__________________________________________________ SUMMARY RELIEF GRANTED AS TO ENTITLEMENT: September 6, 1995 __________________________________________________ GSBCA 12711 INCORE, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Theodore M. Bailey, San Antonio, TX, counsel for Appellant. M. Leah Wright, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), BORWICK, and NEILL. NEILL, Board Judge. This dispute concerns a claim by Incore, Inc. (Incore), appellant in this case, for funds said to be owed under a contract which appellant has with the General Services Administration (GSA). The contract is for construction work done at the United States Border Station in Laredo, Texas. One of the principal undertakings in Incore's contract was the renovation and expansion of existing loading docks. As part of this work, Incore was required to construct numerous vertical supporting piers or caissons.[foot #] 1 These piers are to support the border station's renovated and newly constructed loading docks and surrounding walls. The loading docks are positioned several feet above ground level while the surrounding walls are at ground level. The contract directed ----------- FOOTNOTE BEGINS --------- [foot #] 1 The contract uses the terms "caissons" and "foundation piers" interchangeably. In this decision, therefore, "pier" and "caisson" should be understood as having the same meaning and no special significance should be given to our use of one term rather than the other. ----------- FOOTNOTE ENDS ----------- Incore to excavate holes for the piers to required bearing strata. The piers are to rise from the bearing strata to ground level to support the surrounding walls or to a point several feet above ground level where they are to intersect the lowest beams of the loading docks. The piers are to be of reinforced concrete poured into steel casings. Now that the work has been completed, the parties are in disagreement as to how the "drilling" unit price for the piers is to be paid. Appellant contends that, under the contract's payment provision relating to the installation of the piers, a per linear foot unit price for "drilling" is to be applied to the entire design length of each pier actually installed. GSA disagrees and contends instead that appellant is entitled to payment of the "drilling" unit price only for excavation actually accomplished by boring, that is, "drilling" in the strictest sense of the word. Incore's claim is prompted by a prior claim by GSA for a credit of $150,000. Based on its interpretation of the unit price for "drilling," GSA has decreased the contract price by $150,000 and issued a change order withholding that amount as a credit. Appellant contests this action and claims that, under the contract terms, it is entitled to payment of $159,563.65. By decision dated April 18, 1995, the Board denied a motion for summary relief on the issue of entitlement alone filed by respondent and a cross-motion for summary relief on the same issue filed by appellant. Both parties believed that the issue of entitlement was one of contract interpretation and, therefore, ripe for summary relief. Their motions were denied because of uncertainties in the record concerning facts which the Board considered material to this dispute. Incore, Inc. v. General Services Administration, GSBCA 12711, 95-2 BCA 27,662. In response to the Board's request, counsel for the parties have supplemented the record with additional exhibits and briefing. Now that the record has been supplemented and clarified, the Board is satisfied that no material fact remains in dispute concerning the issue of entitlement. Accordingly, for the reasons set out below, we now grant summary relief in favor of appellant on the issue of entitlement. Background The record for this case does not show any disagreement between the parties to this dispute regarding the following facts. 1. On December 5, 1991, GSA awarded a contract to Incore for improvements to the United States Border Station in Laredo, Texas. Appeal File, Exhibit 1. The GSA also contracted with Walk, Haydel & Associates, Inc. (WHA) to provide construction quality management services at the site. Id., Exhibit 3. 2. The improvements to the border station were to be done in two phases. Phase one included demolition and new construction associated with the west dock and dog kennel, scale house, truck scales, and asphalt paving. Phase two consisted of demolition and new construction associated with the east dock and structural enhancement to the existing east dock floor, roof, office and guard rail. Appeal File, Exhibit 3 at 5. 3. Specification Section 02370 of the contract is entitled "CAISSONS." This specification deals with the foundation piers for the loading docks. Principal provisions of this specification which are material to this decision are as follow: PART I - GENERAL 1.01 DESCRIPTION OF WORK: A. Extent of caissons is shown on drawings, including locations, diameters of shafts, estimated bottom elevations, top elevations, and details of construction. 