CBCA 6149 GRANTED IN PART; CBCA 7071 AND CBCA 7597 DENIED:

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March 21, 2025

CBCA 6149, 7071, 7597

ALARES CONSTRUCTION, INC.,

Appellant,

DEPARTMENT OF VETERANS AFFAIRS,

Respondent.

Douglas L. Patin and Lee-Ann C. Brown of Bradley Arant Boult Cummings LLP,

Washington, DC, counsel for Appellant.

Jennifer L. Hedge, Office of General Counsel, Department of Veterans Affairs,

Pittsburgh, PA; and Kathleen E. Ramos, Office of General Counsel, Department of Veterans

Affairs, Arlington, TX, counsel for Respondent.

Before Board Judges LESTER, RUSSELL, and ZISCHKAU.

LESTER, Board Judge.

These appeals are before us following a five-day hearing that was conducted in March

2023 before Judge Jerome M. Drummond. During post-hearing briefing, Judge Drummond

unexpectedly passed away. After a new presiding judge was assigned to the appeals, the

parties elected to rely on the transcripts of the March 2023 hearing rather than again to

present witnesses for live testimony before the new presiding judge. The parties also

provided extensive and helpful closing arguments to the new presiding judge.

CBCA 6149, 7071, 7597

In CBCA 6149, appellant, Alares Construction, Inc. (Alares), seeks to recover

damages of $1,691,701.85 (a figure that has been revised several times during the course of

litigation) for delays and changes on a construction project at a Department of Veterans

Affairs (VA) medical center but with a reduction to its claimed general conditions costs to

account for its settlement and release of some of its earlier claims under this contract. With

the reduction, Alares tells us, the claim is approximately $1.5 million. Closing Argument

Transcript (Oct. 18, 2023) at 66. Alares asserts that the VA caused all 765 days of delay on

this project, but it seeks to recover extended general conditions for only 653 of those days.

Appellant’s Corrected Pre-Hearing Brief (Mar. 7, 2023) at 5.

Following a thorough review of the record, we find that, although there were some

defects in the specifications for the project that had to be addressed and corrected, which cost

Alares time and money and for which the VA is responsible, the project design was not, as

Alares alleges, “riddled with fundamental design errors.” Appellant’s Corrected Pre-Hearing

Brief at 1. To the contrary, much of the delay on this project was the result of Alares’

difficulty in managing and coordinating the work of its subcontractors. We reject Alares’

contention that the VA’s issuance of cure notices and a show cause notice, as well as the

VA’s purported refusal to acknowledge its alleged responsibility for changes in a timely

manner, were motivated by fears about not having sufficient appropriations to fund the

contract or as retaliation for Alares’ submission of claims. We find that, in CBCA 6149, the

VA is responsible for 218 days of delay to the critical path of performance on this project but

that Alares bears responsibility for the remaining delays.

In CBCA 7071, Alares seeks to recover direct costs associated with alleged extra work

to the patient lift supports in several rooms of the building, and, in CBCA 7597, Alares

asserts entitlement to the same damages that it seeks in CBCA 6149 on the basis of the VA’s

alleged breach of the implied duty of good faith and fair dealing. We deny both of those

appeals.

Findings of Fact

The Contract

On April 28, 2016, the VA awarded a firm-fixed-price construction contract (contract

VA241-16-C-0037 (the contract)) to Alares1 for the replacement/relocation of the deficient

The contract was originally awarded to Alares LLC, see Appeal File, Exhibit

1 at 2, but, on May 25, 2016, was novated through contract modification P00001 to identify

Alares Construction, Inc., as the contractor. Appeal File, Exhibit 14 at 1-31.

CBCA 6149, 7071, 7597

Intensive Care Unit (ICU) at the Providence VA Medical Center in Providence, Rhode

Island, for a lump-sum price of $7,753,880.20. Appeal File, Exhibit 1 at 1-2.2 The project

required the construction of a two-story addition to an existing building. See Exhibit 12.

Alares was to connect the addition to the existing building through an elevated hallway,

which would run between the second floor of the addition and a second-floor opening in the

existing building. See id. Contract duration was to be 425 calendar days from the date that

the VA issued the Notice to Proceed (NTP). Exhibit 1 at 3.

Under the contract, Alares was required to coordinate all aspects of the construction

work in a manner that would avoid delays and ill-timed work:

GENERAL PROJECT COORDINATION

The Contractor shall be responsible to uncover work completed in order

to install ill-timed work, at no additional cost to the Owner.

Where space is limited, coordinate installation of different components

to assure maximum accessibility for maintenance, service and repair.

Coordinate space requirements and installation of mechanical and

electrical work which are indicated diagrammatically on Drawings.

Follow routing shown for pipes, ducts, and conduit, as closely as

practicable; place runs parallel with line of building. Utilize spaces

efficiently to maximize accessibility for other installations, for

maintenance, and for repairs.

Verify that utility requirement characteristics of operating equipment

are compatible with building utilities. Coordinate work of various

Sections having interdependent responsibilities for installing,

connecting to, and placing in service such equipment.

.....

All exhibits referenced in this decision are found in the appeal file, unless

otherwise noted.

CBCA 6149, 7071, 7597

UTILITIES, MECHANICAL AND ELECTRICAL COORDINATION

Coordinate all Work of this Project. Provide full and complete

coordination for utilities, mechanical and electrical work in Divisions

11, 13, and 21 through 28, with Work of other Divisions.

Give all advance notice to public utility companies as required by law,

and provide proper disposition, subject to the Owner’s Project Manager

and the Architect’s approval of all existing pipe lines, conduits, sewers,

drains, poles, wiring, and other utilities that in any way interfere with

the Work, whether or not they are specifically shown on the Drawings.

Coordination regarding existing utilities:

Notify Owner and appropriate authorities when coming across

an unknown utility line(s), and await decision as to how to

dispose of same.

When an existing utility line must be cut and plugged or capped,

moved, or relocated, or has become damaged, notify the Owner

and Utility company involved, and assure the protection,

support, or moving of utilities to adjust them to the new work.

The Contractor shall be responsible for all damage caused to

existing, active utilities located within the limits of this Contract,

whether or not such utilities are shown on the Drawings,

including resultant damages or injuries to persons or properties.

General coordination of piping, ductwork, conduits and equipment:

The Contract Drawings are diagrammatic only intending to

show general runs and general locations of piping, ductwork,

equipment and sprinkler heads. Determine exact routing and

location of individual systems prior to fabrication of

components or installation. . . .

Adjust locations of piping, ductwork, conduits and equipment as

required to accommodate new work with interferences

anticipated and as encountered during installation. . . .

Provide all offsets, transitions and changes of direction for all

systems, as may be required to maintain proper clearances for

headroom, and as may be required for coordination with other

“fixed-in-place” building components (such as structural

systems). . . .

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Provide openings in the work for penetration of mechanical and

electrical work.

Coordinate final locations of ceiling mounted devices (including

air distribution devices, thermostats, heaters, control devices,

sprinkler heads and similar work) with reflected ceiling plans.

Review locations with the Owner’s Project Manager and the

Architect and obtain approval of all devices prior to installation.

Exhibit 6 at 46-48.

The contract specifications required Alares to develop a critical path method (CPM)

plan for scheduling work on the construction project and to utilize and routinely update it as

the project work progressed:

The Contractor shall develop a [CPM] plan and schedule demonstrating

fulfillment of the contract requirements (Project Schedule), and shall keep the

Project Schedule up-to-date in accordance with the requirements of this section

and shall utilize the plan for scheduling, coordinating and monitoring work

under this contract (including all activities of subcontractors, equipment

vendors and suppliers). Conventional [CPM] technique shall be utilized to

satisfy both time and cost applications.

Exhibit 6 at 53. The project schedule had to “reflect the Contractor’s approach to scheduling

the complete project and . . . describe the activities to be accomplished and their

interdependencies,” with “[t]he work for each major trade . . . represented by at least one

summary activity, so that the work cumulatively show[ed] the entire project schedule.” Id.

at 54. The schedule had to show “the sequence of work activities/events required for

complete performance of all items of work.” Id. “Each activity/event on the schedule [was

required to] contain,” at a minimum, identification and a description of each activity/event,

duration, budget amount, early start date, early finish date, late finish date, and total float.

Id.

Under the contract’s terms, the project schedule had to be submitted to the VA

monthly to reflect any activity/event changes resulting from delays in completion of any

activity/event, delays in submittals that made rescheduling of work necessary, and/or

inaccuracies in how the project was actually progressing:

With each monthly submission of the updated project schedule, the Contractor

shall submit a list of any activity/event changes for any of the following

reasons:

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Delay in completion of any activity/event or group of activities/events,

which may be involved with contract changes, strikes, unusual weather,

and other delays will not relieve the Contractor from the requirements

specified unless the conditions are shown on the CPM as the direct

cause for delaying the project beyond the acceptable limits.

Delays in submittals, or deliveries, or work stoppage are encountered

which make rescheduling of the work necessary.

The schedule does not represent the actual prosecution and progress of

the project.

When there is, or has been, a substantial revision to the activity/event

costs regardless of the cause for these revisions.

Exhibit 6 at 58. In addition to monthly schedule updates, Alares’ project manager was

required to meet weekly with the VA contracting officer’s representative (COR) “(or as

otherwise mutually agreed to) . . . for the purpose of jointly reviewing the actual progress of

the project as compared to the as planned progress and to review planned activities for the

upcoming two weeks.” Id. at 57.

The contract also incorporated a clause titled “Subcontracts and Work Coordination

(APR 1984)” from Veterans Affairs Acquisition Regulation (VAAR) 852.236-80 (48 CFR

852.236-80 (2016)), which placed full responsibility on Alares for its subcontractors and for

coordinating their work:

The contractor shall be responsible to the Government for acts and omissions

of his/her own employees, and of the subcontractors and their employees. The

contractor shall also be responsible for coordination of the work of the trades,

subcontractors, and material suppliers.

Exhibit 1 at 17 (VAAR 852.236-80(b)).

Alares’ cost proposal for the project, which was incorporated into the contract,

identified an overhead rate of 10%, calculated by applying 10% to the entire project, and a

profit rate of 7%. Exhibit 1 at 4. The contract incorporated the “Contract

Changes—Supplement (JUL 2002)” clause from VAAR 852.236-88, which included the

following provision about overhead and profit rates applicable to changes of $500,000 or less

that might be made during performance:

Allowances not to exceed 10 percent each for overhead and profit for the party

performing the work will be based on the value of labor, material, and use of

construction equipment required to accomplish the change. As the value of the

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change increases, a declining scale will be used in negotiating the percentage

of overhead and profit. Allowable percentages on changes will not exceed the

following: 10 percent overhead and 10 percent profit on the first $20,000;

7-1/2 percent overhead and 7-1/2 percent profit on the next $30,000; 5 percent

overhead and 5 percent profit on balance over $50,000. Profit shall be

computed by multiplying the profit percentage by the sum of the direct costs

and computed overhead costs.

Id. at 20-21.

The contract incorporated by reference the clause at Federal Acquisition Regulation

(FAR) 52.242-14, Suspension of Work (APR 1984) (48 CFR 52.242-14 (2016)), see Exhibit

1 at 28, which includes the following provision:

If the performance of all or any part of the work is, for an unreasonable period

of time, suspended, delayed, or interrupted (1) by an act of the Contracting

Officer in the administration of this contract, or (2) by the Contracting

Officer’s failure to act within the time specified in this contract (or within a

reasonable time if not specified), an adjustment shall be made for any increase

in the cost of performance of this contract (excluding profit) necessarily

caused by the unreasonable suspension, delay, or interruption, and the contract

modified in writing accordingly. However, no adjustment shall be made under

this clause for any suspension, delay, or interruption to the extent that

performance would have been so suspended, delayed, or interrupted by any

other cause, including the fault or negligence of the Contractor, or for which

an equitable adjustment is provided for or excluded under any other term or

condition of this contract.

FAR 52.242-14(b).

The contract also incorporated by reference the clauses in FAR 52.243-4, “Changes

(JUN 2007)”; FAR 52.233-1, “Disputes (MAY 2014)”; FAR 52.236-2, “Differing Site

Conditions (APR 1984)”; and FAR 52.236-3, “Site Investigation and Conditions Affecting

the Work (APR 1984).” Exhibit 1 at 26-28.

The VA issued the Notice to Proceed on June 3, 2016, with an expected completion

date within 425 calendar days (or August 2, 2017). Exhibit 16.

CBCA 6149, 7071, 7597

II.

Performance Under the Contract

Period 1 (June 3, 2016, to January 13, 2017)

The Original Schedule Logic for Period 1

Period 1 covers the 212-day period of time running from June 3, 2016, through

January 13, 2017. Exhibits 3644 at 5, RS-0593 (Expert Report) at 7. At this time, Nick

Budris was Alares’ project manager. Hearing Transcript, Vol. 3, at 35.

Alares’ Chief Executive Officer (CEO), Donald Maggioli, developed the original

construction schedule for the project with the assistance of one of Alares’ construction

managers. Hearing Transcript, Vol. 1, at 43; see Exhibits 3644 at 4999, 5023-24. As set

forth in its original baseline schedule for the project, dated June 3, 2016, Alares planned to

complete pre-construction development drawings and submissions, to mobilize and prepare

the site, and to complete concrete placement and structural steel erection work during this

period. Exhibit 3644 at 5023. Alares identified various dates from June 3 through July 25,

2016, as its early start dates for the submission to the VA of general requirements and site

development plans, structural steel shop drawings, concrete submissions, and building

envelope submissions. Id. It planned to mobilize to the project site on August 22, 2016, id.,

after which, following installation of erosion control measures and other site protection work,

it would perform certain site and foundation development work (inclusive of excavating for

new footings, relocating existing utilities; installing new drainage, and pouring concrete

footings and columns) with an early start date of October 19 and an early finish date of

December 14, 2016; place structural steel columns, erect structural steel, and plumb and

detail structural steel, with an early start date of December 21, 2016, and an early finish date

of January 24, 2017; and cast the concrete column slab on the deck from January 25 to 31,

2017. Id. It would begin demolition of the existing building’s second floor hallway and

open an entryway, perform exterior sheathing and vapor barrier work, insulate and place

PVC roofing, and install interior wall framing from November 30, 2016, to January 12, 2017.

Exhibit 18 at 23.

Soon thereafter, though, Alares changed the logic behind some of its activities and

moved several activities earlier in time, significantly altering many “early start” dates from

what it had originally planned.3 Specifically, in updated schedules dated July 25 and

Up until January 2017, Mr. Maggioli prepared Alares’ monthly updates to the

construction schedule, utilizing Primavera scheduling software. Hearing Transcript, Vol. 1,

at 44-45. Alares then hired Project Controls, Inc. (PCI), to serve as its scheduling consultant,

CBCA 6149, 7071, 7597

September 26, 2016, Alares indicated that it would perform its site and foundation

development work beginning August 25 and ending October 27, 2016 (rather than a start of

October 19 and finish of December 14, 2016); place structural steel columns, erect structural

steel, and plumb and detail structural steel beginning October 28 and ending November 25,

2016 (rather than December 21, 2016, and January 24, 2017); and cast the concrete column

slab on the deck on November 28 and 29, 2016. Exhibit 18 at 3, 23. This logic restructuring

would allow Alares to progress earlier than previously planned to other activities that could

not reasonably be performed until the concrete deck was cast. Alares now planned to be in

a position to install mechanical, electrical, and plumbing (MEP) rough-in work in a portion

of the building beginning January 13, 2017. See id.

Actual Performance in Period 1

Alares’ June 3, 2016, baseline schedule projected substantial completion of the project

by August 2, 2017. Tab A to Exhibit 3644; Tab B to Exhibit RS-0593. By the time that

Alares issued another schedule update (no. 4) on January 13, 2017, the projected substantial

completion date had moved to September 5, 2017, see Exhibit 3644 at 5; Tab B to RS-0593,

reflecting a critical path delay to the project during Period 1 of thirty-four days. Exhibits

3644 at 8, RS-0593 (Expert Report) at 7.4

The critical path of performance initially, and logically, focused on Alares’ set-up of

the construction site and its initial performance activities. The parties agree that, during the

initial months of the project, there were no critical path delays.

By October 2016, the critical path had turned towards the need to complete

foundational work, which was necessary to allow Alares to begin erecting structural steel.

The parties agree, or at least the VA does not contest, that the VA is responsible for at least

four critical delay days relating to completion of the foundation. Hearing Transcript, Vol. 4,

and, beginning in January 2017, Scott Danzer, a PCI employee, took over responsibility for

the monthly updates (with input from Mr. Maggioli). Id. at 45-46; Hearing Transcript,

Vol. 2, at 32.

In his report and testimony, Mr. Maggioli asserted that there were thirty-three,

rather than thirty-four, days of critical delay during Period 1—four days resulting from

unforeseen underground piping that affected foundation work and twenty-nine days resulting

from coordination issues for which the VA is allegedly responsible. See Exhibit 3644 at 8;

Hearing Transcript, Vol. 1, at 62. Given that the delay in the anticipated substantial

completion date from August 2 to September 5, 2017, was thirty-four days, we adopt that

figure.

