Tip Top Construction, Inc. v. Donahoe

United States Court of Appeals

for the Federal Circuit

__________________________

TIP TOP CONSTRUCTION, INC.,

Appellant,

v.

PATRICK R. DONAHOE, POSTMASTER GENERAL,

Appellee.

__________________________

2011-1509

__________________________

Appeal from the Postal Service Board of Contract Ap-

peals in no. 6351, Administrative Judge Norman D.

Menegat.

____________________________

Decided: September 19, 2012

____________________________

MICHAEL A. GORDON, Michael A. Gordon, PLLC, of

Washington, DC, argued for the appellant.

DAVID A. HARRINGTON, Senior Trial Counsel, Com-

mercial Litigation Branch, Civil Division, United States

Department of Justice, of Washington, DC, argued for

appellee. With him on the brief were TONY WEST, Assis-

tant Attorney General, JEANNE E. DAVIDSON, Director,

and BRYANT G. SNEE, Deputy Director.

__________________________

TIP TOP CONSTRUCTION v. USPS 2

Before RADER, Chief Judge, MAYER, and SCHALL, Circuit

Judges.

SCHALL, Circuit Judge.

Tip Top Construction, Inc. (“Tip Top”) appeals the fi-

nal decision of the Postal Service Board of Contract Ap-

peals (“PSBCA” or “Board”) granting-in-part and denying-

in-part Tip Top’s appeal under the Contract Disputes Act

of 1978, as amended (“CDA”), 41 U.S.C. §§ 7101–7109.

Tip Top Constr., Inc., PSBCA No. 6351, 11-1 B.C.A.

¶ 34,726, 2011 WL 1226107 (Apr. 1, 2011) (“Board Deci-

sion”). In its decision, the PSBCA ruled that Tip Top was

entitled to recover $2,565 of the $12,400 it claimed as an

equitable adjustment resulting from a change order under

its indefinite quantity job order contract with the Postal

Service for renovation and alteration of postal facilities in

the U.S. Virgin Islands (the “contract”). Id., slip op. at 16.

The Board ruled that Tip Top was not entitled to recover

the balance of the amount claimed, $9,835, because it had

failed to demonstrate that the costs at issue were incurred

as a result of the change order. Id., slip op. at 17. Be-

cause we conclude that this latter ruling by the Board was

based upon an error of law and not supported by substan-

tial evidence, we reverse and remand the case to the

Board with the instruction that it grant Tip Top’s appeal

in its entirety.

BACKGROUND

I.

The Postal Service awarded the contract to Tip Top on

July 26, 2007. Id., slip op. at 2, ¶ 1. The contract con-

templated that from time to time the Postal Service would

assign Tip Top individual projects by issuing work orders.

Id.

3 TIP TOP CONSTRUCTION v. USPS

The contract specified a procedure for the issuance of

a work order. Id., slip op. at 2–3, ¶ 3. First, the Postal

Service and Tip Top would hold a Joint Scope Meeting, at

which the Postal Service would explain to Tip Top the

work it wished to have done and Tip Top could provide

input. Next, the Postal Service would prepare a “Detailed

Scope of Work,” on which Tip Top would base its proposal

for the work. The proposal would be a lump-sum fixed-

price proposal which would be contained in a “Price

Proposal Package” which Tip Top would present to the

Postal Service. If the Postal Service accepted Tip Top’s

Price Proposal Package, it would issue a work order for

the project. Id., slip op. at 3–4, ¶ 5. Contract Clause

B.309 stated, “The contractor shall not recover any costs

arising out of or related to the development of the work

order including but not limited to the costs to review the

Detailed Scope of Work or prepare a Price Proposal Pack-

age . . . .” Contract Clause B.309, Work Order (Clause F-

302) (March 2006), subsection I. The contract also con-

tained a changes clause. See Contract Clause B.1006,

Changes (Construction) (Clause B-37) (March 2006)

Modified, subsections a,c.

On May 26, 2009, the Postal Service issued Tip Top a

work order to replace the air conditioning system at the

Main Post Office in Christiansted, Virgin Islands, for the

price of $229,736.92. Subsequently, on July 26, 2009, Tip

Top sent the Postal Service’s construction manager, Victor

Morales, its mechanical subcontractor’s submittals. The

subcontractor planned to install Carrier Air Cooled Con-

densers Model 09DK020 and a Carrier Air Cooled Indoor

Unit Air Handler Model 05BV024. The proposed con-

densers could be used with refrigerants R-12, R-22, R-500,

and R-134a; the proposed air handler could be used with

refrigerants R-22 and R-410a. The equipment submittals

did not identify the refrigerant Tip Top planned to use.