1.02 QUALITY ASSURANCE: . . . . C. Survey Work: Engage a registered surveyor to perform surveys, layouts and measurements for caisson work. Conduct layout work for each caisson to lines and levels required before excavation, and actual measurements of each caisson's horizontal axial location, shaft diameter, bottom and top elevations, deviations from specified tolerances, and other data as required. . . . . 1.03 SUBMITTALS: A. Reports: Submit following reports directly to Contracting Officer, with copy to others as designated. . . . . 2. Certified Caisson Report for each caisson, recording actual elevation at bottom and top, elevation of rock diameter of shaft, final centerline location at top, variation of shaft from plumb, result of tests performed, actual allowable bearing capacity of bottom, depth of socket (if applicable), levelness of bottom, seepage of water, still water level (if allowed to flood), elevation of bottom and top of any casing left in place, any unusual conditions, dates of starting excavation, completion of excavation, inspection testing, and placement of concrete (include any delays in concreting and location of construction joints in shafts) and weather conditions. . . . . PART 3 - EXECUTION 3.01 CAISSON EXCAVATION: A. General: Excavate holes for caissons to required bearing strata or elevation as shown on drawings. Excavate holes for closely spaced caissons, and those occurring in fragile or sand stratas, only after adjacent holes are filled with concrete and allowed to set. 1. Caisson design dimensions shown are minimums. The design of caissons is based on assumed strata bearing capacity. If bearing strata is not capable of maintaining bearing capacity assumed, foundation system will be revised as directed by the Contracting Officer. Revisions will be paid for in accordance with contract conditions relative to changes in work. 2. If required, install casings as excavation proceeds so that earth walls are maintained without spilling into shaft. . . . . H. Depth of Bearing Strata: If indicated depth of shaft excavation is reached without developing required strata bearing capacity, immediately suspend excavation operations and inform Contracting Officer. Contracting Officer will determine procedures to be followed in each instance. . . . . I. Overexcavation: No payment will be made for extra length when caisson shafts are excavated to a greater depth than required or authorized by Contracting Officer, due to overdrilling by Contractor. Complete caisson and fill extra depth with concrete, if other conditions are satisfactory. Overexcavated shafts will be measured and paid for to original design or authorized depth. . . . . 3.04 FIELD QUALITY CONTROL: . . . . C. Inspection and Tests for Caissons: Soil test facility shall perform and report specified tests, and additional tests which may be required. . . . 1. Bottom elevations and bearing capacities and lengths of caissons as shown on drawings are estimated from available soil data. Actual elevations, caisson lengths, and bearing capacities will be determined by soil testing facility from conditions found in excavations. Final evaluations and acceptance of data will be determined by the Contracting Officer. . . . . 3.05 MEASUREMENT AND PAYMENT A. Basis of Bids: Bids shall be based on number of caissons, design length from top elevation to bottom of shaft (extended through the bell, if applicable), and diameter of shaft, as shown on drawings. B. Basis for Payment: Payment for caissons will be made on actual net volume caissons in place and accepted. The actual length, shaft diameter, may vary to coincide with elevation where satisfactory bearing strata is encountered, and with actual bearing value of bearing strata determined by testing services, and with stability and characteristics of soil strata. Adjustments will be made on net variation of total quantities, based on design dimensions for shaft. 1. There will be no additional compensation for excavation, concrete fill, reinforcing, casings, or other costs due to unauthorized overexcavating shafts. No payment will be made for rejected caissons. 2. Prices quoted include full compensation for labor, materials, tools, equipment, and incidentals required for excavation, trimming, shoring, casings, dewatering, reinforcement, concrete, and other items for complete installation. Appeal File, Exhibit 1. 4. The solicitation required a bidder to provide a lump sum bid and also to bid unit prices on item 2 dealing with the construction of caissons. It is the application of these unit prices which has given rise to the dispute between Incore and GSA. The solicitation/contract provision dealing with these unit prices is set out in the following format: 2. UNIT PRICE BID Caissons (Foundation Pier Quantities) These unit prices will be applicable for adjusting Contract Price in event constructed quantities are greater or lesser than quantities stated herein. 