(Opinion issued on June 18, 2013, without redactions or protective legends)

Agency decision

Ask Donna

What actually matters in this document.

Text

GRANTED IN PART: May 24, 2013

CBCA 1559

FLUOR INTERCONTINENTAL, INC.,

d/b/a J.A. JONES INTERNATIONAL,

Appellant,

DEPARTMENT OF STATE,

Respondent.

William A. Roberts, III, Daniel P. Graham, W. Barron A. Avery, Richard B. O’Keefe,

Jr., Christopher M. Mills, W. Barron A. Avery, and Tara L. Ward of Wiley Rein LLP,

Washington, DC; and James A. Hughes, Jr. of Fluor Government Group, Arlington, VA,

counsel for Appellant.

John C. Sawyer and Thomas D. Dinackus, Office of the Legal Adviser, Buildings and

Acquisitions, Department of State, Rosslyn, VA; and Erin M. Kriynovich, Sarah G.

Lounsberry, Kelly A. Yankowski, Philip Gennarelli, Alexandra Wilson, and Jenna Lynn Ellis

of IE Discovery, Inc., Arlington, VA, counsel for Respondent.

Before Board Judges DANIELS (Chairman), VERGILIO, and DRUMMOND.

VERGILIO, Board Judge.

On April 14, 2009, the Board received a notice of appeal from Fluor Intercontinental,

Inc., doing business as J.A. Jones International (JAJI) (contractor), concerning its firm, fixedprice contract with the Department of State to design and construct a new embassy compound

in Port-au-Prince, Haiti. The contractor seeks $38,026,410, plus interest, under theories of

differing site condition (asserting that subsoil at the site was collapsible and represents a type

I and type II differing site condition), failure to disclose superior knowledge (concerning the

CBCA 1559

agency’s knowledge regarding the conditions in Port-au-Prince, specifically, and Haiti,

generally), breach of the duty of good faith and fair dealing (arising from the agency’s failure

to acknowledge that the changed security environment constituted a changed condition, and

direction that the contractor return to Haiti and continue performance under the conditions),

and constructive acceleration (claiming that excusable delays and changed conditions arose

from the deteriorated security conditions, which the agency initially denied, and ultimately

recognized in an untimely manner only days before the contract was to be completed, thereby

requiring the contractor to expend resources to accelerate its performance).

This opinion focuses upon the facts material to the resolution of the various aspects

of the claim, paring down the extensive evidentiary record (of exhibits and hearing

transcripts), detailed position papers, and pre-hearing and post-hearing briefs to what is

essential to understand the context of the dispute and resolve it. Through their submissions,

the parties have brought order to the materials. References to the record are not all-inclusive,

but highlight the support for the conclusions. The transcript is rarely referenced, only

because documents often summarize information, while testimony offers embellishments,

context, and repetition, supporting but not altering the material findings.

Contrary to the agency’s suggestions, the firm, fixed-price design-build contract does

not fully shield the agency from providing additional time and/or money under the terms and

conditions of the contract that includes Excusable Delay, Changes, and Differing Site

Conditions clauses, among others. That is, although the contract was established with a firm,

fixed-price, with specific dates for completion of various tasks, neither the dollars nor dates

are immutably fixed. The specific claims of the contractor must be addressed and resolved.

While the opinion is written with findings and discussions occurring sequentially by

topic (part 1 involves the contract, conditions in Haiti, and interpretation; part 2, the

subsurface soil; part 3, performance, excusable delay, and acceleration), the Board’s decision

on each aspect of the claim is readily summarized. The Board finds that the record does not

establish that the subsoil was collapsible. Accordingly, there was no differing site condition.

The unsettled security situation was well recognized, with the possibility of security and

stability deteriorating over the performance period. The agency did not withhold information

or mislead the contractor. The record does not support the superior knowledge basis of the

claim. There was no breach of the duty of good faith and fair dealing, because the contract

places on the contractor the risks of performing during periods with a deteriorated security

environment. The security conditions did not constitute a change to the contract. However,

the contractor has established that excusable delays occurred arising from Government acts-the ordered departure at the embassy and related urging of American citizens to depart. The

contractor has not established entitlement to more days for performance than the agency

CBCA 1559

granted; however, because the agency failed to timely extend the performance period, the

contractor reasonably took actions to accelerate its performance as it attempted to complete

performance within a shorter period than the contract afforded. The record supports recovery

of $1,253,710, plus interest pursuant to statute calculated from July 28, 2008. Accordingly,

the Board grants in part the appeal.

PART 1: THE CONTRACT & CONDITIONS IN HAITI

Findings of Fact

The contract

The agency issued a solicitation, on August 30, 2004, to obtain, through a

negotiated procurement, design and construction services for a new embassy compound

(NEC) in Port-au-Prince, Haiti, covering approximately ten acres. Exhibits 1 at 1, 10 at 624,

775 (¶ C.1) (all exhibits are in the appeal file). The compound would not be in downtown

Port-au-Prince; it would be in what was viewed as a safer area than the existing embassy.

Exhibits 956, 21665.

On November 9-10, 2004, the agency held a pre-proposal conference in Haiti

with potential offerors. Exhibit 6 at 176-78. Following initial proposals, the contractor

submitted its final proposal revision on December 21, 2004. Exhibits 7, 8. There followed

discussions, and the submission of final price proposals on January 7, 2005. Exhibit 9.

Explaining its understanding of the importance of this project, the contractor stated that its

entire resources were available, if necessary, to ensure that the project is completed on time

and on budget. Exhibit 7 at 310. This was repeated, with the contractor also recognizing,

in its proposal: the objective to provide a secure and safe environment for personnel,

materials, and equipment; its teaming partner’s local construction presence and

understanding of Haitian culture and subcontractor community; and the project’s unique

aspects due to the location and political climate, including security, among various factors.

Exhibit 7 at 319-24.

The parties entered into a firm, fixed-price, design-build contract on

January 14, 2005, with a total price of $74,408,634. Exhibit 10. The performance period

was 851 days from issuance of the limited notice to proceed, Exhibit 10 at 652 (¶ F.1),

thereby requiring substantial completion on July 3, 2007. Exhibit 21192 at 372-73. The

agency extended the performance period, adding 210 calendar days (with various of these

days added for excusable delays) resulting in a substantial completion date of January 29,

2008. Exhibit 25908. Substantial completion occurred on March 31, 2008. Exhibit 25563.

CBCA 1559

Consistent with the terms of the solicitation, the contract contains particular

provisions. The contract contains a War Risks clause, dealing with loss or damage to and/or

destruction of work or materials, as well as a Disputes (JUL 2002) clause, 48 CFR 52.233-1,

and the Disputes, Alternate I (DEC 1991) clause, 48 CFR 52.233-1. Exhibit 1 at 63 (¶ H.20),

104 (¶¶ I.153, I.154). Under the Liquidated Damages--Construction (SEPT 2000) clause, 48

CFR 52.211-12, the contractor was obligated to pay the Government $11,463 for each

calendar day of delay until the work was completed or accepted. Exhibit 1 at 30 (¶ F.3). A

Type of Contract clause states: “No additional sums will be payable on account of any

escalation in the cost of materials, equipment or labor, or because of the contractor’s failure

to properly estimate or accurately predict the cost or difficulty of achieving the results

required by this contract.” Also: “Changes in the contract price or time to complete will be

made only due to changes made by the Government in the work to be performed, or by delays

caused by the Government.” Exhibit 1 at 7 (¶ B.3).

Despite this stated limited nature of changes (only due to changes made by the

Government or Government-caused delays), the contract contains Changes--Fixed Price

(AUG 1987) and Alternate II (APR 1984) and Changes and Changed Conditions ((APR

1984) clauses, 48 CFR 52.243-1, 52.243-5, Exhibit 1 at 99 (¶¶ I.132-134); a Differing Site

Conditions (APR 1984) clause, 48 CFR 52.236-2, Exhibit I at 93 (¶ I.79); and an Excusable

Delays clause:

F.9.1 The Contractor will be allowed time, not money, for excusable delays

as defined in FAR [Federal Acquisition Regulation] 52.249-10, Default (see

Section/Paragraph I.162). Examples of such cases include (1) acts of God or

of the public enemy, (2) acts of the United States Government in either its

sovereign or contractual capacity, (3) acts of the government of the host

country in its sovereign capacity, . . . and (12) unusually severe weather.

F.9.2 In each instance, the failure to perform must be beyond the control and

without the fault or negligence of the Contractor, and the failure to perform

furthermore (1) must be one that the Contractor could not have reasonably

anticipated and taken adequate measures to protect against, (2) cannot be

overcome by reasonable efforts to reschedule the work, and (3) directly and

materially affects the date of final completion of the project.

Exhibit 1 at 31 (¶ F.9). The referenced Default (APR 1984) clause, 48 CFR 52.249-10

(found at I.163, not I.162), identifies delay in completing the work arising from

unforeseeable causes beyond the control and without the fault or negligence of the contractor.

It also contains a similar list of examples, with the addition of delays of subcontractors or

CBCA 1559

suppliers at any tier arising from unforeseeable causes beyond the control and without the

fault or negligence of both the contractor and the subcontractors or suppliers. 48 CFR

52.249-10 (2004); Exhibit 1 at 109 (¶ I.163).

The new embassy compound contains several structures. Of relevance here are

the one-story structures and the perimeter fence. The contractor maintains that the soil

beneath the footprint of these structures represents a differing site condition, in that the soil

was unexpectedly collapsible, deviating from what was anticipated by the details in the

solicitation (and its accompanying preliminary geotechnical report) and by known soils in

Haiti.

Conditions in Haiti

The contract contains an Information Concerning the Host Country clause:

E.6.1 Information Concerning Host Country. The offeror shall confirm and

verify all information and shall not rely on data provided by the Government

concerning the host country, such as climatological data at the site, local laws

and customs, currency restrictions, taxes, or the availability of local labor,

materials and transportation, etc. It is the responsibility of the Offeror to

determine and gather the information necessary to perform this contract.

E.6.2 Information Obtained by Offeror. Before submitting a proposal, each

Offeror shall, at its own expense, make or obtain any additional examinations,

investigations, explorations, tests and studies, and obtain any additional

information which the Offeror requires.

Exhibit 1 at 15-16 (¶ E.6). Additionally, a Review of Documents and Local Conditions

clause specifies that the contractor is responsible for ascertaining the availability of all

materials and equipment necessary to produce the work required by the proposed contract

documents, of sufficient skilled labor to perform the work, and of the availability of

transportation to the site. Exhibit 1 at 64-65 (¶ H.22).

In 2004 Haiti had experienced significant turmoil, particularly surrounding and

following the departure in February of its president, Jean-Bertrand Aristide; American

citizens were evacuated and the United States embassy placed on ordered departure status.

Ordered departure required dependents and certain embassy employees to depart the country.

In contrast, authorized departure status meant that certain embassy employees and

dependents could, but were not required to, depart. Exhibits 989 at 19, 18128. The

CBCA 1559

Department of State, Bureau of Consular Affairs issued a Travel Warning (used to

communicate information to American citizens) in February 2004, “to inform American

citizens that the security situation in Haiti has deteriorated significantly and that safe travel

out of the country by regularly scheduled commercial means is not possible at this time.”

Exhibit 989. In March 2004, a Travel Warning noted that, although the United States

embassy in Haiti had reopened, the situation in Haiti remained dangerous and unpredictable,

warned American citizens to defer travel to Haiti until the situation stabilized, and advised

those citizens remaining in Haiti to take precautions to avoid uncertain security situations in

public areas. Exhibit 990. These and other Travel Warnings were publicly available to the

contractor pre-and post-award.

A Travel Warning issued in May 2004 indicated that the security situation in

Haiti remained unpredictable and potentially dangerous, advising United States citizens to

defer travel in Haiti. The warning noted that the ordered departure of dependents and nonemergency personnel of the embassy remained in effect. The issuance warned that travel into

and around Haiti could still involve serious risks, with the potential for looting, roadblocks

set by armed gangs, and violent crime. “A number of kidnappings for ransom have been

reported during recent weeks. In some cases U.S. citizens were victims.” “[E]ven within

Port-au-Prince, travel can be hazardous. The embassy’s ability to provide emergency

services to American Citizens anywhere in Haiti and particularly outside of Port-Au-Prince

is extremely limited.” Exhibit 991.

10.

In June 2004, a United Nations Stabilization Mission in Haiti (MINUSTAH)

assumed responsibilities in Haiti; with various responsibilities, it was to provide assistance

in restoring and maintaining safety and public order and facilitating the peaceful election of

a new government. Exhibit 1062.

11.

A Travel Warning issued in July 2004, specified that although the ordered

departure of embassy personnel and dependents had been lifted, the security situation in Haiti

remained unpredictable and potentially dangerous. The warning encouraged United States

citizens to defer non-emergency travel to Haiti. Although many areas had calmed

considerably since earlier in the year, “the Department warns U.S. citizens that travel in Haiti

still involves serious risks. Visitors and residents must remain vigilant due to the absence

of an effective local police force in Haiti; the potential for looting; the presence of

intermittent roadblocks set by armed gangs or by the police which may disrupt travel; and the

possibility of random violent crime, including kidnapping.” The deployment of MINUSTAH

is noted, with the cautionary detail that the international presence throughout Haiti will

remain limited for some time to come. Exhibit 992.

CBCA 1559

12.

An early October 2004 Travel Warning provided similar information. It also

repeated information from July, warning that travel can be hazardous within Port-au-Prince,

with some areas off-limits to embassy staff, noting an embassy-imposed night-time curfew

on staff members and limitations on travel outside Port-au-Prince, and specifying that

businesses of United States companies continued to operate in Haiti, but take special

precautions to protect facilities and personnel. Exhibit 993.

13.

On October 14, 2004, the authorized departure from Port-au-Prince of eligible

family members and non-emergency employees at the embassy was approved for a period

not to exceed thirty days; within that period the Chief of Mission was to re-evaluate

conditions and request a continuation or termination of evacuation status. Exhibit 16061.

