Appendix Vol I — Joseph C. Kirchdorfer, Inc. v. Rice

ey «ei

(2) Bupreme Court, U.8

&i2 7790 FILED

J NOV 4 1991

Case No. !

OFFIGE OF THE CLERK

UNITED STATES SUPREME COURT

1991 Term

JOSEPH C. KIRCHDORFER, INC.

Petitioner

Vv.

DONALD B. RICE, SECRETARY OF

THE AIR FORCE,

Respondent

On Writ of Certiorari

to the United States Court of Appeals

For the Sixth Circuit

APPENDIX

VOLUME I

LAURENCE J. ZIELKE

PEDLEY ROSS ZIELKE GORDINIER

1150 Starks Building

Louisville, Kentucky 40202

502-589-4600

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

9271151

SKIP KIRCHDORFER, INC.,

Appellant,

W a

THE UNITED STATES,

Appellee.

ORDER

A suggestion for rehearing in banc

having been filed in this case,

UPON CONSIDERATION THEREOF, it is

ORDERED that the suggestion for

rehearing in banc be, and the same hereby

is, declined.

FOR THE COURT

Dated: September 17, 1991

FRANCIS X. GINDHART, Clerk

SKIP KIRCHDORFER v. US, 91-1151

(BCA - 35074 & 32637)

Filed: US Court of Appeals for the

Federal Circuit Sep 17 1991

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

91-1152

SKIP KIRCHDOKFER, INC.,

Appellant,

Vv.

THE UNITED STATES,

Appellee.

ORDER

Before LOURIE, Circuit Judge,

BENNETT, Senior Circuit Judge, CLEVENGER,

Circuit Judge.

A Petition for rehearing having been

filed in this case,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for

rehearing be, and the same hereby is,

denied.

The suggestion for rehearing in banc

is under consideration.

The mandate will issue on September

i2, i991.

FOR THE COURT

Dated: September 5, 1991

FRANCIS X. GINDHART, Clerk

SKIP KIRCHDORFER v. US, 91-1151

(BCA - 35074 & 32637)

Filed: US Court of Appeals fcr the

Federal Circuit Sep 5 1991

Note: Pursuant to Fed. Cir. R. 47.8,

this disposition is not citable as

precedent. It is a public record. The

disposition will appear in tables

published periodically.

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

91-1151

SKIP KIRCHDORFER, INC.,

Appellant,

Vv.

DONALD B. RICE, Secretary

of the Air Force,

Appellee.

JUDGMENT

On Appeal from the Board of Contract

Appeals Armed Services

In Case No(s) 35074 and 32637

ORDERED and ADJUDGED:

Per Curiam: (Lourie, Circuit Judge,

BENNETT, Senior Circuit Judge, and

CLEVENGER, Circuit Judge):

AFFIRMED. See Fed. Cir. R. 36.

ENTERED BY ORDER OF THE COURT

Dated: August 6, 1991

FRANCIS X. GINDHART, CLERK

|

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

NOTICE OF ENTRY OF JUDGMENT

WITHOUT OPINION

JUDGMENT ENTERED: Aug 06 1991

The Judgment of the Court in your

case was entered today pursuant to Rule

36. No opinion accompanied the judgment.

The mandate will be issued in due course.

Costs may be recoverable under rule

39. A party entitled to costs is

provided with a bill-of-costs form and an

instruction sheet with this notice.

The parties are encouraged to

stipulate to the costs. A bill of costs

will be presumed correct in the absence

of a timely filed objection.

Costs when taxed are payable to the

party awarded its costs. If costs ae

awarded to the government, they should be

paid to the Treasurer of the United

States. Payment should be made to

counsel for the party awarded costs or,

if the party is not’ represented by

counsel, to the party pro se. Costs

should be paid promptly.

Exhibits and visual aids shall be

promptly retrieved by the party that

lodged them with this Court.

