MOTIONS FOR SUMMARY RELIEF AND

MOTIONS FOR SUMMARY RELIEF AND

PARTIAL SUMMARY RELIEF DENIED: May 9, 2007

CBCA 439

ACQUEST GOVERNMENT HOLDINGS U.S. GEOLOGICAL, LLC,

Appellant,

v.

GENERAL SERVICES ADMINISTRATION,

Respondent.

Michael J. Norton and Lindsey N. Rothrock of Burns Figa & Will P.C., Greenwood

Village, CO, counsel for Appellant.

M. Leah Wright, Office of General Counsel, General Services Administration,

Auburn, WA, counsel for Respondent.

Before Board Judges PARKER, GILMORE, and GOODMAN.

GILMORE, Board Judge.

This appeal involves a dispute between Acquest Government Holdings U.S.

Geological, LLC (Acquest or appellant) and the General Services Administration (GSA or

respondent), under a lease agreement which required appellant to construct a facility and

lease it to respondent for a period of twenty years. The dispute centers around the

construction of the facility’s animal holding rooms. Appellant claims that (1) under the

design specified in the solicitation for the animal holding rooms, it was impossible to meet

the performance requirements for heating and ventilation of the rooms; (2) it was required

CBCA 439

2

to perform additional work and install additional equipment in an attempt to meet the

performance requirements and subsequent design changes made by respondent; and

(3) respondent owes the rent that it withheld while the additional work was being performed,

and operating expenses during that period. Appellant’s claim is in the approximate amount

of $936,000. Appellant initially claimed that GSA also owed it additional costs under the

Prompt Payment Act, but has since withdrawn this claim.

Respondent answered that the design features in the solicitation and drawings were

developed only to the 30% level, and that appellant was ultimately responsible for designing

the facility to the 100% level; and that GSA is not liable for any extra costs appellant

expended to bring the facility into compliance with the performance requirements.

Respondent argues that its reduction of the rental amount was justified because GSA was

unable to occupy the holding rooms while corrective work was being performed.

The parties have filed cross-motions for summary relief. Respondent has moved for

partial summary relief alleging that the material facts are undisputed and that it is entitled

to judgment as a matter of law on the issues of whether GSA warranted the initial design

for the animal holding rooms and whether the specifications were defective. It contends that

the undisputed facts establish that GSA, in its solicitation for offers, set forth specifications

to a 30% design level, representing only a “design intent,” and that appellant was

responsible for designing the building, including the animal holding rooms, to the 100%

design level to meet the performance requirements.

Appellant asks the Board to deny respondent’s motion for partial summary relief and

to enter judgment in its favor, contending that the material facts are undisputed and show

that (1) GSA specified design features for the animal holding rooms with which appellant

had to comply; (2) appellant complied with the design specified and was unable to achieve

the performance requirements; and (3) GSA subsequently changed the design requirements

in order to achieve the performance requirements, which required appellant to upgrade the

originally installed equipment.

For the reasons below, we find that there are material facts in dispute and deny both

respondent’s motion for partial summary relief and appellant’s motion for summary relief.

Undisputed Facts

Based upon the pleadings and documents in the appeal file and submitted in the

parties’ cross-motions for summary relief, the following facts appear to be undisputed.

CBCA 439

3

1.

On or about November 1, 2000, the Government issued Solicitation for Offers

(SFO) no. 001-03 for the construction and lease of office and related space in the Natural

Resources Research Park in Fort Collins, Colorado. Appeal File, Vol. 2-1, Exhibit 15 at 11.

On December 6, 2000, the Government issued its first amendment to the SFO, which

incorporated the design drawings. Appeal File, Vol. 1, Exhibit 3. Offers were due on

February 12, 2001.

2.

On February 27, 2001, GSA awarded a twenty-year lease to appellant for

99,150 square feet of office space and 103 parking spaces at the research park at an annual

rent of $2,468,835, which included the cost of tenant improvements of $3,999,771 amortized

over the term of the lease. The lease agreement incorporated the SFO and its amendments.