14.

A Travel Warning dated October 14, 2004, reflected the worsening of

conditions and the authorized departure issuance at the embassy. The warning urged United

States citizens to avoid travel to Haiti due to the volatile security situation. Additionally,

“U.S. citizens in Haiti are urged to consider departing until the situation is stabilized as travel

in Haiti still involves serious risks.” Further,

Visitors and residents must remain vigilant due to the absence of an effective

police force in Haiti; the potential for looting; the presence of intermittent

roadblocks set by armed gangs or by the police; and the possibility of random

violent crime, including kidnapping, car-jacking, and assault. There has been

a noticeable escalation in criminal and gang activity since September 30.

Exhibit 994. The warning repeated the cautions of earlier issuances, regarding the hazards

of travel, curfews, and continuing operations of United States businesses. Exhibit 994.

15.

Each Travel Warning either (1) noted that as the Department of State continued

to develop information on potentially dangerous demonstrations and political unrest in Haiti,

it would share that information through its Consular Information Program documents, and

identified an internet address and telephone numbers to obtain up-to-date information on

security conditions, or (2) indicated that travelers should consult the Consular Information

Sheet for Haiti, again with an internet address and telephone numbers to obtain up-to-date

information on security conditions. Exhibits 989-94.

16.

Consular Information Sheets dated June 4, December 1, and December 23,

2004, and January 10, 2005, began by describing Haiti as one of the least developed and least

stable countries in the Western Hemisphere. Regarding safety and security, the sheets stated

that United States citizens should avoid travel to Haiti at that time. The sheets summarized

CBCA 1559

much of what was found in the Travel Warnings. As to crime, the sheets stated that there

“are no ‘safe areas’ in Haiti. Crime, already a problem, has mushroomed in recent years.”

Further, “Reports of death threats, murders, drug-related shootouts, kidnappings, armed

robberies, break-ins or carjackings occur almost daily. These crimes are primarily Haitian

against Haitian, though some foreigners and U.S. citizens of Haitian origin have been

victimized.” “Neighborhoods in Port-au-Prince once considered relatively safe, such as the

Delmas road area and Petionville, have been the scenes of an increasing number of violent

crimes.” Exhibits 981-84. The December 1 sheet specified that “nine kidnappings involving

U.S. citizens have already been reported during 2004.” Exhibit 982 at 385. The Consular

Information Sheet dated December 23, 2004, repeated this information and stated: “Violent

incidents take place without warning including attacks against government facilities and

random shootings. While U.N. personnel from several countries have been in Haiti since the

change in government, there are relatively few of them and their mission in Haiti does not

include guaranteeing the safety of visitors.” Exhibit 983 at 715. The January 10, 2005,

Consular Information Sheet was not more optimistic and did not suggest that the reported-on

matters had improved since the last information sheet. Exhibit 984.

17.

On November 8, 2004, an extension of the authorized departure status from

Port-au-Prince for an additional thirty days was requested with the justification:

Although the security situation in Port-au-Prince is manageable, the levels of

lawlessness and potential for violence in Port-au-Prince remain high. While

MINUSTAH forces continue to build up their capability to counter that threat,

the process has been slow going with some deployments delayed.

MINUSTAH capability will continue to build in the coming weeks. . . . Post

would like to hold off on any recommendation to lift authorized departure until

we have seen additional forces made operational. It appears that capability

will largely be complete by the end of the month.

Exhibit 16085. This justification was not available to the offerors.

18.

Within this context, in early November 2004, with the embassy on authorized

departure, and the day after the requested extension of that status, the agency held a preproposal meeting with potential offerors, attended by the contractor, among others. During

this meeting, the United States Ambassador to the Republic of Haiti and the Regional

Security Officer for Haiti each made remarks. These remarks were not made part of the

solicitation or contract. Exhibits 1, 10. As reflected in notes taken by attendees, the

Regional Security Officer seemingly made the comment that the security situation in Haiti

had improved with the arrival of MINUSTAH. Exhibits 5 at 165-66, 6 at 176 (¶ 1.1). In

CBCA 1559

contrast, notes of the meeting indicate that the Ambassador commented that MINUSTAH

forces were trying to assert control and the Regional Security Officer noted the country was

in a period of increased unrest and that problems would continue through the election process

in September and November 2005. Exhibit 5 at 165. Further, notes by another individual

attribute to the Regional Security Officer comments that September and October had been

a period of increased unrest, that UN peacekeepers and new police were trying to establish

government control in areas not under government control before the departure of President

Aristide, and that he thought security was getting better as more UN troops arrive, as they get

better organized, and as the police are better trained. Exhibit 20164 at 162-63. Specific

questions were not posed by the contractor regarding the security situation. Transcript (May

15) at 274-75. No assurances as to present or future security conditions in Haiti are found

in any solicitation amendment or in the contract.

19.

During proposal preparation, the contractor was aware of an evacuation

monitor, dated November 10, 2004, issued by an independent security support service firm

utilized by the contractor; the publication categorized Haiti at alert state two (security

situation or country instability represents a risk to staff, their families, and physical assets),

with a stated reason for the categorization:

Despite temporary stabilization of security situation due to the interim

government and the presence of foreign troops, the process of restoring law

and order, staging legitimate elections and fomenting sustainable political

stability will be problematic and lengthy.

Exhibit 6144 at 783-84.

20.

On November 22, 2004, the contractor sought and received a specific response

from the independent security firm concerning the conditions in Haiti, as the contractor was

preparing its proposal. The firm’s response stated, in pertinent part:

The security situation remains problematic and security risks are HIGH.

However, the situation has stabilised following the arrival of foreign

peacekeeping forces and rebel forces have taken a more conciliatory stance.

Companies can now consider returning foreign staff and personnel can

undertake essential business travel.

Despite the recent stabilisation, the situation remains fragile and business

personnel and travellers alike should remain vigilant. All personnel arriving

in the country should be met by a trusted contact. Economic difficulties have

CBCA 1559

also produced a widespread increase in criminal activity, particularly kidnapfor-ransom. Continued economic deterioration will lead to an increased

incidence of crime, especially kidnapping and armed robbery. The rise in rates

of armed crime, murder and carjacking remains a concern. Public security has

dropped dramatically, particularly in Port-au-Prince. Lower-income areas of

Port-au-Prince . . . are particularly unsafe. However, all areas, including the

affluent suburb of Petionville, suffer from random crime.

The police force remains a largely ineffective force and foreign troops are

principally responsible for protecting key infrastructure and diplomatic assets.

. . . Demonstrations and clashes between pro-Aristide and opposition groups

will continue.

The expiry of a deadline for rebel disarmament further increases the

lik[e]lihood that unrest will persist. Personnel should be aware that the

situation could deteriorate rapidly.

On 13 Nov 2004 it was announced that Mr Aristide would be issued with a

warrant for his arrest for financing a wave of unrest in Port-au-Prince. Any

move against Mr Aristide will anger his supporters and make the peace process

in Haiti even harder.

Exhibit 6145.

21.

While preparing its proposal, the contractor was aware of various warnings

concerning Haiti, as it made its own assessments and reached its own conclusions. As one

contractor employee, who was involved in proposal preparation but did not attend the preproposal conference, testified, “By the November prebid meeting, . . . we have the

Department of State inviting U.S. citizens to come down for a prebid. Obviously, reflective

of the stabilization that had been achieved as a result of the peacekeeping forces.” Transcript

(May 15) at 62, 63 (“obviously MINUSTAH was ramping up very rapidly, and the effect was

having a stabilizing effect”), 239. The individual also concluded that the Ambassador and

Regional Security Officer were providing updates and highly customized assessments,

although neither made any statement to such an effect. Transcript (May 15) at 258-61. The

contractor opted to review, or not, various available information, and to give that information

the weight it deemed appropriate. The contractor focuses on the pre-proposal conference

statement that MINUSTAH was a stabilizing force; however, a similar statement was

contained in the report of the independent firm obtained by the contractor, with the notice

that there was a widespread increase in criminal activity and that the situation could

CBCA 1559

deteriorate rapidly. Finding 20. These statements are found in the context of the security

situation remaining problematic and security risks high.

22.

The authorized departure for Port-au-Prince, Haiti, for both eligible family

members and non-emergency employees of the embassy, in effect during proposal

preparation and at the time of award and thereafter, was terminated on March 11, 2005.

Exhibit 16186.

23.

Based upon the record, and as highlighted by these findings, the Board

concludes that during proposal preparation through the time of award, in Haiti generally, and

in Port-au-Prince and its environs, there existed significant concerns for safety over the

performance period. The instability, with the recognized potential for demonstrations,

violence, kidnappings, and other incidents, posed particular threats whose occurrence could

not always be predicted in terms of time and place. These conditions could affect local

workers (and their families), who would be individuals known to be employed with earnings,

and who had to get to and from work; local businesses supporting the contractor, which

would be subject to the same local conditions in getting materials and equipment to the

jobsite; foreign businesses supporting the contractor which also would have to get people

and/or products to the jobsite; and foreign hires to assist in the project. Although the NEC

jobsite was in a relatively safe environment, issuances by the agency and the independent

security firm used by the contractor noted concerns that could affect performance. A volatile

security situation existed; businesses were being advised to take precautions at the same time

that travel to Haiti was being discouraged. The agency did not promise a safe environment

for the contractor.

24.

Pre-award and post-award, the agency had significantly more knowledge about

Haiti than is referenced in this opinion or is contained in the record. Some information was

revealed contemporaneously in warnings and issuances, and in various documents and

conversations. Some information is in the record through testimony. Some information was

and remains classified. The solicitation and contract do not provide that the contractor will

have access to all of the information and views that may lead to agency issuances or

determinations. The solicitation and contract specify that it is the contractor’s responsibility

to determine and gather the information necessary to perform this contract. Finding 7.

CBCA 1559

Discussion

Contract Interpretation

This firm, fixed-price, design-build contract includes a Type of Contract clause stating

that changes in the contract price or time to complete will be made only due to changes made

by the Government in the work to be performed, or by delays caused by the Government.

Finding 4. The clause allocates substantial risks to the contractor. Spearin v. United States,

248 U.S. 132, 136 (1918) (“Where one agrees to do, for a fixed sum, a thing possible to be

performed, he will not be excused or become entitled to additional compensation, because

unforeseen difficulties are encountered.”); McNamara Construction, Ltd. v. United States,

509 F.2d 1166, 1169-70 (Ct. Cl. 1975) (“We have consistently held that the contractor in a

fixed-price contract assumes the risk of unexpected costs. In firm fixed-price contracts, risks

fall on the contractor, and the contractor takes account of this through his prices.” (citations

omitted)).

Contrary to the agency’s suggestions, the firm, fixed-price contract does not absolutely

shield the agency from being obligated to provide additional time and/or money under the

terms and conditions of this contract. This is so because the contract includes an Excusable

Delays clause and a Differing Site Conditions clause, among others. The excusable delays

identified in the clause are not all Government-caused. Similarly, a differing site condition

does not involve a Government change to the contract. Thus, although the contract was

established with a firm, fixed-price and a defined completion date, neither the dollars nor the

date is immutably fixed; the inclusion of these specific clauses recognizes that a situation

may merit revising the completion date and/or contract price for performance. Interestingly,

the agency acknowledged the effects of these clauses in its responses to the requests for

adjustments: the agency treated each clause as permitting a modification with no absolute bar

to the recovery sought; however, because these facts constitute parol evidence, they are not

material or determinative. The contractor seeks relief under the express contract clauses for

what it contends was a differing site condition (the existence of collapsible soils) and for

matters relating to the security environment actually encountered during performance.

Haiti posed various challenges to the contractor, in terms of safety and security, and

their impact on performing, hiring and retaining a satisfactory workforce, and acquiring and

transporting equipment and materials throughout the performance period. The contract

places upon the contractor the burden of obtaining information regarding Haiti and

ascertaining the availability of labor, materials, equipment, and transportation. Finding 7.

The contract establishes no expected conditions in Haiti or thresholds, which if exceeded,

CBCA 1559

would entitle the contractor to additional payment, and identifies no particular dollars to be

earmarked for security purposes.

The unpredictable nature of the situation in Haiti was known at the time of

contracting. The embassy was on authorized departure during proposal preparation and at

the time of award. Agency issuances described Haiti as one of the least developed and least

stable countries in the Western Hemisphere. Regarding safety and security, the issuances

stated that United States citizens should avoid travel to Haiti at that time, noted that there

were no safe areas in Haiti, and advised that crime, already a problem, had mushroomed in

recent years. Further, the issuances specified that death threats, murders, drug-related

shootouts, kidnappings, armed robberies, break-ins, or car jackings occurred almost daily,

with areas once considered relatively safe becoming the scenes of an increasing number of

violent crimes. As of December 1, nine kidnappings involving American citizens had been

reported during 2004. The contractor was also aware of information found in publications

of an independent security firm which categorized Haiti at alert state two (security situation

or country instability represents a risk to staff, their families, and physical assets). The

publication attributed temporary stabilization to the presence of foreign troops, in part. The

same firm reported, after the pre-proposal conference, that the security situation remained

problematic with high security risks, but noted that the situation had stabilized following the

arrival of foreign peacekeeping forces and that rebel forces had taken a more conciliatory

stance. This informed readers that economic difficulties had produced a widespread increase

in criminal activity, particularly kidnap-for-ransom, and indicated that continued economic

deterioration would lead to an increased incidence of crime, especially kidnapping and armed

robbery, while the rise in rates of armed crime, murder, and car jacking remained a concern.

Public security dropped dramatically, particularly in Port-au-Prince; lower-income areas of

Port-au-Prince were noted as being particularly unsafe, while all areas, including the affluent

suburb of Petionville, suffered from random crime. The issuance specified that personnel

should be aware that the situation could deteriorate rapidly.