2.A Existing Dock Item No. Unit Unit Price Item Cost Units Concrete 59 CY $_________ $________ Reinforcing 2.60 TON $_________ $________ Permanent Steel Casings: 24" dia. 510 LF $_________ $________ Drilling 24" dia. 510 LF $_________ $________ 2.A.1 UNIT PRICE BID _______________DOLLARS($________) 2.B New Dock Item No. Unit Unit Price Item Cost Units Concrete 334 CY $_________ $________ Reinforcing 14.69 TON $_________ $________ Permanent Steel Casings: 18" dia. 651 LF $_________ $________ 24" dia. 403 LF $_________ $________ 30" dia. 1,037 LF $_________ $________ 36" dia. 227 LF $_________ $________ Drilling 18" dia. 651 LF $_________ $________ 24" dia. 403 LF $_________ $________ 30" dia. 1,037 LF $_________ $________ 36" dia. 227 LF $_________ $________ 2.B.1 UNIT PRICE BID ______________DOLLARS($________) Appeal File, Exhibit 1. The estimated number of units set out in this request for unit prices for steel casing and drilling are based on the design length of the piers. Respondent's Proposed Statement of Undisputed Facts at 4. (Appellant does not question this contention in its Statement of Genuine Issues.) 5. Incore bid the unit prices for caisson construction in the required format. The total unit price bid, i.e. the sum of 2.A.1 and 2.B.1, is equal to the total of the individual item costs listed for each of the line items for 2.A and 2.B. Appeal File, Exhibit 1 at 4. 6. The contract plans do not specifically show the design length of the individual piers. As already noted, however, Clause 1.01 of Specification Section 02370 states that the "extent of caissons is shown on drawings, including locations, diameters of shafts, estimated bottom elevations, top elevations, and details of construction." This is, in fact, correct. The total estimated design length of the piers can be derived from elevation and dimension data contained on the contract structural drawings. See Respondent's Supplemental Comments of May 18, 1995, at 3-4; Appellant's Supplemental Comments of May 19, 1995, at 2-5. These same drawings, however, do not provide elevation data regarding existing soil levels. Appeal File, Exhibit 1 (Drawings). 7. A note on drawing 7/S/10 of the contract plans provides as follows concerning the top elevation of piers: Elevation of top of piers, unless noted otherwise on drawing is at the bottom of the deepest intersecting beam or wall supported by the pier. Contractor shall calculate and submit to Contracting Officer all top of pier elevations before proceeding with the pier drilling operation. Appeal File, Exhibit 1 (Drawings). 8. Appellant elected to excavate with a backhoe from five to eight feet of soil from beneath the canopy of the existing docks. This was done to accommodate a drilling rig in those areas. Respondent's Proposed Statement of Undisputed Facts 10; Appellant's Proposed Statement of Uncontested Facts 23. Although WHA reminded Incore that excavation such as this would require an approved shoring plan, we can find nothing in the record indicating that either WHA or GSA objected to this excavation. Appellant's Exhibit 3. 9. In November 1992, WHA requested Incore to submit all data attendant to the caissons. In making this request, WHA advised Incore not to include portions of the piers not drilled, such as the top eight feet under the canopy at the existing docks where Incore had excavated for rig entry. Appeal File, Exhibit 8. From the ensuing correspondence in the record, it is clear that a dispute developed over whether Incore was entitled to recover drilling costs solely on the basis of actual boring done for each pier or, instead, on the basis of each pier's design length as adjusted to reflect the actual bottom elevation of each pier. Id., Exhibits 9-11. 10. By letter dated December 22, 1992, the contracting officer sent Incore a proposed change order claiming an equitable credit of $197,259.65. In that letter the contracting officer states: The Government's position is that the method for calculating payment for the drill[ed] piers (Bid Items 2A and 2B) [is] clearly stated in the contract documents in Volume I and III, Section 02370, pages 1 through 16 entitled "CAISSON". This method requires the total length of each drill[ed] pier to be as measured from top of ground elevation (at the time the pier is drilled) to the bottom elevation, multiplied by the unit price submitted by the General Contractor when he proposed on this project. The contract clearly states that unit prices submitted by the General Contractor are to be used to determine the actual cost of the drill[ed] piers. Appeal File, Exhibit 13 at 2. 11. For several months the disagreement between Incore and GSA continued. On May 21, 1993, Incore submitted a certified claim in the amount of $159,563.65 and requested a contracting officer's decision in sixty days. Appeal File, Exhibit 16. 12. The contracting officer's decision was delayed. GSA contends that this was because appellant failed to provide additional supporting documentation for the claim. Appeal File, Exhibits 17, 19, 21, 23. 