The lease was to provide office space and laboratory and industrial space in a newly

constructed building able to meet the requirements set forth in the lease. The office and

laboratory space included ten animal holding rooms, containing approximately 3979 square

feet, which required special temperature, humidity, and air velocity control measures. The

parties’ dispute involves appellant’s construction of the animal holding rooms. Appeal File,

Vol. 2-1, Exhibit 15.

3.

The space was to be provided in a phased occupancy with the biological

laboratories and animal facilities not requiring completion until July 1, 2002.

Commissioning and testing of the laboratory systems could be completed post-occupancy and

were required to be operational no later than August 1, 2002. Appeal File, Vol. 2-1,

Exhibit 15 at 241.

4.

Section 2.3 of the SFO, Preliminary Design Concept, states:

All offers shall meet the requirements of this SFO and the associated

schematic design drawings. Any proposed variances must be submitted with

a specific description in writing with the offer. If the Government receives no

variances, then the offer will be considered to meet all the requirements of the

SFO and associated schematic.

Appeal File, Vol. 2-1, Exhibit 15 at 16.

5.

Section 11.1 of the SFO, Drawings, states:

Drawings will be provided as part of the second phase of the solicitation. The

drawings to be provided are design intent only. The drawings represent the

programming, space planning, architectural and important engineering aspects

of the building. Preparation of complete bid and construction documents is the

CBCA 439

4

responsibility of the successful offeror. The drawings provided do not

represent full engineering analysis or code compliance. It will be the

responsibility of the successful offeror to provide complete engineering

analysis and code compliance.

Appeal File, Vol. 2-1, Exhibit 15 at 205.

6.

The mechanical, electrical, and plumbing portions of the drawings contain the

following language in the bottom corner:

This drawing, with equipment and system component locations, types, and

sizing is meant only to indicate design intent and approximate scope of work,

the offerers [sic] engineers shall be responsible for the final scope definition

and design, as well as final equipment selection, sizing, and performance.

Note: These drawings are supplemental to the SFO and are not intended to be

used separately. Drawings are for design intent only and are not to be used for

construction.

Appeal File, Exhibit 56.

7.

The architectural portion of the drawings does not contain the above language.

The architectural portion of the drawings, on the page titled “Lower Level--East Wing,”

depicts the architectural design for the animal holding rooms with an attached note directed

at wall construction. The legend to that attached note stated: “Concrete masonry unit to

structure with furring and gyp. on finish side to ceiling. No gyp. or furring necessary @

animal ecology lab.” Appeal File, Exhibit 56.

8.

Part Two of the SFO, Section 4, addresses buildout and construction. Section

4.1, Design Concepts Development, provides in pertinent part:

After award, design development will be in accordance with the specific

solicitation requirements. The Contracting Officer shall have the right to reject

any aspect of subsequent design development which varies from the concept

and which would adversely affect the government’s use and occupancy of the

space or the Government’s other interests in the building. Evolutionary

adaptations or changes can be proposed by either party to improve the design,

subject to the Contracting Officer’s approval.

....

CBCA 439

5

Design development after award will not only be in accordance with the

specific solicitation requirements, but also a direct extension of the original

design concept. The further design development shall retain all the

fundamental and physical characteristics of that concept. Neither party will

unreasonably withhold such acceptance of demonstrably beneficial design

adaptations of the concept which would not measurably increase the costs of

construction, operation or occupancy of the space or building and which would

not decrease the utility of the space or building to either party.

Appeal File, Vol. 2-1, Exhibit 15 at 20.

Section 4.1 further requires that the lessor submit 50%, 90%, and 100% design

drawings for government review. The lessor was to submit drawings coordinated with the

mechanical, electrical, and space drawings, and the 50% design submission was required to

include calculations for structural analysis and for mechanical, plumbing, and electrical

systems to justify sizes of the proposed systems. The intent at the 50% design stage was to

“progress the original design drawing information through design development process to

the point where only construction details remain to be completed: i.e., complete intended

design of the facility shall be shown.” The 90% design stage required appellant to submit

a complete set of construction documents, and the 100% design stage required appellant to

submit the final design documents. Appeal File, Vol. 2-1, Exhibit 15 at 20-21.