The contractor maintains that it sought and obtained assurances from the agency

regarding the conditions in Haiti at the pre-proposal conference. The contractor did not

actively seek any such information; it did not pose questions. Rather, the contractor relied

upon statements made by the United States Ambassador to Haiti and by the Regional Security

Officer. The Board concludes that the statements were not assurances. Most significantly,

the statements are not incorporated into the solicitation or contract. Finding 18. Moreover,

in the context of the overall statements, which contain references to MINUSTAH trying to

establish (not having established) control and the past two months having been a period of

increased unrest, with problems to continue through the elections, the comments cannot be

viewed as assurances of present or future conditions. Rather, the statements expressed views

CBCA 1559

of particular individuals at a moment in time. Neither the Ambassador not the Regional

Security Officer made commitments regarding the conditions that would occur during the

performance period.1

Superior Knowledge

The contractor contends that the agency failed to disclose superior knowledge relating

to the security conditions in Haiti. To prevail under the superior knowledge doctrine requires

specific evidence that the contractor:

(1) undertook to perform without vital knowledge of a fact that affects

performance costs or direction, (2) the government was aware that the

contractor had no knowledge of and had no reason to obtain such information,

(3) any contract specification supplied misled the contractor, or did not put it

on notice to inquire, and (4) the government failed to provide the relevant

information.

AT&T Communications, Inc. v. Perry, 296 F.3d 1307, 1312 (Fed. Cir. 2002) (quoting GAF

Corp. v. United States, 932 F.2d 947, 949 (Fed. Cir. 1991)). On each of these elements, the

contractor fails; the Board need not go into details of classified information, even as it may

be assumed that the agency had greater knowledge than the contractor of the up-dated

circumstances in Haiti.

The contractor contends that it was not privy to information known to the agency

about and relating to security threats in Haiti during the pre-award period. Undoubtedly, the

agency had much information that it did not share with the contractor prior to and after

award. However, the solicitation put the contractor on notice that the contractor was

responsible for gathering its own information relating to Haiti and performing under the

actual conditions. Authorized departure procedures in effect at the embassy. Through Travel

Warnings and Consular Information Sheets, the agency put offerors on notice of a wide

During the pre-proposal conference a statement was made, again not

incorporated into the terms and conditions of the contract, that Americans would be treated

as embassy employees should an evacuation occur; that is, that emergency medical coverage

and evacuations would be covered. Such expressed the policy of the United States. That

statement is not relevant, because the ordered departure was not an emergency evacuation

within the policy, and emergency medical coverage was not required during the performance

of this contract.

CBCA 1559

variety of security concerns. Additionally, from an independent security firm, the contractor

obtained information that noted a widespread increase in criminal activity, particularly

kidnap-for-ransom, and suggested that continued economic deterioration would lead to an

increased incidence of crime, especially kidnapping and armed robbery. The information

indicated that a rise in rates of armed crime, murder and car jacking remained a concern,

expressly noted that public security has dropped dramatically, particularly in Port-au-Prince,

with all areas suffering from random crime, explained that the expiry of a deadline for rebel

disarmament further increased the likelihood that unrest would persist, and specified that

personnel should be aware that the situation could deteriorate rapidly. This information

makes it unnecessary for the Board to itemize other sources of material, including contacts

the contractor had in Haiti, and the media, for reports of daily occurrences and other

conjectures of future conditions. The contractor knowingly competed and set its pricing

based upon information it garnered, aware that it was not privy to all the agency knew, and

that it had not sought any additional information through questions which could be answered

in a solicitation amendment. It was evident that the future in Haiti contained many

uncertainties with respect to security and safety; such was a component of the competition

and performance.

No information identified by the contractor as known to the agency but not the

contractor can be deemed vital knowledge considering the backdrop of then-current and

potential security obstacles. The agency could not be aware of the contractor’s actual

knowledge, particularly when the contractor noted in its proposals its awareness of the

political and security environment, and a partner’s presence and experience in Haiti. Finding

2. The agency did not mislead the contractor and expressly put it on notice of its need to

inquire. With no specific information truly vital, the agency did not fail to provide vital

relevant information. Thus, the contractor has failed to demonstrate any of the four elements

necessary to prevail under the superior knowledge doctrine.

PART 2: SUBSURFACE SOIL

Findings of Fact

25.

The site description provisions of the solicitation and contract do not indicate

specifics of the subsurface conditions; however, the clause notes that the site is covered with

vegetation, without trees, and that formerly the area was used for sugar cane cultivation.

Exhibit 10 at 775-76 (¶ C.1.3). Site design requirements relating to geotechnical engineering

specify:

CBCA 1559

C.2.2.1.2.1

A preliminary geotechnical report for this project is provided in Section J for

use in developing a proposal for this project. This geotechnical investigation

was performed primarily for site acquisition purposes and contains general site

development recommendations, generic recommendations for structural

support, as well as subsurface information. The Contractor’s geotechnical

engineer/consultant shall use the subsurface information (boring logs, field

testing, and laboratory testing) contained in this report to develop preliminary

project specific design recommendations for use in preparing the Contractor’s

proposal.

C.2.2.1.2.2

Following contract award, the Contractor shall develop the actual project

specific field geotechnical exploration program to provide the

recommendations for the geotechnical-related design. The Contractor is

responsible for all geotechnical related design (foundation engineering, ground

modifications, slope stability of soils, etc.). The Contractor is responsible for

the assessment of subsurface properties.

Exhibit 10 at 780-81.

26.

Further, regarding geotechnical engineering, the solicitation and contract state:

The Contractor shall engage the services of a geotechnical consultant to

perform all necessary geotechnical work for the project. . . . The Contractor

shall identify the type and cost of Foundation System required. The

Contractor’s proposed Foundation System shall be based solely on the

Contractor[’]s independent analysis and knowledge of the site and subsurface

conditions. The contractor will provide as a requirement of the Proposal a

detailed description of the proposed Foundation System and a [sic] shall

breakout the cost for the foundation work as a lump sum.

Exhibit 10 at 803-04 (¶ C.5.8).

27.

The solicitation and contract recognize that the contractor must obtain the

subsurface information needed for the design of the project, with the contractor’s

geotechnical consultant to submit an exploration and testing program to the agency for

CBCA 1559

review as part of the design development submittal. Exhibit 10 at 813 (¶ C.A.2.1.b). In

particular, the contractor was to evaluate the conditions of the various soils for stability and

for short-term and long-term effects of various foundation elements and structures. Exhibit

10 at 813-14 (¶ C.A.2.2.c).

28.

The preliminary geotechnical investigation report referenced in the solicitation

(and to be relied upon in proposal preparation) contains information regarding subsurface

conditions, based upon sampling and testing of soils taken at various identified locations

within the compound footprint. The report includes subsurface soil classifications with

boring logs from twelve locations, liquid and plastic limits, grain size, and standard

penetration test (SPT) data. The report does not specify void ratios, compressibility, or

collapsibility; no collapse tests were performed for the report. Exhibit 405 at 462-596. The

report notes a vegetal soil on the top layer. Beneath that layer and above a silty sandy gravel

layer (found in each boring) are one or two layers (either of clayey silt and/or silty fine sand

and/or marl) with total depths ranging from 2.0 to 4.5 meters. Exhibit 405 at 487-90. The

parties refer to the soil beneath the top layer and above the gravel layer as the upper silt layer.

The report states in one portion, generally describing the foundation carrying level of the

strata, that the clayey silt layer “is not recommended to receive the foundations because of

its weak mechanical characteristics and its too great heterogeneity.” Exhibit 405 at 503.

While that reference to foundations is non-specific (whether applicable to all structures or

only those of greater height than one story), the conclusions and recommendations section

of the report discusses the stratified alluvial soil with lateral and vertical heterogeneity, the

great variation of thickness in the layers from one point to another, and the options for the

variety of structures to be constructed. The report states regarding one story structures,

“foundations on footings in the first meters of the ground made up primarily of argillaceous

silt could be envisaged, by decreasing the stress of this layer.” Separately, for fencing, the

report concludes: “When building the perimeter fence, the foundations might be established

in the silty layer located above the sandy silty layer if continuous concrete footings are

chosen to connect the columns.” Exhibit 405 at 505-06.

29.

The contractor utilized an engineering and consulting firm in the proposal

preparation process. With a date of November 22, 2004, a geotechnical engineer from that

firm provided the contractor with an analysis. Regarding foundations for the structures here

in question, the analysis states:

Shallow spread footings bearing in the granular fill and designed for allowable

bearing pressure in the range of 3 ksf [kips (thousand pounds of force) per

square foot] would likely be feasible for [the building structures here at issue].

The clayey silt zone would not generally need to be removed completely, but

CBCA 1559

would require significant preparation and inspection by proofrolling and

stabilizing or undercutting weak or soft zones.

. . . [T]he perimeter wall . . . would also generally have acceptable support

conditions in the granular fill placed over existing site grades with limited

inspection preparation.

Exhibit 13084 at 599-600; Transcript (June 1) at 11-17 (detailing some of the underlying

efforts and analysis leading to the represented conclusions).

30.

The contractor priced its proposal in accordance with the recommendations of

the geotechnical engineer so as not to price removing the entirety of the upper silt layer for

the areas here in question. After award, the contractor utilized the same engineering and

consulting firm and the same geotechnical engineer it had used preaward to investigate the

site and prepare the required geotechnical report. Based upon field testing and observations,

the geotechnical engineer noted that soil samples slaked when dropped into a jar of water,

seemed to have low apparent density, and had a dry consistency. Further, he noted vertical

root holes. He maintains that these are indicators of potentially collapsible soil. Transcript

(June 1) at 33. The geotechnical engineer took acceptably undisturbed test pit samples from

the site on March 15 and 16, 2005. Exhibit 949 at 511-18; Transcript (June 1) at 24-25, 3436. On March 21, 2005, the samples (identified with a specific location and depth of sample)

were received at the associated laboratory. Various tests were conducted on portions of some

samples. Exhibit 13091. Of four samples identified for consolidation testing (to measure

decreases in soil height under particular loads), the geotechnical engineer at some point

initially ordered a collapse test on one sample, TP7 (test pit 7). Exhibit 13091 at 286-89 (two

undated lab assignment sheets do not specify a collapse test, at 286-87, two other undated lab

assignment sheets identify a collapse test for TP7, at 288-89); Transcript (June 1) at 34. On

March 23, 2005, the geotechnical engineer informed the contractor that he had samples from

the upper silt layer and noted, regarding the two to four meters of very stiff dry gray fine

sandy silt: “Minor concern that this may be collapsible.” Exhibit 21270 at 28. The TP7 and

TP8 samples were not taken from under or adjacent to the footprint of any structure here at

issue. Exhibit 949 at 478; Transcript (June 1) at 78.

31.

The American Society for Testing and Materials (ASTM) International D5333,

Standard Test Method for Measurement of Collapse Potential of Soils, defined collapse as

a “decrease in height of a confined soil following wetting at a constant applied vertical

stress.” Exhibit 5288 (¶ 3.2.1). In conducting a collapse test pursuant to this recognized

standard, a sample of the soil (approximately one inch high and two and one-half inches in

diameter) at its natural moisture content is trimmed to fit into a ring and placed in a machine.

CBCA 1559

The height of the material is measured initially, and at timed increments as the material is

subjected to given weight loads. At a given load, the sample is inundated with water, with

the height measured at timed increments. A decrease in height attributable to the water

inundation reflects the collapse of the soil, and is categorized based upon the percentage of

collapse. Under this standard, the test would have involved five loadings, with each stage

lasting one hour (dry loading total 5 hours), then an additional 24 hours for the wet loading,

for a total test time of 29 hours. Exhibit 5288; Transcripts (June 1) at 42-43, (June 4) at 168.

The degree of collapsibility of soil is pertinent to designing foundations. With significant

collapsibility, soil may be removed, with volume replaced, as an economical method of

dealing with collapsible soil in the design phase. Transcript (June 4) at 18, 87.

32.

The TP7 sample was collected at a depth of 1.2 to 1.6 meters. Exhibit 13091

at 321. A single consolidation/collapse test was run on a portion of that sample. The test

began on March 24, 2005; the sample was flooded at a given load on April 8; and the flooded

portion of the test at the given load was completed on April 11. Exhibit 13091 at 328-30.

This test was not conducted pursuant to ASTM D5333. The periods of time between loading

the sample and inundating with water exceeded the recognized standard times; the sample

was no longer at its in situ moisture content. The reports indicate no deviations from the

ASTM standard. The test report was not initialed as having been reviewed. Exhibit 13091

at 328. Initially, the test report depicts a collapse of eight percent, viewing the percent strain,

which is a moderately severe collapse potential under the standard. Exhibits 13091 at 378,

5288 at 908. A later test report depicts a collapse of twelve percent, which is a severe

collapse potential under the standard. Exhibits 13113 at 565, 5288 at 908.

33.

The TP8 sample was collected at a depth of .6 to .8 meters. Exhibit 13091 at

340. A single consolidation test of a portion of the TP8 sample began March 24, 2005, and

was run through April 18, 2005. Exhibit 13091 at 354-57. A test sheet was annotated:

“Flood when finished - just to see what happens[.]” A collapse test was then performed on

that sample which was flooded on April 18 with results recorded for April 18-19, 2005.

Exhibit 13091 at 358. The periods of time between loading the sample and inundating with

water exceeded the recognized standard periods; the sample was no longer at its in situ

moisture content. The reports indicate no deviations from the ASTM standard. The test

report was not initialed as having been reviewed. Exhibit 13091 at 354. At first, a

consolidation test report was produced which does not indicate the results of flooding.

Exhibit 13091 at 346. A later consolidation test report shows a collapse of seven percent,

viewing the percent strain. Exhibit 13113 at 5665.

34.

In an initial report, dated April 29, 2005, the geotechnical engineer concluded

that the upper silt layer (that is, the layer beneath the top soil and above the gravel layer) is

CBCA 1559

collapsible and unsuitable for supporting foundations intended to be used by the contractor.

