THIS OPINION WAS INITIALLY ISSUED UNDER

THIS OPINION WAS INITIALLY ISSUED UNDER

PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC

IN REDACTED FORM ON APRIL 4, 2014

CBCA 1849 GRANTED IN PART; CBCA 2386 GRANTED: March 13, 2014

CBCA 1849, 2386

MOSHE SAFDIE AND ASSOCIATES, INC.,

Appellant,

v.

GENERAL SERVICES ADMINISTRATION,

Respondent.

Laurence Schor and David A. Edelstein of Asmar, Schor & McKenna, PLLC,

Washington, DC, counsel for Appellant.

James F. H. Scott, Office of General Counsel, General Services Administration,

Washington, DC, counsel for Respondent.

Before Board Judges SOMERS, VERGILIO, and POLLACK.

POLLACK, Board Judge.

On December 30, 2009, Moshe Safdie and Associates, Inc. (MSA, appellant, or

architect/engineer (A/E)) filed an appeal from a denial by the General Services

Administration (GSA) contracting officer of MSA’s claims for compensation in performing

additional services on design contract number GS-01P-99-BWC-00l6 for the United States

Courthouse in Springfield, Massachusetts. Appellant’s claim of $2,946,622.99, docketed as

CBCA 1849, has been submitted in three segments. MSA alleges it is entitled to additional

compensation (1) because in the development of the original design from March 2000

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through June 2003, GSA changed the criteria, thereby increasing MSA’s design efforts

($1,118,423.59); (2) starting in late 2003, GSA wrongfully required MSA to provide a

redesign to meet the design contract’s target construction budget ($1,320,378.49); and (3)

GSA directed efforts on the post-construction contract services (PCCS) which exceeded the

scope of the modification concerning such work ($460,431.23). MSA’s claim was audited

by GSA. MSA’s claim accepted some of the deductions made by the GSA auditor, which

accounts for differences in the audited claim versus what is now sought. MSA also claims

$47,389.68 for past-due invoices. MSA originally sought $73,377; however, the parties have

agreed on $47,389.68 as the balance due on the remaining invoices. The invoices remain

unpaid due to a set-off as well as a counterclaim asserted by GSA.

In MSA’s appeal of GSA’s government claim, docketed as CBCA 2386, MSA denies

that GSA is entitled to $5,275,880 as reimbursement for escalation costs which GSA asserts

are consequential damages due to appellant’s late delivery of the project. GSA couches the

claim as one for breach of the contract’s Schedule clause and asserts that because it is a

breach of a contract term, it does not implicate the Responsibility of Architect/Engineer

clause and therefore does not require a showing of professional negligence on the part of

MSA.

On October 13, 2011, we denied appellant’s motion for summary relief as to the

matter of consequential damages. Moshe Safdie & Associates, Inc. v. General Services

Administration, CBCA 2386, 11-2 BCA ¶ 34,851. We concluded that consequential

damages could be available, depending on how the case proceeded.

Summary

These appeals involve four claims (three by appellant and one by GSA) which, in

order of presentation in this opinion, seek added design costs by appellant for work on the

original design, for work performed during a government-directed redesign, and for work

performed during the post-construction phase of the project. The fourth claim involves a

demand by GSA for consequential damages arising out of late delivery (due to need to

redesign).

The parties entered into a contract for the design of a courthouse with the cost of

construction capped at $35 million. The cap was informally raised during the design process

to approximately $43 million. The record references various targets ranging from $41

million to $48 million, with MSA’s last estimate (before the construction bid solicitation)

being almost $45 million. We find that during the design phase, the design criteria GSA

gave MSA was significantly changed, particularly as to blast and Leadership in Energy and

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Environmental Design (LEED) criteria, from the parameters provided by GSA at the time of

pricing. We find that those changes entitle appellant to compensation for its added costs.

Appellant has presented a total cost claim. We determine that because of the nature

of the added design work, segregation of costs would be unreasonable. We have modified

the total costs claimed downward, however, based that upon a number of factors, including

but not limited to the “give and take” inherent in a design contract, less than perfect bidding,

inefficiencies not the cause of GSA, and money left on the table in negotiations for some of

the modifications agreed to and priced by both parties.

In creating the design, appellant was responsible for assuring that the project could

be built for the costs allotted for construction. The contract contained a clause that provided

that if bids came in over the number, appellant would have to redesign at its own costs,

unless the cost increase was due to causes beyond its reasonable control. After appellant

completed the design and provided estimates that reflected that the target price could be

achieved, the project went out for bids. Bids, based on appellant’s design, significantly

exceeded the target price. After examination and various discussions, the Government

directed appellant to redesign the project pursuant to the contract’s Design Within Fundings

Limitations clause. For the redesign, the Government increased the budget available for

construction, which if anything inured to appellant’s benefit.

Concerning the redesign claim, we examined the reasonableness of the original target,

the actions of parties as to estimating, and the effect of the Government’s earlier changes.

We conclude that the Government had a right to direct redesign. We find that appellant

should have realized during the initial design phase that its design would not yield bids in

line with the target number and, therefore, it had an obligation to have either modified its

design to meet the target or, at a minimum, notified GSA as to the probability that the design

would not secure adequate bids. Accordingly, we conclude that the costs of redesign are to

be borne by appellant.

We also find, however, that during the redesign the Government added design tasks

which were outside the needed scope and that those efforts warrant some compensation to

appellant. We find additionally that appellant was impacted by the Government’s choice to

change from concrete to steel frame; that in part, the scope of that change exceeded what was

necessary; and therefore some compensation is due for appellant’s effort.

Once the design was near completion and construction about to begin, GSA realized

that it would need some post-design construction services from appellant. To accomplish

that, the parties engaged in negotiations as to added work. Disputes arose during that

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performance as to handling Requests for Information (RFIs), value engineering, and items,

designated by appellant as exceptions. The Government made virtually no challenge to

appellant’s claims as to added work for the value engineering and exceptions. The

Government challenged payment for the claimed additional RFIs. We find that the disputed

RFI work was payable. We also find that appellant is entitled to payment for some other

work items that GSA disallowed due to auditor questions.

CBCA 2386 concerns MSA’s appeal of GSA’s government claim for consequential

damages (escalation costs) caused by the late start of construction. We conclude that for

GSA to recover it needed to establish professional negligence on the part of MSA. We find

it did not. We reject GSA’s argument that the designer could be held to plain breach, finding

that such would be inconsistent with the remedies identified in the Design within Funding

Limitations clause, the Responsibility of Architect/Engineer clause, and case precedent.

Finally, we address a number of accounting matters, principally dealing with hourly

rates and overhead. We reject the adjustments to hourly rates as arbitrary and unsupported.

We, however, make some adjustments as to overhead.

Witnesses and Record

The record for these consolidated appeals includes appeal files and supplements that

exceeded five thousand pages. In addition, appellant submitted a separate protected appeal

file of over two thousand pages, and the parties entered into 165 stipulations.

During a ten-day hearing, MSA called three of its employees as witnesses.

Mr. Warren Mathison, MSA’s managing principal and a licensed architect for thirty-nine

years, negotiated the contract and was involved in correspondence and meetings throughout

the life of the contract. He spent extensive time on this project, but it was not his sole

obligation. Mr. David Honn, a licensed architect for twenty-nine years, was the project

manager from approximately May 2001 to the end of the project. He was not involved in

negotiating the price, but from May 2001 he worked on the project on an extensive, but not

exclusive basis. Mr. David Orens, who had been practicing in the field for fifteen years, and

a registered architect since 2005, became involved in the project during the design phase.

His role increased during the redesign and PCCS phase. He worked full-time on the project.

MSA also called representatives of two of its subcontractors on the project,

Weidlinger Associates, Inc. (Weidlinger) and Cosentini Associates (Cosentini). From

Weidlinger, MSA called Mr. Samuel Tinsley, a structural engineer with twenty-two years

experience and the principal structural engineer on the project; as well as Dr. Robert

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Smilowitz, a principal with Weidlinger (also blast consultant) holding a Ph.D. in civil

engineering. Dr. Smilowitz was brought on as a consultant, once MSA realized the scope

of blast requirements. He spent considerable time on that issue and meshing those

requirements with other building features and functions. He has worked in the field for over

thirty-four years. MSA also presented testimony from Mr. Robert Leber, a senior vice

president with Cosentini. Cosentini was responsible for the mechanical, electrical, and

plumbing (MEP) design, and Mr. Leber was a licensed engineer with more than twenty years

experience. MSA called as a final witness, on rebuttal, Mr. Chad DaGraca, an accountant,

who testified as to accounting matters.

GSA called Mr. Peter Menzies, who was the contracting officer (CO) during virtually

all of the project. He testified as to negotiations on price and his dealings with MSA during

the contract. Mr. Menzies has no technical degrees. GSA also called Mr. Carl Fletcher as

a witness. Mr. Fletcher did not begin his involvement on the project until the construction

phase. At that time, he worked for Coast & Harbor, a firm assisting GSA on construction

management and inspection. He had no role in either the design or redesign. He became a

GSA employee in March 2007, being assigned as project manager. GSA identified Mr.

Fletcher as the individual who provided the technical analysis that Mr. Menzies used as the

basis to deny MSA’s requests for equitable adjustment (REAs). At the hearing, GSA relied

on him to establish its contention that the contract documents adequately conveyed the work

required of MSA. The Board allowed his testimony based on his review of documents, but

was well aware of his limitations as a witness. Mr. Fletcher is not a licensed architect or

engineer, and his resume showed no particular experience in structural or mechanical

engineering, architecture, or estimating. GSA also called Thomas Malinder, a licensed

architect, who had a supervisory role with GSA during the project, but no extensive

day-to-day involvement. His role was at best intermittent. The project was run for GSA by

Mr. Frank Saviano, an architect and the GSA project manager. He, for all intents and

purposes, was GSA on this project. GSA relied on Mr. Saviano for technical management

of the project.

GSA also provided testimony from Mr. Adam Gooch, an auditor with the GSA Office

of Inspector General, who provided his opinion on the costing, and Mr. John Kenny, whose

testimony went solely to the calculation of damages for the counterclaim.

There were two notable gaps as to witnesses. The first was the absence of

Mr. Saviano, who ran the project and was the GSA official most familiar and involved with

the project. Mr. Saviano had been deposed by MSA and thus, at some point, could have been

available to GSA. He was clearly the GSA official around whom almost all of the significant

events revolved. Because of his absence, much of the MSA testimony as to what occurred

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and why it occurred went unchallenged. The second notable absence was the lack of any

witness from Construction Cost Systems, Inc. (CCS), the firm responsible for providing the

MSA target estimate during the design. Due to its absence, the Board had before it no

material evidence to show what steps CCS took to prepare the estimates or CCS’s rationale

for why the numbers were not met. To the extent MSA did provide testimony as to the

actions of CCS, the MSA testimony provided virtually no insight into the CCS procedures

and actions. The Board also notes that neither party called a witness from Heery

International, the firm providing construction management services to GSA during the

design. However, the record contains substantial evidence, through documents, as to Heery’s

role and activities.

Findings of Facts

Pre-Contract

1. In February 1996, GSA contracted with a third party for a prospectus

development study (PDS) regarding the design of a new federal courthouse in Springfield,

Massachusetts The PDS was later incorporated by reference into the design contract in

dispute. At the time, the PDS was primarily used by GSA to solicit funding from Congress

for the project. The PDS identified a number of general project requirements and design

criteria. It described the proposed courthouse as 165,000 gross square feet in area and

estimated construction costs at $41,025,096, before including contingencies, design,

inspection costs, markups, as well as other items. The PDS estimate contemplated a June

1999 start of construction. The PDS was a substantial document exceeding 160 pages.

2. Using the PDS, GSA submitted a fact sheet to Congress in 1998, asking for

$2,323,000 in appropriations for design and review, along with funding for acquisitions. The

fact sheet showed the building as containing 158,000 gross square feet and estimated

construction at $35,384,000. GSA’s estimate, when adjusted to include all markups, set the

total project cost at $43,281,000. At the time of the PDS, the precise setting for the

courthouse had not been set, although the general area was identified.

3. GSA identified a number of PDS provisions which it considers relevant to the

claims. The PDS was divided into three volumes, the first being an executive summary and

the third designated as appendices. Subsections of volume II were designated by the letters

A through F, with the sections designated by letters having further subsections. Listed below

are items that were highlighted by GSA as support for its position on blast and green issues

associated with the scope of the required design. All PDS citations below are from

volume II.

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4. Section B, titled Functional Goals and Objectives, listed fourteen objectives.

There was no indication that one objective was more important than another or that the

objectives were listed in any priority order. The introduction provided in pertinent part:

The following goals and objectives include all project requirements

that define the U.S. Courts and GSA program expectations for the

design and construction of the new courthouse.

Goal 1: Provide a safe, efficient, flexible, comfortable, and healthy

environment for the performance of all U.S. courts and supporting

federal agency missions.

Provide a facility that is sensitive to the art and architecture of the

Region, has architectural merit, and conveys a community presence.

The first objective, Security, stated:

Objective No. 1: Security

a. Building and building occupant security (internal and external to

the tenant agency boundaries) to protect against vandalism,

burglary, sabotage and espionage is of prime importance in this

facility. The security systems and protocols provided shall comply

with a Level IV requirements based on the vulnerability assessment

guidelines for federal buildings as well as all requirements of the

U.S. Court Design Guide and the U.S. Marshal’s Service guidelines.

b. Security devices or infrastructure elements designed into the

building structure and systems shall include the following:

1. Building siting and setback with physical

barriers and exterior surface materials appropriate

to protect the building structure and its occupants

against ballistic or blast attack.

5. Objectives 2-7, in the order listed, dealt with vehicle access control and

pedestrian control at entrances; secure parking; vehicle and building pedestrian sallyports;

dedicated elevators for judges and Marshals Service; screening of those entering the building;

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and perimeter building security protection provided by enhanced lighting, cameras, and

monitoring devices.

6. Section D of the PDS, titled Design Directives, listed fourteen categories of

work, including foundations, electrical, superstructure, and interior construction. Security

was item fourteen, the last item on the list. As was the case with objectives, this listing

contained no language designating one item as more important than another, or attributing

any significance to the order of listing. Each numbered item had subsections. Paragraph

4.1.1, Exterior Walls Concept, provided the following:

2. Provide an exterior wall design that will provide acceptable

solutions to the following issues. Detail each issue in the design

analysis for GSA’s review and approval

a. Blast and ballistic resistance

b. Air infiltration

c. Water penetration

d. Control of corrosion and staining

e. Thermal movement

f. Wind loading

g. Equipment loading

h. Horizontal building movement (interstory drift)

i. Building shrinkage and creep

j. Component deflection.

7.

provided:

Paragraph 4.1.2, under the subheading Exterior Doors and Windows Concept

PERFORMANCE STATEMENT

It is the intent of this design that the new U.S. Courthouse be fitted

with exterior doors and windows that are energy efficient and

configured to allow efficient safe movement of both personnel and

material, are secure, durable, and easily maintained and conform to

all applicable codes and regulations.

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DESIGN DIRECTION

1. The A/E design shall include but not necessarily be limited to the

following Building systems, defined as all materials installed and

operational: (1)

a. Windows that will be:

25% of the exterior envelope

50% level IV bullet resistant (30-06 projectile

resistant)

25% operable (or allow manual introduction

of outside air in an alternative approved

method)

100 % insulated and low E

8.