CBCA 6149, 7071, 7597

at 14-15. Specifically, Alares commenced excavation work on August 22, 2016, see Exhibit

RS-0593 (Expert Report) at 7; had planned on completing foundation work on October 27,

2016, Exhibit 18 at 23; but did not do so until November 1, 2016, four days later than

planned. Tab B to Exhibit RS-0593; Hearing Transcript, Vol. 4, at 15. Alares asserts that

this four-day delay was caused by the discovery of unforeseen underground piping that was

not shown on the contract drawings. Exhibits 3343 at 76, 3644 at 5002; Hearing Transcript,

Vol. 1, at 61. In response to Alares’ submission of request for information (RFI) 002 about

this discovery, the VA provided Alares with a new sewer route location. Exhibit 22 at 1.

This discovery delayed excavation of the water main and sewer line. Exhibit 3343 at 76.

Because installation of both was a precursor to excavation and the placement of three

footings, the discovery delayed the footings work. Id. Neither the VA’s expert, Robert M.

D’Onofrio, nor the VA, contests the VA’s responsibility for this delay or that, because Alares

had to finish the foundation work before it could begin erecting steel, it caused a four-day

delay to the critical path. Exhibit RS-0593 (Expert Report) at 7-8; Tab B to Exhibit

RS-0593.

Under standard practice, the footings that Alares placed would need to cure for

twenty-eight days before Alares could begin placing steel. Exhibit 22 at 1. Under an early

schedule, Alares had planned to erect steel beginning no earlier than December 21, 2016,

Exhibit 3644 at 5023, but, by the time of an updated schedule dated September 26, 2016, had

moved its planned steel erection start date to October 28, 2016. Exhibits 18 at 23, 22 at 1.

Although it is unclear how Alares had planned to satisfy the twenty-eight-day cure

requirement under its original schedules, the delays associated with rerouting the sewer lines

affected Alares’ ability to move forward with the project. At that point, the VA provided

Alares with a way to speed its performance. The VA indicated, in a progress meeting on

November 3, 2016, that it would waive the requirement for twenty-eight days of curing and

allow steel erection to begin early if the results of a test of strength were acceptable. Exhibit

22 at 2, 144. The VA received a positive test result on November 7, 2016, and Alares began

steel erection on November 9, 2016. Id. at 2, 147-49. The VA’s waiver of the twenty-eightday cure requirement minimized and mitigated what otherwise would have been a longer

critical delay before steel erection could commence.

Alares asserts that the remaining thirty days of critical delay during this period

resulted, in large part, from coordination issues in resolving conflicts in the specifications

relating to MEP work, including fire protection and medical gas systems, for which Alares

asserts the VA is responsible. Hearing Transcript, Vol. 1, at 61. MEP coordination is a

normal part of a construction project where the parties try to determine the best routes for

mechanical, electrical, and plumbing in a new building under construction. Closing

Argument Transcript at 98. Alares submitted RFI 005 on October 20, 2016, with preliminary

questions about requirements for the coordination drawings that its subcontractor, Delta

CBCA 6149, 7071, 7597

Mechanical Contractors (Delta Mechanical or Delta), was preparing. Exhibit 83A at 243-50.

The VA responded to the RFI the next day, indicating that it would have the

architect/engineer (A/E) for the building revise plans as needed to reflect new toilet chase

and enclosure dimensions and ceiling tile elevation revisions, the latter of which would allow

for dropped ceiling tiles where needed to accommodate piping. Id. at 245. The VA indicated

in its response, however, that “[t]hese changes will not affect structural steel fabrication,” id.,

such that these MEP coordination issues should not have affected, and did not affect, Alares’

ability to move forward with steel fabrication.

Alares’ subcontractor, Delta, met with the A/E and the VA on November 10, 2016,

and the A/E and the VA indicated that they would consider Alares’ request to drop the

ceilings on an as-needed and room-by-room basis once Alares submitted final coordination

drawings. Exhibit 19 at 163. Alares submitted the initial Delta-created coordination

drawings to the VA on December 20, 2016, while indicating that Delta still needed the A/E’s

revised plans as discussed in the VA’s original response to RFI 005. Exhibit 83k at 287-93.

Alares submitted a revision to RFI 005 on December 22, 2016, Exhibit 19 at 131, 163, and,

when the VA provided an answer about toilet chase sizes on January 26, 2017, told the VA

that it would “need[] an answer on this RFI and revisions to floor plans within the next week

to keep project on schedule.” Id. at 163. On February 10, 2017, Alares submitted its second

revision to RFI 005. Exhibit RS-0593 (Expert Report) at 7. After resolving what it called

“[i]ssues with submission,” Exhibit 19 at 152, and participating in a conference call with

Delta and the VA, id. at 195, the A/E, on or before February 23, 2017, issued Bulletin 3 and

its response to the second revision of RFI 005, resolving the MEP coordination conflicts, id.

at 206, which was immediately forwarded to Alares and Delta. Id.

Although it is clear that there was a delay associated with MEP coordination, that

delay did not affect the critical path during Period 1. Mr. Maggioli testified that coordination

of the MEP drawings for the new building had to be complete “before [Alares] could begin

mechanical rough.” Hearing Transcript, Vol. 1, at 62. Yet, under both Alares’ original

baseline schedule and its subsequent schedule updates, MEP rough-ins were never scheduled

to begin until after the end of Period 1, see Exhibit 18 at 23; Tab B to Exhibit RS-0593,5 and

any MEP coordination issues were not the cause of the additional thirty-day critical path

delay during Period 1. Any delay caused by MEP coordination issues would not, under

Under Alares’ original baseline schedule, dated June 2, 2016, MEP rough-ins

were listed as having a planned early start date of March 7, 2017. Exhibit 3644 at 5024.

Subsequently, by the time that it issued revised schedules on July 25, September 26, and

December 8, 2016, Alares had moved the early start date to January 13, 2017. Exhibit 18 at

3, 23; Exhibit 3345 at 109.

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Alares’ contemporaneous scheduling plans, have impacted critical path items until, at the

earliest, Period 2. Even with that, meeting minutes from Alares’ weekly project meetings

with the VA reflect that, despite the MEP coordination issues that it alleges, Alares had

commenced some initial MEP rough-in work in December 2017, earlier than its projected

early start date. Exhibit 19 at 105-06, 129. Alares acknowledged on January 26, 2017, after

Period 1 had ended, that it would need the A/E’s complete response to RFI 005 “within the

next week” to preclude schedule impacts, indicating that these MEP coordination issues had

not yet impacted the critical path at that time. Id. at 163. We find insufficient

contemporaneous evidence in the record to show that MEP coordination issues impacted

necessary activities on the critical path during Period 1.

Alares also asserted that, beyond the four days of delay previously discussed for which

the VA assumes responsibility, additional critical delays in Period 1 were caused by the

continuing effects of unforeseen underground steam lines, unforeseen underground steel

piping, and defective design drawings. Yet, the parties dealt with these issues before Alares

completed its foundation work on November 1, 2016. Alares issued RFI 002 on

September 1, 2016, seeking instruction from the VA by September 8, 2016, regarding the

discovery of the steam lines impacting the foundation work. Exhibits 2 & 8 to Exhibit

RS-0593. The VA provided an initial response on September 8, 2016, and provided a new

route location on September 19, 2016. Id., Exhibits 3, 4; Exhibit RS-0593 (Expert Report)

at 8. Alares then submitted a change order proposal (COP) on September 23, 2016. Id.;

Exhibit 6 to Exhibit RS-0593 (Expert Report). The COR asked for clarifications and

revisions of the COP twice, but the parties could not agree on the change, and the contracting

officer issued unilateral modification P00002 on October 11, 2016, directing Alares to

complete the work in accordance with the VA’s initial response to RFI 002. Exhibit 24; see

Exhibit RS-0593 (Expert Report) at 8-9; Exhibits 7 & 8 to Exhibit RS-0593. The VA

contracting officer’s resolution of how Alares should proceed predated Alares’ completion

of the foundation, and there is nothing in the record that shows how, once the foundation was

completed, these issues affected subsequent work during this period.

Instead, the record reflects that any critical path delays (beyond the four-day period

associated with laying the foundation) related to Alares’ slow progress on steel erection,

decking, welding, and detailing. Under Alares’ as-planned schedule, steel erection was

supposed to start immediately after the foundation was completed, Exhibit 18 at 23; Tab B

to Exhibit RS-0593, although it is unclear from the record whether that schedule properly

accounted for the contract’s twenty-eight-day concrete cure requirements. Nevertheless, to

expedite the project, the VA, as described above, authorized a shorter cure period (seven days

if the foundation passed a test of strength, which it did) than the contract required. After the

foundation was completed on November 1, 2016, Alares began steel erection on November

9, 2016, eight days later than originally planned (but earlier than would have been realistic

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had the original schedule accounted for the twenty-eight-day cure requirement), but it did not

finish that work until November 30, 2016, taking longer than planned under the baseline

schedule. Exhibit RS-0593 (Expert Report) at 8. Steel decking, welding, and detailing

commenced on November 29, 2016, and was not completed until January 4, 2017, with the

welding and detailing taking longer than scheduled. Id. Alares has identified no viable

defects in drawings or with VA coordination and assistance that would have slowed Alares’

steel work once it began.

Further, under the construction schedule (as revised in the July and September 2016

schedules), concrete slab on deck pours were supposed to have occurred the day after

completion of steel erection, which, as noted above, was finished on November 30, 2016.

Exhibit RS-0593 (Expert Report) at 8. Applying that sequence of events, Alares should have

started casting the concrete slab on December 1, 2016. By schedule update no. 3, dated

December 8, 2016, in which Alares acknowledged that casting the slab remained a critical

path item, Exhibit 3345 at 107, 110, that date had moved to December 19, 2016. Id. at 109.

Yet, in its next schedule update (no. 4) on January 13, 2017, which was the first one prepared

by Alares’ new scheduling consultant (Project Controls, Inc. (PCI)) rather than by

Mr. Maggioli himself, Alares had delayed the start of cast-in-place concrete deck work until

January 30, 2017. Exhibits 31 at 1, 3346 at 126. Although Alares suggested in schedule

update no. 4 that it had a new logic which made MEP coordination issues the only critical

path item (and removed the concrete slab from the critical path), see Exhibit 3346 at 119,

suggesting that its unexplained delays in casting the concrete slab had no impact on the

project, that explanation and Alares’ sudden revision of logic make no sense and ignore or

sugarcoat the impact of delays for which Alares is responsible.6 By January 26, 2017, Alares

had again delayed the start of casting the concrete slab, telling the VA that it was not

planning to do that work until early February. Exhibit 19 at 164. For reasons that Alares did

not explain at the hearing, it ultimately did not start the pour stops and subsequent deck pours

until February 16, 2017, and did not complete them until February 21, 2017. Id. at 196.

Casting the concrete slab on deck was necessary before Alares could begin to construct

exterior light gauge metal framing, which (in schedule update no. 3) Alares had previously

In schedule update no. 4, dated January 13, 2017, Alares added weeks of MEP

cost negotiations to the critical path, with staggered dates beginning December 22 (after the

A/E was to issue revised MEP layouts) that extended out for several weeks to allow the

general contractor to review costs, the owner to review costs, and the parties to negotiate

costs. Exhibit 3346 at 123. The logic behind the inclusion of this extensive cost review and

negotiation period, particularly when adding them as a critical path item leading to MEP

rough-in work without regard to the need first to cast the concrete slab, is unsupported and

does not provide a basis for imposing critical path delays on the VA during Period 1.

CBCA 6149, 7071, 7597

identified as critical path work, see Exhibit 3345 at 107, or complete MEP rough-ins.

Exhibits 18 at 1, 3345 at 110; see Hearing Transcript, Vol. 3, at 36-37 (“Casting the concrete

deck was one of the key items in order to allow the project to move forward.”).

Throughout Period 1 and into Period 2, the VA was complaining that the schedule was

slipping for reasons that the VA did not understand. See, e.g., Exhibits 30 at 1, 31 at 1. On

January 9, 2017, Mr. Boyle, the VA COR, complained that “[a]fter reviewing [the] latest

schedule, dated 12/8/2016, this morning I have to reiterate my concern that the schedule is

sliding on the ICU project. . . . While I realize Alares is bringing a scheduling consultant

onboard per our last weekly meeting, there appears to be a significant loss of time when I

look at the schedule.” Exhibit 30 at 1. Based on the Board’s review of the record, it appears

clear that Alares was not keeping up with its planned schedule for reasons not caused by the

VA.

Summary of Critical Delays in Period 1

Of the thirty-four days of critical path delay in Period 1, four days of that delay were

caused by issues surrounding completion of the building foundation for which the VA is

responsible. The remaining thirty days were caused by Alares’ slow progress, first on steel

erection and then on the cast-in-place concrete slab.

Period 2 (January 13 to July 14, 2017)7

MEP Coordination Issues

Period 2 covers the 183-day period of time running from January 13 to July 14, 2017.

In its January 13, 2017, schedule update, Alares projected substantial completion on

September 5, 2017, Exhibit 3346 at 118, but, in its July 25, 2017, schedule update (which had

In their reports, both Mr. Maggioli and Mr. D’Onofrio select January 13, 2017,

as the start date for Period 2. Nevertheless, their end dates differ. Although Mr. D’Onofrio

picked July 14, 2017, as the end date, Mr. Maggioli selected July 25, 2017, which is the date

that Alares submitted schedule update no. 10 to the VA. See Exhibit 3352 at 182. As Mr.

D’Onofrio correctly notes, however, even though schedule update no. 10 was submitted on

July 25, the data within that update and upon which the update relies was run on July 14,

2017. See id. at 190; Exhibit RS-0592 (Expert Rebuttal Report) at 6-7. Like Mr. D’Onofrio,

we end Period 2 on the date of the July 14, 2017, data run. Given that the parties agree on

the number of days of delay during Period 2, the differences in the parties’ selection of a

Period 2 end date is ultimately of no consequence.

CBCA 6149, 7071, 7597

a run date of July 14, 2017), see Exhibit 3352 at 190, the substantial completion date had

slipped to December 27, 2017. Id. at 183-84. The parties agree that the project was delayed

a total of 113 days during Period 2.

As addressed above in our discussion of Period 1, Alares, as set forth in its schedule

updates dated July 25 and September 26, 2016, had planned to commence MEP rough-ins

by January 13, 2017. See Exhibit 18 at 3, 23; Tab B to Exhibit RS-0593. By the time that

Alares submitted schedule update no. 3 on December 8, 2016, that start date had slipped to

January 13, 2017, Exhibit 3345 at 116, and, in Alares’ schedule update (no. 5) on January 13,

2017, had further slipped to March 13, 2017. Exhibit 3346 at 126-27. Although it is difficult

from the record to decipher some of the logic ties applicable to Alares’ work during this

period, the VA’s expert witness, for reasons that we do not understand, acknowledged in a

rebuttal report that the critical path for activities between January 13 and February 17, 2017,

was driven by “Activity D190,” which involved the VA’s issuance of a response to RFI 005

and the A/E’s issuance of new layouts for MEP, steps needed to allow Delta to revise and

prepare final coordination drawings. Exhibits 18 at 44, 48; see Exhibit RS-0592 (Expert

Rebuttal Report) at 7. Although, in Alares’ updated schedule dated January 13, 2017,

Activity D190 had a projected finish date of January 27, 2017, see Exhibit 18 at 44, 48, the

A/E did not (as previously noted) issue the new layouts until sometime on or before February

23, 2017, Exhibit 19 at 206, delaying resolution of the MEP layout. Nevertheless, as Alares

acknowledged on January 26, 2017, Alares would not have needed the A/E’s complete

response to RFI 005 until early February 2017 to preclude schedule impacts to the critical

path. Exhibit 19 at 163. Putting these pieces together, the VA’s expert conceded a critical

delay of twenty-two days from the delay in Activity D190, for which he determined the VA

is responsible. Hearing Transcript, Vol. 4, at 16; Exhibit RS-0592 (Expert Rebuttal Report)

at 7-8. For reasons that we will explain in our later discussion of delay responsibility for

Period 1, the Board is unable to understand the basis of this concession or the logic for

asserting that MEP coordination issues, rather than the cast-in-place concrete work, was the

critical path item at this point in time.

Responsibility for MEP coordination change delays shifted after the A/E issued new

layouts on or about February 23, 2017. Delta took several weeks to prepare new

coordination drawings based on the A/E’s new layouts, before submitting them to Alares on

March 17, 2017. Exhibit 83N at 318-20. For reasons that Alares does not explain in the

record, Alares waited forty-six days after receipt before, on May 2, 2017, it forwarded

Delta’s coordination drawings to the VA. Exhibits 83N at 316, 83O at 321; Closing

Argument Transcript at 102. The VA approved the coordination drawings sixteen days later.

Exhibit 83O at 321; Closing Argument Transcript at 102. Although Alares complains about

the VA’s delays in approving Delta’s coordination drawings and attributes delays between

February 23 and May 18, 2023, to the VA based on MEP coordination issues, see Exhibit

CBCA 6149, 7071, 7597

3644 at 5005, there was nothing for the VA to approve between February 23 and May 2

because Alares had not provided the coordination drawings to the VA.

Alares also claims that continuing MEP design errors for the locations of tie-ins and

routes for water, electrical, fire sprinkler, and medical gases caused continued delays during

Period 2, until at least June 2, 2017, if not later. See Exhibit 3644 at 5005-06. There were

changes made in tie-ins during this period that were eventually resolved through modification

P00008. See Exhibit 48. Nevertheless, contrary to the suggestion in Mr. Maggioli’s report,

these changes did not affect the critical path of contract performance. Exhibit RS-0593

(Expert Report) at 12-13.