9.

Section 4.5, Construction Inspections, provides that construction inspections

will be made periodically by the contracting officer and/or a designated technical

representative to review compliance with the solicitation requirements. It further provides,

“The lessor will remain responsible for designing, constructing, operating and maintaining

the building in full accordance with the requirements of this solicitation.” Appeal File, Vol.

2-1, Exhibit 15 at 21.

10.

Section 4.8, Construction Documentation After Award, provides that upon

request of the contracting officer, the following documentation must be provided:

E.

Heating and cooling peak load calculations.

F.

HVAC [heating, ventilation, and air conditioning] plans and equipment

specifications----HVAC duct layouts, specific HVAC zones and HVAC zone

controls. All dampers including fire dampers and volume control dampers

must be shown with ductwork ahead of the distribution terminal indicated in

true size; automotive control diagrams showing sequence of operation of

CBCA 439

6

equipment; plans showing plumbing layouts and fixtures; riser diagrams for

waste and vent lines; layout of equipment rooms showing all mechanical

equipment; mechanical details; and complete equipment schedules. All HVAC

calculations shall be provided to show [how] equipment to be installed can

meet the specifications for the building.

....

O.

Before the final inspection process, the Lessor must provide evidence

of the “bake-out” period, the building permit, and inspection sign-off, final

HVAC testing and balancing reports, and occupancy permits. Rent shall

commence when the space is accepted by the Government and a valid

occupancy permits [sic] is received by the Government.

Appeal File, Vol. 2-1, Exhibit 15 at 22.

11.

Section 15010, Basic Mechanical Requirements, Paragraph 1(A)(2)(b),

required that animal labs have a temperature controllable between 7oC and 44oC with

humidity controllable between 20% and 90% relative humidity. Appeal File, Vol. 2-1,

Exhibit 15 at 154.

12.

Section 15010, Basic Mechanical Requirements, Paragraph (1)(F), provides

in pertinent part:

The Central Station Air Handling Unit for the Animal Ecology Laboratory

shall provide the conditions of temperature and relative humidity in the animal

holding rooms necessary to support the various research projects. The quantity

of air supplied and exhausted shall be adjustable from five to twenty five air

changes per hour, animal holding room temperature shall be adjustable from

7oC (44.6oF) to 44oC (111.2oF), and room relative humidity shall be

adjustable from 5% to 90%. The unit shall be capable of conditioning the total

required air from tempered outdoor conditions to the coldest, driest air

condition required by any of the rooms. The cold, dry air is ducted separately

to the spaces and the selected amount metered to the rooms by constant

volume, variable set point terminal units. At each room, the air is then

reheated and re-humidified to the required temperature and humidity.

Constant volume, variable set point terminal units shall be used on the exhaust

from each room to maintain a negative pressure relationship with the corridor

outside of the rooms. Motors with VFDs [variable frequency drives] shall

CBCA 439

7

drive both the supply fan on the Central Station Air Handling Unit and the

exhaust fan on the roof.1

Appeal File, Vol. 2-1, Exhibit 15 at 155.

13.

Before the best and final offers (BAFO) were submitted, appellant asked

respondent for clarification regarding the humidifying units in the animal labs. To respond

to appellant, the contracting officer consulted another government employee as follows: “Re:

Humidifying units in the labs. Drawings call for 10 units. They are spec’d for rooms 2-4

times larger than the labs. Could smaller units be utilized, as it would save $75,000­

$100,000? Please advise. . . . Need these answers ASAP. BAFO offers are do [sic] on

Monday.” The employee responded to the contracting officer as follows: “The labs require

a tremendous amount of flexibility in the humidity control. One way to achieve this is to

oversize the units. Have Acquest bid the humidity control in accordance with the

documents.” Appellant’s Cross-Motion for Summary Relief, Exhibit A.

14.

