___________________________________ GRANTED IN PART: September 8, 1995 ___________________________________ GSBCA 12596 ED A. WILSON, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Bonnie Lee Goldstein of Vial, Hamilton, Koch & Knox, Dallas, TX, counsel for Appellant. Kevin M. Myles, Office of Regional Counsel, General Services Administration, Fort Worth, TX, counsel for Respondent. Before Board Judges NEILL, WILLIAMS, and DeGRAFF. DeGRAFF, Board Judge. The General Services Administration (GSA) and Ed A. Wilson, Inc. (Wilson) entered into a construction contract. The parties disagree as to whether Wilson is entitled to be paid for work it performed to repair damage caused by a broken fire sprinkler line. We hold that Wilson is entitled to be paid for the work it performed, although Wilson is not entitled to recover the entire amount that it seeks. Findings of Fact The Solicitation On April 6, 1992, GSA issued solicitation GS-07P-92-HUC-0048 requesting sealed bids for the renovation of space in the federal building and courthouse in Dallas, Texas. Appeal File, Exhibit 0. The solicitation contains the following provisions: Federal Acquisition Regulation (FAR) 52.236-3 -- Site Investigation and Conditions Affecting the Work (Apr 1984). This clause requires the contractor to satisfy itself as to the character of the materials and obstacles to be encountered, so far as such information is reasonably ascertainable from an inspection of the site and from the solicitation's drawings and specifications. The contractor is responsible for any additional performance costs attributable to its failure either to investigate the site, to examine the drawings and specifications, or to estimate accurately the difficulty and cost of performing the contract work. Appeal File, Exhibit 0. FAR 52.236-7 -- Permits and Responsibilities (Apr 1984). This clause provides that the contractor is responsible for damage that is the result of its fault or negligence. Appeal File, Exhibit 0. FAR 52.236-9 -- Protection of Existing Vegetation, Structures, Equipment, Utilities, and Improvements (Apr 1984). This clause requires the contractor to protect existing improvements and to repair any damage caused either by the contractor's failure to comply with the requirements of the contract or by the contractor's failure to exercise reasonable care during performance. Appeal File, Exhibit 0. FAR 52.243-4 -- Changes (Aug 1987). This clause provides that the contracting officer may make changes in the work required within the general scope of the contract. If a change causes an increase in the contractor's cost of performance, the contractor is entitled to an equitable adjustment to the contract price. Appeal File, Exhibit 0. General Services Acquisition Regulation (GSAR) 552.243-70 -- Pricing of Adjustments. This clause provides that if costs are a factor in a contract price adjustment, the parties will apply the principles contained in Part 31 of the FAR in effect on the date of the contract. Appeal File, Exhibit 0. Section 00800, paragraph 3.1, lists the items of government- furnished property that GSA was to make available to the contractor. Nothing at issue in this case is listed in paragraph 3.1. Appeal File, Exhibit 0. Section 01010 contains a summary of the contract work. Paragraph 1.3 provides that the contractor would repair damage caused by construction operations and would take necessary precautions to protect the building and its occupants during construction. Paragraph 1.7 requires the contractor to adapt its work to existing conditions and to report to the contracting officer conditions which prohibit the contractor from performing the required work. Paragraph 1.7 also provides that if the contractor damages construction work which is to remain in place, the contractor will restore the work to its condition at the time of contract award. Appeal File, Exhibit 0. Section 01040 addresses project coordination. The section requires the contractor to provide temporary support for work to be cut, to provide protection to other work during cutting and patching, to use methods for cutting which are least likely to damage other work, and not to cut and patch structural work in a manner which would result in a reduction of load carrying capacity. Appeal File, Exhibit 0. Section 01045 provides that, when performing cutting and patching work, the contractor will examine the surfaces to be cut and will take corrective action if unsafe or unsatisfactory conditions are encountered. Paragraph 1.2.B.1 provides that the requirements of this section apply to mechanical and electrical installations. Appeal File, Exhibit 0. Section 01546 addresses safety and health. This section provides that the contractor will take the precautions necessary to prevent injury to persons and damage to property. Appeal File, Exhibit 0. Section 02070 contains directions for demolition. Paragraph 1.5.B provides that the Government does not assume responsibility for actual conditions of the structures to be demolished. Paragraph 1.5.D