Section 14.1, under Security Concept, provided the following:

1. The A/E design shall include, but not necessarily be limited to,

the following security system components or concepts: (1)

a. Exterior to the building - passive concept:

i. Building set-back from property lines,

roadways and other hazards

ii. Site physical barriers, including bollards,

planters, fences, or other visual or physical

barriers.

b. Exterior to the building - active concepts (on emergency power):

i. Vehicle Access control to parking on site

and secure parking with card key and gated

access

ii. Heightened levels of exterior lighting

iii. Building perimeter and site CCTV systems

with recording equipment

c. Building - passive concept

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i. Secure enclosed parking for designated

tenant agency personnel.

ii. Building occupant movement protected,

directed or limited by the following:

Pedestrian sallyports

Judges secure elevator

U.S. Marshal secure elevator

Isolated secure corridors

Dedicated tenant circulation corridor

Detention cells

iii. High density building curtain wall

components to provide blast and ballistic

protection (emphasis added).

iv. Ballistic glazing in selected areas.

9. In its briefing, GSA has cited us to no other references to blast in the PDS

beyond that in Section 14. The PDS does reference other documents, including the GSA

Facility Standard for the Public Building Service (PBS) 100 (1993) (PBS 100). The PBS 100

was a principal GSA construction guide and defined and identified criteria that GSA required

to be used in the design and construction of GSA buildings.

10. On December 17, 1998, after Congressional approval for the project, GSA

published a potential sources sought (PSS) notice, where it sought A/E services for the

courthouse design. The PSS identified the target price for construction at $35 million and

identified the project as being a design excellence (DE) procurement. Design Excellence

Competition was a formal program aimed at attracting and selecting high quality architects

that would not otherwise be bidding to design a government building. The PSS stated that

the A/E fee for design services would be within the 6% statutory limitation based on the

government construction contract established at the time of negotiation. The notice provided

that GSA would be considering a number of factors, including energy conservation and the

ability of the designer to make use of “green” building techniques. The PSS identified

several guides that were to be used by the designer. Among the listed guides was the 1993

PBS 100, which the PSS noted was available at GSA for review.

11. MSA received the PSS notice on or about January 6, 1999. MSA was among

several A/E firms that provided submissions under the DE program for this project. Stages

1 and 2 of the competition dealt with the assessment of qualifications, while the final stage,

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stage 3, was an evaluation of the designer’s vision for the project. The design competition

and ultimate selection did not involve pricing.

12. As part of the competition process, MSA secured a copy of the PBS 100. The

parties agree that notwithstanding the reference to the 1993 version in the design documents,

GSA provided the 1996/1997 PBS (96/97 PBS 100) to MSA for competition and

negotiations. Mr. Mathison used that version, along with other information, to familiarize

himself with the project. The 96/97 PBS 100 included a security chapter which primarily

dealt with electronic security, such as closed circuit TV, special locks, panic hardware, and

lighting. It also called for the structure to be designed for progressive collapse. GSA has not

identified any provision of the PDS, PSS, or 96/97 PBS 100 which either calls for the

hardening of the structure to resist blast loads or designates a specific level of protection that

had to be met.

13. The 96/97 PBS 100 requirement that the building be designed for progressive

collapse called for the building to be designed so that the failure of a beam or slab would not

result in failure of the structural system below or in adjacent bays. MSA, through its

structural consultant, Weidlinger, priced progressive collapse into its design proposal.

14. In May 1999, at a point when MSA had been selected for the second phase of

the design competition, MSA officials, including its principal, Moshe Safdie, attended a

meeting with GSA. GSA has asserted in its briefing that at the meeting, the parties discussed

security issues, including a need for a twenty-foot setback from the street for the building,

and that Mr. Safdie was given an undated document titled “Vulnerability Assessment, GSA

Security Design Criteria.” GSA asserts that the document addressed setbacks and put MSA

on notice of blast concerns for the design. GSA asks the Board to conclude from possession

of that document that Mr. Safdie and MSA were aware or should have been aware of GSA’s

interest in blast resistivity as a significant part of the design, and should have priced blast

enhancement efforts (similar to those ultimately required by GSA) into MSA’s price

proposal. There is no dispute that Mr. Safdie was at the meeting and we do not doubt that

some security matters were discussed. However, any conclusion which put the document

into MSA hands would require us to engage in speculation. GSA did not produce a witness

who was at the meeting, to show that Mr. Safdie received the vulnerability assessment

document on that day. Instead, GSA relied entirely upon the fact that the document had

written on the first page the word, “Security,” and the writing was apparently in Mr. Safdie’s

handwriting. In rebuttal, MSA presented testimony of Mr. Honn that MSA did not receive

the document until June 2001, well after contract performance had begun and, therefore, it

had not been earlier received by Mr. Safdie. Mr. Honn was not at the May 1999 meeting.

Apparently, Mr. Mathison was at the meeting. He, however, was not questioned as to what,

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if anything, Mr. Safdie received or whether blast security as to structural elements was a

significant topic of the meeting. The contention that Mr. Safdie had the document was first

raised by GSA as an argument in briefing. Both prior to and at the hearing, GSA made no

indication that the document or allegations as to MSA possession in May 1999 would be an

issue. Moreover, even if MSA had the document in May, that was months before MSA’s

selection as the designer on this project. But for the inference sought as to the document,

GSA produced no substantial evidence as to any emphasis at the meeting as to blast or other

protection considerations. Notes of the meeting referenced the use of setbacks and other

protective measures, but did not address matters as to hardening of the structure or using a

more robust protective collapse criteria. Further, the document allegedly presented to MSA

at the May meeting was incomplete, lacked detail and context, and was made up of excerpts

from a larger document.

15. On July 12, 1999, MSA was notified in writing that it had been selected “to

fulfill the design requirements for the project.” The MSA design selected by GSA called for

a primary building with a curved shape for much of the structure, and a glass facade curtain

wall in the front, along with a courtyard which allowed for the retention of several historic

trees. The design included a second building, connected to the main courthouse, to house the

judges’ chambers. Messrs. Saviano, Malinder, and Menzies comprised the GSA final

selection panel. In a document titled “Design Excellence Exhibit,” which was transmitted

by facsimile to Mr. Mathison from Mr. Saviano, GSA highlighted the curved nature of

MSA’s design as a significant factor in the selection.

16. This design contract was MSA’s first foray into designing a project for the

Federal Government. In determining its price, MSA secured pricing from a number of

consultants, including Weidlinger (structural) and Cosentini (mechanical, electrical, and

plumbing (MEP)). Both had some previous government contract experience; however,

neither played a significant role in the MSA negotiations with GSA as to the design price for

this project. The evidence indicates that the consultants secured information as to the project

through MSA, but does not show how much of the PDS information was provided to them

by MSA. While MSA came to the contract with a world-class reputation as an architect, its

prior work did not ordinarily involve blast resistivity.

17. On September 8, 1999, Mr. Menzies sent MSA a request for fee proposal that

was accompanied by a document that included updated design criteria. According to GSA,

Mr. Menzies had a base design budget of $2,323,000 with which to work. MSA used that

criteria in pricing its cost proposal. With some (non-material) modifications, the criteria

ultimately became part C of the final contract. The building was to be 165,000 square feet

in area, with five courtrooms and other supporting space. Although the location of the

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building site was generally identified, details remained as to the precise setting. Construction

was priced at $35,000,000 with a planned construction award date of December 1, 2001.

Other aspects of the design criteria that MSA was to meet included use of metric

measurements, energy efficiency (commensurate with architectural values), and where

possible, green criteria. The original package showed a scheduled completion duration of

ninety-six weeks, which was later negotiated to seventy-eight weeks. Part C provided that,

after award, the A/E would be required to participate in a vulnerability assessment that would

include input from the Marshals Service and GSA security personnel.

18. The following are relevant provisions from the contract specifications provided

to MSA. The provisions are set out in exhibit 2 of the appeal file, and we identify them by

the page in exhibit 2 on which they appear. We list them consecutively:

Page 1. The project description in the contract’s design criteria incorporates the

PDS program components and design parameters and provides:

(Reference Springfield Courthouse Prospectus Development Study

(PDS) for program components, design parameters, and other

related items)

Page 7. The contract incorporates by reference FAR clause 52.236-22, Design

Within Funding Limitations (APR 1984), often referred to at the hearing and in

briefing as the Limitations of Funds clause (LOF). The proposed contract that was

provided to MSA, as set out below, did not contain an estimated construction

contract price for the blank in subparagraph (c) (that price was provided later on

page 21):

Design Within Funding Limitations (APR 1984)

(a) The Contractor shall accomplish the design services required

under this contract so as to permit the award of a contract, using

standard Federal Acquisition Regulation procedures for the

construction of the facilities designed at a price that does not exceed

the estimated construction contract price as set forth in paragraph c.

of this clause. When bids or proposals for the construction contract

are received that exceed the estimated price, the contractor shall

perform such redesign and other services as are necessary to permit

contract award within the funding limitation. These additional

services shall be performed at no increase in the price of this

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contract. However, the Contractor shall not be required to perform

such additional services at no cost to the Government if the

unfavorable bids or proposals are the result of conditions beyond its

reasonable control.

(b) The Contractor will promptly advise the Contracting Officer if

it finds that the project being designed will exceed or is likely to

exceed the funding limitations and it is unable to design a usable

facility within these limitations. Upon receipt of such information,

the Contracting Officer will review the Contractor’s revised

estimate of construction cost. The Government may, if it

determines that the estimated construction contract price set forth

in this contract is so low that award of a construction contract not

in excess of such estimate is improbable, authorize a change in

scope or materials as required to reduce the estimated construction

cost to an amount within the estimated construction contract price

set forth in paragraph c. of this clause, or the Government may

adjust such estimated construction contract price. When bids or

proposals are not solicited or are unreasonably delayed, the

Government shall prepare an estimate of constructing the design

submitted and such estimate shall be used in lieu of bids or

proposals to determine compliance with the funding limitation.

(c) The estimated construction contract price for the project

described in this contract is $____.

Page 7. The contract included FAR 52.236-23 (APR 1984), the

Responsibility of the Architect/Engineer clause, which provided:

The Responsibility of the Architect/Engineer Contractor (APR 1984)

(a) The Contractor shall be responsible for the professional quality,

technical accuracy, and the coordination of all designs, drawings,

specifications, and other services furnished by the Contractor under

this contract. The Contractor shall, without additional

compensation, correct or revise any errors or deficiencies in its

designs, drawings, specifications, and other services.

14

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(b) Neither the Government’s review, approval or acceptance of,

nor payment for, the services required under this contract shall be

construed to operate as a waiver of any rights under this contract or

of any cause of action arising out of the performance of this

contract, and the Contractor shall be and remain liable to the

Government in accordance with applicable law for all damages to

the Government caused by the contractors’ negligent performance

of the services performed under this contract.

Page 15. The contract contained the following provision, which dealt with delivery

of the design.

Part B - Special Provisions for Architectural-Engineer Design Services

D. Delivery of services:

1. Submission, schedules for services shall be as specified in the

Design Criteria.

2. Submission schedules for services may be adjusted, extended by

the CO if delays arise in the providing of services due to causes

beyond the control of the AE and providing the AE notified the CO

in writing as to the cause and effect of the delay(s).

3. Submission schedules for services may be extended by the CO

for the convenience of the Government. The AE will be consulted

as to and apprised in writing of new submission, delivery schedule.

Page 21. The contract provided a listing of possible special consultants, including:

4. Special Consultants

Special consultants shall include but are not limited to the

following: Courts programming-planning-design, Fire Protection,

Acoustical, Elevator, Surveying, Security/Blast consultant, and

others as required and incidental to the work of this project.

On page 21, the contract also provided a design target price:

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The construction budget (Estimated Construction Contract Amount

ECCA) for this project is $35,000,000 and includes escalation costs

for a projected construction contract award date of 12/01/01. The

Estimated Construction Contract Amount (ECCA) for additional

reimbursable work items is $3,500,000 and it also have [sic] been

escalated for a projected construction contract award date of

12/01/01, however reimbursable work items may or may not be

added by GSA.

Page 34. The contract included design criteria that addressed the need to include

energy conservation and environmental goals, directing appellant to “[d]evelop

design predicated on the following basic criteria:”

A. Sustainable Design, energy conservation, value engineering, and

life cycle costing are to be an integral part(s) of the design effort.

The energy conservation/environmental goal on this project is to

reduce consumption and employ sustainable design/green building

principles to the extent possible.

B. The AE shall provide the most energy efficient design possible

commensurate with architectural values. Requirements re: energy

conservation, contained in the GSA publication PBS PQ100.1,

Facilities Standards for Public Building Service, and GSA Green

Courthouse Design Concepts Manual are to be followed.

C. The AE shall closely coordinate proposed mechanical system

designs and associated equipment with the applicable local utilities

for their review and recommendations regarding “demand side

management” (DSM) and explore the potential for the obtaining

[of] energy conservation incentive/rebate programs.

Page 36. The contract set out security requirements at paragraph 25 of part C. As

contended by GSA, MSA should have included money in its pricing of the design

to cover the costs of incorporation of whatever security directions came out of the

referenced meetings:

25. Security Requirements: After the A/E has reviewed the security

documents and reference material provided by GSA, a security

meeting will be held to discuss overall security needs and strategies to

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respond to comments and concerns of the A/E based on their review

of the security documents. The A/E should record their security

concerns in preparation for the security meeting. The security meeting

attendees will include the US Marshals, the GSA Federal Protective

Service, the US Courts, the US Attorneys, and other GSA project team

members. The A/E will be required to consider security requirements

as an integral component of the development of plans for the three

concept designs and their evolution through the tentative and

construction document phases. The A/E will be required to participate

in a Vulnerability Assessment that will include input from the US

Marshals and the GSA Federal Protective Service. The goal of the

Vulnerability Assessment is to take a balanced approach to security

considering effectiveness and safety while incorporating a

multi-disciplinary approach and coordinating among professionals.

The A/E will be required to attend a one day GSA Federal Building

Security Seminar in Washington, DC. The theme of the seminar is

maintaining public access/open & inviting design while incorporating

security elements and technology as an integral component of design.

Pages 37-38 of the initial appeal file set out the design schedule:

Project Administration:

A. Correspondence:

....

(2) Contract documents are to be submitted in accordance with the following

schedule:

Extra Field Investigation (EFI) I Report:

Programming Phase

Final Working Documents (FWD):

Concept Phase Documents

Tentative Phase Documents

Mid-Point

Final Working Documents

Study and Report

TOTAL:

2 weeks

6 weeks

20 weeks

14 weeks

16 weeks

18 weeks

2 weeks

78 weeks

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Design Review time is built into the 78-week schedule. GSA, with

input from the A/E will develop a strategy to limit the amount of lag

time during review process. The intent of the proposed schedule is

to provide 78 weeks from the dates of contract work to the delivery

of the “100% Documents” (all reviews and corrections including

on-board review @ 100% are included). Should the 100%

Documents need corrections, before issue as a “Bid Set” the

correction time is not indicated in the schedule.

In its appeal file for the counterclaim, GSA included a schedule that showed seventysix weeks and had four rather than six weeks for the programming stage. The two-week

difference is not material to our determinations in either of the appeals before us.

19. Nothing in the contract or in any of the design criteria (including the PDS)

mentioned or incorporated the following documents: GSA Security Criteria, Draft Revision

January 17, 1997; GSA Security Criteria, Draft Revision, October 8, 1997; Inter Agency

Security Committee Security Design Criteria (ISC); or the 2000 PBS 100. Additionally, the

contract documents provided to MSA did not contain the word LEED, nor did any document

set a LEED target (such as silver).

Contract Negotiations

20. On October 8, 1999, MSA submitted its first fee proposal to GSA for

$4,591,499. Messrs. Menzies and Saviano negotiated for GSA, and Mr. Mathison negotiated

for MSA. Mr. Menzies acknowledged in his testimony that he had no architectural training

and no understanding as to the design effort that was needed for the project. He deferred to

Mr. Saviano, who took the lead. Mr. Mathison testified that in negotiating the design price,

he was aware of the presence of a 6% statutory cap on design costs and he knew the 6% was

to be applied against the government construction estimate. Due to the 6% cap, GSA could

not enter into a design contract in excess of $2,323,000. Mr. Mathison at the time of

negotiation was not privy to a specific government estimate for design work. Mr. Mathison

stated that he did not fully understand the Design Within Funding Limitations (LOF) clause

at the time he signed the contract, acknowledging that it was a clause which MSA had not

previously encountered. In negotiating, MSA proceeded under the assumption that the site

would be a flat, 2.5 acre parcel. The proposed site was in an historic neighborhood, but the

exact location and placement of the buildings on the property was still in flux. Although

provisions of the PDS identified the need for setback of the building for protective purposes,

nothing in the contract or PDS set a specific distance standard for setback.