Section 01000 of the SFO, Technical Specifications, provides:

The requirements indicated herein are to be interpreted as minimum quality

standards to be followed. It is the responsibility of the Offeror to ensure that

the products and systems provided meet the requirements of the Project and

that the systems will provide the intended function. The following technical

specification is not intended to be a complete specification for the Project, but

is included to identify specific areas where the Government has specific

requirements. No omission of the information from this technical specification

is to imply such a system or part of a system or its installation is not required

under the terms of the Contract.

Appeal File, Vol. 2-1, Exhibit 15 at 35.

15.

Amendment no. 2 to the solicitation was issued on December 29, 2000, and

incorporated into the lease agreement. Question no. 56 of the amendment stated: “In general,

do the minimum requirements of the SFO take precedence over the Schematic Drawings?

1

In amendment no. 2 to the SFO, the relative humidity required in this section

was changed from the originally specified “5% to 90%” to “20% to 90%,” to be consistent

with paragraph 1(A)(2)(b) of that same section. See Undisputed Fact 11.

CBCA 439

8

Please advise.” The answer was, “The most stringent takes precedence.” Appeal File, Vol.

2-1, Exhibit 15 at 249.

16.

Section 1.5 of the SFO, Fees, required the successful offeror to pay $224,359

to respondent as a “Design Cost Reimbursement Fee.” Appeal File, Vol. 2-1, Exhibit 15 at

13. Appellant paid the fee by check dated November 9, 2001. Appellant’s Cross-Motion for

Summary Relief, Exhibit B.

17.

The SFO included “Execution” paragraphs on every major system and

subsystem of the building. The sections related to the animal holding rooms contained

“Execution” provisions providing the method to be used to execute the design requirements.

For example, Section 15010, Basic Mechanical Requirements, under Paragraph 1(A), sets

forth, among other items, requirements for animal lab indoor minimum and maximum

temperatures and humidity, design noise criteria, outside air ventilation, internal heat

generation allowances for air conditioning load calculations, and the room ventilation rate

per square foot. Item 9 in that paragraph states: “No provisions for addition or reduction of

humidity are necessary, except in the animal ecology area and as noted on drawings.”

Paragraph 1(E)(3) states that the “[a]nimal holding laboratory ceiling exhaust grilles shall

have “bag-out” filter housings to include standard 35% air filters.” Appeal File, Vol. 2-1,

Exhibit 15 at 154-55.

18.

Through Supplemental Lease Agreement no. 6, dated July 22, 2002, the parties

established July 1, 2002, as the date of occupancy and set forth the rental schedule. Appeal

File, Vol. 2-2, Exhibit 21.

19.

As late as December 2002, the GSA contracting officer advised appellant that,

to the best of her knowledge, there were no defaults on the part of the lessor under the lease.

Appeal File, Vol. 7, Exhibit 57, Tab 12.

20.

In February 2003, GSA determined that the heating and ventilation systems in

the animal holding rooms did not meet the performance requirements of the lease. Appeal

File, Vol. 7, Exhibit 57, Tab 16. The problem was that adjacent animal holding rooms could

not maintain opposite extreme temperatures at the same time.

21.

Under Supplemental Lease Agreement no. 9, dated March 10, 2003, it was

agreed that GSA, beginning on March 1, 2003, would deduct, from the monthly rent, the

amount payable for the 3979 square feet of laboratory space (the animal holding rooms)

because the space was “unuseable.” The agreement stated that “[t]he square footage would

be adjusted upward and added back to the total rent payable upon Lessor’s completion of the

CBCA 439

9

Heating, Ventilation and Air Conditioning (HVAC) systems for the Wildlife Laboratories.”

Both parties signed the agreement. Appeal File, Vol. 2-2, Exhibit 24.

22.

To correct the problem, appellant proposed that insulation be installed. This

was rejected by GSA, stating that it would reduce needed floor space. Appeal File, Vol. 7,

Exhibit 57, Tab 29. The parties brainstormed on how to resolve the problem. Appellant

eventually had to install additional HVAC equipment in order to correct the problem.

23.