Cast-in-Place Concrete Slab

Other activities in which Alares planned to engage during Period 2 (as reflected in

schedule update no. 4) included casting the concrete slab that it had originally planned to

complete during Period 1, completing superstructure erection, completing enclosure work,

meeting a weathertight milestone, and installing the Air Handling Unit (AHU). Exhibits

3346 at 123, 125-26; RS-0593 (Expert Report) at 11, 14. With regard to the concrete slab,

the VA COR complained early in Period 2 about the continuing slide in the schedule for that

work and the accompanying delays in other activities (like installation of exterior light gauge

metal framing) that depended on completion of the concrete slab casting work. By email

dated February 8, 2017, the COR informed Alares that, “[a]fter further reviewing your latest

schedule this morning, dated 1/13/2017, the previous schedule dated 12/8/2016, and the look

ahead provided with the meeting minutes received yesterday, I have to again reiterate my

concern that the schedule is sliding on the ICU project.” Exhibit 31 at 1. Focusing on the

cast-in-place concrete work, he noted that, under the latest schedule, it “was to be placed on

1/30-31/2017,” but that, under the weekly “look ahead,” it was “currently scheduled for . . .

2/15-16/2017, and there is little to no progress being made by Alares on any one item in

particular.” Id. “This,” the COR asserted, “represents a 9 week slide in the placement of the

deck from the 12/8 schedule and a 3+ week slide from the latest schedule.” Id. He also

made the following more general observation:

There appears to be an ongoing loss of time and a general lack of progress

when I review project status and schedules. Although the schedule appears to

be well thought out and I only have a few minor comments on the schedule

narrative . . . , my primary concern is that I don’t see a comprehensive course

of action or plan in the narrative that will stop the loss of time and bring the

project back in line with contractual end date.

CBCA 6149, 7071, 7597

Id. He noted that, although Alares identified in its schedule updates ways that Alares

believed the VA had slowed performance and actions that the VA could take to speed Alares’

performance, “nothing is mentioned” in those updates “about the avenues available to Alares

to correct the situation.” Id. at 2. The COR informed Alares that the VA did not intend to

“modify[] the contract to extend the end date” and that Alares should “investigate

adjustments to means and methods to keep the project moving forward and correct the delay

in project completion.” Id. at 1.

As noted in our discussion of Period 1, for reasons that Alares did not explain at the

hearing, Alares ultimately did not start the pour stops and subsequent cast-in-place concrete

deck pours until February 16, 2017, and did not complete them until February 21, 2017.

Exhibit 19 at 196, 198, 207, 209. Although Alares could have immediately commenced

exterior light gauge metal framing at that point, it delayed commencement of that activity

until mid-March 2017, see Exhibit 3349 at 158, for reasons that, again, are not explained in

the record.

Weathertight Milestone and AHU Delays

Aside from the cast-in-place concrete slab work, Alares was, under the schedule that

it had in place at the start of Period 2, supposed to satisfy the contract’s weathertight

milestone by March 10, 2017. Exhibit 3346 at 118. “Achieving weathertightness is

generally an important milestone in the construction of a building as it allows the

construction of aspects of the interior that might be damaged by exposure to the weather,

such as finishes, electrical equipment and so on.” https://www.designingbuildings.co.uk/

wiki/Weathertight (last visited March 21, 2025). By the time that Alares submitted schedule

update no. 6 on March 10, 2017, the deadline for achieving weathertightness had slipped

from March 22 to May 1, 2017. Exhibit 3348 at 141. Weathertightness controlled the

critical path at that point in time, and Alares’ inability to achieve it had caused sixty-two days

of delay to the critical path. Exhibit RS-0593 (Expert Report) at 11.

The initial delays in achieving weathertightness were the result of Alares’ lack of

progress on the superstructure erection. Exhibit RS-0593 (Expert Report) at 11. That is,

Alares could not make the building weathertight until the superstructure was erected. The

weathertight milestone deadline continued slipping to May 22, 2017 (in schedule update

no. 7, dated April 14, 2017), see Exhibit 3349 at 152; then to June 2, 2017 (in schedule

update no. 8, dated May 12, 2017), see Exhibit 3350 at 161; and then to August 15, 2017 (in

schedule update no. 9, dated June 9, 2017). See Exhibit 3351 at 171. There was no

explanation for much of this continual slippage.

CBCA 6149, 7071, 7597

Once the superstructure erection was sufficiently in place, Alares’ ability to meet the

weathertight milestone was affected by delays in roofing activities for the building envelope,

specifically “Roof Railing Assemblies & Closure Plates” and “Roof Blocking - Perimeter &

AHU Deck.” Exhibit RS-0592 (Expert Rebuttal Report) at 8. These delays were the result

of Alares’ lack of progress on the building envelope and a new logic tie that required “Spray

Fireproofing (Roof Deck & Interior Steel)” to commence immediately after the critical

building envelope work was completed. Id. at 8 & n.14. There were also delays, as noted

above, in Alares’ commencement of exterior light gauge metal framing, which, even though

Alares could have begun that work immediately after completing the cast-in-place concrete

slab on February 21, 2017, did not begin until late March and was not completed in the

scheduled time. See Exhibits 3350 at 168, RS-0592 (Expert Rebuttal Report) at 8.

Alares also delayed the start of procurement for the fabrication and delivery of the

AHU and curb. The design of the AHU penthouse building, which was to sit atop the

building, originally contained two AHUs and related equipment. The curb is “a structural

support for the [AHU].” Hearing Transcript, Vol. 3, at 101. In its early schedules, Alares

had planned on commencing procurement of the AHU and curb in January 2017. Exhibit

RS-0592 (Expert Rebuttal Report) at 9. It appears that Alares actually began that work in

January 2017 but that its subcontractor made a mistake by planning on a smaller footprint for

the AHU than the design documents required and failed to coordinate the decreased AHU

footprint with the roofing subcontractor, Exhibit RS-0053 at 7, which essentially required

Alares to start over with planning for the AHU work once the error was discovered.

Accordingly, in its Period 2 schedules, Alares changed its original January start dates to

reflect that work had actually commenced in March 2017, with revised completion dates.

Exhibit RS-0592 (Expert Rebuttal Report) at 9. Nevertheless, Alares also made logic

changes to its schedule to tie fabrication and delivery of the AHU to the completion of

roofing, which reduced the amount of delay originally tied to the AHU and curb schedule.

Id.

Once it recommenced AHU procurement with the appropriate sizing, Alares

discovered a defect in the A/E’s original design for the AHU. On March 9, 2017, Alares

submitted RFI 26, notifying the VA that the manufacturer of the steam generator that was

part of the AHU system, DriSteem, had informed it that the design required two steam

generators, rather than the single steam generator that the A/E had identified. Exhibit 3670

at 5241. Alares asked the VA to have the A/E review the matter and issue appropriate

drawings, sketches, narratives, and a revised equipment schedule, as needed. Id. at 5241,

5243. The A/E did so on March 15 with drawings that the VA forwarded to Alares on March

16, 2017. Id. at 5242. Alares’ subcontractors provided Alares with cost quotations for the

added work on March 30 and April 10, 2017, see Exhibit 33 at 18, 21, and Alares submitted

a change order cost proposal to the VA on April 11, 2017, which the VA rejected three days

CBCA 6149, 7071, 7597

later as too high. Exhibit 50 at 3-4. Alares eventually, on May 12, 2017, submitted a revised

cost proposal through COP 0012-R2. Exhibit 33 at 15.

Eleven days later, on May 23, 2017, the parties entered into bilateral modification

P00005 to add to the contract the work identified in COP 0012R2—specifically, addition of

a second steam generator to the AHU “in accordance with RFI #26 and #31 in the amount

of $42,398.86,” plus associated necessary plumbing. Exhibit 33 at 1. In the modification,

the parties agreed that the “contract completion date remains 08/02/2017” and that the

modification was “the adjustment for the contractor’s proposal and for the contractor’s rights

to submit claims for unresolved issues which are not covered by this change.” Id. at 2. The

modification further provided that “[e]xcept as provided herein, all terms and conditions of

the document referenced in Item 10A of this document, (VA241-16-C-0037) with any/all

modifications as heretofore changed by this modification, remain unchanged and in full force

and effect.” Id. Incorporated into the modification were RFIs 26 and 31 themselves, which

indicated that the increase of $42,398.86 was “only [for] the direct costs of the change” and

that Alares “reserves its rights to additional costs for impact of this change, alone or in

combination with other changes, on unchanged work; for additional time, due to impacts, if

any, on the schedule; and for time-related extended time of performance costs, all of which

will be evaluated separately.” Id. at 15.

When the parties executed modification P00005, Alares anticipated a lead time for the

second generator of four to six weeks, which would result in delivery by early July 2017.

Exhibit RS-0593 (Expert Report) at 13. In the schedule update near in time to the

modification, Alares projected that the AHU work would be complete by July 19, see Exhibit

3350 at 168, but, by June 9, 2017, that date had slipped, without explanation, to August 4,

2017. Exhibit 3351 at 177. Further, by the time of the June 9, 2017, schedule update, the

AHU become the focus of the critical path. Id. at 172. Similarly, the curb associated with

the AHU, though set in the May 12 schedule update to finish on the same day as the update

(May 12), Exhibit 3350 at 168, was delayed to a finish date of August 4 in the June 9 update.

Exhibit 3351 at 177. Nevertheless, delivery of the second generator was delayed until

August 7, 2017. Exhibit RS-0593 (Expert Report) at 13-14. It is not clear from the record

when Alares (or its subcontractor) actually submitted the order to DriSteem for the second

generator.

Despite the length of time that it took to resolve the AHU second steam generator

issue, the controlling critical path delay in Period 2, at least up until June 9, 2017, was the

lack of progress in enclosing the building, coupled with the lack of progress on interior MEP

rough-in work that, despite the lack of a weathertight seal of the building, Alares had already

begun. Exhibit RS-0593 (Expert Report) at 13. Without enclosure, Alares could not create

a weathertight building. Nevertheless, in schedule update no. 9 (dated June 9, 2017), Alares

CBCA 6149, 7071, 7597

shifted the critical path to the rooftop mechanical AHU and curb work (specifically, the

“Fab[ricate] & Deliver – AHU” and “Fab[ricate] & Deliver Curb” line items). Id.; Exhibit

3351 at 172. Despite the shift in the critical path, Alares did not explain why, in its June 9

schedule update, it added more than two weeks of time than had previously been identified

in its prior May 12 schedule update for completing the AHU and added almost twelve weeks

of time for completing the curb.

Alares’ Staffing and Submittal Issues

At various times during Period 2, the VA expressed concern about the continued slide

of the schedule, as well as about schedule updates that, in the VA’s mind, compressed

activities to maintain a particular completion date projection but did not appear logical, as

seen in this email from the VA’s COR to Alares’ project management team from May 26,

2017:

After reviewing the latest schedule update (no. 8), updates 6 and 7, the

narrative and the three week look ahead provided with the meeting minutes

received yesterday, I have to reiterate the VA’s concern that the schedule is

sliding on the ICU project. While the latest updated schedule maintained the

previous finish date, it did not bring the end date back in line with, or move it

closer to, the contractual end date. It appears as though several individual

items were compressed to keep the end date shown in previous schedule

updates. Per my previous e-mails, there appears to be an ongoing loss of time

and lack of progress related to bringing the end date back in line with the

contractual end date. My primary concern is that I don’t see a comprehensive

course of action or plan in the narrative that will stop the loss of time and bring

the project back in line with contractual end date, such as the [overtime] and

[w]eekend work that was discussed in our progress meeting. . . . Please

investigate adjustments to means and methods to keep the project moving

forward and correct the delay in project completion.

Exhibit 35 at 1; see Hearing Transcript, Vol. 3, at 41-43.

The VA’s concerns were reinforced by an email that Alares received from its

fireproofing subcontractor in late April 2017, complaining about Alares’ failure to move the

project along appropriately and performing work out of logical sequence:

I was just informed by my field ops that the second floor at the ICU project has

been completely studded. This is not how we figured this project. We have

been waiting for the roof to on [sic] for months now and then you decide to

CBCA 6149, 7071, 7597

stud the entire floor? Why? This will definitely impede my production. The

studs will have to come down because I will need access with a rolling

scaffold to perform my work. It clearly states in the qualifications . . . that the

floors will have clear access for the efficient use of a rolling scaffold.

Studding the entire floor is not clear access. . . . Please advise what will be

done about this so we can perform our work in an efficient manner.

Exhibit RS-0069 at 59719.

By March 6, 2017, Alares was on its second project manager (Josh Abrams, replacing

Nick Budris). Hearing Transcript, Vol. 3, at 38-39; see Exhibits 19 at 221, RT07. By

April 10, the VA had still not received 50% of the submittals that were required to construct

the project. Hearing Transcript, Vol. 3, at 40. Alares could not perform work on each aspect

of the project until it had provided the VA with a submittal showing how it would

accomplish the work and the VA had approved it, which means that there were many areas

of work that Alares could not yet commence. Id.

Safety Violation Shutdown

On June 16, 2017, the entire construction site was shut down under the authority of

FAR 52.242-14 when one of Alares’ subcontractors, People Ready, created an on-site safety

incident. Exhibit 37 at 1; see Exhibit 096.1 (photograph of safety violation); Hearing

Transcript, Vol. 2, at 168-69. Alares was informed that the suspension would remain in

effect “until an adequate site safety monitoring plan is put into place, or until further

direction is given to you.” Exhibit 37 at 2. Ultimately, the shutdown lasted two weeks, with

the shutdown notice being lifted on June 30, 2017. Exhibit 107. Alares was not allowed to,

and did not, perform any work at the project site during the period of suspension. See id.;

see also Exhibit 17 at 569-82. Alares’ current safety manager, who was not employed by

Alares when this incident occurred, see Hearing Transcript, Vol. 2, at 176-78, acknowledged

at the hearing that the safety incident underlying the shutdown was a “serious concern,” id.

at 172, but he believes that the two-week shutdown was unnecessary and that what he calls

the VA’s zero-tolerance policy for safety infractions after this suspension was too much. Id.

at 163-64. Alares’ safety manager has misstated the requirements that the VA imposed for

restarting on-site operations, which did not impose a zero-tolerance policy, see Exhibit 102;

Hearing Transcript, Vol. 2, at 179-80; id., Vol. 3, at 85-86, and we find the VA’s response

to the safety infraction, including what became a two-week suspension, reasonable. See

Hearing Transcript, Vol. 3, at 82-83 (discussing safety issues). The shutdown occurred

during the procurement of the roof top mechanical AHU and curb, which was not affected

by the shutdown. Appellant’s Post-Hearing Reply Brief (Sept. 14, 2023) at 10; see Exhibit

3352 at 184.

CBCA 6149, 7071, 7597

Although the shutdown was lifted on June 30, Alares did not restart operations on the

job site until July 5, 2017. See Exhibit 17 at 583-87. For the first few days after it resumed

performance (that is, from July 5 through 9, 2017), Alares utilized lower-than-average

manpower at the site (a total of only 104 man-hours during those five days), see Exhibits 17

at 587-94, RS-0592 (Expert Rebuttal Report) at 10, before resuming staffing levels closer to

normal but still less than desirable from July 10 to 17, 2017 (with 59.5, 86.1, 76, 76, and 64

man-hours, respectively). Exhibit 17 at 595-604. Progress was slow between July 5 and 14,

2017.

We find no evidence of any improper motives or nefarious conduct by the VA in the

issuance or duration of the safety shutdown. Although the VA raises the safety shutdown in

its briefing, see Respondent’s Post-Hearing Brief (June 16, 2023) at 33, the VA’s expert

witness did not identify this issue in his expert report as creating any delay to the critical

path.

Summary of Critical Path Delays in Period 2

At the start of Period 2 through February 21, 2017, the critical path of performance

was delayed by Alares’ unexplained delay in the casting of the concrete slab, after which

Alares’ delays in enclosing the building, which precluded Alares from reaching the

weathertight milestone, controlled the critical path, up until June 6, 2017. At that point in

time, delays in being able to complete the AHUs caused by redesign and rework necessitated

by the required addition of a second steam generator (an issue covered in modification

P00005) controlled the remainder of Period 2, although Alares’ progress was unnecessarily

slow.

Of the 113 days of delay during Period 2, Alares is responsible for delays to the

critical path relating to the cast-in-place concrete slab and building enclosure, which cover

the period from January 13 through June 6, 2017. With regard to the remaining thirty-eight

days of delay in Period 2 (from June 7 to July 14, 2017), the VA provided the original

drawings that omitted the need for the second AHU steam generator and is responsible for

extra work and delays associated with the necessary redesign. The VA argues that, by

executing bilateral modification P00005, Alares assumed responsibility for that extra work

and those delays. We will address that argument later in this decision.

CBCA 6149, 7071, 7597

Period 3 (July 14, 2017, to May 18, 2018)8

Weathertight Milestone and AHU Delays

Period 3 covers the 309-day period of time running from July 14, 2017, to May 18,

2018. Exhibit RS-0593 (Expert Report) at 15. At the start of Period 3, Alares’ anticipated

substantial completion date was December 27, 2017, Exhibits 3352 at 183, RS-0593 (Expert

Report) at 10, although the VA was pushing for completion by no later than December 1.

Exhibit 41 at 1. By the end of Period 3, Alares was projecting a substantial completion date

of September 4, 2018, which represented a critical path delay during Period 3 of 251 days.