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21. As negotiations progressed, MSA reduced its initially-proposed price and

manhours estimate. Mr. Mathison explained that he was constantly confronted with charges

that he was making it too complicated and seeing more work than necessary. He said that

Mr. Saviano and Mr. Menzies made representations that the building requirements would not

be new or untested, that GSA would reduce the scope of contract services significantly, and

that GSA would streamline and limit hours needed for the design work. He said he was told

it would not be as cumbersome or complicated as he understood it, and that GSA

representatives would smooth the process and make it easy, enabling MSA to keep its price

and hours down. He stated that MSA’s reductions reflected reliance on those

representations. In support of that, he pointed to the reduction in schedule time from the

ninety-six weeks set out in the initial design criteria to seventy-eight weeks (an 18.8%

reduction). He said that the schedule reduction was a factor in driving costs down and was

in line with the GSA negotiation assurances that the project was simple and that GSA would

expedite the process. He testified that shorter performance time leads to a lesser charge,

stating that he “thought we could get the work done in that time frame if what the

Government was telling us worked out.” He testified that he was aware of “give and take”

in architectural contracting and priced that into the contract.

22. Although Mr. Honn was not involved in the price negotiations, he did have prior

experience in estimating. He acknowledged that, in normal practice, the hours a designer

predicts for a project are typically based on the scope of work, noting that an A/E tries to

match scope with work ethic and schedule. He stated that sometimes the estimate is dead on

and other times it is a miss. The latter could occur for a lot of reasons, noting that the

company could decide a particular area was important and spend more time on it than had

been originally planned or one could miss some aspect when putting dollars together. As to

give and take, he explained that it varies, not only on task, but also based on with whom one

is dealing.

23. Mr. Menzies stated he never made any representations to Mr. Mathison

identifying the effort that MSA would need to put forth, nor did he state that the work would

be streamlined, was not new, and was not untested. He said that, in his experience, he had

never encountered a contractor who had accepted GSA’s explanation of what a contractor’s

effort of performance would be.

24. The parties negotiated over a four-to-five month period and agreed on a price of

$2,322,800, substantially below the initial MSA proposal, but in line with the 6% statutory

cap. MSA’s final negotiated price included $1,912,800 in base services and $410,00 for

three reduced options. Changes in scope or eliminations as to the following five categories

accounted for approximately half of the dollar drop from the initial proposal: (1) security

consultant, (2) audio visual acoustic, (3) post contract construction services, (4) independent

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constructability review, and (5) value engineering. Of the above, items 3 through 5 were

deleted options, which had originally been priced at $1.3 million. Other significant

reductions came from MSA agreeing to reduce overhead from 154% to 142%, which resulted

in a reduction of $212,000; and MSA reducing its man-hours based on the 18% reduction in

schedule time for the work from ninety-six to seventy-eight weeks. As explained by Mr.

Mathison, his final number reflected an approximate reduction from the original labor

numbers of 26%, which MSA compares to the 18% in reduced time from the original

schedule.

25. MSA’s primary design consultants also lowered their pricing. Weidlinger

reduced its price from $306,000 to $218,000 and Cosentini reduced its from $518,587.50 to

$350,000. Witnesses for both stated that their reductions were directly attributable to the

shorter project time. Mr. Tinsley, of Weidlinger, stated that he had some concerns as to the

number, but was told by Mr. Mathison that the building was straightforward and fundamental

with respect to column grids, with grids not being long span. He was also told that GSA

would be very responsive to submittals. In breaking down his pricing, Mr. Tinsley testified

that $165,000 was for the structure and $47,000 for blast considerations. In addition, he

testified that blast considerations were also part of the progressive collapse analysis. For

purposes of comparison, GSA’s internal pre-award estimate for both structural and blast

design was $175,000.

26. To get to the final number, GSA significantly reduced the initially provided

scope of the independent constructability review (ICR). The ICR covers a number of

matters, one of which was to pay for an independent party to cross-check, in detail, the

construction costing of the project as the design evolved. In his post-negotiations

memorandum, Mr. Menzies compared the $150,000 which GSA ultimately allotted for the

service (in the negotiated contract) to the initial MSA number for the service of $454,184.

He described MSA’s initial proposal as overstating all levels of effort. He stated, “Although

the $150,000 as agreed upon is considered less than ideal (in fact below the GE [government

estimate]), it should be adequate to cover the basics at a minimum.” Although the record is

not entirely evident as to some of the details surrounding the ICR work, what appears evident

is that Heery International was the firm that performed ICR work on the original design

phase. While it was paid through the MSA contract, GSA had control over Heery’s activities

and GSA and not MSA had the contractual relationship with Heery. As addressed later in

this decision, due to cost constraints, GSA did not pay Heery for full reviews, and

accordingly Heery did not conduct them.

27. MSA and GSA completed negotiations on March 23, 2000, and entered into the

design contract on April 26, 2000, for $2,322,800 This amount includes the base,

$1,912,800; option 9, $60,000; option 4, $150,000; and option 3, $200,000. The contract

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called for construction award on December 1, 2001. Option 4, as awarded, was the ICR

option that had been reduced to $150,000. After award, Mr. Menzies prepared a price

negotiation memorandum in which he addressed the disparity between the pricing of the final

agreement and MSA’s earlier proposal. He stated that MSA’s proposal was extremely

overstated in all levels of effort, with GSA estimators basing that determination upon

experience on other, recent courthouse design projects and established national courthouse

benchmarks. He continued,

With such a large disparity between the GE and MSA’s proposal,

it would be extremely difficult at best to hope to reduce the A/E’s

level of effort to a point within the government’s budget and

maintain a level of design excellence from the designer. Although

the hours as proposed must be reduced significantly, a creative

approach to accomplishing the work must be embraced by both

GSA and MSA in order to reach an agreement and obtain a

successful design for this project. The fact that very little effort

specified within the base design criteria is optional, decreases the

opportunity to reduce the scope in any way in order to reach

agreement with the A/E. The A/E as well as GSA must be

challenged with more economical and creative means to satisfying

the requirements within the design criteria.

Design Phase

28. Soon after the contract was underway (approximately April 2001), GSA (without

MSA involvement) submitted a prospectus to Congress requesting $53,436,000 for the

project. This request identified an estimated construction cost of $43,836,000, an increase

from the $35 million set out as the construction cap in the MSA contract. GSA has conceded

that the budget increase was not due to any change to the project design requirements. The

estimated construction cost on which the request was based was a benchmark calculation

performed by Jeet Mahal of GSA in August 2000. GSA has stipulated that the Mahal

calculation did not include allowances for compliance with the GSA design criteria dated

October 1997, LEED compliance, or changes as to blast resistance in progressive collapse.

Congress approved the new GSA number, thereby increasing the money available for

construction to more than $43 million. MSA became aware of the added funds early on, and

thereafter, although there was never a formal change to the target number, both parties

proceeded during much of the initial design phase as if approximately $43 million was

available for construction and $35 million was no longer the target. MSA did not request

GSA to formally amend the $35 million number, and GSA issued no document making the

change.

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29. Under the original design schedule, MSA should have completed its final

concept submission within twenty-eight weeks of award. There were extensive delays

created early on by a myriad of matters, including the elimination of a courtroom, changes

in criteria for the Marshals Service, site coordination issues, and the introduction of more

extensive peer reviews of the design. There is no evidence that these delays were the fault

of MSA, which was granted additional performance time by GSA. In fact, in its

counterclaim GSA does not charge MSA for any delay prior to July 2003 (the adjusted date

for providing biddable documents). Instead, GSA measures its escalation claim from July

2003. There is no document which identifies payment to MSA for pre-July 2003 delays.

However, during performance the parties entered into a number of modifications, some of

which dealt with issues that have been noted by MSA as contributing to the initial delays.

30. As one of its contract responsibilities, MSA was required periodically to provide

cost estimates to GSA to assure that the design would be able to yield a building that could

be constructed for the money that was available. As with any design contract, the design was

expected to evolve over time and be fleshed out from the awarded concept. The MSA

estimates were to be a check on the cost effects on price as the design process proceeded its

way out. The contract called for estimates to be submitted with the concept design, as well

as at the development/tentative phase, and at the final working drawing phase. MSA’s

estimate obligation was independent of the ICR check and review.

31. As part of the concept stage, MSA was tasked with developing and delivering

three concepts to GSA. From those, GSA was to select one on which to proceed. On

September 27, 2000, GSA issued its first contract modification, PCO 1, for $75,000, which

called for MSA to perform a pilot design/security study dealing with how to mesh security

and openness concerns as to this project and others. In October 2000, still at the early stages

of concept development, and almost a year before GSA approved MSA’s first formal

submission (the final concept documents), CCS prepared an estimate for MSA which costed

the project below the target threshold. The CCS estimate was turned over to Heery for its

review. On November 21, 2000, Heery provided a letter to Mr. Saviano in which it estimated

that the design would cost about $38.7 million. Heery qualified its review by stating that the

design it reviewed was mostly schematic, with little structural or architectural detail and no

detail as to complexity of design or the overall quality of material. It reported that the square

footage used by CCS was about right and it suggested an annual escalation rate of 3.5% per

year.

32. MSA continued with its concept design through the first half of 2001. According

to Mr. Tinsley, who was putting together the structural design, he saw nothing particularly

complex at that time as to the basic structural framing. He was operating on the basis of the

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96/97 PBS 100 being the standard and thus judged the progressive collapse work on that

basis. He therefore included no blast hardening of the structure or other similar blast

resistance enhancements. At the concept stage, MSA was providing GSA with MSA’s basic

design, layouts, facade, material descriptions, landscaping, and a narrative explaining MSA’s

design intent.

33. In June 2001, Mr. Saviano directed Mr. Honn to no longer follow the 96/97 PBS

100, but rather to use the November 2000 version (2000 PBS 100). He also directed MSA

at a meeting in late June to incorporate the 1997 GSA Security Criteria as a project

requirement. Neither had been part of the original negotiated package and both were being

introduced for the first time. The 2000 PBS 100 introduced several significant changes to

design criteria, primarily requirements for a more expansive progressive collapse standard,

addition of LEED compliance, and assorted added security considerations. The 2000 PBS

100 progressive collapse criteria differed from the earlier version in a number of respects,

with the practical effect being that beams and slabs had to be designed larger, more robust,

and more heavily reinforced. Beams above an area had to effectively span twice the original

distance, as well as support all of the load above the concentrated load in the middle of the

beam. The progressive collapse changes impacted work on MEP tasks, particularly in

affecting the coordination and placement of penetrations through thicker and larger structural

members. Mr. Leber testified that in putting together the initial MEP proposal, he did not

anticipate the degree of coordination with the structural design that he ultimately had to

perform.

34. As to LEED, the 2000 PBS 100 provided, “As a means of evaluating and

measuring our green building achievements, all GSA buildings must be certified through the

Leadership in Energy and Environmental Design (LEED) Green Building Rating System of

the US Green Building Council. Projects are encouraged to exceed basic LEED green

building certification and achieve the LEED Silver Level.” The language as to LEED

materially increased the level and scope of green effort required in the building design. At

the time of pricing, MSA was to design a building that was to incorporate various

sustainability and green measures to the extent practicable. There was no set benchmark and

while we find that a reasonable reading of the contract documents called for MSA to be

reasonably aggressive, those requirements did not call for the project to be driven by

sustainability goals, to require extensive research, or to be anywhere as expansive in

attempting to incorporate green elements. GSA further compounded matters by not only

calling for LEED, but also pushing MSA to comply with LEED silver level status.

35. In late June, in conjunction with GSA directing Mr. Honn to comply with the

newly introduced GSA security criteria, Mr. Saviano sent Mr. Honn a document entitled

“Vulnerability Assessment, GSA Security Design Criteria.” Mr. Honn testified that this was

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the first he had seen that document and that upon his receiving the document from Mr.

Saviano in late June 2001, he recognized that it specified new design criteria, particularly

relating to blast protection. While the document he was provided dealt mostly with perimeter

security, it also did touch on the structure. After reviewing the document, he forwarded it

to Weidlinger. Mr. Tinsley, at Weidlinger, determined that the document contained blast

resistance requirements and then forwarded it to Weidlinger’s blast specialist, Dr. Robert

Smilowitz. GSA claimed in briefing that MSA had seen the above referenced document at

the 1999 meeting with Mr. Safdie. However, GSA provided no witness to corroborate or

establish that.

36. Before addressing Dr. Smilowitz’s reaction, we briefly review the sixteen-page

document Mr. Saviano provided to Mr. Honn at the June 2001 meeting. The document was

a controlled document and one that could only be gotten with the permission of GSA. It was

incomplete, lacked an index, and consisted of excerpts from a larger document. One could

not tell from the sixteen pages what was left out or determine the context of what was

provided. It had some references to Level C security criteria (as to windows, garage area

columns, and structural members in lobbies and other localized areas). It also stated, under

“Stand-Off Distances,” that the preferred design criteria for Level C specifies a twenty-foot

stand-off from all parking, or compensating design measures. It, however, did not say that

Level C was required for this or any courthouse. Moreover, the document provided no

definition of what Level C meant and no qualitative or quantitative criteria as to its

application for the areas with which it was referenced. The document also addressed

progressive collapse, referencing the 96/97 PBS 100 standards. The document stated on the

first page, under “Security Philosophy,” that its primary goal was to save lives and prevent

injury, and its secondary goal was to protect federal buildings, functions, and assets. It

continued that its intent was to take a balanced approach to security, considering cost

effectiveness, acknowledging acceptance of some risk, and recognizing that federal buildings

should not be bunker or fortress-like, but rather, open, accessible, attractive, and

representative of the democratic spirit of the country. It then noted, “Prudent, rather than

excessive, security measures are appropriate in facilities owned by and serving the public.”

On the page showing “Structural Engineering,” the document states that it focuses on

protection and also on managing risk and cost. It then states, “There are three basic

approaches to blast design: loads can be reduced, primarily by increasing stand-off; a facility

can be strengthened; or higher levels of risk can be accepted. The best answer is often a

blend of the three.” Finally, on the same page as the paragraph addressing progressive

collapse, the document contains a paragraph tilted “Explosive Threat.” It states, “Where an

explosive threat, as defined by this document exists, structures shall be designed to resist

blast (B) loads in combination with other loads.” Nothing in the paragraph identifies a

specific blast resistance hardening level or standard required for this or any other facility.

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37. Dr. Smilowitz, who had extensive blast design experience, including with

government projects, was familiar with the whole GSA security criteria document and, as

such, recognized that what had been given Mr. Honn was missing many pages. He knew the

document was a controlled document and one which would have limited distribution. He

asked for a meeting with GSA to receive the full criteria and to find out which options and

which levels of protection the Government wanted to incorporate into the design.

38. On June 21, 2001, GSA hosted a meeting to respond to Dr. Smilowitz’s

concerns. It was attended by Mr. Honn, Mr. Saviano, and Weidlinger’s designers. Mr. Honn

wrote in his minutes:

GSA Security Criteria dated 10/8/97 is the bible for this project;

courthouse is a level “C” Standoff distance was discussed; 20’ is the

goal; we are violating at 3 locations; 20’ is measured from protective

barrier to facade, facade must withstand a 4000# vehicle at 30 MPH; WA

has reports from government with results for tests; 30” high walls are the

standard to withstand impact, although this is subject to interpretation 18” high walls are no good.

