_____________________________________________ GRANTED IN PART: April 24, 1995 _____________________________________________ GSBCA 12990-COM WARD MARINE ENTERPRISES,INC., Appellant, v. DEPARTMENT OF COMMERCE, Respondent. Cecil Ward, President of Ward Marine Enterprises, Inc., Hampton, VA, appearing for Appellant. Jerry A. Walz and Kenneth A. Lechter, Office of General Counsel, Department of Commerce, Washington, DC, counsel for Respondent. Before Board Judges PARKER and GOODMAN. PARKER, Board Judge. Ward Marine Enterprises, Inc. (Ward Marine), appeals four final decisions rendered by the contracting officer in connection with a ship repair contract with the Department of Commerce. Appellant requests an equitable adjustment to the contract for extra costs incurred in installing a new cable, removing additional asbestos containing materials, and expending overtime. Appellant also requests reimbursement of money withheld by the Government for appellant's alleged failure to provide properly working steering gear and oily water separator systems. Appellant elected to process this appeal under the accelerated procedure provided by Rule 14(a). The parties waived a hearing and elected to submit the case for a decision on the record. For the reasons discussed below, we grant the appeal in part. Background 1. On December 23, 1993, the Department of Commerce awarded a fixed-price, dockside ship repair contract, number 50-EANA-4- 00040, to Ward Marine Enterprises, Inc. Appeal File, Exhibit 1. Repairs were scheduled to be performed at the Atlantic Marine Center in Norfolk, Virginia, from January 11, 1994, to February 24, 1994. Electrical Cable 2. The contract specifications provide a description of the work involved for each item, including the following: 3.4 ITEM NO. 4: REVERSE OSMOSIS FEED TANK & PIPING UPGRADE e. Install the following new 1-1/2 inch, bronze valves: . . . . (3) One three-way electric solenoid valve Appeal File, Exhibit 2 at 13. 3. Standard specification AMC-000-1E provides the definition of "install": 3.2 Install. Place the specified item in position for service and make all connections needed to insure proper use, service, appearance, and operation. Includes making of all electrical and mechanical modifications and connections. Appeal File, Exhibit 2 at 1 of 23. Appellant submitted Report Number 073, which recommended the installation of sixty feet of LSTSGU-3 electrical cable to hook up the new three-way solenoid valve. Id., Exhibit 9. The contracting officer's technical representative (COTR) verbally informed the contractor that providing and hooking up the new cable was required in accordance with Standard Specification AMC-000-1E. Ward Marine installed the new cable. Steering Gear 4. The specifications also provide the requirements and testing procedures for the steering gear: 3.6 ITEM NO. 6: STEERING GEAR INSPECTION & MODIFICATIONS 3.6.5 Tests. a. Shift the rudder five times while the ship is dockside. Shifting the rudder is defined as cycling from right full rudder to left full rudder. Select the other steering pump and repeat the test. The rudder shall cycle smoothly, at a constant rate, with no hydraulic oil leaks or saltwater leaks. b. Compare and calibrate all fixed and remote electrical rudder angle indicators to an accuracy of plus or minus 1/2 degree. c. Repeat the requirements in 3.6.4a. and 3.6.4b. above while the ship is underway on sea trials, making way at a minimum of twelve knots. Appeal File, Exhibit 2 at 18. Respondent initially withheld $1,300 from its payment to Ward Marine because the scheduled operational test during sea trial was postponed. Id., Exhibit 6. Ward Marine contested the withholding, complaining that although Ward was ready for sea trials on March 7, 1994, it was being penalized because another contractor's incomplete work caused the delay. Id., Exhibit 7. After the sea trial operational test was performed, the contracting officer notified Ward Marine by letter dated May 3, 1994, that $1,300 was being withheld from final payment because the steering gear took more than thirty seconds to cycle on the starboard pump. Id., Exhibit 11. The record before us contains no requirement for a thirty second cycling time. See id., Exhibits 1, 2. Oily Water Separator System 5. The contract provides the requirements and testing procedures for the oily water separator system upgrade: 3.12 ITEM NO. 12: OILY WATER SEPARATOR SYSTEM UPGRADE 3.12.3 Requirements. a. Crop out the existing piping, associated valves and fittings as follows. . . . b. The extent of the piping to be removed is virtually all of the piping indicated in Appendix B-12. c. Install the new government-furnished oil content monitor on the discharge piping from the oil/water separator. d. Install new one inch, copper-nickel piping and the following new one inch, bronze valves and other fittings. . . . e. Install sufficient pipe unions such that each valve can be removed for maintenance without hot work. . . . f. Hydrostatically test all new pipes and fittings to a pressure of 125 psi for ten minutes. g. Conduct a four hour complete operational test of the oily water separator system, including normal operation, back flush and oil dump to the waste oil tank. Appeal File, Exhibit 2 at 26. Appellant was unable to get the system to operate properly and requested additional information about the electrical connections for the oil content monitor. Id., Exhibit 7. The Government did not provide any additional information. The contracting officer withheld $1,500 from final payment pending completion of a successful operational test. See id., Exhibits 6, 10. Ward Marine responded by letter dated March 28, 1994, stating in part: [The oily water separator] had never worked properly and the only way the system would operate was to jury rig the entire system. . . . [W]e cannot complete the operational test until the Government has a design showing the proper piping orientation and electrical interfacing of the control panel, oil content monitor and solenoids. We consider all design work to be over and above the specification requirements. Id., Exhibit 7. 