In November 2004, appellant hired the Farnsworth Group to test the

mechanical equipment in the animal holding rooms to determine whether the requirements

of the SFO were met. The final report states that the original equipment met the equipment

requirements of the SFO, but the installed equipment did not meet the performance

requirements of the SFO. For the report, Farnsworth reviewed the “SFO requirements

(verbiage and 30% design documents) and the record drawings (100% construction

documents).” The report further noted: “ To meet the performance requirements, additional

HVAC equipment was installed. With the installation of new equipment, the performance

does meet the requirements of the SFO.” Appeal File, Vol. 9, Exhibit 65 at 5.

24.

Appellant filed a claim with the contracting officer on October 14, 2005, in the

amount of $914,093.96, for the rental amount deducted by respondent, the cost of corrective

work, and consultant costs. It appears that respondent was still deducting the square footage

of the animal holding rooms from the rent at the time the claim was filed. Appeal File, Vol.

6, Exhibit 48.

Discussion

Summary relief is appropriate where there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 247 (1986). “Only disputes over facts that might affect the outcome of the case

under governing law will properly preclude the entry of summary judgment.” Id. at 248. The

moving party has the initial burden of informing the court of the basis for its motion and

identifying those portions of the pleadings, depositions, affidavits, admissions, and answers

to interrogatories, if any, which it believes demonstrate the absence of a genuine issue of

material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The non-moving party is

required to point to “specific facts showing that there is a genuine issue for trial.” Id. at 324

(quoting Fed. R. Civ. P. 56(e)). In considering summary relief, the court will not make

credibility determinations or weigh conflicting evidence. Anderson, 477 U.S. at 249. “All

reasonable inferences and presumptions are resolved in favor of the non-moving party.” Id.

at 255.

CBCA 439

10

The mere fact that both parties have filed motions for summary relief does not warrant

the granting of summary relief unless one of the moving parties proves that it is entitled to

judgment as a matter of law upon facts that are not genuinely disputed. We must review the

evidence submitted in support of each cross-motion and consider each party’s motion on its

own merits, taking care in each instance to examine the evidence in the light most favorable

to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

Respondent, in its motion for partial summary relief, relies primarily upon language

in the SFO, including disclaimer language in the written specifications and on the drawings,

to support its contention that the design in the solicitation was not intended to be the final

design upon which appellant could rely. Respondent contends that the undisputed facts

establish that appellant was required by the lease to take the original conceptual design in the

SFO and further design the facility to the 100% design level to meet the performance

specifications. Thus, it contends that there was no implied warranty that the original design,

developed only to the 30% level, would meet the performance requirements.

In support of its position, respondent relies on United States v. Spearin, 248 U.S. 132,

136 (1914), where the United States Supreme Court enunciated the general principle that

“[i]f the contractor is bound to build according to plans and specifications prepared by the

owner, the contractor will not be responsible for the consequences of defects in the plans and

specifications.” Respondent’s Motion at 4. It, thus, argues that because respondent did not

bind appellant to follow the initial design, a decision on the issue of warranty of design

specifications should be rendered in its favor as a matter of law.

Appellant, in its response to the motion and in its cross-motion for summary relief,

agrees that the facts recited by respondent in its motion are not in dispute, since respondent

has simply quoted provisions in the SFO and lease. However, appellant sets forth additional

facts which it contends are also “undisputed” and show that appellant had to construct the

animal holding rooms according to detailed requirements in the SFO, which included the

schematic drawings, and that GSA acted, prior to bid, and during construction, in a manner

that led appellant to believe that it had to comply with the SFO and drawings that respondent

drafted.

Appellant acknowledges that the language on the electrical, mechanical, and plumbing

design drawings states that they are for design intent only and the lessor is responsible for

the final scope, definition, and design, and that they are supplemental to the SFO. Appellant

also cites language in the SFO, however, which states that: “All offers shall meet the

requirements of this SFO and the associated schematic design drawings. Any proposed

variances must be submitted with a specific description in writing with the offer. If the

Government receives no variances, then the offer will be considered to meet all the

CBCA 439

11

requirements of the SFO and associated schematic.” Appellant’s Cross-Motion at 4; see

Undisputed Fact 4. Respondent states that this provision was applicable only prior to award,

so that all offers would be judged using the same criteria. Respondent’s Response to

Appellant’s Cross-Motion at 2-3.