Exhibit 949 at 452. The report includes the consolidation/collapse test results for TP7, but

only the consolidation test results for TP8. Exhibit 949. The report describes the

characteristics of the upper silt layer as including numerous, generally vertical holes, collapse

tests (plural) showing severe collapse potential, relatively high void ratio, low in situ density,

low moisture content, and slaking. Exhibit 949 at 460-61 (¶ 2.4.2).

35.

On April 29, 2005, the contractor informed the agency that, based upon the

geotechnical investigation, and as confirmed by tests, the upper layer of soil at the site is

unacceptably collapsible. The notification specified that pursuant to clauses H.29 and H.30,

the contractor deemed this condition to constitute a differing site condition, and anticipated

cost and time impacts. The contractor sought agency concurrence with recommendations and

immediate direction. Exhibit 13103.

36.

A project executive for the agency responded on May 3, 2005, noting that a

review of the final geotechnical report had not occurred. However, the response identified

a paragraph of the preliminary investigation report referenced in the solicitation that states

that the layer is not recommended to receive foundations because of its weak characteristics

and its too great heterogeneity, Finding 28. The project executive stated that, based upon

this, he intended to recommend to the contracting officer that a request for an equitable

adjustment be rejected in its entirety. Exhibit 13107 at 43. The contractor provided a

response, noting that the solicitation gave no indication of the need for removing the soil here

at issue. Exhibit 13106 at 15-16. On May 5, 2005, the agency acknowledged receipt of the

notice of what the contractor deemed to be a differing site condition, and stated, “please also

note that our representatives do not agree with this determination.” Exhibit 13114. The

contractor responded to the agency, with a letter seemingly of May 5, 2005 (although dated

April 5, 2005), recognizing that the agency had written:

Since this is a design build contract we are not in a position to direct you to

over excavate or not. This is a design problem and not a change to the

contract. You need to provide a[n] engineered solution that meets the

requirements of the contract taking into consideration the questionable bearing

capacity of the soils th[at] was clearly noted in the RFP [request for proposals].

Exhibit 13116 at 27-28. Acknowledging the design-build nature of the contract, the

contractor sought “clear direction,” as it asserted that it “is imperative that we understand

precisely what you want us to do.” Exhibit 13116 at 27-28.

CBCA 1559

37.

With on-going discussions (internal within the agency, between the contractor

and geotechnical engineer, and between the parties), e.g., Exhibit 405 at 561-64, on May 10,

2005, the agency informed the contractor that the agency would not provide a directive to

over excavate and backfill; the agency found no differing site condition. The correspondence

acknowledged and made a matter of record that the contractor might on its own select as a

means and methods to over excavate and backfill. Exhibit 13119 at 28.

38.

Recording the depth of each sample, the contractor’s geotechnical engineer

took additional acceptably undisturbed soil samples from the site between May 23 and 25,

2005; consolidation/collapse testing was performed on four samples. Testing of sample B1

began on June 6, flooding occurred on June 9 (with flooded results recorded through June

13), and testing concluded on June 21, 2005. Exhibit 13091 at 374-77. Testing of sample

B4 began no later than June 9, flooding occurred on June 9 (with flooded results recorded

through June 13), and testing concluded on June 20, 2005. Exhibit 13091 at 365-67. Testing

of sample B8 began on June 6, flooding occurred on June 9 (with flooded results recorded

through June 13), and testing concluded on June 20, 2005. Exhibit 13091 at 360-63. Testing

of sample B9 began on June 6, flooding occurred on June 9 (with flooded results recorded

through June 13), and testing concluded on June 21, 2005. Exhibit 13091 at 369-72. The

geotechnical engineer has written that the collapse tests were conducted pursuant to ASTM

D5333, Exhibit 13113 at 559; no deviations were noted. The geotechnical engineer used by

the contractor characterizes the results of these tests as being based upon a Navy Facilities

Design Manual (not the ASTM D5333 standard), with two showing slight collapse (about

one-half percent) and two showing little collapse. Exhibit 13113 at 560-61, 568, 570, 573,

574. As with the earlier collapse testing, the periods of time between loading each sample

and inundating with water exceeded the recognized standard periods; each sample was no

longer necessarily at its in situ moisture content. Transcript (June 4) at 186. The reports

indicate no deviations from the ASTM standard. As interpreted by one of the experts for the

contractor, these samples showed either no or negligible collapse. Transcript (June 4) at 177.

39.

The contractor submitted a request for equitable adjustment, dated July 1, 2005,

based upon an unforeseen condition (the existence of collapsible soils). The request sought

$1,159,619 in direct and delay costs, with delay costs reflecting an estimated forty days of

extended site overhead. The report includes an independent party’s review and analysis in

support of the contractor’s position; the Board finds that, because of the limited nature of the

analysis, the conclusions are not persuasively supported. Exhibit 405 at 930-58.

40.

In a July 5, 2005, addendum to the report of April 29, 2005, the geotechnical

engineering and consulting company summarized its further investigations and results. The

report states:

CBCA 1559

Neither density, plasticity, liquid limit, classification, nor geographic location

appear to be reliable predictors of collapse potential. As indicated in the

[solicitation’s preliminary] report, the Upper Silt appears to be heterogeneous.

The variability may be further complicated by the presence of significant lime

in the soil which may substantially impact the behavior of the clay fraction of

the soil, causing it to behave more like silt. This may explain why soils do not

always behave as anticipated[.]

Exhibit 13113 at 561. As in earlier versions, this report concludes that all of the upper silt

layer should be considered suspect of having an unacceptable collapse potential, and

recommends that all of the upper silt, defined to the depth of the upper gravel layer, be

removed from beneath structures. Exhibit 13113 at 561.

41.

The contractor acted pursuant to the recommendations of the geotechnical

engineer in removing the upper silt layer, while the agency refused to acknowledge the

existence of a differing site condition.

42.

On August 3, 2005, the contractor sought from the agency an update on the

status of the request for an equitable adjustment concerning the alleged differing site

conditions. On August 11, 2005, the agency informed the contractor that the request would

not be accepted. Exhibit 405 at 1149. By letter dated October 17, 2005, the agency formally

rejected the request of July 1, 2005. Exhibit 43 at 510.

43.

Experts for each side have opined, in submissions, expert reports, expert

responses, depositions, and hearing testimony, on the nature of the soil under the structures

at issue. The record also includes published articles authored or co-authored by these experts

and others. The experts presented by the contractor are absolutely certain of their position

that the upper layer of soil is unacceptably collapsible, meriting removal, as they find support

in the test results as well as the characteristics of the soil. E.g., Transcript (June 4) at 14-18.

The experts presented by the agency are not convinced of that conclusion, as they find the

test results unreliable and the characteristics as not necessarily indicating collapsible soil.

E.g., Transcript (June 5) at 67, 72, 98-100.

44.

Having weighed the evidence, the Board concludes that the collapse tests were

not performed pursuant to acceptable standards and the test results have not been shown to

be reliable. The characteristics of the soil, without a valid collapse test, do not demonstrate

the degree of collapsibility of the soil. Accordingly, the Board does not conclude that the soil

was collapsible, or collapsible to a degree significant to the design of the foundations.

CBCA 1559

45.

In explanation of these conclusions, some matters are particularly noteworthy.

The record does not satisfactorily establish, by a preponderance of the evidence or morelikely-than-not standard, the degree, if any, that extending the period from sample collection

and the start of testing to the conclusion of collapse testing affected the collapse test results,

be that insignificant, significant, or somewhere in between. The contractor is correct, first,

that testing the effects of drying recompacted soils is not directly helpful in determining the

effects of drying undisturbed soil, and, second, that the agency did not test actual soils from

Haiti. However, the contractor has presented no actual test results on the effects of drying

on undisturbed soils (hypothesizing is not the equivalent of actual test results; one typically

would use tests to support a hypothesis), and no test results on soil from Haiti were run

pursuant to the recognized standards. The contractor, with the burden of proof, has not

presented sufficient evidence. It was within the contractor’s ability to obtain and test samples

according to standards.

46.

The characteristics of the soil and site observed by the geotechnical engineer

did not lead him to the conclusion that the upper silt (or any layer thereof) must be

collapsible. The concern was minimal, as expressed in a contemporaneous email message,

and revealed by the ordering of a single collapse test. Finding 30. The totality of the soil

characteristics (including post-award testing other than collapse testing) may well

demonstrate that the soil is potentially collapsible. However, the actual collapse of the soil

and the degree of collapse are not determined on those characteristics alone. Exhibit 18861

at 4-7. The record does not establish a reasoned basis to conclude that the soil in fact was

unacceptably collapsible.

47.

These findings and conclusions that the collapse test results have not been

shown to be reliable, and that the record does not convincingly demonstrate that the soil

reflected a differing site condition, resolve the differing site conditions claim. Moreover, the

testing of such few samples, even if valid tests were performed with reliable results, leaves

additional questions relating to the appropriateness of deeming the soil unacceptably

collapsible, or of extrapolating the particular instances of collapse at TP7 and TP8, each

taken at a specific depth, in a particular soil in the upper silt layer, to areas in the footprints

of the structures here at issue. Stated differently, the experts for the contractor deem

unacceptable the risks of collapse at the entire site (or at least the footprints in question) with

the degree of collapse shown by TP7 alone, or with TP8; the experts for the agency reach a

more limited conclusion. Transcript (day 15) at 72, 99-100 (would advise of the need for

more testing). Journal articles warn against characterizing a site with just one test. Exhibit

5305 at 136. The contractor has not supported adequately its characterization of the soil

conditions here at issue with the observations and test results (even if deemed properly

performed).

CBCA 1559

Discussion

Differing Site Condition Claim

The contractor bears the burden of proof under the Differing Site Conditions clause,

Finding 5. The contractor asserts the existence of both a type 1 and a type 2 differing site

condition. A necessary element of proof under the clause, for either type, is the existence of

a differing site condition. Here, the assertion is that the upper silt layer of soil is collapsible.

Factually, the Board has determined that the contractor has not met its burden of proof.

The testing of the soil was not performed pursuant to recognized standards. The test

results have not been shown to be reliable indicators of the collapsibility of the soil, either

in terms of collapse versus no collapse, or the degree of collapsibility. The totality of the

evidence does not demonstrate the soil is unacceptably collapsible so as to require the

removal of the soil. Without this necessary element of collapsibility, the claim of a differing

site condition fails. Although the contractor complied with the recommendations of its

geotechnical engineer, those recommendations were based upon visual observations and

results of collapsibility tests that had not been performed in accordance with accepted

standards. The Board recognizes that an engineer with the totality of the test results and

observations may be unable to propose a design which leaves the undisturbed soil layer in

place; however, adequate, reliable testing could enable a different conclusion or

recommendation. Sufficient proof of a differing site condition is lacking in this record. The

speculation required by the inadequate and insufficient testing does not enable a conclusion

that a differing site condition existed. Without adequate support for the existence of a

differing site condition, the contractor is not entitled to receive additional time or money for

its efforts under the design-build contract.

The contractor asserts that the agency should not now be heard, several years afterthe-fact, to complain about the contractor’s testing plan and methodology (e.g., the number

of borings made, locations of borings and test pits, number of tests performed--including

response-to-wetting tests--or the type of tests performed). The agency timely put the

contractor on notice that the agency was not accepting the differing site condition conclusion

proposed by the contractor. The agency suggested that further testing would be required.

The contractor had further testing performed. Those results indicated no significant

collapsibility of the samples tested. That the six collapse tests were performed with

deviations from the ASTM D5333 standards was not noted in the reports to the agency.

The contractor also references the Differing Site Conditions clause as imposing a duty

on the contracting officer promptly to investigate after receiving notice of alleged differing

CBCA 1559

site conditions, with an obligation on the agency to provide direction. The agency did

provide direction, rejecting the conclusion that a differing site condition existed and

permitting the contractor to proceed as it deemed appropriate under the design-build contract.

The agency is not contending that the ultimate foundation design was improper; rather, the

agency contends that it is not obligated to provide additional time and/or money under the

contract because the contractor has not established the existence of collapsible soils (that is,

no differing site condition has been demonstrated to have existed). On this point, the agency

is correct.

PART 3: PERFORMANCE, EXCUSABLE DELAY, AND ACCELERATION

Findings of Fact

Post-award Conditions and Performance

48.

Shortly after award, on January 17, 2005, the contractor received another

message from the independent security firm concerning Haiti. The message indicates that

a colleague in Port-au-Prince, working on a kidnap-for-ransom case, thought Kabul

compared favorably in terms of law and order. The message notes that even with the United

Nations peacekeeping troops, the country remained unstable and violence persisted, with

continued volatility likely to hamper economic recovery in the medium term, and with

elections likely to cause further unrest. The email message continues:

Economic difficulties have produced a widespread increase in criminal

activity, particularly kidnap-for-ransom. Criminal gangs target wealthy

individuals and demand ransoms . . . to release their victims. The rise in rates

of armed crime, murder and carjacking also remains a concern. Public security

has deteriorated dramatically, particularly in Port-au-Prince. Lower-income

areas of Port-au-Prince, especially the Cite Soleil, Bel Air and Carrefour areas,

are particularly unsafe. However, all areas, including the affluent suburb of

Petionville, suffer from random crime.

Business personnel should only undertake essential travel to Haiti.

Exhibit 6147 at 249.

49.

As noted, the authorized departure for non-emergency personnel and family

members of embassy employees terminated on March 11, 2005. Exhibit 16186. A Travel

Warning issued that date reported the lifting of the authorized departure, but warned United

CBCA 1559

States citizens of the dangers of travel to Haiti due to the volatile security situation.

“Americans are reminded of the potential for spontaneous demonstrations and violent

confrontations between armed groups.” The warning encouraged vigilance in light of the

potential for looting, the presence of intermittent roadblocks set by armed gangs or the

police, and the possibility of random violent crime, including kidnapping, car jacking, and

assault. It noted that travel could be hazardous within Port-au-Prince, and that United States

businesses continued to operate in Haiti, but took special precautions to protect their facilities

and personnel. Exhibit 995 at 782-83. An agency press guidance issuance of that date notes

the termination, and explains why the agency reissued a Travel Warning: “While security has

stabilized somewhat, we still believe that conditions warrant a travel warning.” Exhibit

16188 at 468.