FRANCIS X. GINDHARD, CLERK

SKIP KIRCHDER V. US. 91-1151

(BCA AS - 35074 & 32637)

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of -- ASBCA Nos. 32637 & 35074

Skip Kirchdorfer, Inc. )

Under Contract No. F08651-84-C-0123 )

APPEARANCE(S) FOR THE APPELLANT:

LAURENCE J. ZIELKE

PEDLEY, ROSS, ZIELKE, GORDINIER

& PORTER

Louisville, Kentucky 40202

APPEARANCE(S) FOR THE GOVERNMENT:

Col. James C. Babin, USAR

Chief Trial Attorney

Mark E. Landers, Esquire

COL Richard L. Farr, USAR

Senior Trial Attorneys

OPINION BY ADMINISTRATIVE JUDGE STEMPLER

These are timely appeals from

contracting officer final decisions.

ASBCA No. 32637 is an appeal from the

termination for default of appellant's

contract. ASBCA No. 35074 is an appeal

from the denial of appellant's $494,475

delay claim. ASBCA No. 35074 is before

us on entitlement only. The Contract

Disputes Act is applicable. A three week

trial was held at the Board starting on

13 March 1989. Both parties have filed

post-trial brief.

FINDINGS OF FACT'

i. On 8 June 1984, the United

States Air Force, Eglin air Force Base,

Florida, and Skip Kirchdorfer, Inc. (SKI)

entered into contract No. F08651-84-C-

0123. The $2,937.704 firm fixed-priced

construction contract called for SKI to

perform extensive improvements on 690

family housing units in the Plew housing

section on the base. The housing project

was divided into three sections: area I,

II and III. Performance was to commence

5 days after receipt of the notice to

proceed and be completed within 540

calendar days (23 January 1986). The

contract contained the following relevant

special provisions and full-text clauses:

SP-10. INVOICES & PAYMENT

Submit invoices in quadruplicate to

the Administrative Contracting Officer,

AD/PMMA-2, Eglin Air Force Base, Florida

32542. Payment will be made by AD/ACFCS-

1, Eglin Air Force Base, Florida.

Payment for work covered by these

specifications will be made in accordance

with General Provisions DAR 7-602.7. No

payment will be made for work

accomplished without prior authorization

of the Contracting Officer for items

specified in paragraph 8.b, page 08200-

2, and paragraph 8, page 09258-2 of the

Specifications.

x ke

SP-13. MATERIALS APPROVAL SUBMITTED

Within 10 days after commencement of

work as otherwise established by the

Contracting Officer, all material and

articles requiring approval, as

contemplated by the "Materials and

Workmanship" clause, shall be submitted

by the Contractor, by means of AF Form

3000.

SP-14. PERFORMANCE SCHEDULE

Performance period is based on the

following schedule:

a. All Type 34 and Type 44 housing

units in Area 1 and all Type 34, 36 and

44 housing units to have bathroom floors

repaired in Area 2 will be unoccupied

during performance of the contract work,

but will contain Government-owned free

standing kitchen ranges and

refrigerators. All other housing units

will be occupied during performance of

the contract work. The Contractor shall

keep the kitchens and baths of all

occupied housing units operational during

the construction period by completing

installation of the dishwashers, garbage

disposals, range hoods, grease

spashplates, and tub-shower enclosures

the same day that work is begun on these

items ina housing unit. New windows and

doors shall be installed in the openings

the same day the existing items are

removed. New ceiling finish in housing

units where ducts are required to be

insulated shall be installed (excluding

taping, finishing, and painting) with

[sic] two (2) calendar days after

existing ceiling finish is removed.

b. Work on -each occupied housing

unit may be done at any time during the

contract period after all materials

required for that housing unit are. on

hand and ready for use. No interior work

shall be performed in a housing unit

unless an adult (18 years or older)

occupant of the unit is present. All

interior work (dishwashers, garbage

disposals, range hoods, grease

splashplates, duct insulation, and all

associated painting) on any one occupied

housing unit shall be completed within

four (4) working days after work is

started on that housing unit. All work

(exterior and interior) on any _-= one

occupied housing unit shall be completed

within fifteen (15) calendar days after

work is started on that housing unit.

C. Exterior and interior work on

all unoccupied housing units will not

commence until 90 days after notice to

proceed to provide time for submittal

approval, and delivery of materials and

to allow time for accumulation of vacant

housing units. These housing units will

be turned over to the Contractor

according to the following schedule:

(1) Provide eight apartments

(housing units) to the Contractor 90 days

after notice to proceed.

(2) Provide four additional

apartments 104 calendar days after notice

to proceed.