Appellant also points to Section 4.1 of the SFO, Design Concepts Development,

which provides that:

After award, design development shall be in accordance with the specific

solicitation requirements. The Contracting Officer shall have the right to reject

any aspect of subsequent design development which varies from the concept

and which would adversely affect the Government’s use and occupancy of the

space or the Government’s other interests in the building. Evolutionary

adaptations or changes can be proposed by either party to improve the design,

subject to the Contracting Officer’s approval.

Appellant’s Cross-Motion at 4; see Undisputed Fact 8. This same section also provides that,

“Design development after award will not only be in accordance with the specific solicitation

requirements, but also a direct extension of the original design concept. The further design

development shall retain all the functional and physical characteristics of that concept.”

Appellant contends that the provisions above require any proposed change to be

approved by the Government and that it was not allowed at its discretion to execute further

design development that did not comply with the SFO and the schematic drawings.

Respondent argues these provisions give appellant the right to change design features on the

drawings to meet the performance specifications and that this supports its position that the

initial design did not provide a “road map” for performance.

Appellant further cites numerous lease provisions showing that respondent specified

a particular manufacturer for appellant to use and specified the sizes and placements required

for various ventilation equipment. Appellant has also produced documents showing that

respondent reviewed appellant’s 50%, 90%, and 100% design submissions against

requirements set forth in the written specifications and the drawings to determine whether

appellant was in compliance with the SFO.

Appellant further points to the fact that appellant paid respondent $224,359, with a

notation on the check that it was a “Design Cost Reimbursement Fee.” Appellant contends

that the payment was to reimburse respondent for the cost of designing the building.

Respondent has not addressed whether this fact is material to the dispute, or its legal

significance.

CBCA 439

12

Appellant also disputes respondent’s characterization of the initial design as being

only to the 30% design level. Appellant’s president stated, in an affidavit attached to

appellant’s motion as Exhibit E, that the documents did not state the design was developed

only to the “ 30%” level, and further, that the drawings and SFO were developed far beyond

any previous design-build project he had worked on for the Government. He also stated that,

at the time he submitted the cost of constructing the animal holding rooms, it would have

been impossible to submit a cost without design documents upon which to base the cost, and

that respondent encouraged appellant to use the design drawings provided as the basis for the

offer.

Appellant, in its motion, cites a number of amendments and changes to the SFO where

respondent made either a correction, clarification, or addition to the original design drawings,

which facts are not disputed by respondent. Respondent, however, argues that most of the

changes made to the design were proposed by appellant and that this is evidence that

appellant knew that the initial design was not meant to be relied upon as the final design for

the facility.

Appellant, in its motion, additionally relies upon the Farnsworth Group report. See

Undisputed Fact 23. Appellant contends that the report evidences that 1) the SFO contained

detailed requirements for the holding rooms’ equipment and installation; 2) appellant

complied with those requirements; and 3) the compliance failed to produce the result

intended--that adjacent rooms could maintain opposite extreme temperatures at the same

time.2

Respondent, in its reply to appellant’s cross-motion, disputes that the Farnsworth

Group report is evidence that the initial design, developed to the 30% design level, was

warranted by the Government, since the report was examining the rooms at the 100% asbuilt level, which it contends was appellant’s responsibility.

Appellant, in support of its position, compares the facts in this case to those in J.E.

Dunn Construction Co. v. General Services Administration, GSBCA 14477, 00-1 BCA

¶ 30,806, in which the Board held that aluminum mullion specifications included in an

architect’s drawings for the fabrication and installation of a glass curtain wall were design

2

Appellant, in its complaint, appears to argue that the specifications did not

clearly state that adjacent rooms had to maintain and withstand extreme temperatures at the

same time. However, appellant seems to have dropped this position in its motion. See

Complaint at 3, 5.

CBCA 439

13

specifications rather than performance specifications, notwithstanding references to

performance requirements, because they granted the contractor very little latitude to make

changes. Appellant’s Brief in Support of its Motion for Summary Relief, at 15-19.