6. A report on the condition of the Oily Water Separator System after appellant had worked on it listed the following problems: 1) Jumper missing for Back Flush Operations; 2) Wires crossed in oily water interface sensor; 3) [Oil content monitor] contacts wired incorrectly; 4) Input power had over size lugs causing arcing on TB-1 of control; 5) Float circuit wired wrong; 6) Three out of four solenoid valves wired to incorrect locations in control. Appeal File, Exhibits 10, 11. The Government hired another contractor to complete the system. Asbestos Removal 7. The contract contains the requirements for removing asbestos-containing materials: 4.11.7 Asbestos-Containing Materials (ACM). Existing panels, insulation, gaskets, and other materials on NOAA ships and boats may contain asbestos. a. Unless otherwise indicated, an asbestos survey has been conducted for each NOAA ship. A Survey Report has been prepared which identifies the location of all known asbestos-containing materials on the ship. A copy of the Survey Report will be made available for review by prospective bidders. b. Within 24 hours after commencement of the contract performance period, conduct an inspection of each work site that will involve a demolition or renovation operation as defined and required by reference 2.e. . . . . e. The Contractor shall be responsible for all removal, handling, repair, and disposal of all ACM that are identified as ACM in the applicable Survey Report, and that is necessary to perform required contract work. Except as otherwise specified, the Contractor is not responsible for removal, handling, repair, or disposal of any ACM which is not identified in the applicable Survey Report. Appeal File, Exhibit 2 at 9-10 of 23. 8. Modification 4 increased the scope of work for HVAC System Balancing & Noise Abatement. Ward Marine submitted a cost estimate (AIR 9), which included its estimate for labor and materials relating to the additional asbestos removal which would be required. Respondent's Record Submission, Exhibit 2. Modification 4 states in part: Increase the scope of the work to install new control air piping between forty-six HVAC air mixing boxes and the thermostats. This represents an upgrade from a one-pipe bleed- off system to a two-pipe, pressure-regulated system. Appeal File, Exhibit 3. 9. According to the contract specialist: On February 3, 1994, I received a revised cost proposal for AIR 9 in the amount of $35,593.00 which included costs for removal of asbestos and additionally requested 10 extra days to perform the work. On February 14, 1994, I received a revised cost proposal from Appellant in the amount of $9,819, which included the cost of asbestos removal and with a request for a contract extension of 10 days. On February 14, 1994, I negotiated a final bilateral modification for AIR 9, in the amount of $9,819.00, together with a 5 day extension, which was incorporated into Mod 4 of the contract. Other than what was included within the negotiations for AIR 7 and AIR 9 there would have been no additional asbestos removal work required to be performed by Appellant. Respondent's Record Submission, Exhibit 2 (Declaration of Linda Jacobs). Overtime 10. The original forty-two day performance period was extended twice, pursuant to modifications, for a total performance period of fifty-four days. The contractor finished on time. See Appeal File, Exhibit 14. On April 26, 1994, Ward Marine submitted a claim for overtime paid to employees because of government delays in responding to four of the contractor's Condition Reports. Id., Exhibit 9. Appellant contends that a minimum of one half of all overtime costs could have been avoided if the Government had responded in a timely manner. Ward Marine submitted a claim for overtime in the amount of $13,873. The contracting officer agreed to pay appellant $1,484.00 for delays associated with two change orders and denied payment of the remainder. Id., Exhibit 16. 11. Appellant claimed that the Government's delay in responding to appellant's request to install brass pipe fittings instead of bronze pipe fittings for item 4 (the Reverse Osmosis Feed Tank) and item 12 (the Oily Water Separator System) resulted in the loss of ten days. After appellant had installed brass valves for items 4 and 12, the COTR informed appellant on February 2, 1994, that the valves were unacceptable because the contract specified bronze valves. Appellant's Response to Respondent's Motion to Dismiss, Exhibit 7. On February 3, 1994, Appellant transmitted by facsimile an explanation of its use of brass fittings. Id., Exhibit 8. The COTR issued a memo on February 7, 1994, stating that the brass fittings were not authorized. Appellant now claims its costs for the overtime expenses incurred to correct the pipe fittings, arguing that the overtime was due to the Government's delay in responding to appellant's requests to use the brass fittings. 12. Appellant claimed that the Government's delay in responding to an additional asbestos findings report resulted in the loss of four days, and that the Government's decision concerning pilot house repairs resulted in the loss of six days. However, the delays concerning the repairs for the pilot house and for the additional asbestos removal resulted in Modification 2. That bilateral modification states as follows: The change in delivery dates, price, or cost and fixed fee described above is considered to be fair and reasonable and has been mutually agreed upon in full and final settlement of all claims arising out of this modification and any other modifications or change orders indicated above, including all claims for delays and disruptions resulting from, caused by, or incident to such modifications or change orders. Appeal File, Exhibit 3. 