(3) Thereafter, provide four

additional apartments every seven

calendar days.

(4) First eight apartments

shall be completed within 28 calendar

days after release of apartments’ to

Contractor.

(5) Each remaining increment of

four apartments shall be completed within

21 calendar days after release of

apartments to Contractor.

d. The area where the contract

work shall begin will be designated by

the Government. Housing units. will

generally be made available within the

same general area for accomplishment of

the contract work; however, in some cases

the contractor may be required to

temporarily skip certain buildings due to

non-availability at that time and to

perform the work at a later date during

the contract’ period. Repairing of

housing units shall be performed in a

consecutive manner; proceeding randomly

throughout the project site will net be

allowed. The contractor shall notify the

Government a minimum of seven _ (7)

calendar days prior to starting work in

each occupied housing unit.

NOTE: The day that work is started shall

be included in the specified number of

days allowed for completion of work

specified in Paragraphs Sp-1l4a, b, andc

above.

COMMENCEMENT, PROSECUTION AND COMPLETION

OF WORK (1965 JAN) DAR 7-602.44(a)

The Contract will be required to

commence work under this contract within

five (5) calendar days after the date of

receipt by him of notice to proceed, to

prosecute said work diligently, and to

complete the entire work ready for use

not later than five hundred forty (54)*

calendar days after receipt of notice to

proceed. The time stated for completion

shall include final clean-up of the

premises.

*See Special Provision SP-14 of the

contract.

kx kk &

LIQUIDATED DAMAGES (1965 JAN)-DAR 7-

603.39

In case of failure on the part of

the Contractor to complete the work

scien iis aaa aa

within the time fixed in the contract or

any extensions thereof, the Contractor

shall pay to the Government as liquidated

damages, pursuant to the clause of this

contract entitled "Termination for

Default--Damages for Delay--Time

Extensions," the sum of $3.50 per day for

each unoccupied housing unit for each day

of delay within the time stated in

accordance with Special Provision No. 14;

in addition $63.80 for each day of delay

in completion for the total project.

(R4, tabs 4, 5)

2 The contract also incorporated

by referenced the following relevant

standard clauses: DAR #-103.12(1),

Disputes (1983 FEB); 7-602.3, Changes

(1968 FEB); 7-602.5, Termination of

Default--Damages for Delay-Time

Extensions (1969 AUG); 7-602.7, Payments

to Contractor (1982 DEC) ; 7-602.9,

Material and Workmanship (1964 JUN); 7-

602.10(a), Contractor Inspection System

(1964 NOV); 7-602.11, Inspection and

Acceptance (1976 OCT); 7-602.54(1), Shop

Drawings (1976 Ors? and 7-603.48,

Progress Charts’ and Requirements for

Overtime Work (1965 JAN) (R5, tab 5).

>. At the time of award, SKI had

a housing maintenance contract on the

base that was to end in November 1984.

Mr. McDonald was SKI's project manager on

the maintenance contract and was to be

the project manager on the construction

contract. Work under the maintenance

contract gave SKI an opportunity to

observe the condition of the units to be

renovated under the instant contract.

The Government extended the maintenance

contract to 28 February 1985 and Mr.

McDonald served as project manager for

both contracts until the maintenance

contract ended (tr. 1/46, 4/30-31, 5/238,

250; exh. A-113).

4. In 1981 or 1982, the Government

has awarded a contract to renovate other

housing on the base referred to as Wherry

QQ»

housing. SKI based its bid price on the

instant contract on what it believed to

be the standard of workmanship acceptable

under the Wherry contract. Mr. Bkio

Kirchdorfer’ testified:

Q. How about your observations of

workmanship under the Wherry Contract

under A-122, how did that affect your

entering into contract in the Plew

Contract?

A. That's -- the standard of

workmanship is what I based my bid price

on.

Q. How can workmanship affect bid

price that you would make?

A. Well, like on the soffit, for

instance, I realize that I would not have

to do any remedial work on the existing

lookouts in areas like that. I knew that

[sic] the matter [sic] in which the drip

edge was installed. I knew what the

doors would look like. Just standard of

workmanship and what they considered

acceptable work.