Exhibit RS-0593 (Expert Report) at 15. Delays during this period were caused by continued

building enclosure delays, Alares’ failure timely to advance the interior rough and finish

work, and, eventually, issues involving receipt of permanent power. Id.

Early in Period 3, Alares changed the performance schedule to compress exterior

enclosure work to allow it to achieve weathertightness for the building. Exhibit RS-0593

(Expert Report) at 15. By the time of its September 2017 schedule update, Alares had

extended the deadline for making the building weathertight until September 29, 2017, but the

VA complained that it seemed unlikely that Alares could meet that date. Exhibits 18 at 83,

45 at 1. Alares blamed delays in its ability to achieve weathertightness on the VA’s own

alleged delays in resolving an AHU curb issue and a separate infill issue. Exhibit 45 at 3.

Yet, those delays were not the VA’s responsibility. The AHU curbing was installed between

August 21 and 23, 2017, and the AHU sections were installed on August 24 and 25, 2017.

Exhibit RS-108 at 21512. In mid-September, one of the VA’s CORs, Scott DaRosa, was on

the roof of the ICU building and discovered two problems: (1) that the eastern edge of the

AHU was overhanging the curb, creating a gap between the AHU frame and the curb, and

(2) that the western curb was damaged during installation, apparently by winches when one

of the AHU sections was being installed that caught the leading edge of the curb and bent it

inward. Hearing Transcript, Vol. 3, at 100-01. This caused springs along the sides of the

curb to protrude outward and caused a structural issue in the supports for the AHUs,

affecting their ability to support the weight of the AHUs. Id. at 101-06. The VA reported

these issues to Alares by email dated September 18, 2017, with suggested corrective

measures. Exhibit RS-108 at 21512-14. Alares took time to resolve these issues, Exhibit 45

at 3, which were not caused by the VA.

We adopt the start and end dates for Period 3 that the VA’s expert,

Mr. D’Onofrio selected, as they have a more logical basis than the start and end dates that

Mr. Maggioli, in his delay report, selected.

CBCA 6149, 7071, 7597

By October 5, 2017, Alares had still not reached the weathertight milestone, evidenced

by a photograph of the exterior of the project from that date showing numerous items

necessary for a weathertight structure—in addition to the AHU curb issue and the infill

issue—that were still far from complete. Exhibit 45 at 4; see Exhibit 17 at 746; Hearing

Transcript, Vol. 3, at 52. The building had to be weathertight before Alares could complete

interior work. Hearing Transcript, Vol. 3, at 50. These delays in enclosing the building were

caused by Alares’ subcontractor workmanship and Alares’ delays in addressing its

subcontractor issues. See Exhibit 45 at 3-4; Hearing Transcript, Vol. 3, at 51-52. Issues

surrounding the AHUs and making the building weathertight at this time were not caused by

the VA.

By its October 27, 2017, schedule update (no. 14), weathertightness had dropped off

of Alares’ written schedule and out of its schedule narrative, and Alares indicated that it was

planning to begin interior drywall work on October 30, 2017. Exhibit 3356 at 216, 218; see

Tab J to Exhibit RS-0593. That, though, does not mean that Alares had achieved the

weathertight milestone. It appears that Alares changed its schedule logic to remove

weathertightness completely from the schedule, which is evident from the listing of other

activities that were precursors to weathertightness which still needed to be completed,

including an AHU and curb corrective plan and roof flashing. Exhibit 3356 at 218.

Although no longer referencing “weathertightness,” Alares indicated that roofing and

exterior framing/sheathing, necessary for building enclosure and weathertightness, were

“nearly complete,” id. at 215, and set to be finished by December 6, 2017. Id. at 218. By the

time of its December 22, 2017, schedule update, the roofing and exterior framing/sheathing

building enclosure were still identified as “nearly,” though not quite, “complete,” Exhibit

3359 at 239, but now with a January 17, 2018, finish date. Id. at 241-42. By the time of its

January 24, 2018, schedule update, Alares had dropped any references to the status of the

roofing and the exterior framing/sheathing but indicated that it was still working on the AHU

and curb corrective plan and roof flashing needed to allow for enclosure, see Exhibit 3360

at 248, which, in a later schedule update, Alares reported completing sometime between June

20 and 22, 2018. Exhibit 3365 at 284. Alares’ schedule updates provided no reason for the

constant and ultimately lengthy delays in completing this work.

Staffing, Scheduling, and Subcontractor Issues, and Two Cure Notices

Early in this period, the VA again recognized and expressed concern about what it

viewed as Alares’ lack of appropriate attention to this project, with inadequate staffing being

assigned to it, as reflected in this email from the VA COR to numerous Alares

representatives on July 25, 2017:

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After numerous understaffed days on the project both last week and this week,

the VA wants to alert you again of our concern regarding the project schedule.

Given the current staffing levels being provided[,] we are concerned that the

project will not be completed in accordance with the latest schedule. (run date

6/13/2017). The VA has previously expressed concerns related to project

progress. . . . Alares should be implementing measures to complete the project

in a timely manner. However given the current staffing levels, the VA is

concerned [that the] completion date will continue to slide. Please provide an

updated schedule prior to the weekly progress meeting so we may review and

discuss it with you during the meeting.

Exhibit 39 at 1; see Exhibit 17 at 619-30 (daily logs showing, from July 24 through 30, 2017,

Alares and its subcontractors worked a total of ninety-six man-hours on the project (spending

thirty-four man-hours on July 24, followed by eighteen, eighteen, eighteen, eight, zero, and

zero man-hours over the next six days); Hearing Transcript, Vol. 3, at 45 (Alares and

subcontractor staffing levels were low at this time). The VA COR expanded on these

concerns in another email just two days later, complaining that, in a new schedule update that

Alares had just submitted (no. 10), Alares had ignored work areas that were causing schedule

slippages but that, seemingly because they were controlled by and the responsibility of Alares

or its subcontractors, Alares excluded from its narratives, including the effect of continual

personnel turnover, a lack of coordination among the various trades and subcontractors, and

inadequate staffing:

Prior to the meeting, seeing [as] how this is Alares’ narrative on the impacts

to the schedule, I am requesting that the narrative be revised to include impacts

to the schedule related to the following:

Alares’ Personnel turnover

Lack of coordination

Delayed responses to VA requests (such as 21 days to provide

information related to the steam generator COP which was

insufficiently documented)

Inadequate staffing

Lack of subcontractor control

Time lost due to 2 week shut down related to continued safety

violations

Etc.

Exhibit 40 at 1. The VA COR raised a concern that “[i]t appears as though the narrative is

carefully written to place the onus for delays squarely on the VA, and does not address a

single item that has impacted the schedule due to Alares.” Id.

CBCA 6149, 7071, 7597

On August 2, 2017, after meeting with Alares on August 1, 2017, the VA contracting

officer issued a cure notice declaring that Alares was in default on the contract for failing to

meet the contractual completion deadline of August 2, 2017. Exhibit 41 at 1. While

reserving “all contractual rights and remedies under the subject contract,” the contracting

officer indicated that “if Alares . . . will pursue all aspects of work required under an

extended schedule to ensure the successful completion of the contract and submit to the

Providence VAMC a recovery plan and schedule indicating major milestones and associated

dates of delivery or completion with 10 calendar days” of the cure notice, the VA would

“modify the contract and extend the completion date to December 1, 2017.” Id. We find no

evidence of any improper motives or nefarious conduct by the VA in the issuance of this cure

notice.

Alares responded on August 11, 2017, with an updated schedule identifying an

anticipated substantial completion date of December 1, 2017. Exhibit 42 at 1. It proposed

deadlines for the completion of remaining tasks on the project, including completion of AHU

installation by August 28; making the building weathertight by August 29; breaking through

to the second floor by August 31; and having the exterior wall complete by October 27, the

envelope complete by October 31, the interior work complete by November 22, and the final

site work complete by November 27. Id. Nevertheless, Alares highlighted its concerns about

a lack of permanent power for the building with its proposed solution involving a contract

modification allowing for the use of temporary power:

Please note that, due to the differing/unforeseen site condition involving the

location of the required electrical panel and the necessity of a contract

modification to correct this problem, permanent power cannot be completed

by the December 1, 2017 deadline. The permanent power connection issue is

still outstanding. Alares Construction requested the VA determine an alternate

permanent power tie-in due to differing site conditions as early as February

2017. This is an issue over which Alares has no control. The change

modification still requires negotiation and, because of the long-lead-time

equipment that must be ordered to correct the problem, the modification must

be finalized by August 22, 2017 in order to have permanent power by January

3, 2018.

Since the earliest permanent power can be completed is January 3rd, temporary

power will be required to condition the interior spaces for the installation of

the finishes to achieve the December 1st completion date. Temporary power

must be installed by September 29, 2017 and will require a change

modification.

CBCA 6149, 7071, 7597

Exhibit 42 at 1. Alares also represented that, as part of what it called a “Recovery Plan,” it

“has additional manpower commitments from the subcontractors” with a “recovery plan

consist[ing] of working double shifts, night work, and weekend work.” Id. at 2. It reported

that, once the VA approved its new schedule, “each subcontractor will develop a micro

schedule to achieve each of the task deadlines and develop manpower projections as well as

dates for double shifts or weekend work,” and “delivery of materials will be expedited to

ensure the labor efforts are not impeded.” Id. Alares also “reserve[d] all rights for an

equitable adjustment and modification to the contract . . . for the above-mentioned

conditions.” Id.

Despite saying that it would adopt a recovery plan, Alares continued to have difficulty

with staffing and with its subcontractors, even though it began significantly to increase daily

staffing and the number of man-hours on the project. See Exhibit 17 at 657-714. It began

complaining to its subcontractors about their insufficient staffing of the project and blaming

them for delays, see, e.g., Exhibits RT-20 at 29-31, RT-33 at 1, RS-0258 at 33888, RS-0279

at 32823, RS-0322 at 34058, RS-0370 at 150241, RS-0439 at 152835-36, even though at

least some subcontractors were complaining that Alares was not willing to pay for increased

manpower. See, e.g., Exhibit RS-0259 at 32295. For example, by letter dated September 8,

2017, Alares complained to one of its subcontractors, Delta, about its “failure to perform in

accordance with the contract requirements, which had “caused significant, unreasonable and

costly delays on the Project.” Exhibit RS-0099 at 1761. It claimed that “Delta has failed to

provide an Air Handler Building and Chiller in accordance with the contract documents” and

“has also failed to install certain materials in accordance with the contract documents such

as hanging pipe and ductwork from the structural steel instead of the metal deck.” Id. It

further pursued its complaints against Delta by letter dated February 28, 2018, warning Delta

that Alares would be filing a claim against Delta’s performance bond because of “Delta’s

failure to perform which caused significant, unreasonable and costly delays on the Project

and caused significant harm to Alares Construction’s reputation.” Exhibit RS-0352 at 44415.

Alares listed the following “major failures” by Delta and represented that Delta was

responsible for 254 days of delay to the project:

Delta did not provide Air handler unit (AHU) building drawings in a

timely manner causing the overall project schedule to delay.

Delta did not properly coordinate the AHU building curb with the steel

contractor causing significant repair costs.

Delta failed to deliver the AHU as originally scheduled.

Delta failed to provide the specified AHU building and equipment.

Delta failed to properly install the AHU building on the roof causing

major rework and delays.

Delta did not provide the proper hangers for ductwork or piping.

CBCA 6149, 7071, 7597

Delta failed to coordinate ductwork and piping in patient room causing

major rework.

Delta did not provide the proper supports for roof exhaust fans.

Alares Construction relied on Delta’s mechanical expertise as Rhode Island’s

premier mechanical contractor to provide a quality mechanical installation on

time and on budget. Instead Alares Construction suffered numerous delays

and sub-par quality installation of materials and equipment by Delta. Alares

Construction’s reputation was permanent[ly] impaired as a result of Delta’s

poor workmanship and schedule delays.

These and other failures have resulted in other subcontractors working out of

sequences, losses of productivity, losses of efficiency, and significant project

delays. Alares will be seeking reimbursement from Delta Mechanical for

damages that of Alares Construction and other subcontractors have incurred.

Alares Construction will be seeking damages of $867,884 for the project

delays. Delta caused the project to be delayed 254 days.

Id. In the appeals now before the Board, Alares has represented that, after sending this letter

to Delta, it eventually changed its mind about Delta’s fault and concluded that none of

Delta’s delays impacted the critical path. Hearing Transcript, Vol. 2, at 8.

Alares was also submitting schedule updates to the VA during Period 2 that failed

accurately to update or include all activities that Alares had to complete. By email dated

October 4, 2017, the VA COR complained that “[i]tems that appeared to be overlooked

during the [most recent schedule] update, and items that are likely going to miss the

scheduled early completion date, include,” among other things, “Milestone: New

Addition—Weather Tight (9/29/2017),” mechanical insulation, setting exhaust fans, interior

framing for stairs, and electrical rough-ins. Exhibit 45 at 1; see Exhibit RS-0439 at

152835-36 (Alares’ complaints about a glass subcontractor’s defective work with soffit

panels).

On May 7, 2018, the VA issued another cure notice, this time because Alares had

failed “to install smoke tight partitions in accordance with Fire Stopping Specification

Section 07 84 00 paragraph 1.1B and Regulatory Requirements Specification Section 01 41

00 paragraphs 1.3-A.1 and 1.3-A.12, a condition that is endangering the performance of the

contract.” Exhibit 54 at 1. Alares responded on May 14, 2018, acknowledging that it was

“aware of the smoke barrier requirements and [that] the drawings provide details of the

smoke barrier wall” but asserting that it felt that it still needed additional guidance. Exhibit

CBCA 6149, 7071, 7597

55 at 1. Through a series of communications between the parties between May 16 and

June 2, 2018, Alares eventually agreed to a remediation plan through which it performed the

identified work. Exhibits 56 at 1-2, 57 at 1-3, 58 at 1. We find no evidence of any improper

motives or nefarious conduct by the VA in the issuance of this cure notice.

Throughout Period 3, Alares was still trying to find subcontractors for work on the

project at prices that Alares found acceptable. See, e.g., Exhibit RT-22 at 258. In September

2017, Alares named its third project manager (George Archambeault, replacing Josh

Abrams). Exhibit 19 at 473, 483.

Permanent and Temporary Power Issues

Contract drawing E2.0 provided detailed conduit routes from the electrical point of

connection in Building 1 to the new ICU addition. Exhibits 12 at 96, RS-0527 at 2. As early

as February 2017, Alares had raised concerns about the installation of electrical conduits for

the new building that would tie-in to the existing Building 1 electrical system, as the routes

identified on the drawings were, according to Alares, not feasible. Exhibits 19 at 218, 3673

at 5268-71, RS-0593 (Expert Report) at 11. The electric panel through which the ICU would

receive permanent electrical power was not in the location as shown on the drawing. Exhibit

RS-0527 at 2. Further, according to Alares, the ceiling through which the electrical conduits

were supposed to be routed was blocked with existing AHU ductwork and piping, leaving

insufficient room for additional conduits. Id. During March 2017, the VA worked with

Alares to identify a solution, looking for alternate routes, Exhibits 19 at 241, 3663 at 5169,

3665 at 5202, but, in response to a change order request from Alares on March 31, 2017, the

COR responded that “the utilities should be installed as shown on the plans” and that Alares

should “[p]roceed with the installation of the interior utilities as needed to maintain project

progress/schedule.” Exhibit 25 to Exhibit RS-0593. The COR cited section 1.4 (Utilities,

Mechanical and Electrical Coordination) of contract specification 01 31 00 to indicate that

the contract drawings were only diagrammatic and that the contractor was obligated to

configure exact runs as conditions permitted:

The Contract Drawings are diagrammatic only intending to show general runs

and general locations of piping, ductwork, equipment and sprinkler heads.

[Contractor should] [d]etermine exact routing and location of individual

systems prior to fabrication of components or installation.

.....

CBCA 6149, 7071, 7597

Adjust locations of piping, ductwork, conduits and equipment as required to

accommodate new work with interferences anticipated and as encountered

during installation.

Id. (quoting Exhibit 6 at 47).

On April 6, 2017, Alares submitted RFI 35, seeking direction from the VA for

alternate routing for the electrical tie-ins, given “that the engineer’s original planned route

did not take in account the obstructions and existing conditions.” Exhibit 3666 at 5210. The

VA COR immediately responded that, because “[t]he routes shown on the plans are

diagrammatic” and “[t]he specifications clearly indicate that the investigation and inspection

to determine final routes . . . is the responsibility of the Contractor,” the VA would “no

longer work to identify an alternate route as this may be cause for a delay and is the

responsibility of the Contractor.” Id. at 5211. In a revision to RFI 35 submitted on May 5,

2017, Alares proposed new routes for electrical services and other MEP tie-ins while noting

that such engineering work was not within the scope of its contract. Exhibit 3668 at 5228.

Further, the original contract drawings only called for one automatic transfer switch (ATS),

which did not comply with the requirements of the National Electrical Code (NEC). The

NEC requires separation of power into three branches, each of which must be supported by

stand-alone power feeders and dedicated transfer switches: (1) life-safety (such as egress

lighting and alarms); (2) critical (patient area lighting and outlets); and (3) equipment (such

as AHUs and elevators). Exhibit 4305 at 10559.