provides that the contractor is to provide bracing or support to prevent movement or collapse of the work which is to remain. Paragraph 1.5.E provides that the contractor is to repair damage to adjacent facilities caused by demolition work. Appeal File, Exhibit 0. The drawings that are a part of the solicitation show the location of the building's supporting columns. The columns are identified by letters (E through P) that extend across the bottom of each drawing from east to west and by numbers (1 through 9) that extend along the side of each drawing from north to south. In these drawings, north is at the bottom of the sheet and east is at the left of the sheet. Beginning at the bottom of each drawing and reading from east to west (left to right), the columns in the bottom row are numbered E1, F1, G1, etc., and the columns immediately above these are numbered E2, F2, G2, etc. Appeal File, Exhibit 0. Drawing A-1 is the demolition plan for the twelfth floor and drawing FP-1 is the fire protection plan for the twelfth floor. Drawing FP-1 explains that the contractor was to remove some fire sprinkler lines, add some lines, and leave some lines in place. The drawing shows three fire sprinkler lines running from east to west on the north sides of columns K4 and L4. The drawing also shows a sprinkler line to be removed which runs from east to west slightly to the north of column L4; the drawing does not show that this line extends east to column K4. Appeal File, Exhibit 0. Contract Award and Performance The contract was awarded to Wilson on October 1, 1992. The solicitation provisions discussed above were incorporated into the contract. Appeal File, Exhibit 1. At a meeting held on November 4, 1992, Wilson asked GSA to identify the procedures to be used in the event of a break in a fire sprinkler line, and GSA did so by identifying the supply valve which was to be used to shut off the supply of water. Wilson informed its employees of these procedures. Appeal File, Exhibits 82, 265, 266. Between December 13 and 21, 1992, Wilson removed acoustical ceiling tile panels as required by the contract. On the night of December 22, 1992, a few minutes before midnight, a Wilson employee was performing demolition work on the twelfth floor. Specifically, the employee was demolishing a plaster wall that ran from north to south between columns K3 and K4, above where the ceiling tiles had been. The area where the employee was working was cluttered with an array of wires, pipes, ductwork, brackets, and hangers which had previously been hidden by the acoustical tile ceiling. The employee was working approximately five feet north of column K4 and did not see a sprinkler line running east to west, through the plaster wall, and slightly to the north of columns K4 and L4. This sprinkler line is not shown in the contract drawings. When the Wilson employee tore down the plaster wall, the sprinkler line fell and broke near column L4. Appeal File, Exhibits 0, 8, 16, 60, 64, 80, 265, 269, 271, 272, 273, 275, 282. Wilson's employee quickly attempted to close the supply valve that controlled the flow of water to the sprinkler line and, although Wilson's employee turned the handle on the valve, the valve did not close. Appeal File, Exhibits 8, 36, 265. Wilson notified the building's security guard of the broken sprinkler line. Appeal File, Exhibit 80. The Wilson employee who was performing the demolition work and his supervisor estimate that it took from sixty to ninety seconds to reach and turn the shut off valve. Appeal File, Exhibits 265, 266. Wilson estimates that, if the valve had worked, the water supply to the broken sprinkler line would have been shut off in approximately two minutes. Appeal File, Exhibit 8. At approximately 12:10 a.m. on December 23, 1992, a security guard at the building called the assistant building manager to report that an indicator light on the fire alarm panel would not reset. Appeal File, Exhibit 35. The assistant building manager called an employee of Johnson Controls World Services (Johnson Controls), a mechanical maintenance contractor, at approximately 12:15 a.m. on December 23, 1992, to report the problem. The Johnson Controls employee arrived at the building at approximately 12:50 a.m. and found standing water in the parking garage. He turned off the fire pump and this shut off the supply of water to the broken sprinkler line. Appeal File, Exhibits 5, 107. Wilson estimates that approximately forty-five minutes elapsed between the time the break occurred and the time the Johnson Controls employee turned off the fire pump. Appeal File, Exhibit 8. At approximately 2:00 a.m. on December 23, 1992, Johnson Controls notified the assistant building manager of the break in the sprinkler line. The assistant building manager and another GSA employee met at the federal building at 4:00 a.m to determine what damage had occurred. A Wilson employee showed the GSA employees what had happened. According to GSA's assistant building manager, the Wilson employee stated that Wilson had encountered