TIP TOP CONSTRUCTION v. USPS 4

The Postal Service’s construction manager approved the

submittals, and based on that approval, Tip Top’s me-

chanical subcontractor ordered the listed equipment and

associated fittings and piping.

In September of 2009, Tip Top sent its submittal for

the system refrigerant to Mr. Morales. In the submittal

Tip Top stated that it planned to use R-22 refrigerant. On

September 18, 2009, Mr. Morales returned the submittal

to Tip Top marked “Reviewed, no exceptions taken.”

Later that same day, however, Mr. Morales emailed Tip

Top stating that Tip Top should ignore the previous

approval and that R-410a refrigerant should be used in

the system. A week later, Ivan Diaz, Tip Top’s consultant

for the project, responded that the equipment previously

ordered from Carrier Corp. (“Carrier”) was only available

with R-22 refrigerant and that a change in equipment

would involve additional cost and penalties estimated at

$20,000. Mr. Diaz asked how Tip Top should proceed.

Mr. Morales responded on September 28, 2009, asking Tip

Top to submit a proposal to furnish and install air condi-

tioning equipment that used R-410a refrigerant.

During the period September 18 through October 13,

2009, Mr. Diaz assisted Tip Top in negotiating the re-

quired change with its mechanical subcontractor and

Carrier. On October 13th, Tip Top submitted to the

Postal Service specifications for air conditioning equip-

ment that used R-410a refrigerant.

The submittal was approved by the Postal Service on

October 15, 2009. Shortly thereafter, on October 19, 2009,

Tip Top, through Mr. Diaz, submitted a proposal in the

amount of $28,838.43 for additional costs associated with

changing the air conditioning system from one using R-22

refrigerant to one using R-410a refrigerant.

5 TIP TOP CONSTRUCTION v. USPS

In early November 2009, Robert Manka, the Postal

Service’s contracting officer, orally instructed Tip Top to

proceed with the change in refrigerant. Subsequently, on

January 12, 2010, Mr. Manka directed Tip Top in writing

to proceed with the change in equipment from a system

using R-22 refrigerant to one using R-410a refrigerant.

Mr. Manka’s letter stated in pertinent part as follows:

Tip Top Construction is hereby directed to proceed

with the equipment refrigerant change from R22

to R410a as detailed in the scope-of-work provided

by Mr. Ivan Diaz in his letter dated October 19,

2009 to . . . Project Manager Victor Morales for a

price to be determined later but not to exceed

$28,838.43.

During the period between September of 2009 and

June of 2010, Tip Top and the Postal Service discussed

pricing of the changed work. Until March 8, 2010, Mr.

Diaz conducted the negotiations on behalf of Tip Top.

From that point on, Percy Hollins, Tip Top’s president,

conducted the negotiations.

The critical issue in the negotiations was whether Tip

Top was entitled to recover the costs it incurred in prepar-

ing the $28,838.43 estimate that Mr. Diaz submitted to

Mr. Morales on October 18, 2009. On April 8, 2010, Mr.

Manka sought guidance within the Postal Service on this

issue, writing “If one of our JOC Contractor firms hires a

firm to do their cost estimating for proposals and modifi-

cations is the cost . . . considered an overhead charge or

does it become a direct or indirect billable cost?” After

receiving an answer to his inquiry, Mr. Manka sent an

email to Mr. Hollins on April 16, 2010, quoting to Mr.

Hollins the advice which he had been given: “The cost is

an overhead charge and is not a billable cost. We recom-

mend you review contract clause F-302 titled Work Order

TIP TOP CONSTRUCTION v. USPS 6

subparagraph I, in the associated contract which provides

specific discussion on processing work orders.” Notably,

the advice Mr. Manka received and which he passed on to

Mr. Hollins only addressed Mr. Manka’s question insofar

as it related to cost estimating for work orders. It did not

address his question insofar as it related to cost estimat-

ing for modifications under the contract’s changes clause.

Beginning in April of 2010, counsel advised Mr. Hollins

and assisted him in his continuing negotiations with the

Postal Service.

Negotiations between Tip Top and the Postal Service

ended on June 18, 2010. That day, Mr. Hollins wrote Mr.

Manka, stating, “Tip Top . . . has reviewed the Postal

Services’ responses dated April 16, 2010, April 23, 2010,

and June 8, 2010 to our emails with outside counsel and

do not consider your position substantially justified.” Mr.

