. Turek

was an attendee at these meetings nor do they indicate a direct order to replace the

cable; they only state, “Electrical Distribution Cable – will be replaced. Order placed.

Delivery date pending based on shipping company ETA – approximately 2 weeks, -

May 18th.” (Id.)

However, our findings do indicate that the government never accepted COR

Lopez’s approval of the wire and continued to reject the wire by finding it non-

compliant with contract requirements (finding 33). Even while the government knew

appellant was installing the wire, inspectors continued to find the wire non-compliant

with NEC 110.3 (findings 33-34). Additionally, T F Power conducted an investigation

of the project and found that the wire did not comply with NEC 110.3 (finding 31).

The CO met with appellant as the wire was being installed and discussed the issue of

the wire and eventually on May 11, 2011 issued a Performance Deficiency Letter

(PDL) requesting appellant submit a Corrective Action Plan to include an alleged

performance deficiency of “unlisted wires.” The PDL asserted that electrical

deficiencies had been noted by Title II inspectors and T F Power since November 2010

and have yet to be addressed. (Finding 36) Appellant argues this letter was a clear

rejection of the installed electrical wire and that removal and replacement with UL

wiring was the only course available given the government’s repeated rejections of the

wire within the context of the project given 80% of the wiring was already installed

and the prospect of facing $6,369 in daily liquidated damages (app. br. at 35 n.2) 27.

The government consistently found appellant’s wire non-compliant but did not

specifically state why other than it failed to meet the requirements of NEC 110.3

because the wire was not listed or labeled. We conclude the government’s consistent

27

$436,276.50 in Liquidated Damages were ultimately assessed at the completion of

the contract.

34

position that the installed wire did not meet the contract requirements, culminating in

the CO’s PDL, coupled with the business imperatives existing at that time, amounted

to an implied government rejection of the wire and a constructive order to replace the

installed wire with other compliant wire. Despite the fact the cable was approved by

the COR, who had authority to do so, the government clearly rejected appellant’s wire

as non-compliant with NEC 110.3.

Given the Rejection of the Wire, the Burden Shifts to the Government to Prove

the Installed Wire Did Not Comply with the Contract Requirements

When the government rejects work as not in compliance with its specifications

the burden of proof shifts to the government to demonstrate that fact. Ensign-Bickford

Aerospace & Def. Co., ASBCA No. 57929, 16-1 BCA ¶ 36,533 at 177,969; (citing Sw

Welding & Mfg Co. v. United States, 413 F.2d 1167, 1176 n.7 (Ct. Cl. 1969); and

Yardney Tech. Prods., Inc., ASBCA No. 53866, 09-2 BCA ¶ 34,277 at 169,333-34).

If the government does not meet that burden, the contractor “is entitled to an equitable

adjustment under the Changes clause” of the contract. M. A. Mortenson Co., ASBCA

No. 53647 et al., 06-2 BCA ¶ 33,400 at 165,575. Therefore the burden shifts to the

government to prove that the wire was not listed or labeled and thus non-compliant

with NEC 110.3.

The parties waived a hearing on these appeals and instead requested these

disputes be heard on the record. The government also chose not to introduce any

testimony or submit any briefs arguing its position. Instead the government relies

upon our review of the record to ferret out and divine its legal arguments from a

voluminous record. Ours is an adversarial system where it is incumbent upon, and a

duty of, the advocates, not the Board, to advocate for their respective clients. It is not

incumbent upon the ASBCA to make the government’s case for them, or to dig

through a voluminous record in search of support for an unsubstantiated argument or

uncorroborated assertion. Lebolo-Watts Constructors, LLC., ASBCA No. 59740 et al.,

21-1 BCA ¶ 37,789 at 183,426. Given the fact the government did not submit any

testimony or briefs, we conclude the government has failed to meet its burden of

showing the wire did not meet the contract requirements of NEC 110.3, i.e., that it was

not labeled and listed. Therefore, appellant is entitled to an equitable adjustment.