SKI originally bid on the Wherry

solicitation but did not bid on the

amended solicitation which resulted in

the contract. Mr. Skip Kirchdorfer was

9

unaware of the modifications amending the

contract or any waivers to the

specifications granted by the government

during performance. In preparing his bid

for the contract in dispute, Mr. Skip

Kirchdorfer observed the work done on the

Wherry contract from his car (tr. 1/77-

78, 106, 4/41, 314-15; exh. a-122).

5. A pre-performance conference

was held on 23 July 1984. In attendance

were: Mr. Herrin (government inspector),

Mr. Hemmer (government technical

representative and civil engineer), MSgt

Karl Weise (government inspector), Mr.

Day (contract administrator) and Mr.

McDonald (SKI project manager). The

government contends that it informed SKI

at this meeting that the government was

selecting, pursuant to special provision

14d, Palm Circle in Area Ii as the place

where work was to commence. SKI denies

10

that it was so informed. Appellant

presented testimony that by the time of

this meeting, it had determined to begin

work in Area I, but did not convey this

information to the government. We find

the government testimony more credible

and determine that Mr. McDonald was

advised by the government’ personnel

present that the government wanted to

commence at Palm Circle (R4, tab 9, SR4,

cape 2, 93 report 1; tr. 5/337-389, 9/7-

8, 210).

6. A notice to proceed was issued

by the government on 23 July 1984 and

received by SKI on 1 August 1984 (R4, tab

8).

7. On 2 August 1984, SKI gave the

governmerx its ceramic tile submittal.

on 10 August 1984, the government

approved the submittal, stating that it

11

would make its color selections at a

later date (exh. a-15).

8. On 17 September 1984, the

government issued SKI a cure notice for

failure to submit a progress schedule to

the contracting officer pursuant to the

Progress Charts and Requirements to the

contracting officer pursuant to the

Progress charts and Requirements’ for

Overtime Work clause. All material

submittals had not been submitted within

10 days as required by special provision

(SP) 13 (r4, tab 11).

9. On 19 September 1984, Mr.

McDonald called the government to discuss

the cure notice. The parties also

discussed the possibility that’ the

government might want to revise the

requirements for a door referred to as

door number 2 and to change the status of

12

unoccupied units to occupied (SR4, tab

6).

10. On 19 September 1984, the

government proposed to change the type of

door for door no. 2 by contract

modification and requested SKI's cost

proposal (R4, tab 12).

11. On 20 September 1984, SKI

submitted its material submittal for wood

doors. The submittal contained

insufficient data and was returned (tr.

9/12, 14, 19).

12. On 24 September 1984, SKI

submitted its required progress schedule

(R4, tab 13).

13. On 28 September 1984, the

contracting officer disapproved SKI's

schedule because it was not in the proper

form and because it did not take into

account that performance was to have

13

started 5 days after the notice to

proceed was received (R4, tab 14).

14. On 1 October 1984, Skip

Kirchdorfer discussed the door no. 2 and

unoccupied to occupied changed with the

government. Despite the government's

prior discussions with Mr. McDonald, Skip

Kirchdorfer had not been aware of the

proposed changes and the government

agreed to send him a copy of the

government's proposal (SR4, tab 7).

iS. On 3 October 1984, the

government issued a show cause notice

because an acceptable progress schedule

had still not be submitted and all

material submittals had not been made.

The contracting officer reminded SKI that

it was not allowed to work on occupied

units until all materials for the units

were on hand and ready for use and that

8 units were scheduled to be turned over

14

to SKI 90 days after the notice to

proceed (R4 tab 15).

16. On 8 October 1984, SKI

submitted a revised progress schedule and

submitted its proposal for the change in

the type of door no. 2. SKI requested a

60 day extension of for manufacture and

delivery of the doors and no money for

the change (R4, tabs 16, 17).

BZ On 15 October 1984, SKI

responded to the show cause notice,

stating that the notice was without

Justification since the chart and

submittals had been submitted prior to 4

October (R4, tab 18).

18. On 16 October 1984, SKI

resubmitted the wood door submittal and

the submittal was approved on 25 October,

although the metal door louvers were

disapproved (exh. A-21).

15

19. On 19 October 1984, SKI

proposed a price increase of $25,290 to

change the housing units scheduled to be

unoccupied in area I and area II from

unoccupied to occupied (SR4, tabs 8, 9).