If you have a lot of distance between barrier wall and your facade then

sliding distance may provide adequate protection. This [sic] is no

uniformity of decision making on these criteria

The minutes went into detail regarding poundage for bombs at various locations,

addressed hardening the slab above the garage, and dealt with other explosion-related

matters. As a separate matter of discussion, Mr. Honn addressed a GSA contract requirement

(in the original documents) that the courthouse have operable windows. He pointed out that

the need for blast resistance might complicate the situation and noted that there might be a

conflict between sustainability and meeting levels of protection, pointing out that it made no

sense to open a window that contains ballistic glazing, if one can get a clear line of sight into

a room with the window open. MSA, which was less than a month away from providing the

final concept submission to GSA for approval, had now been given significant new

information which was to be incorporated into the design and which previously had not been

identified as design criteria.

39. On June 26, 2001, as a follow up, Dr. Smilowitz prepared a detailed

memorandum for GSA in which he laid out his understanding of what was being required,

suggested alternatives, and asked for direction. He also confirmed Weidlinger’s

understanding that GSA was requiring the courthouse to be designed to Level C criteria. He

wrote that at the June meeting, the parties reviewed the general requirements for physical

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security identified in a seventeen-page document titled “Vulnerability Assessment - GSA

Security Design Criteria” and noted the similarity between that document and the more

comprehensive “GSA Security Design Criteria,” draft revision dated October 8, 1997. The

project specific document (the excerpt provided to Mr. Honn) appeared to be a subset; it

specified the GSA Level C “Medium Level of Protection,” but there were notable omissions

pertaining to quantitative blast analysis and design. Dr. Smilowitz stated:

The GSA Security Design Criteria help define the features of physical

protection that will prevent large-scale injury in the event of a terrorist

explosive event. However, when these criteria are applied without

exception, the cost of physical protection may be significant and the

impact on the architecture may be extreme. When applied judiciously,

the costs may be reduced and the goals of sustainability and design

excellence may be achieved without significantly jeopardizing the safety

of the occupants. WAI [Weidlinger] is prepared to discuss these features

should there be any questions regarding their impact on physical security.

Following this, WAI requests that GSA issue a decision so the design can

proceed on schedule, avoiding costly iterations of redesign and

re-analysis.

40. MSA acceded to incorporate the Level C criteria. Before moving forward,

however, and without going into full detail, some aspects of the complete GSA security

criteria bear mentioning, for they show how much was not provided. First, the complete

document is essentially a guide that provides a menu of security choices to be decided by the

owner for incorporation into a design. The document describes itself as intended to

complement the PBS 100, stating its primary goal to protect, but also to take a balanced

approach, so as to avoid a fortress-like structure. It provides that the design is to look at

prudence rather than excessive protection. It says that assignment of a level is to be based

on risk analysis and that building elements may be assigned separate levels. It identifies five

levels of protection. Level E is the highest and Level A the lowest. While Level C is

described as being a medium level, the difference between its description and that of Level

B is not dramatic. The document states that Level C terrorist protection is for use when the

building is a regional symbol or has significant impact on the Government’s mission, when

its damage or loss will have high consequences, and where there is a verified threat. Level

B is described as being used for a building that is a regional symbol or has an impact on the

Government’s mission, when its damage will have moderate consequences, and when there

is a suspected threat. The difference between B and C is one of degree. At the time of

pricing, GSA either had not made a selection or had simply failed to inform MSA of what

level it wished to use. GSA never explained or addressed why Level C, which existed at the

time of the negotiations, was never cited or highlighted as the intended standard during those

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negotiations. As Dr. Smilowitz testified, the owner always identifies the security

requirements and criteria to be used. Accordingly, he would have expected GSA to have

done that here.

41. Despite suggestions made by Dr. Smilowitz to modify aspects of the protection

standard (so as to reduce costs, complications, and later rework), GSA did not provide a

response. That being said, the changes to the criteria did not immediately impact MSA’s

design effort. In late June, concurrent with the new directions, MSA was at the stage of

providing GSA with the final concept design submittal. That submission was sixty-five

pages, estimated construction at $42,290,364, and contained forty-six drawings (which were

generally not detailed, but rather showed the general appearance and location of the facilities

and some additional features). Because it had been directed by GSA to include the GSA

security criteria, MSA acknowledged that the design would incorporate Level C and other

blast enhancements, as well as meet the LEED and progressive collapse changed

requirements. While this was not shown in the drawings provided for the final concept,

MSA in its narrative told GSA that its design would now provide for concrete walls around

the loading dock and mail room. The shear walls above grade (at Spring Street) would be

“hardened” structurally to resist blast loads in accordance with a Level C threat. MSA

identified similar treatment as to hardening of slabs over parking areas and other locations

and specified hardening of various walls. At this point in the concept stage, the submittal

addressed what was to be done, but had not yet addressed how that was going to be

implemented.

42. At some point after July 17, 2001, GSA issued PCO 4 in the amount of

$197,533. MSA signed it on July 30, 2001, and GSA signed it on September 5, 2001. The

modification involved design costs associated with taking a courtroom out of the project, as

well as included other GSA changes which had required rework by MSA or which had

rendered some of MSA’s earlier work moot. In general, the modification dealt with issues

that had arisen several months before GSA introduced the added security and 2000 PBS 100

criteria. Mr. Mathison described PCO 4 as an epiphany, noting that it marked the point when

MSA first began to realize that MSA’s scope and costs were substantially increasing over

what it had priced for the project. When questioned as to whether the compensation for PCO

4 had covered MSA’s costs, Mr. Mathison commented, “probably not enough.” By this point

the project schedule had slipped badly. Much of the slippage in the project to this point can

be attributed to the revisions reflected in PCO 4. While the use of PCO implies a proposed

change order, in those instances where an agreement was reached, the parties did not change

the designation.

43. In early September 2001, GSA officials began expressing concerns as to whether

the project, as designed, could be built within the budget. In a September 6, 2001, e-mail

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message from Mr. Robert Androkonis (Mr. Saviano’s supervisor) to Mr. Edward Feiner,

GSA’s chief architect (copies to Mr. Saviano and Mr. Malinder), Mr. Androkonis praised the

form of the design, but questioned whether it could be built within the budget. He discussed

a number of concerns ranging from location of offices, to ceiling heights, to curved floor plan

and skylights. He noted that the raised flooring, which he said GSA had committed to, was

not in the design at that time, and stated that the estimate included in MSA’s final concept

submittal had been based on updates to earlier estimates and square footage, not on specifics

of the MSA design. In the last page, he stated that GSA had a terrible history lately of

bidding courthouses and therefore needed to be conservative in the design of the building.

In closing, he stated that it was a lovely building, but “lets [sic] make sure we can build it.”

44. Notwithstanding GSA’s concerns, on September 21, 2001, GSA approved

MSA’s final concept submission. By this point, the job was at seventy weeks rather than the

twenty scheduled. The delays were attributable to a number of factors, including the time

required for peer review, issues concerning site conditions and configuration, changes by the

Marshals Service, deletion of a courtroom, and other matters. Some had been dealt with in

PCO 4. The approved concept continued to include the curvilinear design. Additionally, it

remained a concrete structure, continued to include a glass curtain wall and skylights, and

retained the historic trees. Although GSA has asserted in its briefing that the contractually

referenced U.S. Courts Design Guide explicitly admonishes designers against the use of

curvilinear forms and skylights (as they are considerably more expensive than other options),

there is no evidence that GSA attempted to remove those features from the project. Rather,

evidence established that GSA considered those features to be essential and not subject to

GSA compromise. According to Mr. Mathison, up to the point that the final concept was

approved, MSA was pretty much on budget.

45. In October 2001, the parties exchanged correspondence as to cost concerns and

cost drivers. In an October 15, 2001, memorandum, Mr. Honn emphasized how the effort

to save the historical trees and accommodate the size of the building had fixed the siting of

the structure in relation to surrounding streets. He addressed measures to provide the

required blast protection (given the siting) and raised issues as to setbacks, increasing heights

of walls, adding more bollards, and increasing levels of blast resistance for the building

facade. How these matters would be treated had been under consideration by the Marshals

Service since June, but with no resolution. He also addressed ceiling heights, office sizes,

and access flooring. Regarding the estimated cost of construction, he stated:

Since the previous estimate was based on a similar but larger and more

complicated design, the GSA Project Team, and the CM [construction

manager], Heery International, concurred with the estimate adjustment

method used by the architects and concluded that a separate estimate was

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not warranted. The GSA Project Team, the CM and the architects are in

agreement that the estimate and budget are adequate at this phase of

design. The current revised design and adjustments to the original

estimate comply with the architects base contract and the change order

that reduce the building size and program.

To meet the allocated budget, we expect to strike a balance between

building configurations and finishes. The majority of the exterior facade

is actually pre-cast concrete (not stone), a material that MSA has

historically had a great deal of experience with and success at designing

economically. The CM who will be consulting with industry experts on

critical cost items, will constantly monitor the project cost estimates. The

design team will also be performing value engineering reviews with the

intention of identifying potential project cost reductions should they

prove viable.

46. On October 31, 2001, Mr. Androkonis wrote to Mr. Saviano by email to express

his concerns as to some of the matters raised by Mr. Honn. He addressed the A/E handling

of the trees in relation to meeting setback distances and pointed out that providing blast walls

and strengthening the building’s skin as a substitute for the setbacks would add costs to the

project that were not covered by the budget. He expressed concerns as to the cost impact of

curtain walls and skylights, noting they had been a factor in recent bid busts. He stated that

if the concept was approved, it would be much more difficult to control project costs and, if

the concept was later found to exceed authorized funding, GSA might be left to diminish the

quality of finishes, reduce programmed space and/or eliminate features and functions that

were important to the operation of the courthouse. He then stated, “Therefore, it is my

position, if we can not deliver this concept including requirements such as raised flooring,

security setbacks, blast performance, energy goals, system performance, etc., in an acceptable

fashion, we do not have an acceptable concept.”

47. On the same day, Mr. Feiner also weighed in with an internal document

circulated to various GSA officials, including Mr. Saviano. He prefaced his remarks by

stating that both GSA and the courts considered the design to be excellent. He expressed

cost concerns, saying that the courts and the A/E were adamant about there being a separate

structure (the chambers building) for the judges. He said that once he was assured by the

A/E that it was within budget, GSA did not fight it. He expressed concerns as to meeting

setbacks and acknowledged that raised floors might not be needed for the chambers if there

were cost concerns. He commented briefly as to ceiling heights and security and then said:

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The cost issue CANNOT be ignored. If this concept cannot be delivered

in accordance with the scope, it is time to address the issues that are the

drivers. If it means some rethinking or even redesign, now is the time,

not the day after a bid-bust.

On October 31, 2001, the comments of both Mr. Feiner and Mr. Androkonis were

transmitted by Mr. Saviano to Mr. Mathison.

48. On November 5, 2001, MSA, Cosentini, and GSA personnel held a meeting to

assemble a project team to discuss sustainability goals. LEED compliance was a primary

topic. The agenda shows the parties addressed eighteen separate topics, and reiterated GSA’s

emphasis on meeting a silver goal for the project. This meeting demonstrates that the

incorporation of LEED requirements was just getting underway and that many of the items

were going to require strategies that would involve detailed analysis and study.

49. As MSA progressed through the tentative design phase, it was continually faced

with having to make revisions and accommodations based on incorporating the blast criteria

into the project. In a November 6, 2001, memorandum, MSA agreed to revise its design so

as to create a twenty-foot setback to the facade of the chambers building, the siting of which

just had been confirmed by the Marshals Service. The parties were exchanging information

as to whether the courts would accept any modification to courtroom sizes and whether MSA

would be given the go-ahead to treat some areas as transient (and thus no need for blast

criteria). Questions as to raised flooring were resolved in favor of requiring the raised

flooring.

50. On November 27, 2001, Mr. Saviano commented to Mr. Feiner and Mr.

Androkonis regarding Mr. Honn’s remarks of October 15, 2001. Paraphrasing Mr. Honn,

Mr. Saviano stated that the previous estimate was based on a similar but larger and more

complicated design, the GSA project team and the CM concurred with the estimate

adjustment method used by the architect, a separate estimate was not warranted, and the

budget was adequate at the current phase of design. He reiterated Mr. Honn’s assurance that

the CM would be consulting with industry experts on critical cost items and would constantly

monitor the project cost estimates, and that MSA would be active as to value engineering.

51. As the design effort progressed into the latter part of 2001 and into early 2002,

MSA continued to face issues as to what was to be included and what could be eliminated

or changed, particularly in relation to protective design elements and to coordinating the

LEED standards. This was illustrated in a December 12, 2001, memorandum from Dr.

Smilowitz to GSA in which he addressed concerns regarding meshing GSA’s requirement

to design window frames to Level C, with the Marshals Service’s ballistic requirements as

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to the glass. MSA was pressing to use hurricane level windows in its design (which

contractors were familiar with), as opposed to the untested design combination required by

GSA. In addition, he addressed issues involving providing window hardware for operable

windows that would still allow the windows to meet both blast and ballistic criteria. Despite

offering various recommendations, MSA received no timely response and matters continued

under review by GSA and the Marshals Service well into the end of 2002. Ultimately, some

of the recommendations made by Dr. Smilowitz were essentially accepted, although not until

well into the redesign period.

52. On February 5, 2002, MSA sent a memorandum to Mr. Saviano titled

“Additional Cost Estimates.” In the memorandum, MSA described (on a two-page

spreadsheet) additional construction and design effort costs. For each designated item, MSA

placed on the spreadsheet either an estimate of construction costs or a question mark as to

those anticipated costs. Mr. Honn explained that it had become apparent to MSA that the

firm had been doing a lot of work that might have implications as to the construction costs,

so he provided GSA construction cost numbers for that work. In addition, as the last item

in each category, MSA placed a line for additional professional fees associated with the

work. At that point, MSA put in question marks as to the amount of the added anticipated

design costs for each category. The spreadsheet was broken down into five categories:

perimeter security; office space and prisoner delivery; courts; U.S. attorneys; and

sustainability. Each had subcategories, with perimeter security showing twenty-one items.

The perimeter security items did not focus on blast enhancements, but rather, focused on

items such as security fencing and gates, bollards, and how to deal with sixty historic style

houses. The spreadsheet included seven items under sustainability, including a major cost

item for substituting a geothermal system for conventional heating, ventilation, and air

conditioning (HVAC), including changes to air handlers and ductwork. A number of the

items listed in the spreadsheet represented deviations or changes from what MSA had shown

in the final concept that GSA had approved in September 2001. In February 2002, MSA was

in the tentative design phase, a point where its design drawings were still generally schematic

and structural calculations and equipment placement had just begun.

53. Mr. Saviano responded on February 7, 2002, and told Mr. Honn that the design

line items should come out. He said, “[T]he GSA Cover inserts a pro rata design cost

automatically.” MSA understood the direction to mean that MSA did not need to ask for

additional design fees on similar requests, but rather, when an item was included, MSA

would be compensated through a percentage application. MSA complied with Mr. Saviano’s

directive. When MSA sent a revised version to Mr. Saviano, several weeks later, it

specifically did not include a line or space for professional fees. The March 7 submission

showed $4,577,945 for the construction. The sustainability category accounted for

$1,753,500 of the increased costs. While many of the items were not ultimately included,

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each involved some additional study or design effort by MSA. The treatment of windows

continued to be an issue through February and March 2002.

54. On March 31, 2002, MSA submitted a set of tentative design drawings to GSA.

It was at this stage that Weidlinger had begun to size its columns and beams and Cosentini

was zeroing in on equipment and making sure it could fit. At completion of the tentative

design, the design was to have progressed to the point where all major building systems and

components were represented on the design drawings. Because it was added later, the

tentative drawings did not have a geothermal component. The geothermal change, although

substantial, is not an issue as to the design claim. MSA was compensated for its efforts in

changing to the geothermal system in PCO 6.