Hollins wrote that Tip Top therefore was submitting “a

claim and request for an equitable adjustment under the

Contract Disputes Act.” Tip Top’s claim was in the total

amount of $34,553.77. This was comprised of (i) Tip Top’s

subcontractor’s price for the change (in the amount of

$18,757.43, plus 10% profit, 4% insurance, and 4% gross

receipts tax, for a subtotal of $22,133.77); (ii) $9,655 for

“Preparation Costs & Extended Overhead; and (iii) $2,745

for “Legal Fees.”

On June 23, 2010, Mr. Manka issued a contracting of-

ficer’s final decision in which he granted Tip Top an

equitable adjustment in the amount of $22,133.77. He

denied the balance of the claim, in the amount of $12,400.

Mr. Manka based his partial denial of Tip Top’s claim on

two considerations. First, he concluded that the proposal

preparation costs were barred by Contract Clause B.309.

As noted above, that clause provides that contractor’s

costs in connection with work orders are not recoverable.

Second, he concluded that it was unreasonable for Tip Top

7 TIP TOP CONSTRUCTION v. USPS

to spend $6,704.66 to prepare a change order valued at

only $22,133.77.

II.

Tip Top appealed the contracting officer’s final deci-

sion to the PSBCA, seeking to recover $12,400, the

amount of its claim which Mr. Manka had denied. In its

appeal, Tip Top elected to proceed under the Board’s

accelerated procedure, which is available in the case of a

claim of less than $50,000. See 39 C.F.R. § 955.13. Under

that procedure, the Board decides an appeal on the record

without an oral hearing. See id. § 955.12.

On April 1, 2011, the PSBCA issued its decision on

Tip Top’s appeal. The Board ruled that Tip Top was

entitled to recover $2,565 for costs incurred by Tip Top’s

consultant, Mr. Diaz, through October 15, 2009. That was

the day on which Mr. Morales, on behalf of the Postal

Service, accepted Tip Top’s equipment proposal for an air

conditioning system using R-410a refrigerant. Board

Decision, slip op. at 7–8, ¶ 20, 16. The Postal Service had

urged that the provision in Contract Clause B.309 barred

recovery of the costs Tip Top sought. The Board rejected

this argument. The Board stated that Clause B.309 did

not apply to Tip Top’s claim because the clause only

barred recovery of contractor costs incurred in reviewing a

Detailed Scope of Work. This, the Board stated, was “a

process exclusive to award of the original work order.”

Id., slip op. at 11. The Board continued that it was the

changes clause of the contract that governed Tip Top’s

claim for an equitable adjustment resulting from the

Postal Service’s change order. The Board ruled that Tip

Top had met the requirements for recovery under this

clause as far as the $2,565 in costs relating to Mr. Diaz’s

work prior to October 15, 2009 were concerned. The

Board stated that the costs were compensable because

TIP TOP CONSTRUCTION v. USPS 8

they represented “an increase in [Tip Top’s] direct cost of

performance due to the change.” Id., slip op. at 16.

The PSBCA also ruled, however, that Tip Top was not

entitled to recover the balance of its claim, in the amount

of $9,835. This amount consisted of Mr. Diaz’s fees and

overhead costs after October 15, 2009, until he left the job

in March of 2010. It also consisted of legal fees in the

amount of $2,745 for work done during the period April 21

through June 8, 2010. In denying recovery of this part of

Tip Top’s claim, the Board stated that the negotiations

between Tip Top and the Postal Service after October 15,

2009, relating to recovery of Tip Top’s estimating costs,

which resulted in work by Mr. Diaz and outside counsel,

“had nothing to do with performance of the changed work

or genuine contract administration and were solely di-

rected at trying to convince the contracting officer to

accept [Tip Top’s] figure for the change and maximizing

[Tip Top’s] monetary recovery.” Id., slip op. at 18. The

Board concluded: “[O]nce the substitute equipment was

approved, nothing remained to be negotiated except the

price. There is no evidence that the parties’ negotiations

addressed an extended delivery schedule or any other

changes to contract performance requirements.” Id., slip

op. at 18–19. The Board also found that Tip Top had not

adequately documented Mr. Diaz’s charges, stating, “As

the consultant likely was working on other project mat-

ters, it was incumbent upon [Tip Top] to identify hours, if

any, spent on the equipment change issue, and it has not

done so.” Id., slip op. at 17.

Tip Top has timely appealed the PSBCA’s decision.

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(10).