20. A new progress schedule was

submitted by SKI on 22 October, 1984

(SR4, tab 93 report 20).

21. On 23 October 1984, SKI

proposed several changed to the soffit

and gable vents so that SKI's’ roof

supplier's warranty would not be voided,

at a cost to the government of $42,385.59

(R4, tab 19).

22. On 25 October 1984, the

government told SKI that the no cost

portion of the door no. 2 change was

acceptable but that the government did

not agree that a 60 day extension was

needed. The parties negotiated further

over the extension, and on 21 November

16

1984, the government informed SKI that

the government would not make the change

to the contract's door requirements (SR4,

tabs 10-11, 21, 22).

23. Also on 25 October 1984, the

government’ proposed to modify the

contract, making the unoccupied to

occupied change. The government proposed

changing SP 14 as follows:

SP 14Aa: Delete first sentence in

its entirety. In second sentence, delete

"other". In third sentence, of the

occupied housing units, insert "except

Type 34 and Type 44 housing units in Area

I and all Type 34, 36 and Type 44 housing

units to have bathroom floors repaired in

Area 2."

SP 14b: In third sentence after

"enclosures" insert "bathroom floor

repairs".

SP 14c: Delete in its entirety.

SP 14d: Change Paragraph SP 14d to

SP 1l4c.

(R4, tab 22).

24. On 25 October 1984, SKI

notified the government that SKI had

17

suspended its material ordering for the

doors during the parties' discussions

concerning the possibility of changing

door no. 2 and that a 45-day extension

Was necessary (R4, tab 23).

25. Bilateral modification P00001,

with an effective date of 2 November 1984

was issued, implementing the unoccupied

to occupied change and changing SP 14 as

set forth in finding 1. The contract

price was increased by $25,118.10 and the

contract completion date remained 23

January 1986. The modification also

contained a release by SKI for the change

(R4, tab 30).

26. On 2 November 1984, Scott

Kirchdorfer and Mr. McDonald requested

that the government allow SKI to start

work on the units on Oak Drive (102 Oak)

in Area I and moving to Palm Circle.

(Oak Drive is actually in Areas I and II.

18

ee ar ee a

SKI wanted to complete Area I before

moving to Area II. The contracting

officer denied this request and stated

that work would begin on the Palm Circle

units and a written sequence would be

issued (SR4, tab 15; tr. 5/131-33).

27s The materials required for the

work in the units on Palm Circle were

different in some respects for the work

on the units on Oak Drive (tr. 12/24-

25).

28. On 8 November 1984, SKI began

construction of its on-site warehouse to

store materials for the contract (SR4,

tab 93 report 23; tr. 11/58).

29. Also on 8 November 1984, the

government agreed to SKI's soffit vent

Changes but only at no cost to the

government. The government would not

agree to SKI's gable vent changes (R4,

tab 28).

30. On 9 November 1984, SKI ordered

the door manufacturer to begin production

of the doors for the contract stating

that the government had accepted the

change in door no. 2 (exh. A-41).

31. On 14 November 1984, SKI

ordered some of the windows for Area I,

some of which were usable for Palm Circle

in Area II (exh. A-44; tr. 2/24).

32. On 14 November 1984, a

government inspector, Mr. O'Gallagher,

discussed the scheduling of housing with

Mr. McDonald. The inspector showed Mr.

Mcdonald the government's schedule of

houses to be worked on (SR4, tab 93

report 29; tr. 11/59).

33. On 16 November 1984, the

parties met to discuss scheduling. Scott

Kirchdorfer stated that construction

would commence on 7 January 1985. SKI

stated, however, that it had materials

cient

ordered for Area I on Oak Drive and not

for Area II on Palm Circle and therefore

wanted to start on Oak ODrive. The

government insisted that work would start

on Palm Circle (SR4, tab 93 report 13).

34. On 16 November 1984, the

government sent SKI proposed modification

P0002 which would have changed the type

of door no. 2 at no cost and without at

time extension and contained a contractor

release. SKI refused to sign the

modification, requesting a 60-day

extension and stating that work on the

contract was being suspended until the

matter of door no. 2 was resolved (R4,

tab 27, 32).