That being said, we have made a diligent effort to review the record and

conclude the record yields the same conclusion i.e., based upon the record, the

government has failed to prove that the cable did not meet the requirements of NEC

110.3. The beginning point for arriving at this conclusion is a determination of what

were the contract requirements? Surprisingly, the record discloses there was some

confusion over this basic issue.

35

What were the contract requirements?

NEC 110.3 creates a regime where specific testing laboratories are not

designated for every project. Rather it creates the concept of an authority having

jurisdiction (AHJ) that would determine which laboratories qualified to list wire. The

NEC cautions that the AHJ is defined “in a broad manner,” and that an AHJ may be a

“federal, state, local or other regional department or individual,” or it may be “the

property owner . . . commanding officer or departmental official”. (Finding 12) We

conclude this definition is broad enough to encompass a CO or COR. In fact, this

appears to have been the practice in Afghanistan for some time. Additionally, TO 56

specifically requires any electrical materials be submitted to the COR for approval or

disapproval (findings 15-18). This necessarily required the COR (or CO in some

cases) to interpret what laboratories met the requirements for listing wire and if the

product was labeled in compliance with NEC 110.3. This all changed with the

creation of T F Power.

T F Power was created in October 2008 as a result of the tragic military deaths

resulting from electrical accidents in Iraq and Afghanistan and the investigations that

followed. It was tasked with several responsibilities but, relevant to this appeal, T F

Power became the authority to promulgate rules for implementing NEC 110.3 in

Afghanistan. (Findings 13-14). Although T F Power already existed at the time of

award, February 26, 2010, the record does not disclose the existence or

implementation of any T F Power NEC 110.3 rules at that time. In the face of this

ambiguity, we conclude TO 56 envisioned the CO to be the primary AHJ by

delegating authority to the COR for inspecting and approving or disapproving

electrical items falling under NEC 110.3. Our reading of the record indicates this had

been the practice in Afghanistan for some time. (Findings 19-20) In fact, appellant

forwarded a letter to the CO on September 22, 2010 requesting interpretation of the

contract requirements regarding the listing and labeling of electrical equipment. On

September 29, 2010, the CO responded stating: “provide electrical materials that are

listed / labeled by either Underwriters Laboratory (where specified) or other third party

testing certification laboratory for all basic electrical equipment.” (Finding 21)

The record indicates T F Power’s first promulgation of NEC 110.3 rules

occurred on August 3, 2010, some six months after award. These new rules specified

T F Power recognized only two types of credentials: the CE marking (European Union

marking) or listed / labeled and displaying the marking of a Nationally Recognized

Testing Laboratory (NRTL) such as Underwriters Laboratory (UL). (Finding 13) Of

note, this policy did not restrict listing to a particular laboratory but instead retained the

term “Nationally Recognized Testing Laboratory”. However, quickly thereafter on

September 16, 2010, T F Power issued rules significantly narrowing the rules by

restricting the definition of a “Nationally Recognized Testing Laboratory” to only

specific laboratories, stating “For United Stated (sic) the Nationally Recognized

36

Testing Labs (NTRL) as listed by the US Department of Labor OSHA www.osha.gov”

and “For the European Union as listed by website below.” (Id.) In other words, this

latter proclamation imposed a new requirement to use only directed sources from the

United States or the EU. (Id.)

In summary, there were three possible NEC 110.3 standards by the time

appellant sought to have the COR approve its proposed wire: one from the CO and

two from the T F Power. Our review of the contract language leads us to conclude that

the applicable standard to be applied is the one issued by the CO based upon the

standard at time of award. It is self-evident in government contracts that a contractor

is only bound to the requirements in the contract at the time of award unless modified

by a change to the contract pursuant to the changes clause. Be that as it may, we read

the following special clause in this contract to specifically address this principal as it

relates to updates to regulations implementing NEC 110.3. The contract statement of

work at Attachment 1 (January 2010) provides:

The Contractor shall identify, comply with and ensure that

its personnel and its subcontractors and subcontractor

personnel at all tiers obey... [the] National Electrical Code

(NEC)... [and] Regulations, Guidance, and Policy Letters;

Executive Orders (EOs), Afghanistan Construction

Standards, Central Command orders and directives

applicable to personnel in Afghanistan, including but not

limited to USCENTCOM, North Atlantic Treaty

Organization (NATO), International Security Assistance

Force (ISAF) fragmentary orders, instructions and

directives; and include all changes and amendments in

effect on the date of issuance of this TO unless specific

relief is sought by the Contractor in writing and granted by

the Contracting Officer (CO).