Although the VA COR issued a partial response to the RFI 35 revision on June 2,

2017, Exhibit 3668, that response did not provide a complete remedy to the tie-in issues. The

A/E attempted to remedy remaining defects on July 12, 2017, by issuing Bulletin #8, which

identified the need for three ATSs (instead of one) and new panels and transformers that

were not in the original design and that showed alternate MEP routes and tie-in locations in

a somewhat different manner from the COR’s June 2 response. Exhibits 63, RS-0593

(Expert Report) at 13. Bulletin #8 also called for a larger electrical closet to house the

increased number of ATSs and also moved the electrical closet eight feet—from the existing

building to the ICU—to avoid disrupting the pharmacy below. Exhibit 63.9 On August 1,

2017, Alares submitted COP 15 providing a preliminary cost estimate for the changes, which

Alares updated on August 15 and 31, 2017. Exhibits 3391, 3392, 3393.

As we will discuss later in this decision, the bulletin incorrectly only provided

for one control wire from the generator control panel to each ATS when, to comply with the

NEC, it needed more. Exhibit 63 at 9 (note 6).

CBCA 6149, 7071, 7597

As discussed above, the VA issued a cure notice on August 2, 2017, attempting to get

the project on track. Exhibit 41 at 1. When Alares responded to that cure notice on

August 11, 2017, it recognized that it would not be able to complete permanent power

connections by the then-proposed substantial completion date of December 1, 2017. In the

“Recovery Plan” that it provided to the VA, Alares proposed that “[s]ince the earliest

permanent power can be completed is January 3rd, temporary power will be required to

condition the interior spaces for the installation of the finishes to achieve the [then-proposed]

December 1st completion date. Temporary power must be installed by September 29, 2017

and will require a change modification.” Exhibit 42 at 1. In its August 4, 2017, schedule

update, Alares added temporary power activities, proposing to have temporary power in place

by September 29, 2017, Exhibit 18 at 78, although it did not meet that deadline. On October

9, 2017, Alares submitted a change order proposal to “[p]rovide temporary power for the

ICU addition for use until the permanent power tie in is completed,” which would “operate

the AHU and chiller,” with a proposed price of $5914.79. Exhibit 116A at 1133. This

temporary power tie-in would have “allow[ed] the HVAC system to be operated” and “to

control the climate in the space.” Hearing Transcript, Vol. 3, at 96. The contracting officer

agreed to the request, and Alares reported that it was having one of its subcontractors proceed

with installation while the change order was being processed. Exhibit 19 at 507. Yet, on the

day that Alares’ subcontractor, Collard Enterprises Inc. (Collard), was to run the temporary

power cable to the existing panel, Alares told Collard to stop and to abort the work. Exhibit

RS-0246 at 150998. Alares informed the VA on October 30, 2017, that, in the course of a

month, it had lost two months of time on the schedule because of its “review, analysis and

cost feasibility on supplying a temporary power source to start the building HVAC

equipment” and that “[t]he review yielded a cost which was not acceptable to the project

team, therefore, the plan for startup now requires the building permanent power.” Exhibit

3356 at 216. Yet, if price was the concern, Alares never attempted to submit an upward price

revision to its COP proposing temporary power or ask the VA whether it would fund a larger

dollar figure to install temporary power. Alares reported during a November 16, 2017,

meeting that it had decided not to perform the temporary power tie-in and effectively

withdrew its change order request. Exhibit 19 at 556-57.

Alares argues that, although it initially proposed the use of temporary power and

provided a price quote for it, it later determined that temporary power would not have

mitigated delay because the temporary power used to commission the equipment did not have

sufficient capacity. Appellant’s Closing Argument Presentation PowerPoint (Oct. 18, 2023)

at 54, 56-57; Closing Argument Transcript at 36-37. We find a lack of support in the record

for this assertion. When telling the VA that it was abandoning the concept of using

temporary power, which would have allowed Alares to pursue interior work, Alares did not

mention any capacity issue with temporary power. Further, on January 22, 2018, only two

months after withdrawing its request for funding to install temporary power, Alares’ project

CBCA 6149, 7071, 7597

manager, when complaining to its subcontractor, Delta, about delays to the ceiling

mechanical and AHU that Alares was then saying were Delta’s fault, represented that

“[t]emp power can be provided at any time to facilitate start-up,” Exhibit RS-0323 at 35944,

an assertion that is inconsistent with Alares’ position before the Board. Neither the VA’s

internal electrical engineer nor the A/E saw any issues with using temporary power for startup and operation of the AHUs. Hearing Transcript, Vol. 3, at 95. Although it is unclear

from the record exactly why Alares ultimately decided to abandon the use of temporary

power to mitigate the delay in being able to tie in permanent power, it was not because

temporary power would have been insufficient to provide Alares with the ability to perform

interior rough and finish work or other activities.

Eventually, the permanent power issue was resolved through modification P00007,

which the VA issued on December 6, 2017, increasing Alares’ contract price by $208,982.90

in exchange for the tie-in work and ATS and transformer installations identified in Alares’

change order request. Exhibit RS-0268 at 42721-73. The parties executed the bilateral

modification on December 13, 2017. Exhibit 46 at 1. The agreement expressly reserved

Alares’ right “to submit claims for additional time and costs associated with any time

extension required to perform the work under this modification.” Id. at 2.

Despite the delays in resolving the electrical tie-in issues for obtaining permanent

power in the new building, Alares’ monthly schedule updates never identified permanent

power as a critical path item until October 30, 2017, when, in schedule update no. 14, Alares

indicated that the “critical path for this update has changed . . . [to] run[] thr[ough] the

on-going change management associated with the establishment of permanent power.”

Exhibit 3356 at 214; see Exhibit 19 at 506, 515, 525-26, 536, 546, 556 (comments about

critical nature of permanent power at October and November 2017 meetings). This change

was based upon a change in logic to Alares’ planned schedule to make permanent power a

predecessor to HVAC startup and commissioning, which was a change from the logic in

Alares’ earlier schedules. Exhibit RS-0593 (Expert Report) at 17.

After the parties executed modification P00007, Alares’ next several schedule updates

continued to maintain a logic showing the critical path continuing to run through permanent

power. Exhibit RS-0593 (Expert Report) at 18. The prior delays in obtaining permanent

power had delayed Alares’ submittal for approval of electrical equipment required under

modifications P00006 and P00007. Id. The VA received Alares’ submittal for electrical

equipment on January 25, 2018, and approved it on January 30, 2018. Id. Yet, even though

the VA approved that submittal on January 30, Alares inexplicably did not place its order for

the electrical equipment until April 2, 2018, sixty-two days after the VA’s approval. Exhibits

45 at 207, RS-0593 (Expert Report) at 18.

CBCA 6149, 7071, 7597

The VA’s expert, Mr. D’Onofrio, determined that, although some delay in obtaining

permanent power constituted a critical delay for which there was no corresponding

concurrent delay, there were critical delays in the interior rough and finish work, along with

HVAC work, that were the cause of critical delays during Period 3 or were at least concurrent

with delays for which the VA was responsible:

While waiting on permanent power, Alares would have been independently

responsible for critical path delays due to its delayed enclosure and the lack of

progress on the interior build out of the building unrelated to the permanent

power issue. Upon recognizing the added scope associated with the permanent

power issue, much of the delay in the ability to proceed with the added work

was attributable to Alares’ deficient [change order proposal] that underwent

4 revisions, the late execution of Modification P00006, extended/late

submittals and the delay in ordering the required equipment. Independent of

Alares’ declining the VA’s offer to mitigate the permanent power, it still

would have been delayed by its own late progress on HVAC work. Alares

would not have completed its other predecessor work to HVAC startup,

testing, and commissioning for the enclosure, roof, and exterior sheeting on

June 13, 2018, and would not have required temporary or permanent power

through planned tie in of permanent power on July 17, 2018. Even if it did not

exercise the temporary power mitigation that the VA offered to pay for, the

delay that would have been solely due to permanent power would have been

the period between June 13, 2018 and July 17, 2018, meaning Alares would

be owed compensable time for only that portion of delay—34 days.

Exhibit RS-0593 (Expert Report) at 18-19. We agree with Mr. D’Onofrio’s factual analysis.

Interior Rough and Finish Work

In response to the VA’s August 2 cure notice, Alares significantly revised the project

schedule and indicated that it would complete interior work no later than November 22,

2017. See Exhibit 34 to Exhibit RS-0593 at 1-7. Yet, despite the schedule revisions and

promises of a heightened aggressive approach to staffing and to weekend and overtime work,

Alares failed to make any significant progress on the interior rough and finish work. By the

time that it submitted schedule update no. 13 on September 22, 2017, Alares was projecting

that it would not complete interior finishes until January 22, 2018. Exhibit 18 at 85; see

Exhibit RS-0592 (Expert Rebuttal Report) at 11-12 (finding that Alares’ September 22

update showed no significant progress towards interior rough and finish work). When Alares

submitted its next schedule update (no. 14) on October 30, 2017, that completion date had

slipped to April 11, 2018. Exhibit 18 at 85. In fact, in its October 30 report, Alares indicated

CBCA 6149, 7071, 7597

that it had not even begun interior drywall work and had instead been focused on completing

remaining sitework and other activities. Exhibit 3356 at 216. The VA noted during each of

its August, September, October, and November 2017 meetings with Alares that “[t]he

breakthrough and work inside the hospital is a critical path issue, and needs to be done as

soon as possible to meet the December 1st deadline” (even though, by November, it was

clear that Alares would not meet that December 1 deadline). Exhibit 19 at 413, 475, 485,

495, 514, 524, 535, 545, 555. Although Alares completed the breakthrough work, it

continued to work slowly on interior work. By May 18, 2018 (the end of Period 3), Alares

was not projecting to finish interior work until August 7, 2018, a significant delay from its

earlier schedules. Exhibit RS-0593 (Expert Report) at 18. Nevertheless, at this point in time,

the delays in performing interior finish work were not causing any delay to the critical path.

Id.

Summary of Critical Path Delays in Period 3

The initial critical path delays during this period were caused by Alares’ delays in

enclosing the building and failing to advance interior rough and finish work. Alares’

schedules do not show the necessity of obtaining permanent power to have become the

critical path issue until October 30, 2017. By that time, Alares had proposed a mitigation

plan involving the installation of temporary power that, for reasons that the Board has not

been able to identify, Alares suddenly abandoned. The VA’s expert has opined that the VA

is responsible for thirty-four days of critical path delay because of permanent power. Exhibit

RS-0593 (Expert Report) at 17. Although he finds that there were an additional

seventy-eight days of critical delay associated with permanent power between the

November 17, 2017, and May 18, 2018, schedule updates, id. at 17-18, he opines that Alares’

concurrent delays in the building enclosure and interior build-out, unrelated to the permanent

power issue, render those seventy-eight days of delay non-compensable:

While waiting on permanent power, Alares would have been independently

responsible for critical path delays due to its delayed enclosure and the lack of

progress on the interior build out of the building unrelated to the permanent

power issue. Upon recognizing the added scope associated with the permanent

power issue, much of the delay in the ability to proceed with the added work

was attributable to Alares’ deficient COP that underwent 4 revisions, the late

execution of Modification P00006, extended/late submittals and the delay in

ordering the required equipment. Independent of Alares’ declining the VA’s

offer to mitigate the permanent power, it still would have been delayed by its

own late progress on HVAC work. Alares would not have completed its other

predecessor work to HVAC startup, testing, and commissioning for the

enclosure, roof, and exterior sheeting on June 13, 2018, and would not have

CBCA 6149, 7071, 7597

required temporary or permanent power through planned tie in of permanent

power on July 17, 2018. Even if it did not exercise the temporary power

mitigation that the VA offered to pay for, the delay that would have been

solely due to permanent power would have been the period between June 13,

2018 and July 17, 2018, meaning Alares would be owed compensable time for

only that portion of delay—34 days.

Id. at 18-19.10 Alares has not presented a viable critical path analysis to rebut the VA

expert’s findings.

Period 4 (May 18, 2018, to April 12, 2019)11

The Critical Path in Period 4

Period 4 covers the 330-day period running from May 18, 2018, to April 12, 2019.

RS-0593 (Expert Report) at 24. In its May 18, 2018, schedule update, Alares projected

substantial completion on September 4, 2018, Exhibit 3364 at 272-73, but, in its April 12,

2019, schedule update, the substantial completion date had slipped to June 6, 2019. Exhibit

3370 at 323. This change represents a critical path delay in Period 4 of 275 days. Exhibit

RS-0593 (Expert Report) at 19.

Alares’ contemporaneous construction schedule updates identify the critical path

delays during this period as being caused by (1) the completion of ceilings, doors, and

hardware necessary to proceed with HVAC startup, test/balance, and commissioning;

(2) establishing permanent power to proceed with HVAC startup, test/balance, and

commissioning; (3) alleged delay resulting from added ATS and Building Management

System (BMS) interface work; and (4) alleged delay from an added security camera scope.

Exhibit RS-0593 (Expert Report) at 20. In his report, however, Mr. Maggioli attributes all

critical path delays in this period to a design change for the generator switch gear control

panel, Exhibit 3644 at 5011, and a deficient control sequence design for the HVAC system.

Id. at 5013. The VA’s expert attributes these delays to four activities, some of which he finds

compensable: (1) additional activities needed to satisfy revised medical gas requirements

It is not completely clear to the Board why Mr. D’Onofrio selected June 13,

2018, rather than a slightly later date within Period 3, as the start date for the VA’s sole

responsibility for critical path delay during this period, but we will accept his concession that

sole responsibility transferred to the VA by June 13, 2018.

We rely in this discussion on the start and end dates for Period 4 that the VA’s

expert selected.

CBCA 6149, 7071, 7597

(compensable); (2) Alares’ slow progress in installing cable for permanent power

(non-compensable); (3) Alares’ unexplained increased planned duration for HVAC startup,

testing/balancing, and commissioning (non-compensable); (4) change associated with the

ATS and BMS interface (compensable); and (5) Alares’ unexplained delays in getting around

to performing certain activities in a manner consistent with its planned schedule

(non-compensable). Exhibit RS-0593 (Expert Report) at 24. The VA’s expert believes that

Alares is entitled to a total of 131 compensable days of critical path delay in Period 4 but that

Alares is responsible for the remaining 144 days of critical path delay during this period.

At the beginning of this period, Alares submitted a schedule update (no. 22) showing

that the critical path was shifting from permanent power to the work leading to HVAC

startup, test/balance, and commissioning. Exhibits 3364 at 273, RS-0593 (Expert Report)

at 20. By its next schedule update (no. 23), the change was complete: the path now ran

through the change management associated with medical gas requirements on medical boom

assemblies that the VA had revised, which caused a delay in the critical path, Exhibits 3365

at 280, RS-0593 (Expert Report) at 20, because that work had to be completed before Alares

could perform ceiling tiling, flooring, and door and hardware installation, which, in turn,

delayed commissioning. Exhibit RS-0593 (Expert Report) at 20; Tab O to Exhibit RS-0593.

Installation of the medical gas was scheduled to last forty-five work days. Exhibits 3365 at

280, RS-0593 (Expert Report) at 20. This added scope originally resulted in a sixty-four-day

slippage in the schedule, although two days of that delay were subsequently recaptured.

Exhibit RS-0593 (Expert Report) at 20. The VA, which required the extra work necessitated

by its revisions, bears responsibility for this delay. Id.

The critical path then shifted back to permanent power (followed by HVAC startup,

test/balance, and commissioning) because of an expansion of the amount of time that Alares

now anticipated it would take to obtain permanent power. Exhibit RS-0593 (Expert Report)

at 20. Alares was slow in installing cabling for the permanent power, which contributed to

delaying the anticipated connection to permanent power. Id. at 21. Alares did not obtain

permanent power until September 25, 2018. Exhibit 3369-D at 321. The schedule continued

to slip, as seen in Alares’ September 21 schedule update (no. 26), in which Alares added an

additional twenty-one days to the planned duration of the project to allow for HVAC startup,

test/balance, and commissioning without providing any justifiable explanation of the reason

for the addition of time. Exhibits 3368 at 301-02, RS-0593 (Expert Report) at 22.

Subsequently, at a September 25, 2018, meeting, the VA indicated that additional

wires, not shown on the drawings, would be required from each ATS to the building’s

switchgear. Exhibits 3686 at 5359, 3688 at 5364. At this point, the critical path shifted to

this new ATS work. Exhibit RS-0593 (Expert Report) at 22-23. Alares submitted RFI 159

on September 26, 2018, formally requesting direction for the control wiring, including a

CBCA 6149, 7071, 7597

detailed diagram for connecting it. Exhibit 3687 at 5361. The VA responded on September

28, 2018, directing Alares to install thirty-three #14 American wire gauge (AWG) control

wires from each ATS to the control panels. Id. at 5362; Exhibit 3688 at 5365. Although the

VA initially viewed this direction as something within the scope of the existing drawings

based on a note on a drawing directing Alares to provide necessary wiring, Exhibit 3687 at

5362, it eventually acknowledged that the direction was a change and, on November 5, 2018,

requested a change order proposal. Exhibit 3689 at 5369. On November 30, 2018, Alares

provided the VA a COP for the work, id. at 5371-74, addressing the VA’s requirement that

Alares run the thirty-three #14 AWG wires through one-inch electrical metallic tubing (EMT)

that already existed in the building. Because the one-inch EMT conduit was too small to

accommodate thirty-three regular AWG wires, Alares’ subcontractor, Collard, would have

to order special pre-manufactured thin wiring that would allow all of the wires to run through

the one-inch conduit, with a delivery lead time of three to four weeks. Exhibit RS-0527 at

4. The VA provided authorization to proceed with the ATS wiring on December 6, 2018.

Exhibit 3689 at 5369. The ATS wiring and testing was completed on January 22, 2019.