9 TIP TOP CONSTRUCTION v. USPS

DISCUSSION

I.

We review appeals from the PSBCA under the stan-

dard set forth in 41 U.S.C. § 7107(b):

(1) [T]he decision of the agency board on a ques-

tion of law is not final or conclusive; but

(2) the decision of the agency board on a question

of fact is final and conclusive and may not be set

aside unless the decision is--

(A) fraudulent, arbitrary, or capricious;

(B) so grossly erroneous as to necessarily

imply bad faith; or

(C) not supported by substantial evidence.

II.

Tip Top first contends that the Board committed legal

error by holding that its consultant and attorney costs

associated with the negotiations relating to the price of

the changed work were not recoverable. That holding, Tip

Top argues, conflicts with this court’s holding in Bill

Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541 (Fed.

Cir. 1995). Appellant’s Br. 19–22. There, we held that,

under the Federal Acquisition Regulation (“FAR”), con-

sultant costs incurred by a contractor in connection with

negotiations relating to the additional compensation to

which the contractor was entitled by reason of govern-

ment-caused delay of the job were allowable as contract

administration costs, even though the negotiations even-

tually failed. Bill Strong, 49 F.3d at 1550. Thus, Tip Top

urges, the consultant and legal fees it incurred in negoti-

ating the price of the change order are recoverable as

contract administration costs. The fact that the contract

TIP TOP CONSTRUCTION v. USPS 10

at issue is not governed by the FAR is irrelevant, Tip Top

claims, because the contract is governed by a changes

clause which is substantially similar to the standard

changes clause in the FAR. 1 Appellant’s Reply Br. 5.

Tip Top also argues that the Board’s finding of insuf-

ficient evidence supporting certain consultant costs was

not supported by substantial evidence. Specifically, Tip

Top takes issue with the Board’s treatment of Mr. Diaz’s

fees after October 15, 2009, when the substitute equip-

ment was approved. Tip Top contends that it provided

ample support for those costs in the form of Mr. Diaz’s

timesheets and declarations from Mr. Diaz and Mr.

Hollins. Appellant’s Br. 15–19. Noting that this evidence

was unrebutted, Tip Top argues that the Board’s finding

that Mr. Diaz was likely working on other matters was

based purely on improper speculation. Id. at 19.

The government responds by first arguing that Tip

Top’s attorney fees are not recoverable because costs

incurred to prepare and document a claim for equitable

adjustment are not recoverable. Appellee’s Br. 10. Ac-

cording to the government, the record establishes that Tip

Top’s attorney fees were incurred in the filing of a claim

and thus they are not recoverable. Id. at 11–12.

Next, the government contends that Tip Top failed to

provide sufficient evidence to support its claim for con-

sultant costs incurred after October 15, 2009. According

to the government, the invoices of Mr. Diaz do not provide

sufficient detail to determine the type of work he per-

formed. Id. at 12–16. The government further argues the

declarations provided by Mr. Hollins and Mr. Diaz are

after-the-fact and of dubious value. Id. Additionally, the

1 Postal Service contracts are not governed by the

FAR. In re Appeal of Kirkpatrick, PSBCA No. 3832, 96-2

B.C.A. ¶ 28,599, 1996 WL 590751 (Oct. 11, 1996).

11 TIP TOP CONSTRUCTION v. USPS

government states that Mr. Diaz’s costs are unreasonable

because of the ratio between his costs and the cost of the

change. Id. at 16–17.

III.

The PSBCA held that costs incurred after approval of

the substitute equipment were not recoverable. As seen,

the basis for the Board’s holding was its determination

that the efforts of Tip Top’s consultant after October 15,

2009, and the work of its attorney through June 8, 2010,

were “solely directed at trying to convince the contracting

officer to accept Appellant’s figure for the change and

maximizing Appellant’s monetary recovery,” and there-

fore “had nothing to do with performance of the changed

work or genuine contract administration.” Board Decision,

slip. op. at 18. Thus, the Board reasoned that even

though during the period between October 15, 2009,

through June 8, 2010, the parties were negotiating the

price of the changed work, the negotiations did not relate

to contract administration because the Postal Service

already had accepted the substitute equipment and

because Tip Top was trying to persuade the contracting

officer to agree to its price of $28,838.43.