improperly supported sprinkler lines "a lot in this area" and the Wilson employee showed the GSA employees one improperly supported line. Appeal File, Exhibit 35. GSA's assistant building manager noted that there were no light fixtures in the area where work was being performed, that the area was dark, and that the only light was provided by two spot lights mounted on tripods. Appeal File, Exhibit 36. The lights were 500 watts each. Appeal File, Exhibit 80. In a June 16, 1993 letter to GSA, Wilson states that its personnel had identified one instance of improperly supported sprinkler lines before the sprinkler line broke on December 22, 1992, that Wilson's superintendent instructed his employees to look for other improperly supported lines before beginning demolition work, and that the Wilson employee who was performing demolition work on the twelfth floor had surveyed the sprinkler lines before he began his work. In the letter, Wilson also states that the employee who performed the work believes that the lighting was adequate. Appeal File, Exhibit 38. The flow of water from the broken sprinkler line caused damage to desks, carpets, ceilings, and other items. Appeal File, Exhibit 266. On January 5, 1993, the contracting officer directed Wilson to repair the damage that was caused by the break in the sprinkler line. The contracting officer stated that GSA held Wilson responsible for making the repairs at no cost to GSA. Appeal File, Exhibit 10. Wilson stated that it would perform the repairs even though it did not consider itself responsible for the damage. Appeal File, Exhibit 11. The Valve and the Hangers Aguirre Associates, Inc. (Aguirre), an architect and engineering firm hired by GSA, performed an evaluation of the sprinkler system in the federal building and prepared a report dated January 28, 1993. Aguirre discovered that the distance from the plaster wall that had supported the sprinkler line to the nearest sprinkler line support hanger was approximately thirty feet instead of the maximum distance of twelve feet permitted by National Fire Protection Association standards. Aguirre concluded that the existing sprinkler line support hanger system was "grossly inadequate" and needed to be corrected before another sprinkler line break occurred. Appeal File, Exhibit 16. Aguirre also examined the valve that Wilson attempted to close in order to shut off water to the broken sprinkler line. Aguirre determined that the valve did not close because it was a butterfly valve containing a three-inch wafer and it had been installed in a two and one-half inch pipe. At an undetermined time, someone had attempted to close the valve and the valve stem sheared off when the three-inch wafer hit the smaller-diameter pipe. When Wilson's employee attempted to close the valve, he could not do so because of the broken valve stem. Appeal File, Exhibit 16. Aguirre's findings are consistent with those of American Automatic Sprinkler, Inc., which was called to the federal building to repair the broken sprinkler line. Appeal File, Exhibits 77, 283. The broken valve stem was inside the valve assembly and could be seen only when the valve was dismantled. Appeal File, Exhibits 81, 100, 266. The Claim At GSA's direction, Wilson repaired the damage caused by the broken sprinkler line and, on March 21, 1993, submitted a claim to the contracting officer. Appeal File, Exhibits 20, 24, 27. The amount claimed includes these items: Labor $ 5,759.25 Project management 2,238.12 Ceiling tile 443.86 Wall repairs 206.65 American Auto. Sprinkler 448.50[foot #] 1 Blackmon Mooring 3,183.89 ISS Systems 383.16 Mehl Computer Repair 1,972.35 Bizmart (calculators) 71.98 Furniture 2,899.75 Long distance calls 5.18 Parking 4.25 Rental of video camera 40.00 Supplies 35.12 Vehicle expenses 51.00 Attorney fees 684.25 Photographer 437.19[foot #] 2 Overhead (7%) on all of the above expenses 1,320.52 Profit (10%) on all of the above expenses and on overhead 2,018.51 $22,203.62 ----------- FOOTNOTE BEGINS --------- [foot #] 1 Of this amount, $207 was for repairing broken pipe and $241.50 was for inspecting the twelfth floor for conformity to National Fire Protection Association standards. [foot #] 2 This charge is for photographs taken on February 3, 1993, of the twelfth floor. ----------- FOOTNOTE ENDS ----------- All of these items are supported by time sheets, receipts, and invoices, except $210 of attorney fees. Appeal File, Exhibit 27. The attorney fees portion of the claim consists of $100 for a December 28, 1992 conference "regarding potential claim for concealed conditions"; $120 for review on December 31, 1992 of a "draft claim notice to [the] contracting officer"; $252 for January 6, 1993 services to "pursue claim under disputes clause," a January 19, 1993 conference regarding transmittal of correspondence to the contracting officer, a February 19, 1993 review of a draft letter "to contracting officer regarding claim," and a February 22, 1993 conference concerning a letter to the contracting officer "regarding water