55. On April 26, 2002, F. Joseph Moravec, GSA’s Commissioner of Public Buidling

Service, issued a memorandum for assistant regional administrators. The subject was

“Implementation of the Interagency Security Committee (ISC) Design Criteria Regarding

Site Selection.” Although not specific to this project, the memorandum reflects the mind-set

resulting from the September 11, 2001, World Trade Center attacks. The memorandum

conveys a clear intention on the part of GSA to provide measures in its site selection for

federal facilities to protect the federal workforce and visitors. While GSA had protection

concerns prior to the Trade Center attack (specifically the bombing of the Federal Building

in Oklahoma City in 1995), concerns took on even greater importance after September 11th.

56. On May 16, 2002, Heery provided a construction estimate of $41,365,898 for the

tentative design. Thereafter, on June 14, 2002, Heery prepared an updated estimate, this time

at $45,483,007. The latter was based on the tentative design submittal from MSA dated

March 31, 2002. In a July 3, 2002, memorandum from Mr. Honn to Mr. Saviano, Mr. Honn

estimated construction costs at $43,460,593 for the building and $3,081,350 for site work.

57. At the end of July 2002, GSA approved the findings and recommendations of

the special security report that had been ordered in PCO 1, at the start of the design. MSA

charges in its claim that GSA directed it to include aspects of the report into the design. GSA

denies giving such direction. GSA charges that MSA incorporated provisions on its own.

Neither party provided any specifics, and we do not find the security report itself played a

major role. By the time the security report was issued, the GSA changes as to progressive

collapse, hardening, and LEED were already imbedded as contract requirements. At that

point, MSA was designing to Level C and GSA was holding MSA’s feet to the fire as to

LEED efforts.

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58. In August 2002, CCS provided GSA with the 50% construction documents

estimate. CCS based the estimate on drawings and specifications dated July 12, 2002. The

next step was preparation of the 95% drawings, with the final step being the conversion of

the 95% drawings into final drawings.

59. The parties continued to discuss MSA’s allegations of extra work. In an e-mail

message dated November 5, 2002, from Mr. Saviano to Heery, with a copy provided to Mr.

Honn, Mr. Saviano identified several design items as being above normal project costs and

stated that work associated with the items might be compensable to MSA. The items were

(1) landscaping, sidewalks, exterior and street lighting, and employee parking lot, (2)

geothermal system and up-charges from conventional HVAC, architectural, and mechanical

sustainability features, (3) electrical utility related items, and (4) reinforced architectural

perimeter features, including walls, bollards, security benches, and monumental vehicular

stops at the main entrance. A number of these items later became the subject of PCO 6,

which was executed in late November 2003.

60. A December 6, 2002, internal memorandum from court officials identified

several items that could be argued as not having been in the prospectus budget. Among them

were remediation costs due to poor soil conditions, $150,000; costs of required progressive

collapse higher than the benchmark, $160,000; and more costly materials, landscape, and

upgraded bollards because of the building’s location in a historic district. The memorandum

then discussed value engineering and noted that the project had been delayed for eighteen

months by GSA Central Office’s decision to eliminate one courtroom. It said that Heery had

estimated those costs at $2,240,000.

61. On December 16, 2002, Mr. Saviano sent an e-mail message to Mr. Honn titled

“Identification of Design Items Above Contract Criteria,” in which he stated:

Here is what I have come up with for Above Contract Criteria.

ISC Security Design criteria and USCOE protecting Building and

their occupants from airborne hazards look like they were added

after the initial design contract by our security team. Moving Air

Intakes to roof, if attributable to the added criteria, has a major cost

impact that MSA should provide a ballpark cost for.

Facilities Standards at time of contract was PBS-PQ-100.1 dated

12/23/93 and GSA Issued new Facilities Standards Revised 11/00

for inclusion however GSA’s understanding was that new standards

were far less prescriptive and should not add any cost – However,

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MSA and consultants such as Cosentini may and should indicate if

they can identify any additional cost items based on the updated

standards that were not included in the original contract version.

Please let me know if you have any added cost related to the criteria

changes.

62. MSA wrote to Mr. Saviano on December 27, 2002, providing a list of items

which MSA described as scope increases (and thus cost increases) from the 1996 PDS.

Among the items included was having to reinforce concrete to meet progressive collapse and

to meet other enhanced blast criteria, various LEED-related items, intake air at the roof, and

sitework (as affected to accommodate security). While not all items were costed for

construction impact, those items for which MSA did include a cost totaled $2,315,000 in

estimated added construction costs. MSA did not provide a figure for added design costs.

63. In February 2003, Mr. Honn was informed by GSA that “GSA Washington”

would not permit the project to go out for construction bids if the estimate based on 95%

complete drawings exceeded $45 million. Mr. Honn then prepared a memorandum to MSA

and consultants, titled “Cost Control Strategy.” There he said, “The basic strategy then, is

to remove some items from the bidding set and add them back during the contract negotiation

phase.” At the hearing, he acknowledged that removing elements from a design to make an

estimate fit a specific number was “unusual.” MSA also made a wholesale 1% reduction in

material. Mr. Orens, when asked, could not explain the basis of the reduction. What is

evident is that in February 2003, MSA and GSA knew that in order for the project to go out

for bids, MSA would have to get to the $45 million number.

64. CCS prepared an estimate dated March 19, 2003, which Mr. Mathison

transmitted to GSA under cover letter of April 4, 2003. Mr. Mathison identified it as the

95% cost estimate, priced at $44,992,850.71, which is 99.984% of GSA’s limit for the

project. Heery provided a review of the estimate to GSA. Both the CCS estimate and Heery

review showed $45 million plus or minus. On March 14, 2003, a few days before CCS

finalized its March 19 estimate to MSA, GSA and MSA held a meeting to finalize costs.

GSA contends that at that meeting, Mr. Honn disparaged the capabilities of CCS and showed

a lack of confidence in the CCS estimate. More specifically, GSA points out that Mr. Honn

wrote “HA” next to a comment attributed to CCS and having to do with CCS due diligence

in the preparation of the construction estimate. The word “HA” was placed on a sheet next

to the wording, “This cost estimate represents our opinion of probable construction costs for

this project. We have exercised due professional diligence in the preparation of this estimate.

Since we have no control over final market selection, bidding strategies and market

conditions, no guarantee is given or implied with this estimate. This estimate assumes a

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normal market condition.” It should be noted that the quoted language, which is essentially

a limited disclaimer, appeared on all CCS estimates.

65. In addition to Mr. Honn’s comment noted above, GSA charges that Mr.

Mathison presented testimony which calls into question the completeness and adequacy of

the work of CCS. GSA charges that Mr. Mathison testified that MSA did not expect CCS,

in preparing construction estimates, to interpret the things that the contractors had to interpret

in preparing bids. GSA further charges that he admitted that MSA did not direct CCS to

provide blast resistance in any of its estimates. For purposes of context, Mr. Mathison (later

in that same line of testimony) stated that he expected CCS to understand contractor reactions

to the design and was sure CCS made judgments as to that. He further stated that blast

resistance was part of the design MSA was required to prepare and as such would have been

considered by CCS in its estimating.

66. GSA relied on the CCS estimate with an assumption that it had been prepared

using proper estimating techniques. MSA, in defending the adequacy of the CCS estimate,

cites to the fact that Heery performed a review of CCS’s estimate for GSA and the Heery

estimate and CCS estimates were in line. While that is correct to a point, as we address later,

Heery performed that review while operating with significant limitations and thus its results

are not particularly probative as a baseline for purposes of buttressing the CCS estimate.

67. As had been the case with other stages, the period up to the 95% complete

contract documents was extended for a significant period by GSA. MSA continued to

receive comments on a rolling basis until receiving final approval of the 95% design in July

2003. MSA has stated that while the delays for this as well as earlier stages did not have a

day-for-day effect on its operations (for MSA continued to work on the design), the delays

at times resulted in MSA having to go back and modify items that it had already incorporated

into the design. GSA comments, even if late, had to be incorporated into the design. At no

time during the design period did GSA issue MSA a cure notice or blame MSA for any delay

in performance.

68. On May 22, 2003, Mr. Mathison wrote to Mr. Menzies and Mr. Saviano

regarding charges for additional services that MSA believed it was being required to perform

on this contract, some of which had been part of discussions in November 2002. Among the

more significant charges being sought were approximately $63,471.76 for landscape

architectural services; $51,468.41 for additional commissioning and sustainability services;

$80,347.02 for additional geothermal design services; $177,000 for extended CM design

phase services; $166,035 for above-standard design services for the courts, U.S. Marshals

Service, and U.S. attorneys; and additional funds for Heery of $28,600 for estimate review

and $72,600 for coordination review. (While Heery had no contractual obligation to MSA,

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GSA was nevertheless funding Heery through the MSA contract.) MSA also sought

$14,559.48 for revisions due to revised PBS 100 criteria. In summary, MSA identified

sixteen items at a cost of $863,460.39.

69. On July 15, 2003, GSA issued the complete set of MSA contract documents as

a bid set to potential bidders. Bids were opened on August 15, 2003. The low bid was

$65,183,000 with five bids closely grouped. Each potential contractor had been

pre-qualified. The concrete costs in the low bid exceeded the 95% estimate by $10,162,408.

The concrete costs of $650 to $750 per cubic yard reflected in the bids were more than

double the normal prices for concrete in major markets such as Boston. Doors and windows

exceeded the 95% estimate by $3,824,594. The addition of the geothermal system increased

the construction costs by almost two million dollars. The construction costs projected by

CCS’s 95% estimate indicated a square foot price of $272.68. Bids came in between $400

and $429 per square foot.

70. The design claim centers on the reasonableness of the parties’ design

expectations and whether GSA fundamentally changed the design criteria through

introduction of the 2000 PBS 100 and the GSA security criteria, and whether GSA failed to

meet its promises as to streamlining and cooperation. GSA acknowledges that the introduced

documents were neither cited in the original contract nor directly incorporated by reference.

However, GSA asserts that the level of effort and criteria to be used for this project was or

should have been evident to MSA from the contract documents provided. GSA also asserts

that, to the extent MSA had to perform beyond what was set out in the contract, that effort

fell into the normal “give and take” that should have been anticipated on a design contract.

GSA further denies promises of streamlining and asserts that much of MSA’s added work

was due to MSA incorporating into the project on its own various features of the PCO 1

security study. MSA says the changes made by the criteria added by GSA were substantial

and their combination turned the design project into a research and development project for

balancing openness, security, blast resistance, and LEED criteria. MSA charged this was a

combination that no one had encountered before and which had not been specified in the

design contract documents.

71. We set out here additional evidence relating to the above arguments. Mr.

Mathison acknowledged that the PDS “Security Concept” directed the A/E to include

exterior “passive concepts,” such as setback and physical barriers, as well as active concepts,

such as vehicle access control, exterior lights, and closed circuit television (CCTV) systems.

He said it was reasonable for MSA to understand the references in the PDS to bollards and

other physical barriers to not necessarily be related to specific concerns as to blast

enhancements in the structural elements of the building. Rather, he said those items could

be related to preventing a truck from hitting a loading dock, or preventing a vehicle from

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parking on a lawn or accessing a pedestrian-only area. He testified that the blast criteria

required by GSA was well outside the scope of what MSA priced in its design.

72. As to the physical protection measures set out in the PDS, MSA asserts, “Even

when they do serve a function related to security of the building, this does not necessarily

[mean] an explosion.” Mr. Mathison said he interpreted “security” for the contract as being

people-related and focused on electronic security, an interpretation that he considered to be

consistent with the documents referenced in the contract and consistent with his prior

experience. At one point, he described his understanding of blast requirements to be

preventing damage caused by someone carrying a backpack. In responding in its brief to

GSA’s charge that Mr. Mathison was familiar with the use of a truck bomb (as occurred in

Oklahoma City), MSA characterized that point as irrelevant, asserting that security criteria

for a building are to be selected by the owner. MSA continued, “It is not the task of the

architect to speculate as to what criteria the owner wants, and to establish levels of

protection.” With that said, Mr. Mathison did acknowledge that he saw references in the

contract documents to MSA having to provide a “security blast consultant” and understood

that reference to address blast protection. He, however, then emphasized that the blast

consultant provision did not assign any specific level of blast resistance.

73. Regarding the inclusion of blast design elements, Mr. Tinsley testified that the

original contract documents did not require blast resistance for the building structure and

outer walls, and at the time the contract was signed, the 96/97 PBS 100 was in effect. He

said that document had no reference to blast protection for the structure of the building. He

acknowledged that the 96/97 PBS 100 did require progressive collapse protection (which

Weidlinger priced in), but pointed out that progressive collapse and blast resistance are two

different concepts. Each requires a separate analysis and a blast load may not necessarily

cause a collapse, though it could. Progressive collapse, as expressed in the PDS that

Weidlinger used for pricing the design, did not call for hardening of the exterior structure or

designing the facade to be blast resistant.

74. Mr. Mathison, Mr. Honn, and Mr. Leber testified that neither the PSS, the PDS,

nor the contract called for the building to be LEED certified, nor did the GSA documents

include many of the LEED requirements ultimately imposed. LEED certification is a process

of awarding points for various “green” components. The more or higher value components

that are included, the higher the point total. GSA contends that even though LEED was not

mentioned, the various “green” requirements that constitute LEED were identified. GSA,

however, has failed to identify sufficient specifics. As pointed out by MSA, the earlier PBS

100’s had referenced ASHRAE (American Society of Heating, Refrigerating and Air

Conditioning Engineers) 90.1 Energy Efficient Design of New Buildings. In contrast, the

2000 PBS provided “GSA’s sustainability objective for LEED certification will likely be

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associated with trying to beat ASHRAE 90.1 energy performance by defined percentage

levels.”

75. Mr. Tinsley testified that the most significant impact on Weidlinger’s design

effort could be attributed to meeting the Level C standard. As applied by GSA, that meant

that the entire courthouse, including the facade and building structure, had to be blast

resistant and, therefore, more robust. He said that the perimeter of the building facade

needed to be strengthened to resist the blast pressures from the street threat. Therefore, all

perimeter concrete had to be designed for blast resistence. He stated that as a consequence

of the Level C requirement, he had to calculate and address the distribution of loads to

various features such as windows, concrete walls, precast, and floor slabs. He identified

walls with windows as the most complex and difficult, noting that the already complex

glazing system for the windows required substantial coordination with structural engineers.

Normally such coordination would be limited, but here, however, due to the hardening and

blast requirements, the window system was required to transfer blast loads back to the

concrete structure. The requirement for operable windows that met LEED standards further

complicated matters, requiring window latches, insulation, and other treatments to be

designed for a Level C standard. In addition, the imposition of the Level C standard

significantly increased the number of design hours incurred because of the complexities of

designing blast resistence elements into a building with varying floor levels, rather than a

building with flat slabs. Shear walls that would otherwise have been designed to resist lateral

and vertical load now had to be designed to resist blast loads as well. Coordination with the

MEP designer was affected as changes impacted vertical penetration, as well as penetrations

through the exterior. Even the geothermal system had an impact on Weidlinger, as it

interfered with the design of underslab drainage and required coordination with the MEP

designer and MSA. MSA, as the primary designer, had to be involved in all of these matters.

It particularly spent significant time in dealing with achieving Level C compliance for the

window design. Various MSA witnesses testified that much of the design became a research

and development project, attempting to figure out how to mesh blast protection, ballistic, and

other security issues, with the GSA demand that LEED compliance also be met. GSA

presented no credible evidence to challenge this testimony.