50.

On May 26, 2005, ordered departure from Port-au-Prince was approved for a

period of thirty days (with continuation or termination to be requested following reevaluation) of eligible family members and non-emergency personnel at the embassy.

Exhibit 21717. This ordered departure did not apply to the contractor. A Travel Warning

(#17) was issued on May 26, 2005,

to warn American citizens of the continued dangers of travel to Haiti. Due to

the volatile security situation, the Department has ordered the departure of

non-emergency personnel and all family members of U.S. Embassy personnel.

The Department of State warns U.S. citizens to defer travel to Haiti and urges

American citizens to depart the country if they can do so safely.

Exhibit 996 at 435. The warning states, “Americans citizens who remain in Haiti despite this

warning are urged to consider departing.” Exhibit 996 at 436. As in the Travel Warning of

March 2005, Finding 49, the warning reminded Americans of the potential for spontaneous

demonstrations and violent confrontations between armed groups, the potential for looting,

the presence of intermittent roadblocks set by armed gangs or the police, and the possibility

of violent crime, including kidnapping, car jacking, and assault. Also, as in earlier warnings,

it noted that travel could be hazardous within Port-au-Prince, and that United States

businesses continued to operate in Haiti, but took special precautions to protect their facilities

and personnel. As in the earlier warnings, this warning also advises, “U.S. citizens who

travel to or remain in Haiti despite this Travel Warning must remain vigilant with regard to

their personal security and are strongly advised to register online . . . or contact the Consular

Section of the U.S. Embassy in Port-au-Prince . . . .” Exhibit 996 at 435-36.

51.

On May 27, 2005, the contractor informed the agency: “We are following the

instructions contained in the Department of State instructions [in the Travel Warning]. All

CBCA 1559

of our expat [expatriate] staff will leave Haiti no later than Tuesday after we secure our

temporary establishments.” The contractor advised of contractual implications relating to

delays and additional costs. Exhibit 21731 at 35-36.

52.

Later that same day, the agency responded to the contractor:

This email is to inform you that at the current time no directive to stop work

or suspend work at the site will be forthcoming from this Department to you

for this project. Safety is a primary concern for all of us and this condition is

being monitored. Your firm can stop performance on this site unilaterally if

it deems that force majeure conditions make performance impossible, but in

such a case even if the USG [United States Government] agrees as to the

existence of force [ma]jeure conditions your firm would only be entitled to a

time extension and not an equitable adjustment for delay costs.

Exhibit 21731 at 35.

53.

On May 31, 2005, the contractor notified a subcontractor performing

excavation on site:

As a result of actions and directions by our client, the U.S. State Department

related to recent security incidents in Port-au-Prince, the management of J.A.

Jones, International has ordered that our expatriate personnel depart from

Haiti. Accordingly, we will be departing tomorrow morning. It is our

expectation and our hope that the State Department will provide definitive

direction to JAJI that will allow us to proceed with this project shortly.

Our Contract does not permit permanent works to proceed without an

American supervisor present. Therefore, [you are] hereby directed to suspend

all excavation of soils and placement of backfill effective at the close of

business today. You are further directed to ensure that the excavations are

properly bermed and stockpiles are properly shaped to protect the existing

works from storm damage to the extent possible by the end of today’s work.

Exhibit 21782. On June 1, 2005, expatriate personnel of the contractor departed Haiti;

American citizens in the employ of the contractor did not remain. Exhibit 21785. Work on

the critical path of performance ceased.

CBCA 1559

54.

The Department of State issues Warden Messages which provide safety or

travel information concerning countries or localities, with such messages sent by email to

those registered for such receipt; the messages convey timely information on changing

conditions. A Warden Message (#18) of June 3, 2005, noted that all United States embassy

personnel had been advised that all travel to and from the airport must be in lightly armored

vehicles (LAVs), with specified roads approved for airport travel. The message repeated

information in the Travel Warning referenced above (reminding Americans of the potential

for demonstrations and confrontations, and summarizing the variety of violent crimes).

Exhibit 5609 at 435-36.

55.

During the ordered departure period, which was extended, the agency approved

travel to Haiti for specific individuals. Exhibits 5666-73, 5700. One such approval issued

on June 13, 2005, permitting the visit of one individual to provide supervision of on-site

security personnel in support of the construction project, specifies:

The crime situation has reached critical levels in Port-au-Prince.

Demonstrations occur at irregular intervals in and around the Embassy area.

At times, demonstrations have blocked roads leading to the Embassy with

burning tires and garbage. Carjackings and armed robberies are on the

increase within Port-au-Prince area and can occur at any time of day or night.

To avoid being a victim of crime, [temporary duty] personnel are strongly

advised to observe the following common-sense rules: . . . In Port-au-Prince

traffic is gridlocked and driving is dangerous. The Cite Soleil area of Port-auPrince is currently off-limits to all personnel. Visitors are reminded to lock

vehicle doors and keep their windows rolled up at all times. When traveling

outside the Port-au-Prince area, personnel are requested to travel with at least

two vehicles for safety reasons.

Exhibit 5674.

56.

By letter dated June 17, 2005, the contractor informed the agency of its position

“that these recent events represent changed circumstances that are compensable under the

terms of the contract and that any resulting delay is excusable.” The letter specifies further,

With respect to alternative options, we wish to reiterate that JAJI remains

committed to the project and wants to find a way to make this work. We must

however have adequate assurances that the Government will recognize its

contractual responsibility to fund the various measures which will allow JAJI

to execute the work in a safe environment.

CBCA 1559

Exhibit 21995 at 218. In terms of proceeding with performance, the contractor stated:

Given the current situation, in order for JAJI to return its personnel to Haiti,

we would have to implement extraordinary security measures. These include,

but are not limited to, providing additional armored vehicles, changing the plan

for individual housing to a “camp style” situation nearer to the project site, and

additional security personnel and equipment. These measures will require time

to implement before we can return the expatriate personnel to Haiti.

Furthermore, it is expected that the security situation and measures to cope

with it will severely impact JAJI’s ability to prosecute the work in an efficient

and timely manner. We therefore wish to caution that a resumption of work

in [Port-au-Prince] is certain to involve substantial additional initial costs and

subsequent inefficiencies in productivity if we are directed to return.

Exhibit 21995 at 225-26. In a conversation with the contractor on June 23, 2005, the agency

indicated that it considered there to be no changed conditions in Haiti, and that no assurances

were provided during the preproposal conference. The agency requested that the contractor

determine the security enhancements it thought necessary to return to the site; that is, develop

a plan and cost of implementing the plan, with information from proposal calculations to

demonstrate what the contractor had included in its pricing. Exhibit 16330.

57.

On June 25, 2005, the ordered departure was authorized to continue for a

period of thirty days. Exhibit 22157 at 911. A Warden Message (#19) issued on June 26,

2005, stated that due to the volatile security situation in Port-au-Prince, the United States

embassy had further reduced the number of its non-emergency personnel and required the

departure of all family members of United States personnel. The message urged citizens to

depart Haiti, if they could do so safely, and repeated the information referenced above

(reminding Americans of the potential for demonstrations and confrontations, and

summarizing the variety of violent crimes. Also, “As unrest continues, it is important for

U.S. citizens to assess their personal security situation and decide whether to depart Haiti.”

And, “Ordered departure status of an Embassy signals that the US Government is concerned

for the safety of its employees and should be considered a strong signal to private U.S.

citizens.” Exhibit 22143 at 133.

58.

On June 28, 2005, the embassy established, for all of its direct-hire American

staff, mandatory rules relating to curfew and the requirement to travel in a LAV with an

armed escort. These rules did not apply to the contractor. Exhibit 22159.

CBCA 1559

59.

On July 1, 2005, the contractor responded to the agency request of June 23,

providing “concept plans and alternatives” instead of any pricing information. In part, the

contractor stated:

It is, therefore, imperative that we mutually understand the available options,

and not under-estimate the financial and schedule implications of this difficult

and complex undertaking.

In order for JAJI to resume permanent construction work in Haiti, we will

require some type of clearly documented contractual agreement, defining the

terms and cost/schedule elements associated with such efforts.

Exhibit 405 at 1081.

60.

By letter dated July 12, 2005, the contracting officer notified the contractor that

its demobilization from the jobsite was endangering performance. Further, “the Government

regards [your] firm’s stated unwillingness to resume construction activities in Haiti until the

Government agrees to a substantial renegotiation of your contract as tantamount to a

repudiation of your contractual obligations amounting to anticipatory breach of contract.”

Exhibit 16381 at 334. The letter noted the agency’s position that no changed conditions had

arisen since the award of the contract, and that the civil unrest was essentially the same

condition that prevailed at the time of contract award. The agency asserted that the Travel

Warning of May 26, 2005, was not an order to demobilize, but rather contained language

substantially the same as those since March 2004. The contracting officer opined that the

contractor’s unilateral suspension of on-site activities would warrant a cure notice or an

immediate termination for default. “We will defer any such action for ten days in the hope

that you will reaffirm your contractual undertakings and provide an acceptable plan for

progressing the work under its terms.” Exhibit 16381 at 334-35.

61.

The contractor responded by letter dated July 15, 2005, expressing its belief

that significantly changed conditions in Haiti presented a unique circumstance that is

compensable under the contract, and specifying that it did not intend to repudiate its

obligations, as it intended to perform and had continued to perform (e.g., design,

procurement, and shipping) while not on site. The contractor stated that it did not view the

Travel Warning as a de facto suspension of work.

Rather, JAJI directed its employees to leave [Port-au-Prince] (and to attempt

to continue working from the Dominican Republic) because it assessed the

security situation as having deteriorated to the point where it could not

CBCA 1559

reasonably allow them to remain without implementing substantially enhanced

security measures. This assessment was substantiated and reinforced by the

May 26 Travel Warning, which “ordered the departure of non-emergency

embassy personnel,” and “urge[d] American citizens to depart the country if

they can do so safely.” Just as the Department’s ordered departure reflects its

concern for the safety of its employees, JAJI’s decision reflects its own

concern and duty to reasonably ensure the safety of its employees.

Exhibit 18065 at 729-30. The contractor further opined that any direction to come back

under current conditions would be a constructive acceleration entitling it to additional

compensation, and noted that it would resume permanent construction work as soon as it was

assured that it could adequately protect its employees “given the new reality of significantly

increased violence and civil unrest that was not present at the time of contract award” and

the agency “recognizes that the additional costs of providing such protection are not included

within the current fixed-price of the contract.” Exhibit 18065 at 731.

62.

On July 21, 2005, the ordered departure was extended for a period of thirty

days, through August 23, 2005. Exhibit 5705 at 970.

63.

The contractor provided the agency with a request for equitable adjustment

(REA) dated July 26, 2005, setting forth security costs and general concepts from its

proposal, and estimates for additional security measures (LAVs, enhanced communications,

security housing measures, and additional guards), credits if requirements for cleared

Americans (CLUS) were reduced, and increased labor costs reflecting incentives under the

difficult security circumstances to obtain and retain personnel. Exhibit 16437.

64.

The contracting officer provided a response, by letter dated July 29, 2005,

explaining, while assuming that crime and civil unrest in Haiti had materially worsened since

award, that there was no contractual basis for additional compensation for performing the

contractual scope of work under the firm, fixed-price contract: “such worsening of civil

conditions, as may have occurred in Haiti since contract award, was neither unforeseeable

nor has it necessitated a delay in the work.” The letter concludes, “In the absence of a plan

for JA Jones to resume work on-site, the Government will consider whether it is appropriate

to issue a show cause letter with respect to your progress on the project.” Exhibit 18070.

65.

In a responsive letter dated August 9, 2005, the contractor expressed its

disagreement with the views of the contracting officer: “JAJI’s position has been that where,

as here, the security environment substantially deteriorates far beyond the point where the

reasonable security measures that a contractor should have been expected to employ to

CBCA 1559

perform the work are no longer adequate to protect its workforce, the fixed-price nature of

the contract does not preclude the contractor from recovering the costs associated with

providing additional security when the Government directs (explicitly or implicitly)

continued performance.” However, the contractor specified that consistent with the direction

of the agency, “JAJI will now continue the implementation of all necessary security measures

and seek the compensation to which it is entitled through the claims process.” Exhibit 22584

at 369-70.

66.

Also on August 9, 2005, the agency provided clearance for entry to Haiti for

an agency employee to provide project director support for this project. The clearance states,

in part:

The crime situation has reached critical levels in Port-au-Prince.

Demonstrations occur at irregular intervals in and around the Embassy area.

At times, demonstrations have blocked roads leading to the Embassy with

burning tires and garbage. Carjackings and armed robberies are on the

increase within Port-au-Prince area and can occur at any time of day or night.

Exhibit 22596 at 870. (The reference to the embassy area is to the existing embassy, not the

project under construction, which is distant from the existing facility.)

67.

The contractor began remobilizing to the jobsite, with a phased approach

dependent upon its defined set of security measures to accommodate the increased staff.

Exhibit 405 at 0698. On May 29 and 31, 2005, the contractor had eleven and nine personnel,

respectively, in Haiti. As of June 2, 2005 (the day after departures), the contractor had five

personnel, the number that remained until August 1, 2005, when it rose to seven. For the

remainder of 2005 (at least through November): From August 20 and thereafter, there were

at least nine personnel; by September 12, there were at least twelve personnel; and by

October 22 there were at least fourteen personnel. Exhibit 25909. On September 21, 2005,

critical path work resumed (excavation for the main building). Exhibit 3903.

68.