Exhibit RS-0527 at 4. The additional RFI 159 interface work created a sixty-nine-day delay

for which the VA is responsible.

Alares submitted a schedule update (no. 29) on December 14, 2018, reflecting an

anticipated substantial completion date of February 14, 2019. Exhibit 3369-D at 318. At that

point, Alares indicated that the critical path was running through resolution of the interface

requirements between ATS and BMS. Id. at 319. Alares did not submit schedule updates

in January, February, or March 2019. Its next schedule update was not submitted until

April 12, 2019. Exhibit RS-0593 (Expert Report) at 23. By that point, Alares had shifted

the substantial completion date to June 6, 2019, Exhibit 3370 at 323, but provided no

explanation for this delay. See id. There are no daily logs or time records that explain the

work that Alares performed between December 14, 2018, and April 12, 2019. By the time

that the April 12 schedule update was submitted, the critical path, according to Alares, had

shifted to management of security cameras. Exhibit RS-0593 (Expert Report) at 23. Yet, we

do not see that work identified on its schedules.

Alares’ Performance Problems During Period 4

On July 16, 2018, the VA issued a show cause notice to Alares, stating that, “[s]ince

you have failed to perform [the contract] within the time required by its terms and cure the

conditions endangering performance as described to you in the Government’s letter of 02

[August] 2017; the Government is considering terminating the contract under the provisions

for default of this contract.” Exhibit 4139 at 9075. We find no evidence of any improper

motives or nefarious conduct by the VA in the issuance of this show cause notice.

CBCA 6149, 7071, 7597

Alares responded to the show cause notice on July 26, 2018, asserting that “[s]everal

significant causes beyond Alares Constructions control and without fault or negligence on

Alares Construction’s part delayed the project and prevented project completion by the

original contract completion date of August 2, 2017 and the extended completion date of

December 1, 2017 deadline” and explaining the reasons that it believed continued

performance of the contract was in the Government’s best interests:

We believe that it is in the best interest of the Government for Alares

Construction to continue working to complete the project. The project is

currently 92% complete (as shown on the May 2018 invoice and VA’s

agreement of the % complete) and activities are on-going to substantially

complete the finishes in 6-8 weeks. The remaining work after the finishes will

only involve the completion of the permanent power installation and follow-on

related tasks, which were delayed due to VA design omissions. We anticipate

completing the permanent power installation and related tasks by November

15, 2018. In addition, there is low risk to the Government because of Alares

Construction’s detailed knowledge of the project and momentum as we near

completion, and any break to that work would only serve to create additional

delays. Simply put, a work stoppage would be less efficient and more

expensive to the government.

Exhibit 129 at 1334. Alares identified the following actions that it had taken “to ensure the

project remains on track”:

Supplemented labor to the drywall contractor

Removed and replaced the panel subcontractor for non-performance

Continued pressure on subcontractors to complete their work

Provided timely response to Government requests

Improved communication with subcontractors

Hiring of additional personnel as space and activities permit

Id. at 1335. Nevertheless, Alares acknowledged the problems that it had been having with

obtaining sufficient manpower to perform:

One issue that was beyond Alares Construction’s control is the availability of

capable and available trades. It is universally accepted that the construction

industry is experiencing a considerable labor shortage. We have continually

requested additional manpower from the subcontractors to accelerate the

schedule.

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Id. At that point, it anticipated substantial completion of the project by November 6, 2018.

Id. at 1342.

As Alares reported to the VA, it was having trouble getting its subcontractors to

provide sufficient manpower for the project and was having to correct work that its

subcontractors had performed incorrectly. For example, on June 5, 2018, Alares notified its

glass subcontractor, which had been on the project since May 2017, that it was being

terminated for default because “[i]t has come to a point where your actions have been

detrimental to the project causing significant financial harm to Alares Construction and

unacceptable project schedule delays.” Exhibit RS-0443 at 151157. Alares reported that the

subcontractor had “demonstrated a lack of experience with the installation of [the] Insulated

Panel System” and had “installed [it] improperly per the manufacturer’s instructions,”

“proceed[ing] with the installation of the exterior panels without the proper insulation

installation.” Id. It complained that the subcontractor had “demonstrated the inability to

properly measure for installation [of] the individual panels as the initial panel order was

manufactured improperly and had to be discarded,” with “[t]he panel reorder caus[ing] more

schedule delays.” Id. It further complained that the subcontractor’s improper removal of

soffit panels had “resulted in a two to three month delay to finish the panel system as new

panels will need to be manufactured, shipped and installed,” id. at 151157-58, and that it had

“failed to achieve the schedule as provided [by Alares] at the beginning of the project,” as

explained below:

[The subcontractor] started the exterior panel project in September 2017 which

was scheduled to take one month. [It] still has not finished the exterior panels.

You are nine (9) months behind schedule. The exterior panels system requires

rework and the soffit panels were not installed correctly.

Id. at 151158.

Similarly, on September 4, 2018, Alares terminated its framing and drywall

subcontractor, which had worked the project since November 2016, because the

subcontractor had “failed to properly provide sufficient manpower to complete the project.”

Exhibit RS-0480 at 151050. Alares said that it had “sent dozens of emails . . . requesting

additional manpower because the project schedule was delayed” but that the subcontractor

“did not send the manpower.” Id. Alares also complained about the subcontractor’s

“fail[ure] to install framing and drywall in accordance with the contract documents[,] causing

Alares . . . to retain additional resources to correct [the subcontractor’s] mistakes,” at

“significant costs to Alares.” Id. In terminating the subcontract, Alares represented that the

subcontractor’s “actions have been detrimental to the project causing significant financial

harm to Alares Construction and unacceptable project schedule delays.” Id.

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At the same time, Alares’ subcontractors were complaining about Alares’ lack of job

management for this project. One subcontractor contacted the other subcontractors through

a group email on July 23, 2018, to express frustrations with Alares’ project management

failures:

To my fellow owners and/or subcontractors,

I can’t speak for each of your companies, however our experience at the above

named project is something I’ve never experienced in my 27 years of owning

my company; whether it’s payments, lack of schedule, lack of job meetings,

change orders, or being treated fairly[.] We have dealt with approximately 6

[project managers] on this job, and I ran out of fingers counting supers.

I’d like to suggest meeting at my office to discuss a possible team effort in

dealing with Alares. Please feel free to bring your counsel or check with them

as I believe there is power and strength in numbers in getting us compensated

for the delays that their combined lack of management on this project created.

Exhibit RT-0042 at 1.

The VA contracting officer ultimately did not terminate the contract for default and

allowed contract performance to continue. Nevertheless, Alares did not meet the November

2018 substantial completion deadline that it set for itself in its show cause response.

Summary of Critical Path Delays in Period 4

The VA is responsible for a total of sixty-two days of critical path delay early in this

period that resulted from the VA’s revision of medical gas requirements in the contract.

The VA is also responsible for sixty-nine days of critical path delay that resulted from the

change management of the ATS and BMS interface and associated added work, which was

a contract change.13

The VA’s expert showed that, originally, there were sixty-four days of critical

delay from the revision to the medical gas requirements but that Alares was able to recapture

two of those days and decrease the duration of the delay. See Exhibit RS-0593 (Expert

Report) at 20-21, 24.

The direct costs associated with the VA’s changes to the medical gas

requirements and the ATS/BMS interface are not before us in these appeals. They appear

to have been resolved through Alares’ October 29, 2019, “Final Release of Claims,” Exhibit

CBCA 6149, 7071, 7597

The VA’s expert identifies eleven days of critical path delay between the July 20 and

August 17, 2018, schedule updates, which were the result of Alares falling behind in its

cabling installation. Exhibit RS-0593 (Expert Report) at 21. Although the VA’s expert finds

this delay to be Alares’ responsibility, id., Alares met its burden of showing that the VA’s

vendor was the cause of this delay. The email exchanges between the VA’s COR and

Alares’ project manager, George Archambeault, sufficiently support Alares’ position because

the COR acknowledged that the VA’s other contractor had to resubmit a junction box,

causing a delay, and Mr. Archambeault explained to the COR how the junction box rather

than the conduits caused the delay because the junction box “isn’t in place and [he has] no

cut sheets on it after multiple requests.” Exhibit 4150 at 9184; see Hearing Transcript,

Vol. 5, at 5-8.

Remaining days of delay in Period 4 are Alares’ responsibility. Delays in HVAC

startup, testing and balancing, and commissioning resulted from Alares’ slow discussions

with its vendor and the historical timing for inspections and follow up on the project. And,

during the last 112 days in Period 4, Alares was inexplicably deferring performance of a part

of the contract (the security camera scope). Even if the security camera scope was not the

cause of delay here and, as Alares argues, the delay was instead because of a delay in the

performance of one of its subcontractors, Stryker, Alares cannot impose liability on the VA

for deficiencies of Alares’ subcontractor.

Period 5 (April 12 to September 6, 2019)

Period 5 covers the 148-day period of time running from April 12 to September 6,

2019, the latter date being when the VA accepted the project “as is.” Exhibit RS-0593

(Expert Report) at 24-25. In its April 12, 2019, schedule update at the start of this period,

Alares projected substantial completion by June 6, 2019. Exhibit 3370 at 323. The VA’s

expert opines that there were ninety-two days of delay to the critical path during this period,

none of which he believes are compensable, running from the projected June 6 substantial

completion date through the VA’s “as is” acceptance of the work on September 6, 2019, see

Exhibit RS-0593 (Expert Report) at 24-25, while Alares asserts that every day between

April 12 and September 6—147 days in total—constitutes a critical path delay for which the

VA is responsible.14 Strangely, in addressing delay days, neither party addresses the fact that

RS-0533 at 3116, which is discussed below.

Mr. Maggioli used a different period of time—February 14 to September 6,

2019—than Mr. D’Onofrio as Period 5. For that period, Mr. Maggioli found that every

single day during that period—205 days—were compensable delay days. Exhibit 3644 at

5013-15, 5018. Although we are using April 12, 2019, as the start date for Period 5, it is

CBCA 6149, 7071, 7597

most of the alleged delays to the critical path occurred long after the substantial completion

date of the project.

Specifically, on May 15, 2019, Alares provided the VA COR with what it called the

“updated punch list from the final walkthrough.” Exhibit 3920-29-00 at 7546. Although

Alares still had to complete commissioning, install some seismic bracing, and adjust some

doors, Alares told the VA that it had achieved substantial completion of the project:

Based on the work completed to date we are substantially complete in

accordance with the contract documents and the VA can take possession of the

space.

Id. Alares repeated its representation that the project was substantially complete, “except for

a few punchlist and warranty items,” and was ready for beneficial occupancy at a weekly

meeting on May 16, 2019. Exhibit 82 at 242. Alares continues to believe that the project

was substantially complete on May 15, 2019, see Hearing Transcript, Vol. 1, at 154-55; id.,

Vol. 2, at 34, and the VA essentially agrees. Exhibits 4310 at 11063, 4311 at 11125.15 We

agree that substantial completion occurred on May 15, 2019.

Two weeks later, by email dated June 5, 2019, Mr. Maggioli reiterated that the project

was substantially complete when he informed the VA contracting officer that “[s]ince the

project is substantially complete the weekly meetings are no longer needed,” that “going

forward the Thursday morning meetings are canceled,” and that Alares would “provide the

VA updates of the punchlist items, warranty issues and the change order work as they get

completed.” Exhibit 144 at 1522. Although the VA contracting officer suggested that

continued weekly meetings would be beneficial “until all remaining items are complete,” id.

at 1521, Mr. Maggioli responded that Alares would “require a change modification to attend

clear from his delay report that Mr. Maggioli believes that every single day from April 12

through September 6, 2019, constitutes a compensable delay day.

The VA presented Mr. Boyle to testify for the VA in response to a deposition

notice under Rule 30(b)(6) of the Federal Rules of Civil Procedures in which the VA was

asked to identify the date that it believes the project was substantially complete. See Exhibit

4310. Mr. Boyle responded that substantial completion would have been the date of

“transmittal of the final consolidated punch list,” which he identified as “early June 2019.”

Id. at 11063; see Exhibit 4311 at 11125. Because the punch list that we located in the record

that resulted from the parties’ final walkthrough was provided on May 15, 2019, see Exhibit

3920-29-00 at 7546, we interpret Mr. Boyle’s testimony as acknowledging May 15 as the

date of substantial completion.

CBCA 6149, 7071, 7597

these meetings” and that Alares could “keep everyone updated on the progress via email

which is more than adequate considering where we are in the project.” Id. The weekly

meetings stopped.

After Alares submitted its April 12, 2019, schedule update (no. 30), it never again

submitted a schedule update. Exhibit RS-0593 (Expert Report) at 25; Hearing Transcript,

Vol. 2, at 32-33. Beginning May 24, 2019, it also stopped creating daily activity reports of

on-site work. Exhibits 3635 at 4143, RS-0593 (Expert Report) at 25. It did not create

minutes for any meetings and, in fact, had no meetings with the VA after May 16, 2019.

Exhibit 82 at 239-41.16 Alares has provided virtually no contemporaneous evidence of what

work, if any, it performed after May 24, 2019. Although it maintained sign-in sheets for the

project site through June 14, 2019, the only notations on them indicate work that is more

indicative of punch list work than continuing construction work. See, e.g., Exhibit 3643 at

4996 (note to Alares from a subcontractor on June 14, 2019, sign-in sheet: “There were 2

Broken Light Jars and one light fixture that is corroded and needs replaced! I drained all the

water out of the others. Water getting inside which caused glass to break.”).

After declaring substantial completion, Alares still had to complete the commissioning

process for the building. As defined in the contract specifications, commissioning under this

contract was “a systematic process of verifying that the building systems perform

interactively according to the construction documents and the VA’s operational needs.”

Exhibit 6 at 233. “The commissioning process [was to] encompass and coordinate the

system documentation, equipment startup, control system calibration, testing and balancing,

performance testing and training.” Id. The specifications anticipated that there would be

“[c]ommissioning during the construction and post-occupancy phases.” Id.

On July 8, 2019, EBI Consulting (EBI) issued the “Final Commissioning Report” for

the building. Exhibit 4234. As part of its report, EBI identified several “Major Issues

Outstanding,” including low flow frequency in the chiller, negative pressure volume issues

in the anteroom, balance issues involving an exhaust tie-in in the soiled utility room, and the

humidifiers’ return air humidity levels. Id. at 9468.

On July 26, 2019, Alares submitted RFI 179 to the VA, seeking direction for the

control sequences (for controlling the heating and cooling of the space, as well as two

Although the VA’s expert represented in his report that the last meeting

minutes were issued on May 23, 2019, Exhibit RS-0593 (Expert Report) at 25, we have been

unable to find minutes from that May 23 meeting in the record.

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isolation rooms that have negative pressure for infectious control). Hearing Transcript,

Vol. 1, at 147. In that RFI, Alares complained as follows:

Delta and the VA’s proprietary vendor JCI has retested all the sequences to try

to resolve the two issues noted by the [commissioning] agent. Also VA noted

an alarm issue with the isolation rooms. According to Delta, the sequences

have been programmed according to the contract documents.

As you know, we have conducted retesting on several occasions over the last

month to try to resolve the chilled water flow and humidifier issues identified

by the [commissioning] agent. In testing the sequences and programming for

the chilled water flow and humidifier, we identified more issues that are design

related. We brought back the balancer on one of the site visits to verify

whether there were balancing issues and found that there were not any that

would interfere with the operation of the facility.

At this point we have exhausted our options to resolve the identified issues and

will need the engineer of record to resolve the noted issues. We believe the

chilled water flow issue was resolved by changing the control sequences.

However, we need engineer of record approval of the changes. Also the

humidifier issue remains unresolved and we believe it is due to design issues.

Exhibit 3692 at 5382. Alares listed several issues that it wanted the VA to address, all of

which it claimed were design defects. Id. at 5382-86. Alares requested a response by

August 5, 2019. Id. at 5382.

The VA did not respond to the RFI. Instead, in an email dated September 6, 2019, the

VA contracting officer notified Alares that the VA would not respond to RFI 179 and that,

instead, the VA was immediately “taking over full occupancy of the space and acceptance

of any/all remaining outstanding items” on the project. Exhibits 145 at 1526, 3691 at 5379.

She asked that Alares “forward a release of claims and notate any items Alares is not

providing full release for.” Exhibit 3691 at 5379. A few days later, by email dated

September 12, 2019, the VA contracting officer made clear that the VA had accepted the

building “as is” and that Alares’ work was done:

The VA has taken full ownership of this space as indicated to you on 9/6. If

you or any subs need to access this space, it needs to be fully coordinated and

approved by the VA at least one week in advance. You informed the VA on

9/10 at 2:05pm your sub would be onsite, without fully disclosing the

reason/need for their visit, to which Scott [DeRosa] responded on 9/11 at

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11:47am informing you it would be a conflict. This email was delivered and

read by you yet the sub still came on site on 9/12. Any unauthorized visits

made to this site will be considered as trespassing.