(Finding 14) (emphasis added). We interpret this language to encompass any

directives/regulations issued by T F Power and the contractor is only responsible for

such rules as exist at time of award, February 26, 2010. It follows that any T F Power

mandates issued after award are only binding on the contractor if formally

incorporated into the contract by modification. Obviously, the government has the

authority to change the contract requirements under the changes clause. However, if it

chooses to do so it must do so bilaterally or unilaterally entitling the contractor to a

possible equitable adjustment.

There were only three modifications to TO 56 (finding 14). Although two

modified contract requirements, none of them incorporated the requirement changes

37

specified by T F Power. 28 Additionally, Modification 1 was effective June 7, 2010 and

T F Power’s first promulgation of NEC 110.3 rules did not occur until August 3, 2010.

So we conclude that the appropriate standard to apply is the one stated by CO Toscano

on September 29, 2010. The CO stated that appellant must, “provide electrical

materials that are listed/labeled by either Underwriters Laboratory (where specified) or

other third party testing certification laboratory for all basic electrical equipment . . .

that are listed/labeled.” (Finding 21)

Was Vatan a Listed Third Party Qualified / Nationally Recognized Testing

Laboratory 29

The burden of proof is on the government to show the wire installed was non-

compliant with the requirement of NEC 110.3 as stated by CO Toscano, i.e. that the

wire was not listed. Mr. Turek’s unopposed testimony is that TSE is the nationally

recognized testing laboratory in Turkey (finding 10 at n.10). Despite this, the

government’s repeated rejection of the Vatan cable implicitly meant that the

government found TSE not to be a qualified third party or nationally recognized

testing laboratory per NEC 110.3. Although implied, we are unable to find anything in

the contemporaneous record where the government specifically alleged TSE was not a

NEC 110.3 qualified third party or nationally recognized testing laboratory. In fact,

after COR’s approval of the wire, any government mention of TSE is conspicuously

absent in the contemporaneous record. On the other hand, Mr. Turek’s unopposed

testimony was that Vatan cable had been used on other projects in Afghanistan and

that TSE is the nationally recognized testing organization in Turkey. Likewise, Vatan

wire, although not this specific wire, was among AFCEE pre-approved wire lists.

(Findings 19-20) In summary, the government has failed to present any proof that

TSE was not a qualified third party or nationally recognized testing laboratory per

NEC 110.3. and, as a result, that the Vatan wire was not “listed”.

28

The first modification, effective June 7, 2010, incorporated some changes to the

statement of work but there was no change to the above language at § 2.0.;

Modification 2 did not involve the statement of work and was effective on

November 30, 2010 after the COR had already approved the wire; and

modification 3 was effective on November 28, 2011, after the wire had been

removed and UL compliant wire ordered May 20, 2011. (Findings 14).

29

We agree it is unclear whether appellant’s cable was CE certified. The Title II

inspector who assisted and advised the COR when he approved the cable

contacted the manufacturer who confirmed they were authorized to display the

CE mark. Likewise, the COR had access to Vatan’s catalogue which also

displayed the CE mark. However, there is no direct proof such as testimony or

photos displaying the CE mark. As a result, based upon the record, we cannot

conclude whether or not the cable was CE certified.

38

Labeled by a Qualified Testing Laboratory

We also conclude the Vatan wire was labeled in accordance with NEC 110.3.