On September 14, 2005, the contractor submitted a request for equitable

adjustment for a compensable time extension, seeking time due to the alleged security-related

issues, that is, relating to its departure from the site (111 days) and the alleged differing site

condition (26 days) as discussed in Part 2 above, and a total of $1,002,081 in costs known

to date. Exhibit 185 at 54-55. The agency rejected project execution schedules submitted

by the contractor, because the schedules did not reflect completion by July 3, 2007. Exhibit

15519 (Nov. 7, 2005) at 333. By letter dated December 9, 2005, the contractor informed the

agency that it deemed the agency’s refusal to allow additional time to be a constructive

CBCA 1559

directive to accelerate performance. Exhibit 188. By letter dated December 11, 2006, the

agency informed the contractor that the agency would withhold 10% retainage from monthly

progress payments based upon the contractor’s projected completion date of May 31, 2008,

instead of the contract completion date of July 3, 2007. Exhibit 18164.

69.

Superseding the Travel Warning issued May 26, 2005, a Travel Warning dated

November 22, 2005, was issued to alert American citizens to the continued dangers of travel

to Haiti. The warning noted that the ordered departure of non-emergency employees and

adult dependents had been lifted (not so for dependents under age twenty-one). Other items

in the warning included a reminder of the potential for spontaneous demonstrations and

violent confrontation between armed groups, and for looting, the presence of intermittent

roadblocks, and the possibility of random violent crime, including car jacking and assault.

The warning states that travel could be hazardous within Port-au-Prince, notes that some

areas are off-limits to embassy personnel, and indicates the existence of an embassy-imposed

curfew. Further, “Kidnapping for ransom remains a particular threat, with over 25 American

citizens including children kidnapped over the past year. National elections have been

scheduled for late 2005 and early 2006. These elections may become a stimulus for further

social tension, which could include violence.” Exhibit 997 at 998-99.

70.

By email message dated December 20, 2005, the agency stated that it was not

responsible for any delay, thereby rejecting the contractor’s view that constructive

acceleration existed. Exhibit 405 at 1217.

71.

A Warden Message (#21) of December 29, 2005, stated that due to the recent

increase in kidnappings, the embassy had instituted a more restrictive travel policy and earlier

curfew for embassy employees. Exhibit 5612.

72.

On July 7, 2006, a Travel Warning noted that the State Department had lifted

the ordered departure of embassy employee dependents under age twenty-one, and repeated

the earlier warnings of the dangers of travel to Haiti and hazards within Port-au-Prince.

Also, “Kidnapping for ransom remains a serious threat, with more than 50 American citizens,

including children, kidnapped over the past year.” Exhibit 998 at 755-56.

73.

The security situation in Haiti continued to pose various risks over the course

of performance. Although there has been much testimony and numerous documents

addressing the situation, the next Travel Warning, of January 10, 2007, summarized the

difficult situation in 2006 and urged caution in 2007. The warning began by noting that it

is a reminder to American citizens of ongoing security concerns in Haiti, including frequent

kidnappings of Americans for ransom. Travelers were strongly advised to thoroughly

CBCA 1559

consider the risks before travel to Haiti, and to take adequate precautions to ensure their

safety if they did so. The warning further specified:

2. U.S. citizens traveling to and residing in Haiti are reminded that there is a

chronic and growing danger of kidnappings. Most kidnappings are criminal

in nature, and the kidnappers make no distinctions of nationality, race, gender

or age; all are vulnerable. Over 60 Americans were kidnapped in 2006, most

in Port-au-Prince. Many abductions are the result of carjacking or home

invasions. Past kidnappings have been marked by deaths, sexual assault,

shooting and physical assault of Americans. The lack of civil protections in

Haiti, as well as the limited capability of local law enforcement to resolve

kidnapping cases, further compounds the element of danger surrounding this

trend.

3. U.S. citizens are also reminded of the potential for spontaneous protests and

public demonstrations that can occur at any time, day or night, and may result

in violence. . . . [There exists t]he potential for looting; the presence of

intermittent roadblocks set by armed gangs or by the police; and the possibility

of random violent crime, including carjacking and assault.

4. Travel can be hazardous within Port-au-Prince.

Exhibit 999.

74.

A Travel Warning dated August 31, 2007, reinstated and updated the warning

of January 10, 2007, and reminded “American citizens of ongoing security concerns in Haiti,

including frequent kidnappings of Americans for ransom. Travelers are strongly advised to

thoroughly consider the risks before travel to Haiti, and to take adequate precautions to

ensure their safety if traveling to Haiti.” Exhibit 1000 at 30. The Travel Warning continued:

U.S. citizens traveling to and residing in Haiti are reminded that there

is a chronic danger of violent crime, especially kidnappings. Most

kidnappings are criminal in nature, and the kidnappers make no distinctions of

nationality, race, gender or age; all are vulnerable. As of the date of this travel

warning, there have been 12 Americans kidnapped in 2007, most in Port au

Prince. Past kidnappings have been marked by deaths, physical and sexual

assault, and shooting of Americans. The lack of civil protections in Haiti, as

well as the limited capability of local law enforcement to resolve kidnapping

cases, further compounds the element of danger surrounding this trend.

CBCA 1559

U.S. citizens are also reminded of the potential for spontaneous protests

and public demonstrations that can occur at any time, day or night, and may

result in violence. American citizens are advised to take commonsense

precautions and avoid any event where crowds may congregate. Visitors and

residents must remain vigilant due to the absence of an effective police force

in much of Haiti, the potential for looting, the presence of intermittent

roadblocks set by armed gangs or by the police, and the possibility of random

violent crime, including carjacking and assault.

Travel is hazardous within Port-au-Prince. Some areas are off-limits

to embassy staff, including downtown Port-au-Prince, after dark. . . .

Due to the current security situation in Haiti, the Department of State

reminds U.S. citizens traveling to or residing in Haiti to remain vigilant with

regard to their personal security . . . .

Exhibit 1000 at 30-31.

75.

On June 29, 2007, the agency unilaterally issued a contract modification

(number 14) with an effective date of June 28, 2007. The modification stated that its purpose

was to extend the period of performance by 143 days; the new period of performance ended

on November 24, 2007. Exhibit 25296 at 205. Without the modification, the contract

completion date had been July 3, 2007. In a cover letter, the contracting officer explained

the modification includes a time extension in response to various requests for equitable

adjustments filed by the contractor. Exhibit 25296 at 204. The 143 days equates to the sum

of the 111 days relating to the contractor’s departure from the site and lack of work on the

critical path, 26 days relating to the alleged differing site condition, 4 days relating to a labor

strike, and 2 days relating to a transportation strike. For these final incidents totaling six

days, the modification issued approximately five weeks or less after a request for an equitable

adjustment. Exhibit 25907. The extension for these six days was reasonably prompt; the

record does not indicate that the contractor expended any particular resources to overcome

these six days of delay.

76.

Subsequent to modification 14, when a contracting officer recognized

excusable delays of 143 days, the agency issued various other contract modifications,

extending the performance period by an additional fifty-four days. Some of those days

related to additional or changed work, others to strikes, weather, a Haitian government

holiday, and demonstrations. Time extensions for thirty-nine of the days were issued after

CBCA 1559

substantial completion. Exhibit 25907. The record does not demonstrate that the contractor

was required to expend any particular additional resources to overcome any of these delays.

77.

A Travel Warning, dated April 11, 2008, which was after substantial

completion, Finding 3, was issued to inform American citizens of violent demonstrations in

Haiti and to urge American citizens to defer non-essential travel to Haiti. The warning,

which superseded that of June 29, 2007, noted that official American citizens were restricted

from travel to Haiti, and stated that American citizens visiting Haiti should consider

departing as soon as circumstances permitted. The warning specified that travel is always

hazardous within Port-au-Prince. Exhibit 1001 at 33-35.

78.

During the performance period, Port-au-Prince, as well as Haiti generally,

experienced ups and downs in security and violence, with hours or days of unrest, shootings,

kidnappings, and crime. The numbers of kidnappings of American citizens and children

were not insignificant; kidnappings affected those directly involved and those living and

working in that environment. The levels and spread of violence and insecurity that occurred

during the period of performance were not unanticipated during proposal preparation. As

previously found, Haiti was known to be an unstable country, with portions of Port-au-Prince

particularly unsafe (i.e., around the existing embassy, the cement plant used by the contractor,

and the embassy warehouse). Unsafe areas and conditions can affect the transportation of

workers, materials, and equipment. The violence and security concerns did not cease or

abate with contract completion; had performance continued the contractor would have faced

similar challenges to those during performance. The contractor performed amidst the

conditions, taking actions it deemed necessary to provide for the security of its personnel and

property. Its efforts included the purchase of additional LAVs and the creation of a man

camp near the work site to house personnel.

79.

The contracting officer received a certified claim from the contractor on

July 28, 2008. The contractor sought an upward adjustment of $43,808,837 in the contract

price, an additional extension of 234 calendar days in the contract’s substantial completion

date, and a determination that the agency is not entitled to assess liquidated damages against

the contractor. Exhibit 404. The contracting officer denied the claim. Exhibit 403. The

contractor has refined that claim to now seek $34,848,562, to which it adds profit of

$3,177,848, for a total of $38,026,410, plus interest from July 28, 2008. That basic amount

is composed of the following:

$ 532,125 additional earthworks subcontractor/geotechnical engineering

967,408 evacuation, remobilization, and security change costs

2,159,807 time-sensitive costs

CBCA 1559

12,091,187

7,579,332

1,757,535

7,367,957

722,508

117,979

1,552,724

man camp costs

craft labor and small tools costs

additional equipment and fuel, oil and grease costs

staff labor costs

local labor lunches due to acceleration

OBO/CST/CAG overtime due to acceleration

general and administrative costs

Exhibit 18980 at 51. (OBO--Department of State’s Bureau of Overseas Building Operations;

CST-- Construction Surveillance Technician, and CAG--Cleared American Guard). The

contractor states that these costs represent the agency’s share of the contractor’s incurred

costs.

80.

The contractor incurred costs of approximately (all amounts are approximate)

$12.6 million to install and demobilize the man camp, and $6.3 million for occupancy,

security, and miscellaneous costs. From the sum of those figures, $18.9 million, it deducts

$1.6 million as credits for payments received from agency and other visitors, housing costs

avoided, and lunches not supplied. Of that difference, $17.3 million, the contractor seeks

72%, the percentage of the acceleration it attributes to the agency. Exhibits 15201 at 27-28,

25920 at 2.

81.

For craft labor and small tools costs, the contractor’s supporting summary does

not seek $7,579,332, but rather $8,306,386, composed of estimated small tools costs

attributable to acceleration; costs for cleared United States workers wage uplift (increased

pay to hire or retain individuals); craft labor costs attributable to acceleration; and an amount

for loss of productivity. Exhibit 15201 at 29-31, 291-301.

82.

The contractor seeks to recover costs for equipment and fuel, oil, and grease

(FOG) that the contractor attributes to its efforts to recover excusable delays for which the

agency failed to provide a timely contract extension. The contractor seeks $1.7 million for

rented equipment, $.36 million for purchased equipment less $.12 million for its salvage

value, and an agreed-upon percentage for the FOG. The parties disagree on one particular

aspect of the costs of rented equipment; namely, the rental costs of $1 million incurred by the

contractor when it rented equipment from a wholly-owned subsidiary. Exhibits 15201 at 31,

25920 at 4, 10. The contractor’s determination of its costs for that rented equipment is

supported by the record and reflects reasonable costs given the circumstances in Haiti. The

agency views the contractor’s charges as other than actual costs, so the agency utilizes

ownership costs pursuant to rates of the United States Army Corps of Engineers. The rates

used by the agency are not comparable to those for performance in Haiti.

CBCA 1559

83.

Of $7.4 million the contractor seeks related to staff labor costs, the contractor

attributes $5.9 million to total staff labor and overheads, to which it applies its 72%

acceleration factor; $2.3 million to loss of productivity (based upon 25% of staff labor costs);

$.4 million to security and differing site condition staff labor costs and a security uplift on

expat staff; and $.4 million to expat staff travel and subsistence. Exhibit 15373 at 72. These

figures are not reconcilable fully with others in the record. Exhibits 15201 at 33-34, 308-42,

25920 at 4, 8, 10. The agency contends that the contractor did not add all personnel as a

result of delay or acceleration for which the agency is responsible, that certain of the costs

should be part of the time sensitive category, and that although additional payments were

paid to original project staff, there is no agreement as to the reason or basis for agency

liability. Exhibit 25920 at 4, 10. The calculation of staff costs includes hours expended in

2005, prior to any claim period for excusable delay. The costs are minimal. Exhibit 15201

at 318-33 (schedules 7.1.1, 7.2.1). The record does not tie the identified security/differing

site condition staff labor costs to the excusable delay and acceleration claim. Other costs

relate to the contractor’s overall effort in performing the contract and overcoming the various

delays.

84.

The contractor expended $1 million for lunches for local labor, of which it

attributes $.7 million to efforts to recover excusable delays for which the agency refused to

provide a timely extension. Exhibits 15201 at 34-35, 15373 at 73, 25920 at 4, 8. Finally, the

contractor incurred $163,860 in overtime costs for agency and other personnel, said to be

incurred because of delays. The contractor seeks to recover $117,979, based upon the 72%

factor it used it allocating acceleration costs. Exhibits 15201 at 35-36, 15373 at 73.

85.

In this proceeding, the parties have reached a joint stipulation covering many

of the costs incurred by the contractor; that is, the parties agree that the record supports the

conclusion that the contractor incurred most costs as stated. Of note, the parties have reached

no agreement on entitlement to any dollars or for any particular areas of costs. Exhibit

25920. Regarding acceleration, the agency disputes the contractor’s assertion that it

accelerated performance and its entitlement to any recovery for the claimed acceleration

costs. However, the parties stipulate that if the contractor proves that the agency

constructively accelerated the project, it is appropriate to allocate the acceleration costs based

on each party’s share of the delay that caused the acceleration. Exhibit 25920 at 4 n.15. The

parties have stipulated to a rate for general and administrative (G&A) costs (4.68%) and a

rate for profit (9.15%).