damage claim"; $2 for telecopy charges; twenty-five cents for copying; and $210 (for which no documentation exists) for what Wilson describes as a review of its "claim letter." The law firm that performed these services does not represent Wilson in this appeal. Appeal File, Exhibit 27. On March 25, 1994, Wilson sent GSA and the Board a one-page list of additional costs allegedly incurred between March 20, 1993, and March 20, 1994. These costs include: Labor $ 2,131.08 Attorney fees 1,458.00[foot #] 3 American Auto. Sprinkler 241.50 Overhead (7%) on the attorney fees and the American Automatic exp. 268.14 $ 4,090.00 Appeal File, Exhibit 261. Wilson provided no documentation to support any of these claimed expenses. The contracting officer denied Wilson's claim on June 29, 1993.[foot #] 4 Appeal File, Exhibit 39. Wilson filed this appeal on September 27, 1993. Discussion Entitlement ----------- FOOTNOTE BEGINS --------- [foot #] 3 The attorney fees are for unspecified work performed in 1993 by a law firm that does not represent Wilson in this appeal. [foot #] 4 The contracting officer wrote to Wilson on July 30 and August 24, 1993, and asked Wilson to remit an additional $9,973.11. The contracting officer never issued a decision demanding payment of this amount, so there is no government claim presented to us for decision. Appeal File, Exhibits 42, 46. ----------- FOOTNOTE ENDS ----------- Wilson asserts that it is entitled to an equitable adjustment to the contract price because GSA changed the terms of the contract. GSA counters by arguing that the following provisions of the contract required Wilson to repair the damage that occurred: FAR 52.236-3, FAR 52.236-7, FAR 52.236-9, and sections 00800, 01010, 01040, 01045, 01546, and 02070.[foot #] 5 The contract provisions cited by GSA do not provide that Wilson was required to perform repairs as a result of the broken sprinkler line. Therefore, GSA's requirement that Wilson repair the damage caused by the broken sprinkler line constitutes a change to the work required by the contract, and Wilson is entitled to an equitable adjustment to the contract price pursuant to the changes clause, FAR 52.243- 4.[foot #] 6 The FAR Clauses GSA contends that FAR 52.236-3 requires Wilson to repair the damage that occurred. This clause imposed an obligation upon Wilson to conduct a pre-bid site investigation and to examine the drawings and the specifications in order to satisfy itself as to the obstacles it would encounter during performance.[foot #] 7 Wilson could not have discovered the existence of the sprinkler line or the deficiencies in the hangers and the valve by looking at the drawings and specifications, because neither the sprinkler lines nor the deficiencies are mentioned in the drawings or specifications. GSA's assertion that the sprinkler line is shown in the contract drawings is simply wrong. Likewise, Wilson could not have reasonably ascertained the existence of the sprinkler line and the deficiencies in the hangers and the valve by inspecting the site prior to bid submission because the sprinkler lines and hangers were hidden above the acoustical tile ceiling and the problem with the valve could be detected only when the valve was taken apart. FAR 52.236-7 and 52.236-9 place upon Wilson responsibility for damage that results from either its fault, its negligence, its failure to comply with the contract, or its failure to exercise the appropriate degree of care. The damage that ----------- FOOTNOTE BEGINS --------- [foot #] 5 GSA also asserts that Wilson's insurance carrier, not GSA, should reimburse Wilson for its expenses. We rejected this argument in our opinion dated November 21, 1994. [foot #] 6 Because we grant this appeal based upon the contract's changes clause, we do not consider Wilson's other theories of relief. [foot #] 7 To the extent that GSA is arguing that FAR 52.236-3 imposed a post-bid obligation upon Wilson, we note that we can find no authority to support such an interpretation of this regulation. ----------- FOOTNOTE ENDS ----------- resulted when the sprinkler line broke is not attributable to any fault or negligence of Wilson and is not the result of Wilson's failure to comply with the contract or to exercise the appropriate amount of care. There is no evidence to suggest that Wilson's employee was performing his work carelessly or negligently. Before Wilson's employee began his work, he knew where the water supply valve was located and he knew how to use the valve. Wilson's employee did not see the sprinkler line that was supported by the plaster wall because the line is not shown on the contract drawings and because the line was part of a tangle of wires, pipes, and hangers in the area where the employee was working. Although the area was undoubtedly not as well lighted as it had been before the demolition work began, the employee believed that the light was sufficient for him to perform his work, which was the demolition of a wall. When the inadequately supported line broke, the employee quickly