76. Mr. Leber stated that part of the additional time Cosentini spent on the MEP

design was due to fact that the LEED concept was new at the time. Mr. Fletcher confirmed

that LEED was evolving. Mr. Leber testified that LEED introduced multiple additional

considerations, such as energy optimization, green power, irrigation reduction, alternative

wastewater technology, and low emitting material, all of which he had to look at as part of

the project. Mr. Leber said that due to LEED, Cosentini was required to assist the

government LEED consultant in researching the feasibility of virtually all available LEED

points, as well as additional post-sustainability items that GSA requested. MSA and

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Cosentini were also required to investigate the use of multiple fuel source systems with a

separate but similar system for the U.S. Marshals Service space, green building power

sources, fuel cells, photovoltaic arrays, solar collectors, waterless urinals, and grey water for

irrigation. After MSA investigated and priced the systems described above, GSA decided

all were unaffordable, and they were eliminated from the project.

77. Another major change introduced by the 2000 PBS 100 was a requirement to

move air intakes from a lower level (as planned) onto the roof. The 2000 PBS required that

in buildings four stories or higher, air intakes had to be located at the fourth floor or higher.

This was a security measure to protect a building from someone introducing contaminants

through the ductwork. Additionally, the 2000 PBS added a protection requirement for

utilities located within fifty feet from a loading dock, as well as for entrances and parking.

Finally, the 2000 PBS required that utilities be concealed and blast protected. As noted in

Finding of Fact 61, Mr. Saviano acknowledged that the move of the intakes to the roof

constituted a change. MSA was never paid for that extra design effort.

78. To support its assertion that the original contract documents adequately and

accurately conveyed the GSA requirements as to LEED and security measures, GSA cited

various provisions in the PDS, and particularly the requirements for bollards and other

protective features to protect the building against “ballistic or blast attack.” It also cites the

requirement for a blast consultant; the fact that Mr. Mathison testified he was familiar with

the use of trucks to deliver bombs to a federal buildings; and a requirement for twenty-foot

setbacks, all of which GSA said should have put MSA on notice that the design required

enhanced blast protection. Additionally, GSA repeatedly emphasized that security and the

protective items were set out as “Objective No. 1,” citing a listing in the PDS of goals and

objectives for the project. As pointed out earlier, “Objective No. 1” was simply the first item

in a list, a list that was not identified as being in any priority order. It provides little else As

to LEED, GSA essentially relies upon language in the PDS which provided that the

successful designer would be expected to make use of green building techniques..

79. In its brief, GSA charges that many of the changes asserted by MSA were the

result of MSA incorporating results of the PCO 1 security study into the design on its own

and without consulting with GSA. GSA does not provide details. More importantly, the

study was not completed until July 2002 and the directions as to blast, progressive collapse,

and LEED were all delivered in the summer of 2001. GSA did attempt, through

Mr. Fletcher, to equate the information provided in the initial contract with the requirements

for LEED compliance. His testimony lacked specificity. Moreover, in other testimony

regarding building commissioning, Mr. Fletcher conceded that MSA was owed some

additional money for the LEED design. He also acknowledged that LEED was in a process

of migration and flux at the time. As to blast enhancement, his testimony was conclusory and

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without detail. He relied heavily on the provision of the contract which advised MSA of

intended meetings after award as to security. He appeared to conclude that because GSA had

identified in the contract that there would be future meetings to address security concerns,

MSA was responsible for designing, without any cost adjustment, whatever came out of

those meetings. While the reference to future meetings could be read as an indicator of some

anticipated alterations, nothing in the contract suggested fundamental changes to the project’s

scope. Finally, Mr. Fletcher acknowledged that the progressive collapse requirement also

evolved during the life of the design contract. He recognized that changes as to progressive

collapse requirements warranted some price adjustment.

80. One final matter before addressing the redesign phase. The contracting officer,

Mr. Menzies was questioned by GSA counsel regarding MSA’s claim for added costs due

to changes in the design. Mr. Menzies testified that he did not know details about MSA’s

claim for having to perform added work until the matter came to trial. When asked by the

Board to clarify, pointing out that Mr. Menzies had issued a final decision in 2009 and thus

had to have know something by then, Mr. Menzies testified that he first learned of MSA’s

allegations of a changed scope of work at the time he received REAs on each item. In later

testimony he said he first learned of the claim in 2009; however, that is inconsistent with his

having received the REAs in 2008. As to the effect of his knowing when he did and its

impact on GSA, he provided testimony speculating that had he known of MSA incurring

additional design costs, it was possible that Congress may not have been willing to pay and

could have killed the project. Finally we note this last item. When asked (in context of

design claim items) if Mr. Saviano ever informed him that there was a likelihood that MSA

would be asserting a claim for additional compensation relating to the design, Mr. Menzies

stated, “I don’t believe so, no.” When asked if anyone from GSA informed him, he again

said no.

Bidding/Redesign Phase

81. Construction bids were opened in August 2003, and they dramatically exceeded

the estimated pricing. In order to salvage the process, GSA convened a meeting in early

September 2003, which included MSA and various bidders. The meeting was an attempt to

identify why there was such a divergence between the bids and the estimate. One of the

participating bidders, Clark Construction, cited a number of reasons that contributed to the

pricing of its bid, including that the size of the site impacted the ability to stockpile backfill;

the geothermal feature affected schedules between site excavation and the start of

foundations; there were a limited number of concrete subcontractors in the northeast capable

of constructing a building of this nature; and there were few available subcontractors. Clark

highlighted that there was less competitive bidding as to glass and glazing, concrete,

elevators, and HVAC, with the latter two due to qualification limitations. Clark stated that

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using metric measurements had very little effect on its cost and that labor rates in Springfield

and Boston were about the same. Clark pointed out that the extensive amount of perimeter

concrete walls resulted in an inordinately high ratio of vertical to horizontal concrete in the

building, a situation that invariably increases costs. In describing what it considered to be

fundamentally different on this project as opposed to other courthouses, Clark identified

building size and configuration, the design for blast resistance, and the LEED certification

as elements that affected its bid price.

82. The record contains a number of other comments and findings as to the reasons

for the high pricing. In a September 11, 2003, e-mail message, Mr. Moravec, GSA Public

Building Service Commissioner, addressed a conversation with Heery in which Heery

reported that several potential contractors said that the job was very intricate, detailed, and

high quality, and that they bid accordingly. Mr. Morovec’s e-mail message highlighted the

following factors to explain the overrun: the structure (based on higher post 9/11 security

standards), LEED features, scope creep, and finishes. He criticized Heery’s role and

acknowledged the irregular set up with Heery as the CM. He focused on the fact that Heery

had not been operating with a contract, even though it had been involved on the project since

1999, and concluded, “This is a highly unusual and irregular CM relationship, to say the

least, and I would be interested to know why we have proceeded in this manner.” He then

conceded that he did not see how GSA could hold Heery responsible, given the fact that

Heery had not been asked or paid for its normal services.

83. On September 17, 2003, in an e-mail message from Mr. Androkonis to various

other GSA officials, Mr. Androkonis described the plan for going ahead. He said GSA

would select one of the five contractors who bid the project and pay the firm a small fee to

work with GSA and the A/E to bring the project within budget. If that would not work, he

would direct the A/E to redesign on the A/E’s dime. In an e-mail message of

October 6, 2003, Mr. Moravec again questioned how the bid bust could have happened. He

stated that the region had two years to raise the alarm as to what the actual costs of the

designed project might turn out to be. He noted the gross mis-estimate of the actual cost to

construct and said the blame was neither MSA’s nor Heery’s responsibility. He said it falls

on the region, as “[w]e’re supposed to be a professional development organization. A bid

bust of this magnitude does not, frankly, inspire confidence.”

84. In a memorandum to Mr. Saviano, dated October 16, 2003, Mr. Mastroyin

provided his take on the bid bust. He first stated that GSA, in preparing its in-house

comparative estimate, was aware of scope increases in general conditions, security, and

sustainability relative to comparable courthouse projects. He explained that to account for

the added criteria, the project was priced at 20% greater, stating that GSA assumed the 20%

differential and favorable market conditions would compensate for the significant criteria

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additions. He said that GSA also relied on favorable estimates from the A/E and CM. Under

the subheading “GSA Criteria Loading in General Conditions,” he listed a number of factors

which he understood contributed to the cost, such as pre-qualifying of general contractors

and selected subcontractors, LEED commissioning, LEED construction, construction

excellence, construction and document security, electrical supply-side security, mechanical

coordination, protection of existing historic trees, inclusion of full geothermal system, site

geometry and size. He identified those as in addition to costs associated with security

hardening, blast, and barrier requirements that he cited as above standard. He also noted that,

in addition to the price for concrete being more than double, another item driving costs was

the curtain wall envelope including the blast criteria, which “strongly influenced the decision

to utilize a hollow metal system that results in extremely limited competition.”

85. Heery formally provided its take in a letter of October 21, 2003. It said it had

been tasked with performing a review of the CCS estimate prior to the bidding. It explained

that a review of a cost estimate addresses items within the cost estimate itself, i.e., unit prices,

items missing or misinterpreted, computational errors, and so forth. It continued that a

detailed cost estimate, which Heery emphasized it did not perform, would be based upon the

plans and specifications and would entail both quantitative metrics, including material

takeoffs and specific systems, as well as a variety of other aspects influencing costs. Heery

noted that those areas would include items such as the use of proprietary specifications, the

impact that the construction details and schedule requirements have on means and methods,

the availability of specified material,and so forth. Heery concluded that the items, which it

described as those important factors, were beyond the scope of Heery’s review (what GSA

was paying for).

86. In the letter, Heery, relying on information from the September meeting with

bidders, addressed some of the differences between the 95% estimate and received bids.

Heery observed that all bidders appeared to price the same project, all indicated that the

construction documents were clear in intent, and all understood the architect’s desired result.

Heery listed five areas with significant deviation from the 95% cost estimate, which alone

accounted for $20.4 million. Of the five, the concrete variance of approximately $10 million

was the single greatest item. Heery noted that the concrete variation occurred in both precast

and cast-in-place concrete and that some of bidders pointed out that the required quantity of

reinforcing steel per cubic yard was significantly higher than would normally be expected.

It appeared that the complexity of the cast-in-place concrete formwork, installation of the

large quantity of reinforcing steel, and placement of concrete had a much greater impact on

costs than anticipated.

87. Heery also identified the following items as driving costs: variations in the slab

elevations due to the requirement of raised flooring, large floor-to-floor dimensions, perfect

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rough opening details in exterior cast-in-place concrete walls, large quantities of vertical

concrete, and the extensive use of architectural concrete in the basement and garage area.

Some bidders indicated they did not read much flexibility into the specifications with respect

to use of larger precast panels. Heery concluded that some of the unanticipated structural

costs might be directly attributed to the interpretation and/or application of the new blast and

progressive collapse criteria, as well as the final detailing of the building components. It

recommended that GSA look at the performance of the double exterior wall assembly of the

exterior cast-in-place concrete wall and precast concrete panels, as well as the associated

structural connection detailing, in an attempt to achieve better efficiency in pricing. Heery

noted that it had researched recent bid results for any federal courthouse project that had met

the new structural design criteria, but it had been unable to identify any project that met the

same criteria established for the Springfield courthouse. It thus concluded that it could not

determine if further courthouse projects would incur similar costs. In addressing doors and

windows, it pointed out that there were issues as to the exterior curtain wall system being

restrictive due to a single source of certain system components. As such, that specification

did not allow for similar systems, and thus prevented competition. Heery commented that

the design was created under federal blast criteria and concluded the criteria did cause

significant cost impacts. Finally Heery cited as additional factors, the geothermal

requirement, the staging involving the trees, and LEED requirements.

88. In its letter, Heery also discussed in detail its tentative design cost estimate. It

stated its cost estimate was developed during the months of April and May 2002 and

consisted of take offs, system analysis, and confirmation of unit prices of various building

systems. Heery stated that the tentative design phase is similar to the traditional American

Institute of Architects (AIA) design development phase. At that point, the documents

consisted of 345 architectural and seventeen structural drawings. There were also another

eighty-five assorted drawings. From an architectural and structural point of view, the project

scope was delineated in plans and elevations; however, there were few details explaining the

complexity of the structure or of the architecture at that point. The MEP drawing also was

not particularly detailed. A 10% contingency was included at that stage for items that had

not been included or anticipated in the design documents.

89. Heery then reviewed its role as to the 50% and 95% CCS cost estimates. In

summarizing both, it stated:

Significant variation in pricing from the cost estimate might be associated with

incorrect quantity take offs or variation in the anticipated systems performance

from that ultimately specified in the final construction documents. The complexity

of the project could have been under-estimated by CCS in their cost assumptions,

especially in the areas of progressive collapse and blast criteria. Also, the final

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interpretation of the unique design criteria by vendors and subcontractors could

have had a much larger impact than anticipated for a number of reasons or could

have been misinterpreted and resulted in a much higher cost for a system than

intended.

Heery stated that its cost estimating scope of work during the contract design phase

was limited to reviewing the estimates prepared by CCS. It stated that a review of a cost

estimate addresses items within the cost estimate, such as unit prices, items missing or

misinterpreted, and computational errors.

90. Mr. Malinder attributed the high concrete costs to MSA’s decision to design a

curvilinear concrete building. He said that because of the curvilinear nature of the building,

none of the concrete forms used in the initial design’s cast-in-place concrete system would

be reusable; all would be custom made. He stated that due to the scale of the building, there

was actually down time when an idle contractor would have to wait for concrete to cure, prior

to adding more weight to it. He testified that the cost of concrete form work is primarily

driven by labor, not material, and that MSA’s election to incorporate the trees into the design

further increased costs of construction. He stated that the presence of the trees required

multiple relocations of cranes. He also attributed the high bids to other design features, such

as quality of finishes inside the courthouse and a curtain wall, which he said was not a

program requirement. MSA did not present substantive evidence contradicting

Mr. Malinder’s testimony as to the impact on costs due to accommodating the shape of the

building. MSA did argue that to the extent the shape and trees contributed to the added cost,

GSA had equal responsibility, as GSA approved them as program requirements. MSA also

identified a number of items which were independent of the items noted by Mr. Malinder,

such as the hardened structure, which MSA asserted contributed to the overall bid bust and

specifically to concrete costs.

91. MSA has asserted that the unfavorable bids were outside its control. It has cited

as support many of the factors identified in Heery’s report, particularly Heery’s conclusion

that there was exponential added cost from security and blast resistance criteria. MSA also

cites LEED, geothermal, and other GSA-imposed criteria as cost drivers. As to elements of

the design such as the curved glass curtain wall and retention of historic trees, MSA stressed

that GSA wanted that design and approved it through all stages. MSA contended that GSA

acted as more than simply a rubber stamp, citing a number of instances where GSA directed

certain features. MSA also stressed that Heery reviewed the various MSA estimates and

Heery uniformly concurred. MSA emphasized that GSA had more than three years to

express concerns as to the project being over-designed, which MSA says GSA did not.

Specific items such as the trees and building configuration were wanted by GSA. MSA

further contended that the $45 million allotted was not adequate to meet the GSA criteria,

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and pointed to the fact that the ultimate construction contract was for $53 million. In its

brief, MSA states it was preposterous that MSA could have designed either a $35 or $45

million building, given the criteria it had to include. However, the fact remains that MSA

did not indicate to GSA prior to the bid bust that construction bids were in jeopardy of not

coming in within budget. Rather, MSA confirmed that the design would yield a building

within the cost target.

92. In partial response, GSA cited the requirements of the Design Within Funding

Limitations clause, and specifically the fact that the clause provides for redesign where

construction cannot be done due to excessive price. GSA highlighted another portion of the

LOC clause, which calls for notifying GSA during the design if the cost cannot be achieved.

GSA points out that despite various estimates, MSA continued, during the original design

phase, to assure that the building could be constructed within the target, with the construction

target number varying between $43 and $45 million.