Our findings establish that NEC 110.3 states the “suitability of equipment use may be

identified by a description marked on or provided with a product” (finding 7)

(emphasis added). Likewise, NEC 110.3 defines “Labeled” as material “to which has

been attached a label, symbol, or other identifying mark of an organization that is

acceptable to the authority having jurisdiction and concerned with product evaluation,

that maintains periodic inspection of production of labeled equipment or materials”

(finding 11). Our findings establish, per the definition above, that NEC 110.3 does not

require the label, symbol, or other identifying mark to be stamped on the wire (finding

7). There is evidence in the record, a photo taken during T F Power’s inspection,

showing that the wire’s packaging as delivered displays the TSE label (finding 31).

Our conclusion is that this is sufficient to meet the definition of labeled under the

appropriate standard at that time. Again, the government has failed to prove

otherwise.

COR Approval

Additionally, probably the strongest evidence that the wire was compliant with

NEC 110.3 requirements is the fact that the COR, who possessed authority to approve

the wire, inspected the wire and approved it on November 12, 2010 (findings 23-29).

T F Power had already issued two regulations changing the rules for complying with

NEC 110.3 by the time the COR approved the wire but the government had not

contractually implemented those rules (findings 13-14). Surprisingly, there is no direct

contemporaneous evidence in the record that anyone at the construction site was even

aware of the T F Power changes. There is no mention of the T F Power rules by the CO,

COR, or even the Title II inspectors who later found the wire non-compliant.

Additionally, the record is devoid of mention of T F Power until it was brought in to

conduct an inspection after the approval and the wire was almost installed. Although T

F Power’s inspection report found the wire non-compliant, it only referenced NEC 110.3

but none of its implementing regulations.

CONCLUSION ON ENTITLEMENT

In summary, we conclude, based upon the record, that appellant did meet the

requirements of NEC 110.3 as awarded, i.e. that the wire was listed and labeled per

NEC 110.3, and the government has not entered any evidence to the contrary.

Conversely, the government has failed to meet its burden of proof, i.e. that the wire

was not listed or labeled per NEC 110.3. As a result, appellant is entitled to an

equitable adjustment under the contract’s Changes clause.

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QUANTUM DECISION

ASBCA No. 59280

As claimant, appellant has the burden of proving its damages with “reasonable

certainty.” Precision Pine & Timber v. United States, 596 F.3d 817, 833 (Fed. Cir.

2010). “[R]easonable certainty” has been defined as, “more than a guess, but less than

absolute exactness or mathematical precision” (id.). This standard has sometimes also

been stated as the moving party “bear[ing] the burden . . . of proving the amount of

loss with sufficient certainty so that the determination of the amount of damages will

be more than mere speculation”. Lisbon Contractors, Inc. v. United States, 828 F.2d

759, 767 (Fed. Cir. 1987). To prevail, appellant must prove three elements:

(1) liability- that the government did something that changed the contractor’s costs for

which the government is legally liable, i.e. entitlement; (2) causation-that there exists a

causal nexus between the basis for liability and the claimed increase in costs; and

(3) resultant injury. Servidone Constr. Corp. v. United States, 931 F.2d 860, 861 (Fed.

Cir. 1991). We conclude, based upon our findings, that appellant has proven its

damages with reasonable certainty. Additionally, we conclude that appellant has

proven entitlement, causation, and resultant injury entitling appellant to an equitable

adjustment under the changes clause in the amount of $924,295, plus interest under

41 U.S.C. § 7109 from September 6, 2013 until payment. (Findings 53-81)

DECISION

COMPENSABLE DELAY CLAIM - ASBCA No. 60760

Entitlement

ECC seeks a compensable contract extension in the amount of $916,840.82 for

114 calendar days of delay for the period between July 31, 2011 and November 21,

2011. “To prove entitlement to a compensable delay, [ECC] must show that the

government was responsible for specific delays; overall project completion was

delayed as a result; and any government-caused delays were not concurrent with

delays within appellant’s control”. WECC, Inc., ASBCA No. 60949, 21-1 BCA ¶

37,948 at 184,306, citing,Columbia State Bank, ASBCA No. 59531, 16-1 BCA ¶

36,399 at 177,456, (quoting, Versar, Inc., ASBCA No. 56857 et al., 12-1 BCA ¶

35,025 at 172,128). Additionally, ECC “must show that the government’s actions

affected activities on the critical path of the contractor’s performance of the contract.”