attempted to shut off the water supply valve which, if it had worked properly, would have stopped the flow of water after a few minutes. Due to no fault of Wilson, the valve did not work and water continued to flow for approximately forty-five minutes, causing most of the damage that GSA required Wilson to repair. Other Contract Sections The government-furnished property listed in section 00800 does not include any of the property at issue in this case, so this section does not require Wilson to effect repairs. Sections 01010 and 02070 provide that the Government does not assume responsibility for actual conditions of the structures to be demolished, that Wilson will adapt to existing conditions, that Wilson was to protect work which was to remain in place after demolition and construction, and that Wilson was to repair damage caused by demolition and construction work. The work being performed by Wilson was the demolition of a plaster wall. The damage that occurred was not due to the condition of the wall, was not due to Wilson's efforts to protect work which was to remain, and was not ultimately caused by Wilson's work. Instead, the damage occurred because the sprinkler line, which was not shown in the contract drawings, was not properly supported and because there was no working water shut off valve. GSA cannot use sections 01010 and 02070 as a means for transferring to Wilson responsibility for the damage that occurred when the sprinkler line broke. The portions of sections 01040 and 01045 upon which GSA relies apply to cutting and patching in connection with mechanical and electrical installations. The evidence does not establish that Wilson was performing cutting and patching work when the sprinkler line broke, and so does not establish that these sections required Wilson to perform the repair work as directed by GSA. There is no evidence either that Wilson failed to take the necessary precautions to protect safety and health as required by section 01546, or that Wilson's failure to take such precautions resulted in the damage that occurred. Summary The sprinkler line, which is not shown on the contract drawings, fell and broke when Wilson's employee demolished the plaster wall. The line fell and broke because it was improperly supported. The damage that occurred was largely due to the fact that the shut off valve did not work properly. The contract does not make Wilson responsible for damage that resulted from inaccurate drawings, an improperly installed sprinkler line, and a faulty water shut off valve. When GSA directed Wilson to repair the damage caused by the broken sprinkler line, it changed the terms of the contract and this change is compensable according to FAR 52.243-4, the Changes clause. Damages Wilson requests a $26,293.62 equitable adjustment to the contract price. The burden of establishing the amount of an equitable adjustment falls to Wilson, which must demonstrate both the reasonableness of its claimed costs and the causal connection between the change and the costs. Of the amount claimed, $5,251.44 (plus associated overhead and profit) is not recoverable for the following reasons. The changes clause provides that Wilson is entitled to an equitable adjustment to the contract price if GSA's change to the terms of the contract caused an increase in Wilson's cost of performing the contract. Wilson has not established that either the $40 it paid to rent a video camera or the $437.19 it paid for photographs taken approximately two months after the sprinkler line broke are attributable to the change directed by GSA or that these costs were costs of performing the contract. As a result, Wilson cannot recover these amounts. Wilson cannot recover the $684.25 it claims for attorney fees because this cost was incurred to promote the prosecution of a Contract Disputes Act claim against GSA. 48 CFR 31.205-47(f) (1992); see Bill Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541 (Fed. Cir. 1995). In addition, Wilson has not established that $210 of this amount, which is not supported by any documentation, is a cost that was incurred as a result of the change directed by GSA. The $4,090 that Wilson requested on March 25, 1994, is not supported by any documentation. Wilson has not established whether any part of the $4,090 is included in the March 21, 1993 claim and has not established that the costs claimed are attributable to the change directed by GSA. Wilson cannot recover this $4,090. Wilson is entitled to recover its claimed costs of $17,703.15 plus overhead at a rate of seven percent and profit at a rate of ten percent, for a total of $20,836.61 plus statutory interest. Decision The appeal is GRANTED IN PART. Wilson is awarded $20,836.61 plus interest at the rate authorized by the Contract Disputes Act, 41 U.S.C. 611 (1988), from March 21, 1993, until paid. ________________________________ MARTHA H. DeGRAFF Board Judge We concur: _______________________________ ________________________________ EDWIN B. NEILL MARY ELLEN COSTER WILLIAMS Board Judge Board Judge