93. In a fax to Mr. Ian Parr of CCS dated November 11, 2003, Mr. Honn commented

upon issues he had with the cost estimate that had been provided to MSA from CCS. He

identified problems with what he described as the most basic categories, such as resilient

flooring or acoustical tile, and asked why entire assemblies delineated on the 90% contract

documents, such as roof carpentry, were completely missing from the estimate. MSA,

however, also placed some of the blame on Heery. In a March 2004 letter to Heery,

regarding a Heery request for payment, MSA criticized Heery as not filling the role on the

project to give local market place knowledge and cost and constructability advice, and said

the cost overruns related to Heery’s poor knowledge of the local marketplace.

94. Mr. Menzies testified that the twenty million dollar budget bust was

unsalvageable. He stated that GSA could have rebid the design if the overrun had been three

million. After assessing the situation, GSA, in the fall of 2003, decided that MSA should be

directed to proceed with a redesign effort, at no cost to GSA. GSA initially set the target for

redesign at $48 million.

95. To effectuate the redesign and expedite the start of construction, GSA

implemented several decisions. One was to convert the construction project delivery method

from a sealed bid to a negotiated construction management format. Toward that end it

entered into a construction manager contract (CMC) with Daniel O’Conner and Sons (DOC),

which had been a bidder on the original design. DOC’s first task was to provide GSA with

a feasibility study of possible cost savings, which it did on December 23, 2003, showing

construction costs of $50 million. Although it was clear in late December and into early

2004, that the project would have to be redesigned so as to meet budget, GSA was

nevertheless holding MSA to retaining the exterior design, including the curved form, curtain

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wall, and historic trees. As far as GSA was concerned, any redesign had to include those

items. Mr. Menzies explained in his testimony that the exterior could not change because if

it did, it would have had to be submitted to a national committee for design review and GSA

could not accept the delay.

96. While the parties were staking out positions as to redesign, several other matters

were proceeding concurrently. On November 26, 2003, well after the bid bust and soon after

GSA entered into the construction manager contract with DOC, the parties formalized a

bilateral agreement, under PCO 6, as to payment by GSA to MSA for some of the added

work that had been performed during the design phase. Although the modification was

valued at $700,000, the figure to be paid MSA was actually less. The modification was

composed of a direct payment of $450,000 to MSA, the deletion of services worth $200,000

(with no request for return of money for the deleted services), and a reduction of $50,000

(identified as a “CMC service credit”) that GSA took as a credit for work ultimately provided

through GSA. Thus, MSA netted $650,000. The modification covered the following items:

special survey and rent area calculation, added landscape design/historic trees, additional city

meetings/presentations, added commissioning/sustainable, tenant upgrade design based on

reimbursable work authorizations (RWAs), revised mail room security design, HVAC special

security design, Marshals Service program and space revisions, GSA basement

program/design changes, additional geothermal, extended CM service, and

Telephone/Data/Audio Video – all non-court offices. The largest dollar item was the revised

design to incorporate the elimination of a conventional boiler and chiller system and proceed

with a geothermal system. The modification did not address blast or LEED matters.

97. The $50,000 reduction was justified by GSA as the added cost of having to bring

on DOC as a construction manager after the design bust. When questioned about the overall

adequacy of compensation for PCO 6, Mr. Mathison stated that it did not compensate MSA

for all the added work MSA performed or for the added time and man-hours it spent as a

result of the items covered. Also, MSA took the position that the decision as to the CMC

contractor was imposed on it and it should recoup the $50,000.

98. In late November 2003, as part of the redesign effort, Weidlinger sent a report

to Mr. Saviano. The objective was to find cost savings. Weidlinger proposed reducing costs

of construction by selectively limiting the extent of protection incorporated into the facility.

The primary suggestions called for waiving the glass fails first requirements, waiving blast

resistant glazing for windows and enclosed transient spaces, and waiving through better

screening items associated with underground parking threats.

99. In a November 13, 2003, e-mail message from Mr. Honn to Mr. Mathison, Mr.

Honn addressed modification of the mullions in relation to the glass and glazing and

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47

addressed concerns as to substituting hurricane windows for the windows required by GSA,

GSA was requiring windows to meet both blast and ballistic requirements and was not

amenable at that time to MSA’s requests for substitution. No standard product was available

that met the GSA requirements as to the windows. This added to the design effort and to the

ultimate cost to build. In his message, Mr. Honn also addressed the structure/concrete and

said:

It is obvious to us that DOC is expecting a change to a steel frame

regardless of what simplifications, concessions we make on the concrete.

Weidlinger is preparing a tonnage total and description of the framing

required.

Mr. Honn’s statement makes clear that the die was cast as to changing the structure

from concrete to steel. GSA had determined that the project could be constructed more

inexpensively with steel. GSA recognized that a change to steel would entail a major

redesign on the part of MSA. Also in November 2003, GSA had already determined that it

would abandon the geothermal system and return to a conventional system.

100. In December 2003, GSA directed MSA to prepare several concepts that

rethought the building in order to incorporate the cost reductions suggested by DOC. In

January 2004, MSA provided two schemes. One eliminated the chambers building, and the

other kept the outside otherwise intact, but moved the mechanical equipment to the roof.

101. Although MSA was working collaboratively with DOC and GSA, it was not

volunteering to redesign at its costs. It took the position that GSA caused the problem by

adding criteria, particularly as to blast and LEED enhancements. In a letter of

February 16, 2004, to Mr. Menzies, Mr. Mathison addressed both additional work that had

been required of MSA (for which it had not been compensated) and the bid bust. He stated

that MSA was shocked at the pricing of concrete in the bids and pointed out that MSA had

selected a well-respected construction management firm working in Springfield to advise

them as to constructability and marketplace issues. Mr. Mathison identified several potential

causes for the unfavorable bids, including the Government’s new criteria for blast protection,

use of metric measure (noting that CMC was asking for a change to the English system), site

selection, concrete prices, requirement for geothermal energy, and aspects of the site not

being clear. MSA put an estimated price of $1.1 million on the task of redesigning the

building so as to meet the cost proposed.

102. Mr. Mathison also addressed delays in completing the design, blaming GSA

for untimely action on submissions, making changes to criteria, problems in satisfying the

Marshals Service (due to changes in personnel and leadership), and various guideline

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interpretations. He acknowledged that MSA was compensated for a portion of the changes,

but stated it was not compensated for the time and effort to resolve the differences or due to

disruptions caused the project as a whole. After commenting that the government review

process was unusually time consuming, he stated, “Now that we have been involved with

other GSA projects, we appreciate even more sharply the unusual complexity and time

consumed in bringing closure to many issues compared to other cases.”

103. In an e-mail message of February 5, 2004, Mr. Moravec summarized a meeting

he held with the GSA Administrator and congressional officials as to the courthouse. He

stated that he was committed to the curvilinear form, colonnade, chambers building, grand

staircase, historic trees, and pavillion. He said these elements were sacrosanct. He was

looking at a $50.8 million cost estimate for the project at that point.

104. The most dramatic change directed in the redesign was the requirement that

MSA change the building frame from cast-in-place concrete to structural steel. On March

9, 2004, MSA provided GSA its anticipated costs for redesigning, based on the new

requirements: $469,071 for MSA; $225,000 for Weidlinger; and $275,000 for Cosentini.

MSA also listed miscellaneous consultants at $95,000 and expenses at $35,000. Mr. Leber

provided in a letter of February 19, 2004, addressing the MEP number and said that his figure

was based on an assumption that the basic layouts, including ceiling plans and receptacle

layouts, would not be changed. He assumed that, given the structural renovations, the clear

space in the ceiling cavity would remain such that re-coordination of all of the floors would

not be required. On February 19, 2004, Weidlinger had sent a letter to MSA costing the

scope of the redesign and noting that a complete redesign of the structure to a steel frame

(from concrete) would be equal to its original design efforts. It identified $175,000 in

anticipated costs, as well as an additional $50,000 for a blast study. Thereafter, MSA was

ordered by GSA to proceed with implementing the redesign.

105. As the redesign proceeded, MSA continued to identify changes to the

requirements. Mr. Saviano acknowledged that MSA was entitled to some compensation due

to changes made during the original design, as well as for some changes involving work

during the redesign. He specifically noted that MSA should be compensated for going back

to a conventional heating system in lieu of the earlier geothermal choice of GSA.

106. According to MSA, and not challenged by GSA, MSA wanted to explore using

some of the concrete structure in lieu of the change to total steel. GSA, however, was

unwilling to do that, initially because it thought steel would be less expensive. However,

even after GSA knew that the price of steel had spiked dramatically, GSA was unwilling to

entertain a combination. GSA viewed a change to steel as a potential means of securing

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additional funding from Congress, while staying with concrete would not.

March 17, 2004, e-mail message, Mr. Malinder stated,

In a

We are now embarking on redesigning the structural system

from concrete to steel for Springfield Courthouse. Obviously,

we will not benefit to the extent anticipated by this major design

change because of rising steel prices. At some point all

“savings” may be lost and concrete will be the same cost, only

we can’t afford it. If run away costs of steel may be rebated in

some form by congress, we need to stay with the steel design.

Switching back to concrete will lock in a cost beyond reach.

107. Concurrent with moving forward on the redesign, MSA continued to pursue

payment for extra work. On March 30, 2004, MSA submitted a change order proposal to

GSA. Portions of that proposal ultimately became part of proposed modification PCO 7, a

modification that was never consummated. In its letter, MSA broke out the extra costs into

three time categories: Category 1, pre-bid period; Category 2, post-bid period; and Category

3, anticipated claims during the redesign phase. The submission is summarized below:

Design Phase, Category 1:

1-1

Reducing no. courtrooms,

schedule disrupt

Combined w/ 1-5

1-2

Program change to USMS space

$ 35,000

1-3

Revisions basement and

custodial after 50% design

completed

$ 37,000

1-4

Prep and delivery of 75%

documents at request of court

$ 28,000

$ 15,000

1-5

Schedule disruption

$187,000

1-6

Additional peer review

$ 60,000

1-7

Added time to secure site

$

4,000

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50

Design criteria change as to site

and blast consideration of site

$ 45,000

$411,000

The above totaled $411,000 for Category 1. All of the above are for the original

design.

Redesign Phase, Category 2:

2-1

Prepare documents for use by

CMC and GSA to develop

additional cost estimates

$ 35,000

2-2

To verify quantity takeoffs of

submitted subcontractor bids

$ 16,000

2-3

Construction cost adjustment

budget increase $41.6 to $48 M

$384,000

2-4

Project delivery/schedule change

assist GSA in converting the

project delivery method from

GC lump sum to CMC

$ 32,000

$467,000

Redesign Phase (not yet done), Category 3:

3-1 to 3-3

All involve project delivery

including coordination of site

activities, modifying contract

award method, and added

meetings with city and neighbors

$8000, $2000, and

$4000

3-4

For reducing the allotted time for $128,000

production of revised contract

documents by one month

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3-5

Schedule change to reflect status

of construction 9/20/04 and

effect of escalation

no # but refers to

2-3

3-6

Geothermal HVAC system,

delete and substitute

conventional cooling tower

boiler system and revise

basement

$195,000

3-7

For adjusting documents for

imperial measurements

$ 12,000

3-8

GSA blast criteria was not

definitive and was untested in

marketplace. The criteria and

thus the design will need to be

modified to meet the intent but

keep the ensuing cost reasonable

$ 36,000

3-9

Revision to access flooring

$ 16,000

3-10 to

3-12

For elevator amendment,

finishes for courtroom and

chambers and review of glazing

and security changes

$2000, $4000, and

$2000

$409,000

At the close of the letter, MSA provided, under Notes, “At cost; markups and profit

not included. For computation of claim amounts, assumes an average hourly billable rate of

$100/hr.”

108. On April 8, 2004, Mr. Saviano provided notes reflecting his review of the

submission. He found that item 1-1, the reduction of courtrooms, had already been

compensated. He found no entitlement for items 1-2 to 1-8, with the exception of printing

(item 1-4), for which he found partial entitlement (in a later June 23 update, Mr. Saviano

priced this item at $20,000). As to the category 2 items, he allotted for 2-1, $30,000; for 2-2,

$12,500; and for 2-3, $250,000. As to category 3, he found zero for 3-2, 3-3 and 3-7 through

3-12. He adjusted 3-1 to $8000; 3-4 to $95,000; 3-6 to $150,000, and 3-7 to $10,000. At 3-5

he placed a question mark. Item 2-3 was described by Mr. Saviano as “Construction cost

adjustment. Construction budget increase from 41.6 M to 48M.” MSA’s dollar claim for

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this item of $384,000 was based upon it applying a 6% factor against the $6.4 million

difference between $41.6 M and $48 M. Mr. Saviano’s estimate of $250,000 for item 2-3

was not explained.

109. Thereafter, on April 15, 2004, Mr. Saviano prepared another summary as to

claim items. On this he listed GSA initial numbers, GSA bottom line, and MSA revision.

The figures were:

1-5

1-6

1-8

2-1

2-2

3-1

3-4

3-6

3-7

3-8

GSA Init

150K

45

40

27.5

12

8

115

170

11

30

GSA bott

125K

30

30

20

10

5

95

125

7.5

25

MSA revised

187K

60

45

35

16

4

128

195

12

36

Some items, such as 2-3, were dropped from the new calculation. If we total the

columns, the totals are: GSA Initial $608,500; GSA bottom line $472,500; and MSA revised

$718,000. The document had a handwritten figure of $800,000 on the side, but with no

explanation. The document was not shared with MSA at the time.

110. A May 24, 2004, memorandum by Mr. Saviano summarized a meeting where

eighteen value engineering items GSA was planning to incorporate into the revised design

were addressed. Some were adopted and some rejected.

111. On May 28, 2004, Mr. Menzies addressed Mr. Mathison’s request of March

30, 2004, for compensation due to changes. Using Mr. Mathison’s item designations, Mr.

Menzies grouped them into the following designations: Category 1, justifiable change orders

considered for negotiation with supporting documentation, 2-2, 3-1, 3-4, 3-6, and 3-7; and

Category 2, potentially allowable with proper and complete supporting documentation, 1-5,

1-6, 1-8, 3-8, and 3-9. Mr. Menzies disallowed the remaining items put forth by Mr.

Mathison, 1-1, 1-2, 1-3, 2-3, 2-4, 3-2, 3-3, 3-5, 3-11, and 3-12. Item 1-4 was not addressed.

112. Mr. Mathison responded on June 2, 2004, and, following Mr. Menzies’

categories, provided proposed costs along with backup. He restricted his response to the

items that Mr. Menzies listed as either justified or potentially justified.

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Category 1

2-2

Takeoff comparison with A/E takeoffs

$ 16,003.98

3-1

City of Springfield contributing for site

work

$ 20,006.66

3-4

Accelerated delivery schedule for

contract documents

$128,027.98

3-6

AE reverting back to conventional from

geo

$267,712

3-7

Changing from metric

$ 24,475

Category 2

1-4

Addition of 75% package

$ 43,257.50

1-5

Schedule lengthening

$187,558.71

1-6

Additional peer reviews

$ 60,094.84

1-8

Original prospectus document re site

$ 44,762.28

3-8

Work with bidders as to finding products

to meet blast

$ 36,030.48

3-9

Deletion of added access flooring

$ 41,388.24

113. On June 30, 2004, Mr. Leber sent a memorandum to Mr. Honn addressing

memoranda that Mr. Saviano had written on May 24, 2004, and June 15, 2004. Mr. Leber

sent his memorandum to ensure that there would be no confusion as to which of the value

engineering items would be incorporated into the design documents.