13. By letter dated December 8, 1993, the contracting officer issued her decision denying Incore's claim for payment. In her decision, the contracting officer repeats her earlier contention: Drilling lengths are measured from the actual point that the drilling beings (i.e. the surface of the earth) to the bottom of the drilled pier, not from the top of the pier to the bottom of the pier, which would result in the Government paying for the contractor to drill through air. The drilled piers should be paid for based upon the actual depth drilled, not the total length of the pier itself. Appeal File, Exhibit 25. In her decision, the contracting officer also points out that Incore, by removing approximately eight feet of soil to accommodate its drilling rig, reduced the amount of drilling required. This is said to have led to the Government's claim for a credit on the drilling line item. Id. On December 10, 1993, the contracting officer issued a unilateral change order decreasing the contract price by $150,000. Id., Exhibit 26. Discussion We agree with the parties that the issue of entitlement in this case can and should be resolved through a motion for summary relief. The ultimate question here is one of contract interpretation, with no genuine issues of material fact. Armco, Inc. v. Cyclops Corp., 791 F.2d 147 (Fed. Cir. 1986). At first blush, the contracting officer's position in this dispute has a certain allure. Contract item 2 does list a specific unit price for "drilling." The GSA contends that "drilling" should be understood as just that and nothing more. Hence, the contracting officer understandably insists that compensable drilling lengths are to be measured from the surface of the earth where the actual drilling begins. This position, however, does not bear up under close analysis. The Government's interpretation lacks support in the contract itself. We find no contract provision which expressly states that the application of the unit price for drilling is to be based on lengths actually drilled through the earth from the existing surface. As a matter of fact, the caisson specification (02370) and the contract structural drawings say precious little if anything about the surface or ground level elevations. By contrast, data regarding bottom and top elevations is expressly called for in the provision dealing with survey work (1.02 (C)) and in that concerning the certified caisson report (1.03 (A)(2)). The fact that the contract has so little to say regarding actual soil elevations provides scant support for GSA's contention that this is a critical element in applying the unit price for drilling. By far, however, what most undermines the Government's application of the unit price for drilling is that this interpretation is in conflict with relevant contract provisions and, in particular, the contract's Measurement and Payment Clause. Ordinarily we would read the term "drilling" as GSA and its on-site quality manager do. Given the contractual scheme employed here, however, it is obvious that, for this contract, the term must be understood in a broader sense. The Measurement and Payment Clause, i.e. Clause 3.05 of Specification 02370, expressly provides that bids shall be based, inter alia, "on the design length from top elevation to bottom of shaft." Bidders were furnished the total estimated design length of the piers in linear feet in order to calculate their per linear foot unit price for drilling. In short, the solicitation directed bidders to spread over the entire estimated design length of the piers all excavation costs associated with their installation. Respondent accuses appellant of seeking to be reimbursed for drilling through air. We think not. The solicitation directed bidders to calculate a per linear foot rate for "drilling" by spreading their expected excavation costs out over the entire design length of the piers -- including that portion running through the air from the ground surface to the top elevation of the piers. If Incore is paid the unit cost for drilling, based on the design length of the pier, therefore, it will merely be recovering this same estimated cost -- subject, of course, to some adjustment based on differing bottom elevations. Respondent's position regarding the application of the unit drilling price is likewise in conflict with the payment portion of the contract's Measurement and Payment Clause. Under 3.05 (B), payment for the piers or caissons will be made on actual net volume of caissons in place and accepted. The clause speaks of adjustments to be made on net variations of total quantities "based on the design dimensions for the shaft." This portion of the clause recognizes that the actual length may be subject to variation based upon satisfactory bearing strata being other than those originally anticipated. In other words, the parties have allocated between themselves the risks associated with a change in the