Exhibit 145 at 1523. Between July 26, when Alares submitted RFI 179, and September 6,

2019, Alares was on the project site a total of no more than four days. Hearing Transcript,

Vol. 4, at 24. One of the VA’s employees testified that the VA had to hire other contractors

to complete the project work, including electrical work, medical gas tie-ins to the Stryker

boom, work on exhaust fans, and velocity nozzle installation. Exhibit 4309 at 11048

(Deposition Testimony of Michael LeBeau (June 7, 2022)); see Exhibits 4243, 4244, 4246,

4247 (evidencing the VA’s hiring of other contractors to perform additional work after

September 6); Closing Argument Transcript at 93-94.

On October 29, 2019, Alares signed and provided the VA with the following “Final

Release of Claims” on this contract, excepting REAs 1 through 29, to obtain final payment:

KNOW ALL MEN BY THESE PRESENTS: In consideration of the premise

and sum of $8,243,391.89 (Eight Million two hundred forty three thousand

three hundred ninety one and eighty nine cents) lawful money of the United

States of America (hereinafter called the “Government”) of which of

$8,207,391.89 (Eight Million two hundred seven thousand three hundred

ninety one and eighty nine cents) of the total amount has been paid, and a

balance due of $36,000 (thirty six thousand) which is to be paid by the

Government under the above noted contract, the undersigned contractor does

remise, release and forever discharge the Government, its officers, agents and

employees of and from all liabilities, obligations and claims whatsoever in law

and equity under, arising out of or by virtue of said contract, except specified

claims [REAs 1 through 29] in stated amounts, or in estimated amounts when

the amounts are not susceptible of exact [sic] by the contractor [as identified

in the release itself].

Exhibit RS-0533 at 3116. The excepted REAs included REA 17 (Repair Patient Lift

System), REA 20 (Extended General Conditions), REA 25 (Attorney Fees), and REA 26

(Delta Mechanical Issues). Id.

In these appeals, Alares asserts that every day between April 12 and September 6,

2019, including days after substantial completion of the building, constitutes a compensable

delay to the critical path of contract performance, alleging that these delays were caused by

defects in the “control sequences design.” Hearing Transcript, Vol. 1, at 147; see Appellant’s

Closing Argument Presentation PowerPoint at 71. Mr. Maggioli testified at the hearing that

CBCA 6149, 7071, 7597

“[w]e could not complete commissioning, which was a critical task, until the control

sequences were redesigned, and we couldn’t turn the space over to the Government until all

those control sequences were properly working.” Hearing Transcript, Vol. 1, at 147. Alares

also argues that the VA’s lack of a response to Alares’s RFI 179 led to Alares being unable

to complete the HVAC commissioning and thus project completion. Appellant’s Closing

Argument Presentation PowerPoint at 74; Exhibit 3692.

III.

Alares’ Claims and Proceedings Before the Board

CBCA 6149

On March 1, 2018, long before completing work on this project, Alares submitted a

request for an equitable adjustment (REA) to the VA contracting officer, seeking (1) payment

of $1,039,693 for extended general conditions allegedly resulting from government-caused

schedule delays and differing site conditions, and (2) a time extension for completion of the

project from August 2, 2017, to August 3, 2018. Exhibit 50 at 1. Alares alleged that the

major issues causing scheduling delays at that time included differing site conditions relating

to permanent power (259 days), differing underground site conditions (forty-nine days), and

the need for an additional steam generator (thirty-eight days). Id. at 3-4. Alares asserted that

“[t]here were other delays due to differing site conditions but these tasks were not on the

project schedule critical path.” Id. at 1. In the REA, Alares included the claim certification

language required by the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–7109. Exhibit

50 at 4.

On April 2, 2018, Alares converted its REA into a certified claim. Exhibit 4274.17

On June 5, 2018, after the deadline for the contracting officer to issue a decision on the claim

had passed, Alares filed a notice of appeal with the Board of the contracting officer’s

“deemed denial” of the claim, which the Clerk of the Board docketed as CBCA 6149.

The parties, on September 6, 2018, requested that the Chair of the Board assign a

mediator to assist them in settlement efforts, a request that the Chair granted. At a certain

point in time, the parties ended the mediation but continued to engage in settlement efforts

for several months. This appeal essentially remained stayed while the parties engaged in

mediation efforts.

Alares filed an updated certification for the April 2, 2018, claim with the Board

on March 31, 2021.

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On May 29, 2019, while the parties were still engaged in mediation, Alares submitted

REA 20 to the VA contracting officer, essentially updating its April 2, 2018, claim.

See Exhibit RS-0527 at 1-7. It requested an equitable adjustment of $1,903,257.01 “for

extended general conditions due to government schedule delays and differing site conditions

. . . caused by the government.” Id. at 1, 7. It asserted that the VA was responsible for 682

calendar days of delay at that point in time, which it claimed were caused by “[d]iffering site

conditions relating to permanent power due to design errors,” “[d]iffering [u]nderground

[s]ite conditions while doing site work,” “[a]dditional steam generator due to design errors,”

and “ATS rewiring due to design errors.” Id. at 1.

On February 10, 2020, again while the parties were continuing their settlement efforts,

Alares submitted another revised version of its April 2, 2018, certified delay claim to the VA

contracting officer, increasing the amount of its claim for “extended general conditions due

to government schedule delays and differing site conditions” to $1,941,801 and alleging 764

days of critical path delay. RS-0535 at 1, 28. Alares alleged that the critical path delays for

which the VA was responsible were caused by the need to redesign the AHU equipment to

accommodate a second steam engine, design errors relating to the new electric service,

design errors relating to back-up emergency power, and a delay, and failure to coordinate

requirements for installing the Stryker Boom equipment in the building. Id. at 2-7. It also

alleged that the VA was responsible for numerous other delays that were not on the critical

path, id. at 7-26, including various weather delays between November 2016 and May 2017

that it asserted “equate[d] to a critical path delay of 25 working days.” Id. at 9.

On August 10, 2020, Alares submitted yet another revised version of its delay claim

to the VA contracting officer, asserting that it was modifying its claim “due to recent REA

#20 review comments by the VA,” reducing its monetary demand to $1,535,552, and

reducing its total claimed compensable time to 653 days. RS-0537 at 1, 30. It explained the

basis of its updated claim as follows:

The government reached beneficial occupancy of the Project on May 10, 2019

when the VA took possession of the ICU space. However, the contracting

officer notified Alares Construction on September 6, 2019 stating the VA will

be taking over full occupancy of the space and acceptance of any/all remaining

outstanding items. The September 6, 2019 date was 764 days beyond the

Contract completion date of August 2, 2017. Alares Construction is seeking

total compensable time of 653 days.

CBCA 6149, 7071, 7597

Id. at 1.18

Proceedings in CBCA 6149 and other Alares appeals that the Board had previously

consolidated with CBCA 6149, all of which arose out of the same contract, remained stayed

until April 13, 2021, when the Board granted the parties’ joint request to lift the stay of

proceedings. On June 28, 2021, the VA filed a motion to dismiss the appeal for lack of

jurisdiction, alleging that Alares’ name in these appeals differs from the name on the contract

at issue and that, therefore, Alares lacked privity of contract to pursue the appeal. The Board

denied the VA’s motion by decision dated August 11, 2021. Alares Construction, Inc. v.

Department of Veterans Affairs, CBCA 6149, et al., 21-1 BCA ¶ 37,906, at 184,099-100.

Subsequently, the parties engaged in discovery. The VA engaged Mr. D’Onofrio to

serve as its expert witness to analyze the delays on this project using a CPM analysis, and he

prepared a report of his findings, which the VA shared with Alares. Alares’ president,

Mr. Maggioli, prepared a delay analysis for his company, and Alares shared his report with

the VA.

Alares also requested dismissal with prejudice of six appeals—CBCA 7069, 7070,

7072, 7074, 7075, and 7086—that the Board had previously consolidated with CBCA 6149,

representing that the parties had settled the claims at issue in those appeals. Modification

P00015, executed November 16, 2021, resolved Alares’ direct labor cost claims for smoke

seal installation, scraping fireproofing, control joint installation, raising patient boom

supports, reimbursement for egress maintenance, and metal roof repairs. Exhibit 3301 at 12.

In those six claims, taken together, Alares had sought damages totaling $167,756, but it

agreed to resolve those claims in exchange for payment by the VA of $88,000 and provided

the following release:

RELEASE. In exchange for the relief enumerated [in this contract

modification], Alares agrees that such relief constitutes full and complete

settlement and satisfaction of the Claims including but not limited to all costs,

On May 28, 2021, Alares filed in CBCA 6149 and the appeals with which

CBCA 6149 was then consolidated what it titled “Amended Notice of Appeal,” which

purported to amend the notice of appeal in CBCA 6149. Alares asserted in its amended

notice that the VA contracting officer never issued a final decision on its August 10, 2020,

claim; that it therefore was “deemed denied”; and that Alares was adding that deemed denial

to CBCA 6149. The Clerk of the Board did not docket the “Amended Notice of Appeal” as

a new appeal but allowed it to remain filed as part of CBCA 6149.

CBCA 6149, 7071, 7597

direct and indirect, interest, and attorney fees including those recoverable

under the Equal Access to Justice Act (EAJA).

Exhibit 3301 at 13.

On November 22, 2022, as part of its responses to written discovery requests that the

VA had served, Alares again changed the amount of damages that it was claiming. Although

Alares indicated in its written discovery responses that it had recalculated its damages to

remove attorney fees related to claim preparation and prosecution, see Exhibit 3891 at 7078,

its claimed damages actually increased from $1,535,552 to $1,691,701.85. Exhibit 3901 at 1.

No explanation for the basis of the increase was provided.

CBCA 7071

On February 10, 2020, Alares submitted REA 17 (revision 1) to the VA contracting

officer, seeking payment of $7344.70 for being required to remove and then reinstall patient

lift (LIKO) system supports that it had installed above the ceiling in Rooms 208, 209, 211,

and 213 to allow duct and pipe work to be completed. Exhibit 66T at 756-59. It asserted that

this work was caused by conflicts in the detailed layouts for the LIKO system that the VA

had provided. Id. at 756. The VA contracting officer denied the REA, which it considered

to be a claim, by decision dated January 4, 2021, finding that the only reason that Alares had

to remove the supports was because one of its subcontractors had installed them before a

different subcontractor had installed piping that needed to be installed before the supports

were put into place. Exhibit 66V at 799-800. The contracting officer represented that “[t]he

lack of coordination by the Contractor is the only reason this additional work was required.”

Id. at 800. The decision provided Alares notice of its appeal rights. Id. at 802.

Alares filed a notice of appeal with the Board on March 17, 2021, which the Clerk of

the Board docketed as CBCA 7071. By order dated April 2, 2021, the Board consolidated

CBCA 7071 (and other Alares appeals that were then pending) with CBCA 6149.

CBCA 7597

On July 27, 2022, Alares filed with the Board in CBCA 6149 what it called a “second

addendum to its claim for general conditions at the [CBCA].” Exhibit 4273. In that

“addendum,” it attempted to add a claim for the VA’s alleged breach of good faith and fair

dealing to its existing appeals, asserting that VA officials took actions to deny change order

requests and REAs because of funding limitations that would have caused the VA, if it

approved the requests, to exceed the available appropriation for Alares’ contract. See id.

The VA argued to the Board that the second addendum was in reality a new claim over which

CBCA 6149, 7071, 7597

the Board lacked jurisdiction because it had never been submitted to the VA contracting

officer for a decision. By decision dated November 9, 2022, the Board denied Alares’

request to add its “second addendum” and its supporting documents to the record, finding

that the Board lacked jurisdiction to consider the addendum. Alares Construction, Inc. v.

Department of Veterans Affairs, CBCA 6149, et al., 22-1 BCA ¶ 38,225, at 185,649.

While awaiting the Board’s decision on whether the Board possessed jurisdiction to

consider its “second addendum,” Alares converted its “second addendum” into a new CDA

claim through which it sought payment of $1,679,495.60 and, on September 22, 2022,

submitted it to the VA contracting officer, along with a claim certification from

Mr. Maggioli. Exhibit 4278. By decision dated November 28, 2022, the VA contracting

officer denied that claim. Exhibit 4279. On November 30, 2022, the Clerk of the Board

docketed Alares’ appeal of that decision as CBCA 7597.

The VA filed a motion seeking to dismiss CBCA 7597 for lack of jurisdiction,

alleging that the new claim failed clearly to identify the sum certain to which Alares believed

itself entitled and, in the alternative, seeking summary judgment, alleging that the “Final

Release of Claims” that Alares executed on October 29, 2019, discharged the VA from all

liabilities under the contract except for those expressly listed therein. The Board denied the

VA’s motion by decision dated March 3, 2023. Alares Construction, Inc. v. Department of

Veterans Affairs, CBCA 7597, 23-1 BCA ¶ 38,296, at 185,927-28. By order dated March 6,

2023, the Board consolidated CBCA 7597 with CBCA 6149 and 7071 and indicated that it

would be included as a part of the hearing that was scheduled to begin on March 8, 2023.

The Consolidated Hearing and Post-Hearing Proceedings

Beginning Wednesday, March 8, 2023, the parties presented five days of witness

testimony before Judge Drummond at a consolidated hearing covering CBCA 6149, 7071,

and 7597 that concluded on Tuesday, March 14, 2023. The hearing was conducted virtually

using the ZoomGov platform. During the hearing, Judge Drummond denied Alares’ request

to qualify Mr. Maggioli as an expert in scheduling and delay analysis, determining that

Alares had not established his qualifications. Hearing Transcript, Vol. 1, at 39-42.

Nevertheless, Judge Drummond allowed Mr. Maggioli to testify about his views on the

project’s critical path of performance as a lay witness, id. at 42, and the VA did not request

that his report be removed from the appeal file. Judge Drummond indicated that he would

give Mr. Maggioli’s report “the appropriate weight” but would not “refer[] to it as an expert

report.” Id. at 42. At the VA’s request, Judge Drummond qualified Mr. D’Onofrio, without

objection from Alares, as an expert in CPM scheduling, schedule delay analysis, time impact

analysis, disruption and inefficiency analysis, and construction. Hearing Transcript, Vol. 4,

at 10-11.

CBCA 6149, 7071, 7597

In an order issued following the conclusion of the hearing, Judge Drummond directed

the parties to file post-hearing briefs no later than May 18, 2023. See Post-Hearing Order

(Mar. 14, 2023) at 1. By May 16, 2023, when the parties requested an enlargement of time

for filing those briefs, Judge Drummond had unexpectedly become unable to continue work

on these appeals. On May 19, 2023, the Clerk of the Board assigned Judge Harold D. Lester,

Jr., to take Judge Drummond’s place as the presiding judge in these appeals. Judge

Drummond passed away in June 2023.

After being assigned to these appeals, the new presiding judge immediately requested

a status conference with the parties to discuss the situation and to “obtain the parties’ views

regarding the extent to which any modifications to the existing schedule of post-hearing

activities may be necessary” because of the reassignment of the appeals to a judge other than

the one who had heard the witnesses testify at the hearing, “including a discussion of whether

either party will want to present any live witness testimony for a second time.” Order (May

19, 2023) at 2. During the conference, both parties indicated that they did not wish to ask

for a new hearing or to recall witnesses to testify except to the extent that the new presiding

judge would find it helpful. Conference Memorandum (May 25, 2023) at 2. The new

presiding judge indicated that, after the parties had completed post-hearing briefing, he

would schedule a closing oral argument to help ensure that he fully understood the issues and

evidence in the appeals. Id. at 3.

The parties submitted their post-hearing briefs on June 16, 2023, and reply briefs on

September 14, 2023. They provided their positions to the Board through detailed

presentations at the closing oral argument on October 18, 2023.

Discussion

Evidentiary Issues

Requirements When an Appeal is Reassigned After the Hearing

Neither the Board’s Rules nor due process mandate that the judge who presided over

the taking of testimony at a hearing be one of the judges who ultimately decides the case.

See, e.g., Tri-Cor, Inc. v. United States, 458 F.2d 112, 116-17 (Ct. Cl. 1972); Blake

Construction Co., GSBCA 2196, 70-1 BCA ¶ 8166, at 37,941-42. Rule 63 of the Federal

Rules of Civil Procedure (FRCP), to which the Board looks for guidance, see Board

Rule 1(c), provides that, “[i]f a judge conducting a hearing or trial is unable to proceed, any

other judge may proceed upon certifying familiarity with the record and determining that the

case may be completed without prejudice to the parties.” Judge Drummond’s successor in

these appeals studied the appeal record thoroughly, went through the voluminous number of

CBCA 6149, 7071, 7597

exhibits contained in the appeal file, digested and analyzed the competing reports from the

VA’s expert witness and Alares’ president, and repeatedly reviewed the hearing transcripts

of the witnesses’ live testimony. In addition, at the successor judge’s request, the parties

presented detailed closing arguments on October 18, 2023, after post-hearing briefing was

complete, to walk the successor judge through the factual evidence supporting their positions

in the appeals as well as their legal theories for or against recovery, an effort that the

successor presiding judge found to be very helpful. To the extent that FRCP 63 requires the

successor presiding judge formally to certify his familiarity with the record and that these

appeals may proceed without prejudice to the contractors, he does so here.