86.

actions:

One of the experts for the contractor summarizes his view of the contractor’s

CBCA 1559

JAJI began its acceleration efforts in late 2005 when it began working

on all available buildings and structures in an attempt to meet the original

Contract Completion Date. Had JAJI been granted the time extension for

delays experienced as of that time, it could have followed its original plan to

pursue the work in a more sequential than concurrent method. This would

have allowed for a more efficient use of its resources. Ultimately, JAJI’s

acceleration was insufficient to overcome all Project delays as a result of

slower than planned production due to on-going security impacts and the skills

of the local workforce. The costs associated with this multiple work front

approach, while more than anticipated at the time it prepared its bid, paled by

comparison to the costs JAJI was forced to expend in the fall of 2006 in an

attempt to mitigate the Project delays.

In the fall of 2006, JAJI changed its approach to the Project and made

the decision to invest significant additional resources in an attempt to complete

the Project as expeditiously as possible. JAJI decided to add additional U.S.

expatriate supervision and import additional skilled labor in order to recover

delays associated with the differing site conditions, the evacuation, the ongoing security impacts and the lower productivity on the Project.

Exhibit 15401 at 57. The decision to initiate work on various buildings simultaneously

related to the excavation and fill resulting from what the Board has concluded was not a

differing site condition. This change in approach from the schedule was not induced by lack

of having been granted additional time to perform.

87.

The record demonstrates that the contractor had devised and implemented

performance plans that were insufficient to complete the contract within the original and the

modified performance period. Factors in this include its foreign teaming partner, the

situation in Haiti (security, the skill level of the available local work force, and available

concrete and other resources) and its impact on recruitment and performance, and the

contractor’s security and management oversight. The period of departure and the lack of a

timely excusable delay extension were not the significant factors in shaping many of the

contractor’s efforts and expenditures of dollars the contractor attributes to acceleration

related to excusable delay. The security situation in Haiti required the contractor to commit

substantial additional resources in order to accomplish performance. The reallocation of

resources and resequencing of performance, with work occurring on multiple fronts, as well

as the hiring of additional labor and supervisors, the purchase and rental of additional LAVs,

equipment and tools, and the creation of a man camp near the new embassy facility, were

efforts largely to cope with the security environment and to complete performance as

CBCA 1559

expeditiously as possible. Even with these efforts, substantial completion occurred after the

modified contract date. However, without a timely modification for the days of excusable

delay, the substantial completion date in the contract reflected a shorter period than was

required. The shortened performance period affected the contractor’s scheduling and

planning to some degree. The Board has the task of ascertaining the costs arising from the

untimely granting of the excusable delay, apart from the costs arising from the extra

excavation and fill (the non-differing site condition) and the general security environment,

under which the contractor was obligated to perform. The acceleration and associated costs

cannot be measured precisely.

88.

The contractor has introduced evidence of expert-prepared measured mile

analysis said to reflect labor inefficiencies in the concrete work on the main building, which

the contractor extrapolates to its work as a whole. The Board concludes that such analysis

is of limited value. Regarding just the concrete work, which required rebar and form work

to pour slabs (horizontal), walls (vertical), and other components, there were variations in the

work (vertical versus horizontal versus other components), sizes of pours, and the availability

of concrete. While the experts from both sides arrive at differing degrees of efficiency by

grouping work periods differently, the analysis does not explain the causes of the seeming

inefficiency. It may be that the variations over the performance period are normal or

anticipated based upon differences in work done; even if inefficiencies exist, attributing any

portion to the accelerating work is not certain. In short, the experts have not convincingly

demonstrated that the work was inefficient or what the cause (be it acceleration or otherwise)

was of any inefficiency.

89.

Even if the Board found meaningful inefficiencies in the performance of the

concrete work, it is another step to conclude that such rates of inefficiency should apply to

other work on the project. Any limitations or inefficiencies affecting the concrete work have

not been shown to have affected or be replicated in other work. Other trades performed work

at the project that encompassed several buildings. Additional workers distributed over

different buildings, or on different floors, or in different rooms, may or may not have

performed with interference or obstruction. We recognize that performance can become

inefficient or slow down with an overlapping of trades, whether the overlap is caused by

acceleration or otherwise. The precise degree of inefficiency of the workforce because of

acceleration actions has not been demonstrated in this record. In part, this is due to the

contractor hiring laborers from outside of Haiti, who were more skilled than those initially

hired, enabling quicker performance, albeit at a higher labor rate, with added costs of

recruitment.

CBCA 1559

90.

Having dealt with its own erroneous expectations and scheduling, and various

delays (its own, agency, excusable, and other), the contractor achieved substantial completion

on March 31, 2008. The contractor claims that it expended additional efforts and resources

to achieve an accelerated substantial completion date, that is, finishing sooner than it would

have otherwise. With acceleration, some efforts and expenditures are off-set by savings on

labor and supervision, man camp, rental, and other costs that the contractor would have

incurred with a lengthened performance period.

91.

Most of what costs the contractor describes as costs of acceleration simply

represent costs of performance under the given security environment and as required under

the contract as the contractor attempted to minimize liquidated damages and complete

performance in case the security situation worsened. Even with its efforts, the contractor was

72 days late in completing substantial performance beyond the modified contract completion

date. Moreover, the agency extended the completion date by modification 14 at the end of

June 2007, at which point the contractor had additional time to complete performance.

92.

After conducting an analysis of delays occurring over the course of

performance, the experts for the contractor assign responsibility for calendar days of delay,

also broken down by time periods, with adjustments made for contractor acceleration: 211

to the agency, 47 to the contractor, and 35 to other causes, for a total of 293 calendar days

of delay. Exhibit 15401 at 49. The Board does not accept these figures as helpful in

determining or allocating the actual acceleration or the acceleration costs, given that they

reflect assignment to the agency and not the contractor of many of the security related delays.

Further, the analysis credits the contractor with a disproportionate number of days of delay

recovered.

93.

Through June 2007 the contractor was proceeding without a time extension and

had resequenced its work as it changed its approach in an attempt to complete the job earlier

than ultimately required. With this revised approach the contractor overcame some of its

own shortfalls, as well as delays (agency, excusable, and other). The agency’s position that

the contractor incurred no additional, compensable costs of accelerating performance is not

supported by the record. Had the agency initially granted the excusable delay claimed by the

contractor, the contractor could have planned for performance with a different schedule and

sequence of work. The months of excusable delay were a significant portion of the

performance period; after resuming performance, the contractor could allocate resources

differently based upon the period for completion. That said, however, the contractor did not

achieve substantial completion within the original or modified periods. The actual costs of

acceleration arising from the delayed granting of the excusable delay days are far more

CBCA 1559

modest than those derived with the contractor’s allocation of responsibility to the agency of

72% of the contractor’s costs.

94.

The majority of the contractor’s costs were for dealing with the security

situation and not related to any agency-caused acceleration efforts. In developing a

percentage, the Board finds that five percent is a figure that represents the overall or general

percentage of costs attributable to acceleration efforts caused by the agency’s initial denial

and eventual granting of an excusable delay. The five percent figure lacks a mathematical

formula for its derivation, but is based upon a consideration of the record (with particular

attention paid to the reports and testimony of the experts and the testimony and submissions

of the contractor’s personnel) and the ultimate conclusions that a differing site condition did

not exist and that the security environment did not represent a changed condition affecting

the entire performance period. Most of the contractor’s costs do not represent costs of

acceleration tied to the excusable delays. In particular, the contractor expended significant

funds and time in dealing with the situation in Haiti, and to a lesser extent in dealing with the

alleged differing site condition. Completing performance earlier than otherwise saved the

contractor various costs.

Discussion

Worsened and Varying Conditions

The contractor ties much of its claim for monetary relief and additional time to the

deteriorated conditions in Haiti, especially in and around Port-au-Prince. The conditions

required the contractor to implement security measures for which it had not budgeted. The

contractor was impacted in the hiring, retention, and housing of laborers and supervisors, in

the transportation of personnel, material, and equipment, and by the daily environment in

which performance occurred. At times work was less efficient as workers were concerned

about their safety at, and getting to and from, the job site, and the safety of spouses, children,

and others who also resided in Haiti. Conditions occasionally delayed deliveries and

transportation, for example, because of closures and actual or threatened unrest in the streets.

The worsening of and variations in the conditions in Haiti, by themselves over the

period of performance, do not represent an excusable delay or otherwise compensable basis

for a change under the contract. The conditions in Haiti were known to pose security risks

and issues that would and could impact performance. Prior to award, it was not unexpected

that conditions could deteriorate during performance. As detailed in the facts and

summarized above, the potential for rising crime and security problems was real and

substantial, and expressed as a concern for individuals and businesses in Port-au-Prince,

CBCA 1559

specifically, as well as Haiti. Further, just after award, with ordered departure still in effect

at the embassy, the contractor learned from the independent security firm it utilized that (a)

economic difficulties had produced a widespread increase in criminal activity, particularly

kidnap-for-ransom (criminal gangs were targeting wealthy individuals and demanding

ransoms); (b) a rise in rates of armed crime, murder and car jacking remained a concern; (c)

public security had deteriorated dramatically, particularly in Port-au-Prince; and (d) lowerincome areas of Port-au-Prince were particularly unsafe, while all areas, including the

affluent suburb of Petionville, suffered from random crime. This information came with the

suggestion that business personnel should undertake only essential travel to Haiti. Finding

48. With the foreseeable obstacles ahead, a prudent contractor would take actions to ensure

that the contract could be performed on schedule. Ultimately, the contractor took adequate

measures to protect against and perform under the security threats. The contractor performed

its contractual duties; there were not compensable changed conditions under the contract.

The contractor underestimated what its performance entailed. Given the place of

performance, what transpired does not represent unexpected impediments; the variations in

and deteriorations of the security environment fall within the foreseeable and probable.

United States v. Brooks-Callaway Co., 318 U.S. 120 (1943) (the examples of excusable delay

itemized in the clause are not always unforeseeable; the attendant circumstances must be

considered). Under the contract, the contractor assumed both expected and unexpected risks.

Northrop Grumman Corp. v. United States, 47 Fed. Cl. 20, 56-57 (2000). The risks of

deteriorated security conditions should have been recognized and anticipated prior to award,

given the conditions in Port-au-Prince and Haiti and that the solicitation and contract

expressly noted that the contractor bore risks with respect to labor, transportation, and

materials, and emphasized the fixed nature of the contract price, Findings 4, 7.

Even if the changes in security are deemed to be unforeseen, the risks are on the

contractor. As the Federal Circuit has stated: “Because fixed-price contracts do not contain

a method for varying the price of the contract in the event of unforeseen circumstances, they

assign the risk to the contractor that the actual cost of performance will be higher than the

price of the contract.” Dalton v. Cessna Aircraft Co., 98 F.3d 1298, 1305 (Fed. Cir. 1996).

Using the guidance found in McNamara, the contractor assumed the entrepreneurial risk

associated with the conditions in Haiti. “Plaintiff would convert this fixed-price contract into

a cost-plus contract and make the defendant an insurer upon the assumption that Congress

wanted the project so badly that it would pay any additional price.” 509 F.2d at 1171-72.

For these reasons, while the contractor references its actual costs expended compared to the

contract price, the agency contract price estimate, and other proposed prices, those

comparisons are not material. Had the contractor’s price better anticipated its actual costs,

it may not have received the award, or the agency may not have awarded a contract because

CBCA 1559

the contract would have been too costly or beyond its budget. After the award of a fixedprice contract, these circumstances do not permit reformation or a reallocation of risks or a

payment above the fixed price for contract performance.

Excusable Delay

The above conclusions do not resolve this dispute. The contractor also seeks relief

under the contract because of excusable delays. The contract expressly recognizes an

entitlement to additional time, not money, for excusable delay. Acts of the United States

Government in either its sovereign or contractual capacity may constitute excusable delays.

An excusable delay must arise from unforeseeable causes beyond the control and without the

fault or negligence of the contractor. 48 CFR 52.249-10 (2004); Finding 5.

As discussed above, the decline in security after award that affected performance

routinely was identified during the formation stage of the procurement as a concern and

potential challenge. By itself, the actual change in the security situation, even with prolonged

periods of widespread and serious crime, does not here form a basis for excusable delay. An

excusable delay must arise from unforeseeable causes.

Significantly, one element was added to the equation at the end of May 2005: the

Government-ordered departure of non-emergency personnel and dependents at the embassy.

This was a Government act that did not directly apply to, but impacted, the contractor. The

agency issued a Travel Warning that referenced the ordered departure, warned of continued

dangers, highlighted the volatile situation, and stated: “The Department of State warns U.S.

citizens to defer travel to Haiti and urges American citizens to depart the country if they can

do so safely.” Finding 50. As the agency points out, this quoted language does not differ

markedly on its face from the language issued in conjunction with the authorized departure

in effect during contract formation: “U.S. citizens in Haiti are urged to consider departing

until the situation is stabilized as travel in Haiti still involves serious risks.” Finding 14.

However, the difference between ordered and authorized departure indicates a Government

perception that the security situation is or readily can become more dangerous, perhaps

without further warning. With an ordered departure in place, the Government benefits by

having fewer American citizens in the country should conditions deteriorate or deteriorate

further, particularly if an evacuation must occur.

It was not within the contractor’s control to put the embassy on ordered departure and

to urge the departure of American citizens at that time. This Government action did not

occur in connection with the contract; it was an action outside of the control of the

contracting officer. The contract does not explicitly require the contractor to continue

CBCA 1559

performance under such circumstances; the Excusable Delays clause explicitly recognizes

that circumstances may constitute an excusable delay. The contractor acted reasonably under

the heightened security conditions in following the urging to depart while the embassy was

on ordered departure. The test of legal impossibility to support an excusable delay does not

require a showing of actual or literal impossibility. Because neither this contractor nor the

contracting officer would be aware of all of the bases underlying the change in status at the

embassy and the scope and duration of any particular perceived threats, it was commercially

impracticable to perform critical path work. International Electronics Corp. v. United States,

646 F.2d 496, 510 (Ct. Cl. 1981). The Board concludes that the ordered departure and

related urging of American citizens to depart constituted a basis for excusable delay under

the contract.