estimated design length based on the bottom or below- ground elevation being different from the original estimates. No adjustment is contemplated in the contract, however, so far as the upper portion of the design length of the pier is concerned. Nevertheless, GSA, in insisting that payment for drilling be limited to that portion of the pier where actual drilling was required, has, in effect, further reduced the design length of the piers which was to serve as the basis for payment. This is clearly in conflict with the payment provision and exposes appellant to the adverse consequences of a risk which was never allocated to it under either the solicitation or the contract. Part III of Specification 02370 on caissons discusses the "excavation" required for the installation of the caissons. Although the term "drilling" appears occasionally in this section, we are far from convinced that drilling is the only type of excavation anticipated or permitted under the contract. Indeed, the preference in the specification for the more generic term "excavation" suggests that it clearly is not. Furthermore, we are aware of no evidence suggesting that respondent objected to Incore's partial excavation for the piers by a method other than drilling. The solicitation's instruction to spread drilling costs out over the entire design length of the piers unquestionably leads to an artificially low per linear foot unit price for drilling when compared to what the per linear foot unit price might have been had it been calculated solely on the basis of estimated lengths requiring actual drilling. This pricing technique actually used by GSA, however, is not devoid of any rationale. Here it clearly works in the Government's favor in the event additional excavation is required beyond original estimates to reach strata with acceptable bearing capacity. Conversely, a unit price calculated in this fashion makes adjustments somewhat more palatable to the contractor when they are required because acceptable strata have been reached sooner than anticipated. In any event, one cannot change rules midway in the game. In the solicitation, GSA clearly called for and envisioned one method of bidding and payment of a unit price for drilling. It cannot now change that method subsequent to contract award. Respondent's position regarding the application of the unit price for drilling under this contract leads to incongruous, if not absurd, results. The excavation of from five to eight feet of earth beneath the canopy of the existing loading docks to accommodate the drilling rig significantly reduced the need for actual drilling in that area but obviously represented a genuine excavation cost to appellant. The GSA's insistence on applying the unit price of "drilling" only to those pier lengths requiring actual drilling leaves Incore with no means for payment under the contract for this excavation cost associated with installation of the piers. The bizarre consequences of the respondent's interpretation which precludes Incore from recovering substantial excavation/drilling costs are avoided, however, and the excavation portions of Specification 02370 are found to accord neatly with the provisions of the contract's Measurement and Payment Clause, if the unit price for "drilling" is understood not as applying only to pier lengths requiring actual drilling but rather to the entire design length of the piers as adjusted for actual bottom elevations. We find this application of the unit price for "drilling" to be correct since it is in harmony with the contract when read as a whole and produces no anomalous results. Granite Construction Co. v. United States, 962 F.2d 998, 1003 (Fed. Cir. 1992); United States v. Johnson Controls, Inc., 713 F.2d 1541, 1555 (Fed. Cir. 1983); Victory Carriers, Inc. v. United States, 467 F.2d 1334, 1342 (Ct. Cl. 1972); Hol- Gar Manufacturing Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl. 1965). Decision Incore, as a matter of law, is entitled under the contract to payment of a unit price for "drilling" based on the actual design length of the piers as that length may be adjusted for actual bottom elevation. This appeal is, therefore, GRANTED as to entitlement. The $150,000 credit taken by respondent through its unilateral change order is in conflict with and unsupported by contract provisions. Instead, appellant is entitled to payment in accordance with the contract as interpreted herein. Because this decision is limited to appellant's entitlement to payment, we make no finding at this time regarding the specific amount being sought by appellant. The quantum of appellant's claim remains before the Board. The parties are directed to advise the Board within thirty days of this decision of the status of their efforts to resolve this remaining issue of their dispute. ________________________ EDWIN B. NEILL Board Judge We concur: _______________________ ________________________ STEPHEN M. DANIELS ANTHONY S. BORWICK Board Judge Board Judge