Even with that certification, FRCP 63 requires that, “[i]n a hearing or a nonjury trial,

the successor judge must, at a party’s request, recall any witness whose testimony is material

and disputed and who is available to testify again without due burden.” “Courts . . . have

read into Rule 63 the negative inference that if the presiding judge in a civil case has yet to

issue his findings of fact and conclusions of law, a successor judge must retry the case”

unless “all parties . . . consent to allow the successor judge to make findings of fact and

conclusions of law based on the trial transcript.” Emerson Electric Co. v. General Electric

Co., 846 F.2d 1324, 1325-26 (11th Cir. 1988); see Townsend v. Gray Line Bus Co., 767 F.2d

11, 17-18 (1st Cir. 1985) (“An exception to the rule mandating a retrial is normally made

only if all parties agree to allow the successor judge . . . to make findings of fact and

conclusions of law based on a prior, or stipulated, record.”). Here, we expressly offered the

parties the opportunity to re-present witness testimony before the successor judge, but the

parties declined that opportunity in favor of extensive post-hearing briefing and the ability

to walk the successor judge through their positions in detail at a closing argument.

FRCP 63 also permits the successor judge, sua sponte, to “recall any other witness”

from whom the judge might like to hear. We elected not to require the parties to go to the

expense of presenting witness testimony a second time.

Alares’ Request to Disregard Certain Appeal File Documents

In its post-hearing reply brief, the VA has cited to several appeal file documents that

were not discussed during the hearing (Exhibits 17, RS-0103, RS-0222, and RS-0589),

including the deposition transcript of Alares’ finance manager (Exhibit RS-0058), who

provided testimony about the preparation of financial documents upon which Alares’ cost

claims are based. Alares asks that we disregard those exhibits, stating that it is unfair for the

VA to use them to attempt “to impeach Mr. Maggioli when those documents were never

raised to Mr. Maggioli during cross-examination” at the hearing and “he was never given an

opportunity to explain/address them.” Appellant’s Post-Hearing Reply Brief at 36.

CBCA 6149, 7071, 7597

Under Board Rule 9(a) (48 CFR 6101.9(a) (2024)), “‘[t]he record on which the Board

will decide a case includes,’ among other things, ‘Rule 4 appeal file exhibits other than those

to which an objection is sustained,’ other documents or parts thereof admitted as evidence

at a hearing, and transcripts of testimony before the Board.” SRM Group, Inc. v. Department

of Homeland Security, CBCA 5194-R, et al., 21-1 BCA ¶ 37,869, at 183,886 (quoting Rule

9(a)), aff’d, No. 2021-2104, 2022 WL 1089228 (Fed. Cir. Apr. 12, 2022). “Accordingly, in

reaching a decision in an appeal following a hearing, the Board is not limited to the testimony

presented and exhibits introduced at the hearing but may also ‘rely upon any evidence

contained within the appeal file.’” Id. (quoting Springcar Co. v. General Services

Administration, CBCA 1310-R, et al., 10-2 BCA ¶ 34,534, at 170,333). Under Board

Rule 4(g), “[t]he Board considers appeal file exhibits part of the record for decision under

Rule 9(a) unless a party objects to an exhibit within the time set by the Board and the Board

sustains the objection.”19

Alares has no basis for waiting until its post-hearing reply brief was due to request

exclusion of this evidence. Here, the VA added Exhibit 17 to the appeal file on July 9, 2018,

almost five years before the hearing in these appeals, and added the other exhibits on

February 3, 2023, more than a month before the hearing. By order dated January 17, 2023,

Judge Drummond adopted the VA’s unopposed proposed revised schedule (filed on

December 29, 2022) that identified a deadline of February 10, 2023, for submitting

objections to appeal file documents and a deadline of February 17, 2023, for objecting to

exhibits. Alares filed a list of appeal file exhibits to which it objected by the February 10

deadline, but none of the exhibits that Alares now asks the Board to disregard was listed

there. Neither party filed objections to exhibits.

Even if we might be willing for good cause to consider a late-filed objection in some

instances, Alares has identified no good cause here. Further, Judge Drummond, at the

conclusion of the hearing on March 14, 2023, closed the evidentiary record in these appeals,

“except for submission to the clerk’s office and the briefs that will be coming in.” Hearing

Although Board judges, under their authority to “alter these procedures . . . to

promote the just, informal, expeditious, and inexpensive resolution of a case,” Board Rule

1(a), have the authority to limit the documents that they will consider in deciding an appeal

to those that the parties discuss with a witness or reference at a hearing, see Lebolo-Watts

Constructors 01 JV, LLC, ASBCA 59740, et al., 21-1 BCA ¶ 37,789, at 183,426 (2020)

(discussing another board’s analogous authority), aff’d, No. 21-1749, 2022 WL 499850 (Fed.

Cir. Feb. 18, 2022), Judge Drummond did not announce any such limitation in this case,

meaning that Alares has no right to insist upon such a limitation here. In this instance, we

will apply the standard rule set forth in Rules 4(g) and 9(a).

CBCA 6149, 7071, 7597

Transcript, Vol. 5, at 91; see Order (Mar. 14, 2023) at 1 (“The record will close at the end

of March 14, 2023, except for evidence that was already admitted and the filing of posthearing and reply briefs.”). Alares’ objections, first raised four months after the record

closed, are clearly too late. Its objections are considered waived.

Alares’ Failure to Qualify its Scheduling Witness as an Expert

During discovery, Alares identified its CEO, Mr. Maggioli, as its expert witness in

scheduling and delay analysis, and Mr. Maggioli prepared a “Schedule Delay Analysis

Report” in which he constructed what he identified as “an ‘as-built’ critical path” schedule

for the project (Exhibit 3644 at 3) purporting to assess critical delays on the project, to

identify causes of and assess responsibility for those delays, and to establish a basis for a

damages award of more than $1.5 million resulting from those delays. Id. at 2-22. At the

hearing, Alares presented Mr. Maggioli and, over the VA’s objection, asked that, pursuant

to Rule 702 of the Federal Rules of Evidence (FRE), he be qualified as an expert in

construction scheduling and delay analysis. As part of its objection, the VA noted that,

although Alares did not mention it in its request to qualify him as an expert, Mr. Maggioli

purported to provide extensive damages analyses in his report as part of his critical path delay

opinions. Hearing Transcript, Vol. 1, at 40. After providing Alares an opportunity to

establish Mr. Maggioli’s background and areas of expertise, Judge Drummond declined to

qualify Mr. Maggioli as an expert witness. Id. at 39-42. Nevertheless, Judge Drummond,

without objection by the VA, allowed Mr. Maggioli to present his analysis as lay opinion

testimony under FRE 701. Id.

The panel agrees with Judge Drummond’s determination that Alares did not establish

Mr. Maggioli’s qualifications to testify as an expert under FRE 702. Only “[a] witness who

is qualified as an expert by knowledge, skill, experience, training, or education may testify

in the form of an opinion or otherwise” as an expert at a hearing. FRE 702. The proponent

of expert testimony bears the burden of establishing by a preponderance of the evidence that

the proposed witness qualifies as a expert. Sykes v. Napolitano, No. 07-42, 2009 WL

10696622, at *1 (D.D.C. Aug. 21, 2009); Chung v. World Corp., No. CV-04-0001, 2005 WL

8155795, at *2 (D.N. Mar. Is. Oct. 24, 2005). “Whether a witness is qualified as an expert

can only be determined by comparing the area in which the witness has superior knowledge,

skill, experience, or education with the subject matter of the witness’s testimony.” Carroll

v. Otis Elevator Co., 896 F.2d 210, 212 (7th Cir. 1990).

At the hearing, Alares’ basis for presenting Mr. Maggioli as an expert in scheduling

and delay analysis was his status as a professional engineer, Hearing Transcript, Vol. 1, at 25,

and “his 35 years of preparing schedules for projects, updating schedules for projects, and

. . . advising the VA on scheduling.” Id. at 39. Although Judge Drummond recognized that

CBCA 6149, 7071, 7597

Mr. Maggioli might have extensive experience in forward-looking construction project

scheduling, id. at 39-40, the report that Mr. Maggioli prepared did not involve forwardlooking scheduling but instead purported to reconstruct prior project timelines, assess past

time impacts, assign responsibility for delays on the completed project through what

Mr. Maggioli described as a critical path analysis, and quantify more than $1.5 million in

alleged damages. See Exhibit 3644 at 2-22. Mr. Maggioli had never previously prepared a

schedule delay analysis report, Hearing Transcript, Vol. 1, at 42, and Alares presented no

evidence that Mr. Maggioli had ever previously conducted a critical path delay analysis or

damages quantification. In such circumstances, Judge Drummond properly found that Alares

did not meet its burden of establishing Mr. Maggioli’s qualifications to testify as an expert

under FRE 702 on scheduling, delay, and damages analysis. See The Sherman R. Smoot Co.,

ASBCA 52261, 03-1 BCA ¶ 32,197, at 159,151 (excluding testimony of proposed expert in

construction CPM schedule analysis for lack of qualifications).

Ultimately, however, Alares suffered no prejudice from that ruling. Despite the lack

of evidence supporting Mr. Maggioli’s expertise in delay and damages analysis, Judge

Drummond, without objection by the VA (Hearing Transcript, Vol. 1, at 41-42), allowed

Mr. Maggioli to present his analysis as lay opinion testimony, eliminating any possible

prejudice to Alares from his exclusion as a FRE 702 expert witness, and the entirety of his

report was included in the Rule 4 appeal file. FRE 701 provides that, “[i]f a witness is not

testifying as an expert, testimony in the form of an opinion is limited to one that is:

(a) rationally based on the witness’s perception; (b) helpful to clearly understanding the

witness’s testimony or to determining a fact in issue; and (c) not based on scientific,

technical, or other specialized knowledge within the scope of Rule 702.” To the extent that

Mr. Maggioli’s testimony went beyond that which a lay opinion witness might ordinarily be

allowed to provide,20 the VA represented at the hearing that it had “no objection to him

testifying as a fact witness based on his personal experience on this project,” Hearing

Transcript, Vol. 1, at 41, and it did not otherwise object at any time during the hearing to any

of the testimony that he provided about his schedule delay analysis report. In such

circumstances, the VA waived any objection to the Board’s acceptance of his testimony.

Fruin-Colnon Corp. v. United States, 912 F.2d 1426, 1429 (Fed. Cir. 1990); see Constant v.

The type of critical path schedule analysis that Mr. Maggioli purported to

provide, inclusive of a quantification of damages based on that analysis, typically would be

viewed as “based upon ‘scientific, technical or other specialized knowledge’ and therefore

[would] fall outside the ambit of Federal Rule of Evidence (FRE) 701.” Regency

Construction, Inc. v. Department of Agriculture, CBCA 3246, et al., 17-1 BCA ¶ 36,884, at

179,774 (2016).

CBCA 6149, 7071, 7597

Advanced Micro-Devices, Inc., 848 F.2d 1560, 1566 (Fed. Cir. 1988) (“Failure to object in

a timely fashion constitutes a waiver.”).

Alares’ Request for an Adverse Inference

Although the VA indicated on its witness list that Karla Rotondo, the contracting

officer for this project, would testify at the hearing, and although Ms. Rotondo attended the

hearing, the VA ultimately did not have her testify.21 Focusing on its implied duty of good

faith and fair dealing breach claim, Alares asks that we draw an adverse inference against the

VA and find that, had Ms. Rotondo testified, her testimony on issues such as the VA’s

funding limitations, the VA’s motives in issuing show cause and cure notices, the VA’s

recognition of delay caused by defective designs, and the VA’s ultimate breach of the duty

of good faith and fair dealing would not have been helpful to the VA. Appellant’s

Post-Hearing Brief (June 16, 2023) at 37. The VA responds that, in light of the documentary

evidence in the record and the fact that Peter Boyle, the COR, testified, Ms. Rotondo’s

testimony was unnecessary and would have been duplicative of Mr. Boyle’s, making an

adverse inference unwarranted. Respondent’s Post-Hearing Reply Brief (Sept. 14, 2023) at

12-13.

“When it would be natural under the circumstances for a party to call a particular

witness . . . and the party fails to do so, tradition has allowed the adversary to use this failure

as the basis for invoking an adverse inference.” 2 Kenneth S. Broun, McCormick on

Evidence § 264, at 220 (6th ed. 2006); see Graves v. United States, 150 U.S. 118, 121 (1893)

(“[I]f a party has it peculiarly within his power to produce witnesses whose testimony would

elucidate the transaction, the fact that he does not do it creates the presumption that the

testimony, if produced, would be unfavorable.”). Yet, “a party’s failure to call a witness does

not necessarily imply that the witness’s testimony would have been unfavorable to that

party.” United States v. Busic, 587 F.2d 577, 586 (3d Cir. 1978), rev’d on other grounds, 446

U.S. 398 (1980). “Every experienced trial lawyer knows that the decision to call a witness

often turns on factors which have little to do with the actual content of his [or her]

testimony.” Id. The adverse inference is potentially available only if the missing witness

“could have given material non-cumulative evidence.” LaMarca v. United States, 31 F.

Supp. 2d 110, 128 (E.D.N.Y. 1998). “If the testimony of the witness would be merely

cumulative, the inference is unavailable.” 2 Kenneth S. Broun, supra, § 264, at 222. Further,

even when all of the elements supporting an adverse inference are met, the tribunal may

Alares also listed Ms. Rotondo on its own witness list but then elected not to

call her to testify. See Appellant’s Witness List (Feb. 13, 2023) at 2; Closing Argument

Transcript at 69-70.

CBCA 6149, 7071, 7597

“exercise [its] discretion and decide not to grant a request for an adverse inference.”

BancorpSouth Bank v. Herter, 643 F. Supp. 2d 1041, 1061 (W.D. Tenn. 2009) (quoting

Kounelis v. Sherrer, 529 F. Supp. 2d 503, 521 (D.N.J. 2008)).

We deny Alares’ request for an adverse inference for several reasons:

First, “the availability of modern discovery and other disclosure procedures serves to

diminish both [the] justification [of an adverse inference] and the need for the inference.”

2 Kenneth S. Broun, supra, § 264, at 223. Other tribunals have held that “the fact that [the

party seeking an adverse inference] had [the missing witness’s] testimony available in

deposition form” weighs heavily against allowing an adverse inference against an employer

who did not call the witness to testify. Labit v. Santa Fe Marine, Inc., 526 F.2d 961, 962-63

(5th Cir. 1976). During the discovery period, Alares deposed Ms. Rotondo. Closing

Argument Transcript at 68-69; Respondent’s Response to Board’s Order (Jan. 20, 2025) at 1.

Although Alares included deposition transcripts from two VA witnesses in its appeal file

supplements, see Exhibits 4309, 4310, 4311, it did not submit Ms. Rotondo’s. We can only

presume from Alares’ decision not to introduce the deposition transcript that it does not

contain the types of admissions that Alares would have us now infer. See Bent Glass Design,

Inc. v. Brandt Manufacturing Systems, Inc., Civ. No. 89-4748, 1991 WL 60595, at *4 (E.D.

Pa. Apr. 10, 1991) (“[P]laintiff had the opportunity to introduce all or part of the [missing

witness’s] deposition and having declined to do so, dispelled any possible inference that [the

witness’s] testimony would have been adverse to defendant’s interest.”).

Second, the VA presented the live testimony of the COR and project manager,

Mr. Boyle, see Hearing Transcript, Vol. 3, at 9-10, and there is nothing in the record to

suggest that Ms. Rotondo’s testimony would be anything but duplicative of, yet potentially

less fulsome than, Mr. Boyle’s. Mr. Boyle testified that he and Scott DaRosa, another COR

on the project, took the lead in much if not most of the cost estimating for change orders, id.

at 11, and he would likely have had more routine contact with Alares and contemporaneous

insight into on-site work, see id. at 33-34, and the VA’s internal evaluations than the

contracting officer, who would have been located somewhere other than the job site. Alares

offers nothing to suggest that Ms. Rotondo disagreed with Mr. Boyle, and neither

Mr. Boyle’s testimony nor the documentary record in this case suggests it. To the contrary,

counsel for Alares represented during closing arguments that, during her deposition,

Ms. Rotondo repeatedly indicated that she did not remember the specifics of this project.

Closing Argument Transcript at 69-70. Because “the documentary evidence amply explains

the parties’ intents and there is no reason to believe that [the missing witness’s] testimony

would be materially any different than [Mr. Boyle’s,] [t]he government’s failure to call a

witness that the appellant believes would be helpful to appellant’s case, without more, does

not justify an adverse inference.” Aegis Defense Services, LLC, ASBCA 59082, et al., 17-1

CBCA 6149, 7071, 7597

BCA ¶ 36,915, at 179,859 n.10; see Del E. Webb Corp., ASBCA 22386, 79-2 BCA ¶ 14,140,

at 69,597 (“The contracting officer’s final decision is part of the record of this appeal. It

speaks for itself. No good purpose would have been served by calling the contracting officer

to testify as to what [is] already in the record.”), aff’d, 652 F.2d 69 (Ct. Cl. 1981).

Third, Alares listed Ms. Rotondo on its own witness list. Ms. Rotondo was available

at the hearing, and Alares could have called her to testify. It chose not to do so. We see no

basis for an adverse inference when Alares decided not to call a witness from its own list.

Fourth, because “[f]ailure to anticipate that the inference may be invoked entails

substantial possibilities of surprise, . . . courts often require early notice from a party

expecting to make a missing witness argument or intending to request [an adverse inference]

instruction.” 2 Kenneth S. Broun, supra, § 264, at 223 (citing cases). Nothing in the record

suggests that, prior to filing its post-hearing brief, Alares ever informed the VA that it viewed

the VA’s failure to call Ms. Rotondo to testify as something warranting an adverse inference

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