Respondent counters that Dunn is not supportive of appellant’s position because in Dunn the

Government supplied architectural drawings developed to the 100% level and not to the

30% level as in this case. Respondent’s Response to Appellant’s Cross-Motion at 22-23.

Appellant contends that the specifications were purely design specifications, while

respondent contends that the specifications were purely performance specifications. Under

design specifications, the Government provides precise details of the materials and manner

in which the work is to be performed, from which the contractor is not permitted to deviate.

Under performance specifications, the Government sets forth an objective or standard to be

achieved, and the contractor is to use its own ingenuity to select the means to achieve that

objective or standard of performance while assuming responsibility for meeting the contract

requirements. J.L. Simmons Co. v. United States, 412 F.2d 1360, 1362 (Ct. Cl. 1969).

Whether a specification is a design or performance specification depends upon the obligations

imposed by the specification, not upon the label given to it. Blake Construction Co. v. United

States, 987 F.2d 743, 746 (Fed. Cir. 1993). Contracts may have both design and performance

characteristics. Id.

Appellant acknowledges that the lease required it to submit further design drawings,

but argues that it could not execute further design development that did not comply with the

SFO and the schematic design developed by respondent. Respondent argues that the SFO

stated performance requirements and allowed appellant to submit changes necessary to meet

the performance specifications, and that this evidences that the initial design was not “set in

stone,” as appellant contends.

The build/lease scheme depicted in the SFO is not a model of clarity. The disclaimer

language in the SFO and on the drawings provides strong support for respondent’s position

that appellant was not to rely on the conceptual design to construct the animal holding rooms.

Also, there is no dispute that the lease required further design development by appellant, to

a 100% design level. On the other hand, however, there is evidence in the record supporting

appellant’s position that it did not have unfettered discretion to change the initial design in

order to meet the performance requirements, and that it had to work within the design

parameters provided in the SFO. Respondent also stated, in its motion for partial summary

relief, on page 4, that “[t]he complicated laboratory and animal holding rooms required that

the Government provide a few more details in order to communicate its needs to the lessor

than would normally be provided in a typical generic office build to suit.” We view this as

an admission by respondent that, for the animal holding rooms, the SFO specified more design

requirements than would normally be provided.

CBCA 439

14

Another fact that has not been put in context is that appellant paid respondent $224,359

as a “Design Cost Reimbursement Fee.” Appellant argues that this payment is evidence that

the design was a part of the requirements, since it was a part of the cost to appellant to

construct the facility. Respondent did not address the legal implication of the payment.

Respondent also argues that, because appellant could submit changes that it believed

were needed in order to meet the performance requirements, and would receive an equitable

adjustment if its costs were increased or decreased, this claim is one arising under the Changes

clause, and is not an issue to be decided under the theory of warranty of design specifications.

In considering a motion for summary relief, we cannot try issues of fact, i.e., weigh

evidence or judge credibility, but only determine whether there are issues to be tried.

Anderson, 477 U.S. at 249. Here, there is a genuine dispute over whether appellant, in

implementing its 50%, 90%, and 100% design requirements, had the discretion to change the

initial design criteria supplied by respondent in constructing the animal holding rooms. Also,

respondent has not established that the design defect is one that could not have been readily

discovered by appellant during its subsequent design development. See J.E. Dunn, 00-1 BCA

at 152,093. Based upon the facts presented in the cross-motions, the law cited by the parties

in support of their positions, and drawing all reasonable inferences in favor of the non-moving

party, we conclude that appellant is not entitled to judgment in its favor as a matter of law, and

respondent is not entitled to partial judgment, on the issue of warranty of design

specifications, as a matter of law.

Decision

Appellant’s MOTION FOR SUMMARY RELIEF is DENIED and respondent’s

MOTION FOR PARTIAL SUMMARY RELIEF is DENIED.

________________________

BERYL S. GILMORE

Board Judge

CBCA 439

15

We concur:

____________________________

ROBERT W. PARKER

Board Judge

_________________________

ALLAN H. GOODMAN

Board Judge