With a basis for excusable delay established, relief (time, not money) under the clause

requires that in each instance, the failure to perform must be beyond the control and without

the fault or negligence of the contractor, and the failure to perform furthermore (1) must be

one that the contractor could not have reasonably anticipated and taken adequate measures

to protect against, (2) cannot be overcome by reasonable efforts to reschedule the work, and

(3) directly and materially affects the date of final completion of the project. Exhibit 1 at 31

(¶ F.9); Fraser Construction Co. v. United States, 384 F.3d 1354, 1361 (Fed. Cir. 2004).

Regarding the first element, particularly after the ordered departure in 2004, even if

the contractor reasonably could have anticipated another ordered departure at the embassy,

the contractor could not have taken measures to protect against the Government’s actions

coupled with the urged departure of American citizens. Future conditions could change

rapidly; the Government would benefit by a reduced presence of American citizens. As

found above, the contractor acted reasonably in departing while the embassy was on ordered

departure. With the departure of various personnel, the contractor could not continue with

performance as reasonably planned, with its personnel overseeing performance. The contract

does not require the contractor to have delegated performance to subcontractors or other nonAmerican citizens.

While some performance continued, work on the critical path ceased. Reasonable

efforts to shorten a knowingly tight schedule on the critical path were not available. Because

of this, the date of final completion was directly and materially affected. The final two

elements of an excusable delay were satisfied.

The Board rejects the agency-suggested application of the War Risks clause, Finding

4, to limit its liability here at issue. The clause, which applies to property loss, damage, or

destruction, does not come into play here, because such did not occur. The express shift of

CBCA 1559

risks to the agency under the one clause, does not mean that the agency does not accept risks

for excusable delays and actual or constructive acceleration arising under other contract

provisions. The contract places those risks on the agency.

The agency suggests that the contractor was compelled to complete performance by

the contractual completion date, during the period that the contracting officer had not

approved an excusable delay. The agency relies upon the Disputes, Alternate I, clause, which

dictates that the contractor shall proceed diligently with performance pending final resolution

of any request for relief, claim, or appeal, and comply with any decision of the contracting

officer. Finding 4. The inclusion of the Disputes clause in the contract does not eliminate

the Excusable Delay clause from the contract; the agency included both clauses in the

contract. Reading the contract as a whole, the clauses compel the contractor to proceed

diligently, but permit a later resolution regarding the existence, or not, of an excusable delay

and its length. When an excusable delay is found under such circumstances, and one

ascertains the length of the delay, the next potential question to address is whether a

constructive acceleration arose from the compelled completion within the unlengthened

performance period. This contractor has specifically raised the question of relief for an

excusable delay and constructive acceleration.

To resolve this matter, we must consider the length of the excusable delay. The

contractor departed the site and ceased critical path work on June 1, 2005. Finding 53. At

the agency’s urging (by its discussion of default and liquidated damages, viewed by the

contractor as threats), the contractor returned to the site in phases. By September 12, it was

at its pre-departure staffing level, with the addition of an individual to oversee security. On

September 21, 2005, excavation on the critical path resumed. Finding 68. The contractor

claimed excusable delay of 111 days relating to the security situation (this roughly coincides

with the June 1 to September 21 period) and 26 days relating to its alleged differing site

condition. Finding 68. A contracting officer granted 143 days of excusable delay on

June 29, 2007, shortly before the initial contract completion date. Finding 75.

The contractor has demonstrated that it is entitled to the 111 days of excusable delay

for the period it was not performing critical path work. The contractor has not demonstrated

that it was entitled to 26 days of excusable delay relating to what the Board has found not to

have been a differing site condition. Other delays arose during the performance period. The

contractor has not demonstrated that it is entitled to more than the 143 days of excusable

delay granted by the contracting officer, or that its acceleration efforts arose from other than

those excusable delays arising from suspending operations for several months in 2005. The

agency has not demonstrated that the contractor was not entitled to the days in the

modifications. Norair Engineering Corp. v. United States, 666 F.2d 546, 548 (Ct. Cl. 1981)

CBCA 1559

(“We may not assume that the post hoc extension was some sort of gratuity; [the contractor]

presumably was granted it because it deserved it[.]”).

Excusable delay entitles the contractor to additional time, not money. The contractor

received additional time for performance. The contractor seeks additional money under the

theory of accelerated performance, said to have been required by the agency’s granting

additional time long after requested and long after various denials, and only a few days

before the unmodified contract completion date would arrive.

Acceleration Because of Excusable Delay

The belated recognition of the contractor’s entitlement to excusable delay raises the

possibility of the contractor’s recovery for costs incurred in accelerating performance. To

recover the contractor must demonstrate that performance was accelerated. The contractor’s

efforts, particularly with additional laborers (and more significantly, better-skilled laborers)

and supervisors, and the needed tools and equipment, accelerated performance.

The benefits of those efforts are not quantifiable exactly and the actual costs of only

the acceleration cannot be determined with precision. It is true, as the agency points out, that

the contractor did not complete performance by the original completion date (unmodified by

the excusable delays) or by the modified completion date (as extended by excusable and other

delays and causes). The contractor underestimated the availability and productivity of the

local work force, the length of time to complete performance under the given conditions, and,

more importantly, the security situation in Haiti, and the need for security and project

management. However, with appropriate management and supervision and an expenditure

of dollars for additional personnel, tools, and equipment, the contractor performed more

readily.

The agency fails to acknowledge any liability for acceleration costs. That position is

not supported by the record. By denying the contractor’s excusable delay claim for months,

and granting it only a few days before the completion date, while liquidated damages loomed,

the agency impressed upon the contractor the need for completion with no extension due to

excusable delay. The contractor acted accordingly in planning the remainder of performance.

Ultimately, the contractor achieved substantial completion after the modified date. However,

the contractor experienced much delay due to the security situation and, to a lesser extent,

the subsoils (a non-differing site condition), which impacted the benefits of acceleration

efforts. As explained in the findings, the Board attributes 5% of the contractor’s acceleration

costs to having arisen from the excusable delays.

CBCA 1559

With this conclusion that the contractor is entitled to recover acceleration costs

incurred because of the delayed granting of time for excusable delays, each of the particular

costs elements can be examined. The contractor seeks $34,848,562, to which it adds profit

of $3,177,848, for a total of $38,026,410, plus interest from July 28, 2008. Exhibit 18980

at 51. The specific elements of the claim are set out in Finding 79.

Item one: alleged differing site condition

The first item ($532,125) of the claim relates to what the contractor describes as its

differing site condition claim. The Board has concluded that the record does not establish

the existence of a differing site condition. Accordingly, these costs are not recoverable.

Item two: evacuation, remobilization, and security related costs

Under the second item ($967,408) of the claim the contractor seeks payment for costs

of evacuation, remobilization, and various security-related costs. The Board has determined

that the evacuation and remobilization occurred because of an excusable delay. Under the

clause, the contractor is entitled to a time extension (already granted by the agency) but not

compensation for its associated costs. The record does not demonstrate that the contractor

incurred any particular security or other costs when it arrived back in Haiti, while an ordered

departure of personnel remained in place at the embassy, which would not have been

incurred with a later return. Accordingly, despite the accelerated return of some individuals,

no costs are compensable.

Item three: time sensitive costs

In an expert report, the contractor describes the time sensitive costs as cost arising as

a result of security-related and differing site conditions. These costs are detailed in the third

item ($2,159,807) of the claim:

JAJI is entitled to reimbursement for the time-related (i.e., fixed) costs which

were caused by delay on the Haitian Embassy Contract. Because of the delay

experienced on the project, JAJI was forced to devote a portion of its

productive capacity (as measured by fixed costs) to the Haitian Embassy

Contract for a longer period of time than anticipated in the original contract or

than would otherwise have been necessary.

Exhibit 15201 at 234.

CBCA 1559

As defined by the contractor, these costs were not costs of acceleration. Any

acceleration would reduce the period over which the contractor incurred the time-related

costs. To the extent that costs were incurred because of an excusable delay (either during the

period of delay or the resulting extension), the costs cannot be reimbursed under the

Excusable Delay clause, which provides for time, not money, compensation. No other

specific delays have been established for which the contractor remains to be compensated.

Item four: man camp costs

The contractor seeks to recover $12,091,187 of its man camp costs that it attributes

to the acceleration. The Board concludes that the man camp was created because of the

security situation in Haiti. Even if the agency had granted an excusable delay earlier, the

contractor still would have constructed the man camp and incurred many of the charges, and

received many of the credits. Therefore, the contractor’s claimed costs of the man camp,

$17.3 million, less its installation and demobilization costs, $12.6 million, results in $4.7

million which can be apportioned based upon acceleration efforts. The Board has deemed 5%

of the expended acceleration costs to be the appropriate share to be paid to the contractor;

therefore, the contractor is entitled to $235,000. In reaching this amount, the Board utilizes

the figures proposed by the contractor, aware that the agency disputes allocations for the

number of workers and meals used in the calculations. The data provided and necessary

speculation makes such a refinement neither practical nor of significance.

Item five: craft labor and small tool costs

The contractor seeks to recover $7,579,332 for craft labor and small tools costs. The

record does not explain the difference between this figure and the calculations in the

supporting documentation; some of the difference relates to a difference in the percentage

of acceleration costs, reduced to 72% in the final request for recovery. The contractor seeks

relief for four categories of costs it attributes to acceleration: small tools, a wage uplift for

cleared United States workers, craft labor, and loss of productivity.

The contractor has not demonstrated entitlement to loss of productivity costs or the

wage uplift; neither cost has been shown to relate to constructive acceleration for a given

period of time. Therefore, the contractor not entitled to recover on the second or fourth

categories of these costs. Of the other costs for craft labor and estimated tool costs, the

record reflects an expenditure of $7,075,252, to which the Board applies the 5% factor for

recovery. The contractor is entitled to recover $353,763.

CBCA 1559

Item six: additional equipment and fuel, oil, and grease costs

Of the costs related to additional equipment (purchased and rented) and FOG costs,

the parties disagree on costs incurred by the contractor in renting equipment from a whollyowned subsidiary. Regulation allows the rental costs of personal property leased from any

subsidiary of the contractor under common control, that has an established practice of leasing

the same or similar property to unaffiliated lessees. 48 CFR 31.205-36 (2004). The

contractor sufficiently has established the practices of its subsidiary. The regulation does not

require the leasing of identical equipment; the reasonableness of rates is to be considered

under the circumstances.

The contractor’s additional costs for rented and purchased (less salvage value)

equipment and FOG is $2.441 million. Applying the 5% factor for costs attributable to the

acceleration caused by the agency’s untimely granting of an excusable delay results in the

contractor’s entitlement to $122,051.

Item seven: staff labor

The contractor seeks to recover $7,367,957 in staff labor costs. The staff labor costs

of $5.9 million were affected by the delays during performance. The contractor is entitled

to recover $293,068 (5% of the staff labor costs). The record does not demonstrate that a

loss of productivity was attributable to the delayed granting of the excusable delay; therefore,

the contractor is not entitled to the $2.3 million it seeks under that category. As with time

sensitive costs, the security/differing site condition labor costs are not recoverable, as these

have not been tied to the acceleration. The additional compensation to hire and/or retain staff

became a cost of doing business. The contractor is entitled to be reimbursed $15,888 for the

5% share of those costs of $317,757 incurred because of the agency-caused acceleration.

These two figures sum to $308,956. On that amount, the contractor is entitled to recover its

incurred travel and subsistence costs at the undisputed rate of 6.19%, or $19,124. In total,

on this item, the contractor recovers $328,080.

Item eight: local labor lunches due to acceleration

The contractor incurred $1,003,483 in costs of providing lunches to local labor. The

contractor seeks $722,508, which it attributes to its agency-caused acceleration efforts. The

provision of lunches limited down time for workers and eased security concerns. The Board

finds entitlement of $50,174, calculated using the 5% factor for agency responsibility arising

from the untimely granting of the excusable delay.

CBCA 1559

Item nine: OBO/CST/CAG overtime due to acceleration

The contractor incurred $163,860 in overtime costs for agency and other personnel

because of various delays. Instead of the 72% factor used by the contractor in seeking

$117,979, the Board uses the 5% factor to find entitlement to $8,193.

Item ten: general and administrative costs

The parties have stipulated to a percentage rate to be applied to recovered costs that

represents recoverable general and administrative costs. Exhibit 25920 at 4. Applying that

percentage (4.68%), the contractor is entitled to recover $51,352 for these costs.

Item eleven: profit

The parties have stipulated to a percentage rate to be applied to recovered costs

(including general and administrative costs) that represents recoverable profit. Exhibit 25920

at 4. Applying that percentage (9.15%), the contractor is entitled to recover $105,098 as

profit.

In summary, the Board determines that the contractor is entitled to recover the

following costs:

235,000

353,762

122,051

328,080

50,174

8,193

1,097,260

51,352

105,098

$1,253,710

additional earthworks subcontractor/geotechnical engineering

evacuation, remobilization, and security change costs

time-sensitive costs

man camp costs

craft labor and small tools costs

additional equipment and fuel, oil and grease costs

staff labor costs

local labor lunches due to acceleration

OBO/CST/CAG overtime due to acceleration

SUBTOTAL

general and administrative costs

profit

TOTAL

CBCA 1559

Decision

The Board GRANTS IN PART this appeal, concluding that the contractor is entitled

to recover $1,253,710, plus interest pursuant to statute, calculated from July 28, 2008.

______________________________

JOSEPH A. VERGILIO

Board Judge

We concur:

________________________

STEPHEN M. DANIELS

Board Judge

________________________

JEROME M. DRUMMOND

Board Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.