33. On 19 November 1984, SKI

requested that the government rescind its

cure and show cause notices because work

had been suspended on the contract since

21 September 1984 due to the proposed

21

government changes. The parties

discussed the matter further and on 22

November SKI was informed that P00002

would be cancelled. On 10 December 1984,

the government did cancel the proposed

change in writing and directed SKI to

submit the door per the contract

requirements (R4, tab 31, 35).

36. On 27 November 1984, SKI's door

manufacturer refused to accept SKI's door

order (exh. A-43).

37. On 6 December 1984, the

contracting officer wrote SKI and

provided a list of the sequence of houses

which the government was requiring SKI to

, The

perform pursuant to SP _ 14d.

government ordered work to begin at 108

Palm Circle (Area II) and proceed through

Area II to Area I starting at 102 Oak,

then proceeding through Area I to Area

en oe Skip Kirchdorfer testified, on

22

6 specie ea

cross examination, that when he received

the letter, he did not consider the

letter to be a divantivs, despite the

fact that the letter said the work "shall

begin", nor was he concerned enough about

the contents of the letter to contact the

contracting officer. He merely filed the

letter away, intending to speak to the

contracting officer about the matter the

next time he visited the site.’ On

direct examination, Mr. Skip Kirchdorfer

testified that he planned to tell the

contracting officer that he (the

contracting officer} did not have the

right to direct tne sequence of houses

and if that he wanted to change the

contract, to let him know (R4, tab 33;

tr. 2/36, 4/36-37, 11/55-56).

38. On 18 December 1984, SKI

finished construction of its on-site

23

warehouse (SR4, tab 94 report 1; tr.

11/58).

39. SKI did not perform any on-

Site work from 19 December 1984 to 8

January 1985 (SR4, tab 94 report 2).

40. On 20 December 1984, SKI gave

the government its submittal for door no.

2 (exh. A-25).

41. On 8 January 1985, the

government received SKI's first invoice,

for $124,656. The parties conferred, and

based on a contract completion figure of

2.65%, the invoice amount was changed to

$88,783.46. This amount was paid to SKI

on 14 January (R4, tab 37; tr. 13/183).

42. On or about 9 January 1985, a

partial shipment of windows became the

first materials to arrive on site (SR4,

tab 94 report 3; tr. 11/58-59).

24

43. By letter dated 10 January

1985, the government made its ceramic

tile color selection (exh. A-16).°

44. SKI did not perform any on-

site work on the contract from 10 January

1985 to 22 January 1985 (SR4, tab 94

report 4-6).

45. On 11 January 1985, according

to its own schedule, SKI should have been

9.5% complete. The government wrote SKI

stating that the contract was only 2.65%

complete and requiring SKI to respond

with a plan to get back on schedule (R4,

tab 36).

46. On 14 January 1985, the parties

met to determine what materials were

present on the job site. Other than

government furnished equipment, SKI had

only some windows on-site, but promised

that all major items would be on-site in

3 to 4 days (SR4, tab 94 report 7).

25

47. On 18 January 1985, SKI

submitted its door submittals with a new

door supplier. On 22 January, the

government approved the doors

(disapproving the metal louvers) (exh. A-

273."

48. SKI did not perform any on-

Site work from 23 to 31 January 1985

(SR4, tab 94 report 8).

49. On 24 January 1985, in response

to the government's 11 January letter,

SKI stated that there had bee no actual

construction yet because progress had

been stopped since 21 September 1984 due

to the proposed change to the type of

door for door no. 2 and that progress

should start in about 6 weeks (R4, tab

38).

50. On 1 February 1985, the

government discovered that SKI had

removed the windows from 208A Elm Street

26

(in Area I) and installed new windows

without the government's permission. The

government informed SKI that the

installation was poor (SR4, tab 94

reports 9, 11).

51. On 7 February 1985, the

government disapproved SKI's soffit vent

proposed change and SKI withdrew the

proposal. (R4, tab 39).

52. From 15 February 1985, to 3

March 1985, SKI did not perform any on-

site work (SR4, tab 94 report 18).

53. On 4 March 1985, the parties

met to discuss the construction start

date. The government reminded SKI that

the contract required 7 days notice

before working on an occupied unit, and

that the government had directed that

work would begin at Palm Circle. Mr.