114. Mr. Menzies and MSA continued to discuss the equitable adjustment items.

On July 7, 2004, Mr. Menzies wrote that items 2-2, 3-1, 3-4, 3-6, and 3-7 had sufficient merit

to warrant further negotiation to determine a fair number. He advised that items 1-4, 1-5,

1-6, 1-8, 3-8, and 3-9 had been determined to have a range between no consideration and

potential for partial justification. Items 3-8 and 3-9 dealt respectively with helping bidders

as to blast requirements and with the access floor. He said that item 1-4 would only cover

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printing. He limited tenant review delays (1-5) to post-95% design completion delays. Then,

in what appears to be an internal contradiction, he stated that the additional peer review item

(1-6) was untimely and would not be considered. Finally, he said that additional site effort

as to security related changes would only be based upon timely revisions.

115. In the fall of 2004, although MSA was working on the redesign, issues still

remained as to the final parameters of the redesign, as to what GSA was requiring MSA to

retain and what MSA could modify to lower costs. As part of the process, GSA was reacting

to demands of the court as to what it would allow MSA to do. In a memorandum dated

September 15, 2004, sent to Project Security Team, Mr. Saviano was still seeking permission

to alter the Level C requirements needed for the project. He referenced the GSA Security

design criteria publication dated January 17, 1997, and its effort to provide a safe

environment within cost parameters established by GSA. Toward that end he said he was

attaching a memorandum from the team’s blast consultant dated November 17, 2003, and

stated that the memorandum summarized security issues and outlined items for which the

team was seeking the approval of waivers. It primarily included modifications to windows,

skylights, curtain walls, and glazing. Finally, Mr. Saviano received approval to drop some

of the requirements. By letter of October 5, 2004, he informed Mr. Mathison that MSA was

to proceed with the revised strategy. Much of that strategy had been proposed by MSA

through its November 2003 consultant report. Thus, almost a year had gone by. Mr. Saviano

added that MSA was to provide security calculations when GSA obtained the related

system’s technical performance criteria from the selected window wall manufacturer, and

that the project security blast engineer was to participate in a follow-on meeting with the

project security team. The approval finally allowed for use of extreme hurricane criteria for

aluminum windows and skylights in both transient and occupied spaces and allowed waivers

to the curtain wall. Once the approval was given, the project had almost no windows that

opened, almost all punched windows were fixed, and Level C compliance was relaxed.

116. As of September 2004, there was still no agreement as to the appropriate

compensation for extra work. In a memorandum dated September 22, 2004, Mr. Saviano

provided Mr. Menzies with a summary and recommendations for MSA’s request number

seven for additional money. He stated that on June 2, 2004, MSA had asked for $1.28

million based on twenty-four line item categories of additional work, which MSA claimed

were the result of GSA actions and added criteria that had not been fully defined in the

original contract documents. Mr. Saviano specifically called for paying MSA for

accelerating the redesign process by a month to counter an acceleration of the construction

schedule. The acceleration was intended to allow GSA to award a contract in the current

calendar year, which both GSA and its CM determined would result in considerable cost

savings. As to the twenty-four items, Mr. Saviano described the GSA strategy to eliminate

any line item that related to redesign work required by the contract and which was not a result

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of GSA criteria changes and acceleration. He stated that as a result of an initial review, GSA

recognized six of the twenty-four items as compensable and GSA would consider four more

that were designated as questionable. GSA’s overall estimate for the six items was about

$400,000, compared to MSA’s $800,000. Mr. Saviano finally set out a negotiation strategy

to accept only the six recognized items, reject the four questionable items, and then set a

maximum target of $500,000, contingent on a full release for all other items claimed. In

closing, he said that MSA had accepted an offer of $497,000 for all of the twenty-four

requested items and was agreeing to a release. That, in fact, was not the case, as MSA did

not agree and no modification was ever consummated.

117. Starting in April 2004, and running into July 2005, Mr. Saviano produced

periodic estimates as to the various claimed MSA items. The estimates are in the record, but

were not amplified by any testimony. They simply assign numbers to identified items of

work (using Mr. Menzies’ identification numbers as set out in his June 2004 letter). In his

estimates, Mr. Saviano was consistent with the value placed on some items, but not others.

There was no explanation as to the reason for changes between estimates. Among the

estimates provided are figures for five items identified by Mr. Menzies as payable: items 22, 3-1, 3-4, 3-6, and 3-7. In addition, Mr. Saviano provided estimates for five of the six items

identified in his September 22 memorandum as justifying further discussions. Those six

items were 1-4, 1-5, 1-6, 1-8, 3-8, and 3-9. The May, June, and July estimate sheets include

a GSA price for each of these items except 1-6 (additional peer review). We list here the

numbers provided in Mr. Saviano’s June 2004 list of estimates. First, as to the Menzies

items, Mr. Saviano provided, for 2-2, $12,000; for 3-1, $20,000, for 3-4, $115,000; for 3-6,

$185,000; and for 3-7, $15,000. In addition, Mr. Saviano provided the following: 1-4,

$20,000; 1-5, $115,000; 1-8, $40,000; and 3-8, $35,000; 3-9, $40,000. Neither the June 2004

estimate or either of the other two had a number for 1-6. However, in April 2004, Mr.

Saviano had placed a value on 1-6 of between $45,000 and $30,000. Of the above, only

items 1-4, 1-5, 1-6, and 1-8 relate to the design phase. Putting aside item 1-6, they total

$175,000. The remaining items (categories 2 and 3 above) cover work during the redesign

phase and total $422,000. In the latter figure are two major changes during the redesign.

One of the changes, 3-4, involves changes to scheduling (acceleration). The other, 3-6,

involves changing from geothermal back to conventional heating.

118. On November 1, 2004, GSA sent MSA a proposed modification, which

included a two-page addendum that listed all of the items that had been claimed by MSA

(many of which GSA had denied as negotiations proceeded). The modification stated that

as a condition of settlement, MSA was to sign a release which agreed that the settlement

covered all claimed items. MSA did not sign the proposed modification, as it was not willing

to release many items that it thought were compensable. On January 21, 2005, Mr. Safdie

wrote to Mr. Moravec, addressing the issues to that point. Particularly germane, he stated

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that the firm was experiencing losses on this project which had more than wiped out all of

the accumulated profit for other projects, resulting in its inability to provide bonuses to its

staff.

119. In a letter of January 26, 2005, Mr. Saviano provided Mr. Menzies with a rough

estimate as to the added design cost involved in changing the concrete structure to structural

steel. He estimated $475,000 for redesign, based on a structural steel contract value of $5

million. He then performed a calculation which relied primarily upon application of

percentages to set sums. No attempt was made to actually calculate design hours that would

be required. Using Mr. Saviano’s formula, he allowed 6% of the structural steel contract

value ($5 million) for structural design ($300,000), 2.5% contact value for architectural and

curtain wall redesign ($125,000), and 1% of the same number for MEP redesign coordination

related to structural redesign changes ($50,000).

120. On February 15, 2005, Mr. Moravec re-entered the picture and responded to

an MSA letter in which MSA continued to pursue compensation for changed work. Mr.

Moravec cited what he said he understood as an agreement for $497,500 of MSA’s revised

claim of $869,319. He stated that modification PCO 7, along with a settlement release, had

been sent to MSA but GSA had received no response. Thereafter, the modification continued

to sit in limbo. It was officially canceled in June 2008.

121. Through the beginning of March 2005, DOC had been performing as CM. On

March 15, 2005, although GSA knew that the MSA redesign still was not finished, GSA

entered into a construction contract with DOC for $53,314,000. MSA was not notified or

involved in the award, but it was aware that the DOC contract was issued.

122. While not fully clear, it appears that DOC was aware of the state of the

drawings at the time. Even if not, DOC was advised by GSA that it would have leeway to

make some decisions and changes in design aspects as the job progressed. DOC availed

itself of that right, and the consequence was that at times, as shop drawings would come in

to MSA for review, Mr. Orens would see that the DOC drawings showed features different

from what MSA had specified. As stated by Mr. Orens, battles would ensue over what was

in and what was not in the job. GSA acknowledges that its decision to award when it did

involved the risk of increased RFIs from the contractor, but it saw that as an appropriate

trade-off for a lower price for the construction and avoiding the impact of further escalation.

GSA says that as of March 15, 2005, when it secured the fixed price from DOC, the cost of

the project had increased, due to escalation, by $5,275,880 from July 2003 (the original

opening of bids) to March 2005. Over the course of construction, GSA and DOC executed

change orders which brought the total of the DOC contract to $57,278,525.

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123. The building being constructed under the redesign was essentially the same in

outward appearance as the original design. While the most dramatic alteration on the

redesign was changing the structural components to steel, much of the mechanical equipment

was moved from the basement to the roof, floor-to-floor heights were reduced, the

geothermal feature was eliminated, the amount of access flooring was reduced, GSA

modified the Level C blast resistance criteria in some areas, and much of the LEED criteria

was eliminated (although LEED was not formally eliminated until February 27, 2006). The

security criteria were modified with respect to air intake placement, as air intakes were

removed from the roof (required by PBS 100) and set at grade; major alterations were made

as to glazing, with allowance of hurricane level protection for windows (which had been

proposed for the original design).

124. The change from concrete to steel and change of floor-to-floor heights had an

impact on multiple items, such as ceilings, lighting, piping, and duct work. Steel structures

are deeper, so that factor, plus the loss of one foot per floor, caused MSA to essentially lower

everything. The piping and ductwork that had been earlier designed did not fit without

extensive adjustments. Taking out the geothermal feature also changed piping. Change from

blast to hurricane standard was a big item from a cost standpoint. By going to steel from

concrete, precast panels now had to be attached to steel columns and steel beams. In the

original design, precast was attached to concrete walls. As a consequence, MSA had to add

supplemental steel framing. Further, in order for GSA to meet budget goals, significant

adjustments and changes to the design were introduced as the redesign work was underway.

125. Once the job was awarded, the focus turned to adding post-contract

construction services (PCCS). The services are discussed below in a separate section. DOC

proceeded with construction in 2005, and during 2006, it completed excavation, had

foundations in place, and installed some structural steel. The construction was substantially

finished in July 2008, but Mr. Orens continued to work on the project into September of that

year.

126. During construction, MSA continued to seek compensation for changed work

due to the blast criteria and other matters. In his letter of July 6, 2007, Mr. Mathison

formally advised Mr. Menzies that MSA could not accept the terms of GSA’s proposed

modification PCO 7. He asked that GSA consider paying MSA for line items specifically

identified in an enclosed list. He noted that the items from categories 1 and 2 (which

included work performed during both the original design and redesign) totaled $706,596.22

(when excluding item 1-8). He stated that MSA was willing to accept $497,500 and absorb

$209,096.22, so as to achieve a resolution as to those items. His letter left open a number of

items which GSA had attempted to have MSA release in the modification. The record

contains no response from GSA to this letter.

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127. Additionally, the letter again addressed MSA’s justification for added

compensation due to the blast criteria changes. Mr. Mathison said that it took Weidlinger

and MSA, working with GSA, more than two years to develop and implement the blast

resistance and progressive collapse criteria in the project, with GSA reviewing as matters

progressed. After all that effort, the parties concluded (well after bids came in) that

hurricane-resistant criteria and materials could effectively satisfy many of the specialized

blast resistance systems required by GSA, at substantially reduced costs. He laid out a list

of items which were impacted by the blast criteria change, particularly focusing on the

windows and glazing system coordination. He again contended that the primary reason bids

on the original concrete frame building exceeded the budget was due to the requirements that

the building meet the blast resistance and progressive collapse criteria, and how that

requirement was exacerbated further by the site selected by GSA.

128. Thereafter, with matters still not resolved, MSA prepared and presented to

GSA three REAs, dated June 1, 2008 (for the redesign), September 5, 2008 (for the initial

design), and November 26, 2008 (for the PCCS). GSA took no immediate action. As part

of its claims, MSA seeks reimbursement for the hours it spent in preparing each of the REAs.

MSA claims labor costs before overhead and profit of $17,490.04 for design, $45,274.05 for

redesign, and $14,523.42 for PCCS. GSA presented no testimony, documents, or argument

challenging the reasonableness of the hours attributed to the REA work or in opposition to

the MSA position that the REAs were prepared in furtherance of negotiations. GSA

challenges the hourly rates MSA used for the REAs and the overhead rate MSA applied (to

be discussed below). At the time the REAs were provided to GSA, the door had not closed

on negotiation or settlement. GSA’s position on requiring redesign, however, was firmly

established.

129. On April 21, 2009, the CO rejected all three REAs. In his letter of rejection,

the CO agreed to pay MSA for tree protection ($11,659.86) and protective design analysis

($10,847.90). MSA submitted invoices for the items but GSA did not pay for them.

Thereafter, on August 14, 2009, MSA presented its certified claims to GSA for

$1,208,870.61 for the design phase, $1,362,581.84 for the redesign, and $461,339.18 for

PCCS. The claim letters were generally very detailed and tracked much of the earlier REA

submissions for each of the disputed items. The design claim emphasized the change in

criteria and its impact. MSA also cited the effect of the size of the site and stand-off

distances and how that interacted with the blast criteria. Appellant also emphasized LEED

compliance. The redesign claim disclaimed MSA responsibility, pointing to the additions

which MSA charged caused the project to outdistance marketplace knowledge. In addition,

MSA addressed the direction by GSA that MSA revise the entire building structural system

from a cast-in-place concrete system to a steel-framed system. Appellant stated that the GSA

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mandate prevented MSA and the structural engineers from exploring potentially viable

alternatives, such as deleting all of the vertical cast in place concrete but leaving the

horizontal slabs and columns intact. It emphasized that the change to the steel structure

system had a significant impact on many other aspects of the design and that it was not until

late in the redesign process that GSA relented as to allowing program modifications,

accepting them finally as a last resort. The PCCS claim relied on the contention that the

dollars sought were for work beyond what had been agreed to in PCO 8. On December 4,

2009, the CO issued a decision denying all three claims. MSA appealed that denial on

December 30, 2009.

130. At no time from the date of the bid bust forward is there evidence that GSA

indicated to MSA that it would be seeking consequential damages or that it planned to seek

escalation damages from MSA. Rather, consequential damages were first raised in

conjunction with set-off in GSA’s Answer in CBCA 1849. Thereafter, on April 1, 2011, the

a CO issued a decision demandeding payment from MSA of $5,275,880, as consequential

damages, due to MSA having to redesign the project. In its affirmative claim, GSA

essentially contends that MSA breached the Schedule clause of the contract, which caused

GSA consequential damages in the form of added construction costs that GSA would not

have incurred but for the delay caused by the claimed breach. MSA timely appealed by letter

dated April 7, 2011, and the matter was then docketed as CBCA 2386. The latter appeal was

then consolidated with CBCA 1849.

Post-Contract Construction Services

131. At the point GSA entered into the construction management contract with DOC

in 2004, MSA had a limited obligation as to PCCS. That was a consequence of deletions

made through PCO 6, early on in the original contract (unrelated to the design claim).

However, with construction on the horizon, GSA recognized it would need the services and

took steps to add PCCS back in. The additions were ultimately set out in PCO 8. By the

time serious negotiations were completed on PCO 8, GSA had already converted the CM

contract with DOC into a construction contract with a fixed price.

132. On February 17, 2005, MSA submitted its initial proposal to GSA for PCCS.

MSA identified the proposal as being based on the scope of services outlined under option

3 of the original negotiated contract provided to the A/E (minus deletion of as-built

drawings). Option 3, which had originally been designated as PCCS, had been removed

under PCO 6. In April and May 2005, Mr. Mathison and Mr. Saviano negotiated the scope

of the services. Mr. Mathison said that in his proposal, he had originally included unlimited

responses to Requests for Information (RFIs). However, he was told by Mr. Saviano that

GSA did not have the money to pay for those services, and he and Mr. Saviano therefore

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addressed a more limited approach. He said that at the time he was negotiating, he was

aware that the contract documents provided to DOC were not complete, and in negotiating

the services, he attempted to restrict the language t

This text is long and has been trimmed here. Open the source document for the complete record.