Under the changes clause of the contract, Tip Top was

entitled to an equitable adjustment for any increase in its

costs due to the change in the refrigerant. See Contract

Clause B.1006, Changes (Construction) (Clause B-37)

(March 2006) Modified, subsections a,c (“If any change

under this clause causes an increase or decrease in the

supplier’s cost of, or the time required for, the perform-

ance of any part of the work under the contract, whether

or not changed by any order, the contracting officer will

make an equitable adjustment and modify the contract in

writing.”). The question is whether costs arising from

negotiations relating to the price of the changed work are

TIP TOP CONSTRUCTION v. USPS 12

recoverable in this case because they constituted part of

the increased costs arising from the change directed by

the Postal Service. The government does not appear to

dispute that costs associated with general contract ad-

ministration are recoverable. Indeed, the government

acknowledged at oral argument that costs associated with

price negotiations are potentially recoverable if the requi-

site showing is made to the Board. Oral Arg. at 25:23,

available at http://www.cafc.uscourts.gov/oral-argument-

recordings/2011-1509/all (“[Costs associated with price

negotiation are] potentially recoverable if the requisite

showing is made to the Board.”). Rather, the government

argues that Tip Top’s consultant costs and attorney fees

are not recoverable because they were incurred in the

process of claim preparation. In short, both the PSBCA

and the government take the position that reasonable

contract administration costs arising in the setting of a

change order are recoverable. 2 We do not disagree. It

seems to us proper that if a change order requires a

contractor to incur contract administration costs, those

costs are recoverable to the extent they are reasonable.

Thus, the dispute depends on whether the costs are

classified as general contract administration costs or

claim preparation costs.

Although it involved the recovery of costs under the

FAR, our discussion in Bill Strong provides guidance on

how to classify costs. 3 In Bill Strong, a contractor who

2 As seen, the Board allowed recovery of Mr. Diaz’s

costs incurred up to October 15, 2009, but denied recovery

of his costs and the fees of Tip Top’s attorney after that

date. The Board stated that these latter costs and fees

“had nothing to do with performance of the changed work

or genuine contract administration . . . .” Board Decision,

slip. op. at 18.

3 The government argues that our subsequent rul-

ing in Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir.

13 TIP TOP CONSTRUCTION v. USPS

was renovating housing units on a military base asserted

that it was incurring increased costs because the govern-

ment was releasing the units for work out of sequence. 49

F.3d at 1542. In response to the contractor’s assertion,

the government requested cost data and information from

the contractor. The contractor, in turn, hired a third-

party consulting firm to handle the submission of data to

the government. Id. at 1543. Eventually the parties

reached a settlement agreement. Id. The agreement,

however, specifically excluded the costs of the third-party

consultant’s fees, and the parties agreed that the con-

tracting officer would issue a final decision on the recov-

erability of those fees. Id. The contracting officer denied

recovery of the fees, stating that the work performed by

the third-party consultant was performed after the com-

pletion of the contract work and was thus “not incurred in

connection with the actual performance of the work.” Id.

at 1543–44.

In deciding the case, we examined the distinction be-

tween costs incurred in connection with the administra-

tion of a contract and costs incurred in connection with

the prosecution of a CDA claim, the former being recover-

able, but the latter not. Id. at 1549. In analyzing the two

types of costs, we observed the following:

In the practical environment of government

contracts, the contractor and the CO usually enter

a negotiation stage after the parties recognize a

1995) (en banc) casts doubt upon the discussion of cost

classification in Bill Strong. In Reflectone, we addressed

when a claim arises for purposes of the CDA and over-

ruled Bill Strong on this point. The discussion in Bill

Strong regarding whether a particular cost should be

classified as either a contract administration cost or a cost

incidental to the prosecution of a claim, however, remains

good law.

TIP TOP CONSTRUCTION v. USPS 14

problem regarding the contract. The contractor

and the CO labor to settle the problem and avoid

litigation. Although there is sometimes an air of

adversity in the relationship between the CO and

the contractor, their efforts to resolve their differ-

ences amicably reflect a mutual desire to achieve

a result acceptable to both. This negotiation proc-

ess often involves requests for information by the

CO or Government auditors or both, and, inevita-

bly, this exchange of information involves costs for

the contractor. These costs are contract admini-

stration costs, which should be allowable since

this negotiation process benefits the Government,

regardless of whether a settlement is finally

reached or whether litigation eventually occurs

because the availability of the process increases

the likelihood of settlement without litigation.

Additionally, contractors would have a greater in-

centive to negotiate rather than litigate if these

costs of contract administration were recoverable.