McDonald was unable to provide a start

559

at

date until he spoke to Skip Kirchdorfer

(SR4, tab 94 report 19).

54. On 7 March 1954, the government

paid SKI's 4 February 1985 invoice. The

invoice was for $59,404.23. After

reductions for duplications of amounts

already paid, the invoice was paid in the

amount of $41,037.23 (R4, tab 40; exh. A-

116).

55. On 13 March 1985, the

government inspectors and Mr. McDonald

met at SKI's warehouse to inventory the

material. Mr. McDonald was unable to

give the government a firm start date but

thought work might commence on 18 March.

Mr. McDonald was reminded of the 7 day

notice requirement and that work would

begin on Palm Circle. Mr. McDonald then

stated that work would not begin on Palm

Circle (SR4, tab 94 reports 20, 21; tr.

12/12-13).

28

56. On 18 March 1985, SKI reported

that it did not have all of the material

to start on Palm Circle and still had no

firm start date (SR4, tab 94 report 23).

57. On 19 March 1985, Mr. McDonald

informed the government that work would

start on 26 March (SR5, tab 94 report

24).

58. Virtually the only

contemporaneous records made by SKI were

randon, cryptic notes kept by Mr.

McDonald. Mr. McDonald's notes begin 19

March 1985 and stop on 18 September 1985

(exh. A-107; tr. 6/11-14, 23-28).

59. On 21 March 1985, Mr. McDonald

informed the government that the doors

would not arrive before 27 March and the

countertops might be on-site by 25 March

(Sr4, tab 94 reports 26, 27).

60. On 25 March 1985, the

government inspected SKI's warehouse to

29

a

determine what material was on-site. All

of the materials for any one unit on

either Palm Circle or Oak Drive were no

on-site. Missing items included: roofing

Supplies (said to be a locally available

item), doors, sinks, countertops, and

kitchen cabinets (Sr4, tabs 29, 104, 95

reports 29-30; tr. 12/22-25).

61. On 25 March 1985, SKI informed

the government that it would begin work

at 102 Oak Drive (in Area I) on 26 March

and contended that it had 20 days per

house to perform its work. The

contracting officer said that personally

it did not matter to him where work

started, but that engineering wanted the

work to begin on Palm Circle and that SKI

had been directed to start on Palm

Circle. SKI's written reply to this

repeated direction to commence on Palm

Circle was to allege that the government

30

was refusing to make units available to

SKI and that the government had breached

the contract and ordered the work to stop

(R4, tab 42; SR4, tabs 27, 94 reports 29-

30).

62. On 28 March 1985, the parties

met. to discuss the contract. SKI

contended that SP14 allowed SKI to start

in any occupied area as long as all

materials were on hand and all materials

were on hand for Oak Drive. Skip

Kirchdorfer stated that the government

had approved stating on Oak Drive to

which the contracting officer replied

that SKI had been directed to start at

Palm Circle a number of times and had

even been provided a detailed schedule by

the government (SR4, tab 28).

63. As far as the Board can

determine, the reason the government was

insisting on work commencing on Palm

31

Ow

Circle, was because a colonel who lived

there had initiated an Inspector

General's investigation as to why his

quarters did not have a dishwasher (SR4,

tab 36).

64. On 2 April 1985, the

contracting officer replied to SKI's 25

March 1985 letter. He reminded SKI that

it had been directed many times to begin

work on Palm Circle and that these units

were made available. Furthermore, the

contracting officer stated, SKI had not

complied with SP14 inasmuch as all the

materials for work were not on hand and

ready for use. Concluding that SKI had

failed to perform the contract in

accordance with its terms, the

contracting officer issued a cure notice

(R4, tabs 42, 43).

65. On 4 April 1985, SKI wrote the

contracting officer, objecting to the

32

government's refusal to make unoccupied

units available pursuant to SP14b. SKI

stated that its schedule was to start

work in Area I at 102 Oak and work

consecutively until completed. SKI also

inquired if the government was interested

in negotiating a termination for the

convenience of the government (R4, tab

44).

66. On 5 April, SKI wrote the

government, stating that the government

had no authority under SP14 to schedule

the order in which housing units were to

be worked on. It was SKI's contention

that work could not begin on Palm Circle

because all the materials were not on

hand and ready for use and SKI had given

notice on 19 March that work would

commence on 26 March at 102 Oak (R4, tab

45).