Kinetic Builder’s Inc. v. Peters, 226 F.3d 1307, 1317 (Fed. Cir. 2000).

ECC submitted an expert report that found ECC is entitled to 114 calendar days

of compensable delay for the period between July 31, 2011 and November 21, 2011

(findings 42-48). Based upon our review of the report, we concur with its conclusions.

40

Accordingly, our findings establish that the government was responsible for specific

delays; the overall project completion was delayed as a result; the government-caused

delays were not concurrent with delays within appellant’s control; and, the

government’s actions affected activities on the critical path of the contractor’s

performance of the contract (findings 41-46). The government did not submit any

testimony or brief in opposition to appellant’s expert report. The government did

submit two emails in opposition that responded to appellant’s REA submittal but not to

the appellant’s expert report. Consequently, we did not ascribe any weight to these

submittals. (Findings 47-48)

We conclude that ECC has proven entitlement to a compensable delay of 114

calendar days.

Quantum Compensable Delay Claim, ASBCA No. 60760

Appellant presented testimony from Mr. Leung explaining that he prepared the

cost calculations for the delay claim and how the claimed costs were collected and

captured in ECC’s accounting system. He also testified that the associated general

requirements costs (or extended field overhead costs) were included within the delay

claim and how he calculated those costs. (Findings 83-85) Appellant’s claim included

a large amount of detailed support documentation (888 pages of supporting costs data)

collected from ECC’s accounting system that included names of employees, payment

amounts, etc. (Finding 85) Below is a summary of our findings:

COMPENSABLE DELAY CLAIM COST SUMMARY

Direct Labor $251,682

Fringe $63,619

Overhead $139,205

Subtotal Total Labor $454,506

Subtotal Non Labor (ODCs) $388,643

G&A $73,691

Entitlement Total $916,840

Unlike the removal and replacement claim, the government did not submit a

DCCA audit addressing this compensable delay claim. In fact, the government did not

submit anything in opposition to this claim (finding 87).

Based upon our review of Mr. Leung’s testimony and the associated supporting

data, we conclude that appellant has met its burden of proof by a preponderance of the

evidence. Additionally, the government has not entered any evidence in opposition.

Accordingly, we conclude appellant is entitled to compensable delay in the amount of

$916,840 with interest under 41 U.S.C. § 7109 running from April 19, 2016 till paid.

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Liquidated Damages

The government assessed liquidated damages based upon 69 days of delay in

the amount of $429,906 (finding 38). The government is not entitled to these damages

because we have determined ECC is entitled to 114 days of excusable delay.

CONCLUSION

ECC’s appeal in ASBCA No. 59280 is sustained and ECC is entitled to

$924,295 with interest under 41 U.S.C. § 7109 running from September 6, 2013 until

paid. Additionally, ECC’s appeal in ASBCA No. 60760 is sustained and ECC is

entitled to $916,840 in compensable delay damages with interest under 41 U.S.C.

§ 7109 running from April 19, 2016 until paid. The government assessed liquidated

damages based upon 69 days of delay in the amount of $429,906. The government is

not entitled to these damages.

Dated: July 15, 2022

JOHN J. THRASHER

Administrative Judge

Chairman

Armed Services Board

of Contract Appeals

I concur I concur

RICHARD SHACKLEFORD OWEN C. WILSON

Administrative Judge Administrative Judge

Vice Chairman Vice Chairman

Armed Services Board Armed Services Board

of Contract Appeals of Contract Appeals

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I certify that the foregoing is a true copy of the Opinion and Decision of the

Armed Services Board of Contract Appeals in ASBCA Nos. 59280, 60760, Appeals of

Environmental Chemical Corporation, rendered in conformance with the Board’s

Charter.

Dated: July 15, 2022

PAULLA K. GATES-LEWIS

Recorder, Armed Services

Board of Contract Appeals

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