In classifying a particular cost as either a con-

tract administration cost or a cost incidental to

the prosecution of a claim, contracting officers, the

Board, and courts should examine the objective

reason why the contractor incurred the cost. If a

contractor incurred the cost for the genuine pur-

pose of materially furthering the negotiation proc-

ess, such cost should normally be a contract

administration cost allowable under FAR 31.205–

33, even if negotiation eventually fails and a CDA

claim is later submitted. On the other hand, if a

contractor’s underlying purpose for incurring a

cost is to promote the prosecution of a CDA claim

against the Government, then such cost is unal-

lowable under FAR 31.205–33.

15 TIP TOP CONSTRUCTION v. USPS

Id. at 1549–50 (citations omitted). We held that, under

this framework, the contractor’s consultant costs were

recoverable. Id. at 1550–51. With the guidance provided

in Bill Strong, we turn to the present case.

After reviewing the record in light of the discussion in

Bill Strong, we conclude that the PSBCA erred in holding

that the consultant costs and attorney fees which are at

issue were not “genuine contract administration costs”

because they were “solely directed at . . . maximizing [Tip

Top’s] monetary recovery.” Board Decision, slip op. at 17–

18. On October 19, 2009, Tip Top submitted its proposal

for the additional costs associated with the change.

Thereafter, in response to the proposal, the contracting

officer, in his January 12, 2010 letter, specifically referred

to “a price to be determined later.” Subsequently, Tip Top

and the Postal Service negotiated over the pricing of the

changed work. Through March 8, 2010, Mr. Diaz handled

the negotiations on behalf of Tip Top. After that, Mr.

Hollins conducted the negotiations for Tip Top. On April

16, 2010, Mr. Manka advised Tip Top by email of the

guidance he had received from within the Postal Service

as to the recovery of Tip Top’s consultant costs. Id., slip

op. at 9, ¶ 27. Negotiations then continued with Tip Top

assisted by counsel. Id., slip op. at 9, ¶ 28. Tip Top then

submitted a claim under the CDA on June 18, 2010. Id.,

slip op. at 10, ¶ 29. The contracting officer’s final decision

issued on June 23, 2010. Id., slip op. at 10, ¶ 31.

In our view, both the costs of Mr. Diaz’s work between

October 15, 2009, and March 8, 2010, and counsel’s fees

through June 8, 2010, were incurred “for the genuine

purpose of materially furthering the negotiation process.”

Bill Strong, 49 F.3d at 1550. The contracting officer, in

his letter of January 15, 2010, expressly left open for

further negotiation the issue of price. Thereafter, Tip Top

and the contracting officer continued to engage in negotia-

TIP TOP CONSTRUCTION v. USPS 16

tions over the price of the changed work in order to avoid

litigation. 4 Only on June 18, 2010, did negotiations

finally end when Tip Top submitted its claim under the

CDA. Simply because the negotiations related to the

price of the change does not serve to remove the associ-

ated costs from the realm of negotiation and genuine

contract administration costs. Consideration of price is a

legitimate part of the change order process. In holding

otherwise, the Board, we believe, erred.

IV.

Having held that the Board committed legal error, we

review whether substantial evidence supports the Board’s

alternative holding that Tip Top failed to establish its

costs for the time period after the substitute equipment

was approved. Based upon the record before us, we find

the Board’s holding unsupported.

Tip Top provided timesheets for Mr. Diaz’s work for

the relevant time period. To the extent more detail was

needed, Tip Top submitted declarations from Mr. Diaz

and Mr. Hollins describing the work performed by Mr.

Diaz. Additionally, Tip Top submitted attorney billing

records to support its claim for attorney fees. This evi-

dence was unrebutted. In reviewing the evidence, the

Board engaged in speculation that Mr. Diaz was working

on other projects, speculation which is not supported by

the record. In view of the evidence before us, we hold that

Tip Top adequately supported its costs for the time period

after the substitute equipment was approved and that

4 We see nothing in the record suggesting that ei-

ther Tip Top or the Postal Service negotiated in other

than good faith. In addition, by only claiming attorney

fees incurred through June 8, 2010, Tip Top limited its

claim to fees incurred during the negotiation process.

17 TIP TOP CONSTRUCTION v. USPS

those costs were reasonable in light of the course of the

price negotiations.

CONCLUSION

For the foregoing reasons, we reverse the ruling by

the Board insofar as it denied-in-part Tip Top’s appeal.

We remand the case to the Board with the instruction

that it grant Tip Top’s appeal in its entirety. This means

that Tip Top is entitled to recover $9,835 for consultant

costs and attorney fees, plus interest to the extent allowed

by the CDA.

Appellant shall have its costs.

REVERSED and REMANDED