67. On 18 April 1985, the

contracting officer issued a show cause

letter stating that SKI's response to the

cure notice was inadequate in light of

the government's directions to commence

work on Palm Circle. The contracting

officer expressed doubt as to whether SKI

intended to perform the contract and

demanded concrete evidence of an

intention to perform. In light of the

contracting officer's doubt as to SKI's

intentions, he suspended material

payments pending satisfactory proof of

SKI's intent to begin work at Palm Circle

(R4, tab 46).

68. On 25 April 1985, SKI responded

to the show cause letter and alleged that

the parties had previously agreed that

work would begin in unoccupied units in

Area I and that the area to start work

had not been changed by modification

34

a

POOOO1, only whether the units would be

occupied or unoccupied was changed. SKI

alleged that the government's refusal to

allow SKI to begin work on Oak Drive was

stop work order and had created delay

costs and the suspension of material

payments was a breach of contract. SKI

concluded that if the government

reinstated material payments, work could

commence at Palm Circle within 90 days

(R4, tab 47).

69. On 9 May 1985, the contracting

officer notified SKI that its response to

the show cause letter was inadequate and

the contract was being fprwarded to a

Termination Contracting Officer (TCO) for

evaluation (R5, tab 48).

70. On 29 May 1985, SKI notified

the TCO that it had invested all of its

available resources on the contract. SKI

‘ also informed the TCO of it

39

interpretation of SP14 that would allow

SKI to work at anytime on unoccupied

units (R4, tab 55).

71. On 5 June 1985, SKI sent the

TCO a $14,744.80 invoice allegedly for

material which had been ordered and could

not be cancelled. SKI requested that it

be allowed to start work and alleged that

it was never the government's intention

that SKI be allowed to perform the

contract (R4, tap 56).

72. On 6 June 1985, SKI notified

the contracting officer that it had begun

work on 108 Palm Circle. SKI was

reminded that the unit was occupied and

that the contract required all of the

material to be on hand and ready for use,

and work could not start until the 7 day

notice requirement had been met.

Therefore, the contracting officer

36

ieee

stopped SKI's work (SR4, tabs 33, 57, 95

reports 12-14).

73. Also on 6 June, a meeting was

held to determine if SKI had _ the

necessary materials on hand to perform

the work. Mr. McDonald stated that he

had the necessary material on hand but

changed that statement, admitted that SKI

did not have the roofing material, fill

dirt, or cement and gravel. The

government inventoried SKI's material and

found other items not on hand and ready

for use (SR4, tabs 34, 95 reports 12-

14).

74. On 7 June 1985, the parties met

and SKI was directed not to start work

until all the materials for 108 Palm

Circle were on hand and ready for use and

that work could not commence until the

seventh day following SKI's notice that

ae

it was ready to start work on a unit

(SR4, tab 35).

75. On 10 June 1985, the government

gains inventoried SKI's materials. Some

of the roofing material had arrived, but

the windows for the Palm Circle units

were not present and had not even been

ordered until the prior week (Sr4, tab 95

report 17).

78 On 13 June 1985, SKI began work

on 108 Palm Circle. Mr. McDonald told

the inspectors that the windows for the

Palm Circle units were in inventory. A

check of SKI's inventory revealed that

they were not. The contracting officer

then stopped SKI's work and Mr. McDonald

agreed to notify the government when all

the materials were on hand and ready for

use (R4, tab 58; SR4, tabs 40, 95 reports

20-22).

ae

77. Although it is SKI's allegation

that it did not have sufficient funds

available to purchase the Palm Circle

material because it had already purchased

the Oak Drive material, Mr. Skip

Kirchdorfer testified that SKI never

attempted to compute how much the Palm

Circle material would cost. SKI also did

not present any financial statements that

show that it was financially unable to

purchase the Palm Circle material at any

time. Mr. Skip Kirchdorfer testified

that he did not know what SKI's financial

status was at that time but the

additional material purchase would have

presented a severe cash flow problem.

Based on this, we.are unable to find that

SKI was financial unable to purchase the

Palm Circle materials at any time during

performance of the contract (tr. 4/86-

S/7, 122-26.