13. Appellant claimed that it lost fourteen days in the installation of new galley equipment due to the delay in obtaining Government approval. The contract specification for item number 11 states in part: ITEM NO. 11: GALLEY EQUIPMENT REPLACEMENT 3.11.3 Requirements. a. Cut an access through the superstructure's longitudinal bulkhead, port side, between frames 66 and 70, above the main deck. The access shall be sized for the removal of selected existing galley equipment and the installation of the new government- furnished equipment. Appeal File, Exhibit 2 at 24. Appellant incurred overtime costs of $7,567.10 in connection with the galley work. Because appellant is claiming half of its total overtime as being caused by Government delay, we calculate appellant's claim for this item to $3,783.55.[foot #] 1 14. Ward Marine has appealed the following final decisions: (1) the denial of Ward Marine's claim for $712.00 for the installation of new electrical cable; (2) the decision to withhold payment in the amount of $2,800.00 for the steering gear ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Board calculated the overtime amounts by using appellant's average hourly overtime rate of $24.41 per hour. That rate was computed by dividing appellant's total claimed amount of overtime ($13,873) by appellant's total claimed overtime hours (568.25). Appellant claims that it incurred 310 hours of overtime for the galley work, of which it claims half, or 155 hours. Thus, appellant's claim for the galley work is $24.41 times 155, or $3,783.55. ----------- FOOTNOTE ENDS ----------- inspection and oily water separator system upgrade; (3) the denial of its claim for $12,721 for the removal of asbestos containing panels; and (4) the denial of its request for $13,873 for overtime costs. Appeal File, Exhibit 17. Discussion Electrical Cable Appellant claims that the Government owes it $712.00 for providing sixty feet of electrical cable necessary for installation of the three-way electric solenoid valve. The contracting officer denied appellant's claim based on standard specification AMC-000-1E, which defined the term "install." We agree with respondent that providing the cable necessary to install the solenoid valve was required by the contract. The definition of "install" is straightforward: the contractor is required to "make all connections needed to insure proper use, service, appearance, and operation." Finding 3. The cable in question forms the connection between the new valve and the source of electricity. Ward Marine has not argued that an unforeseeable situation existed, such as the existence of a defective cable that Ward Marine did not expect to have to replace. Appellant simply argues that the contract did not require it to supply the cable to connect the valve. This is incorrect. Because the contract required the contractor to install a functioning valve, appellant was required to supply the cable necessary to connect it. Appellant argues that because respondent accepted its claim for costs relating to a new electrical cable installed for the galley equipment replacement, respondent established a precedent for compensating the contractor for new cable costs. We disagree. The contractor submitted its claims for new cable costs to the contracting officer at the same time and did not know at that time whether the claims would be accepted or denied. Thus, appellant cannot say that it relied on a precedent established by respondent. Moreover, appellant has not shown that the two situations are comparable. According to respondent, the electrical cable for the galley equipment replaced a cable which was expected to be re-used, but was found to be missing during the renovations. Deposition of James B. Stricker, at 7-8. In contrast, the cable for the solenoid valve was expected from the beginning to be supplied by the contractor. Id. The appeal is denied as to this claim. Steering Gear Inspection and Modifications The Government withheld $1,300 from the contractor because the steering gear took more than thirty seconds to cycle on the starboard pump. Finding 4. The contracting officer alleges that the thirty second cycle time requirement is located in Technical Manual S2200-4, referenced in the specifications. The technical manual, however, was not submitted into evidence. The specifications relating to the steering gear inspection do not include the thirty second cycle time in either the "Requirements" section or the "Tests" section. Finding 5. Although the specifications describe the test in detail, nowhere is the thirty second cycle time expressly stated. The contractor argues that it was not clear that the thirty second cycle time was required. Based on the available record, we agree. Ward Marine is entitled to $1,300 withheld by the Government, plus interest. Oily Water Separator System Upgrade The Government withheld $1,500 from Ward Marine because appellant failed to complete the oily water separator system upgrade. Appellant argues that the specifications did not require "electrical troubleshooting" for a system that had never worked properly. See Finding 5. We agree with respondent that Ward Marine failed to perform the system upgrade as required by the contract. The contract required appellant to "install" a number of pipes, several electrical valves, and an oil content monitor, and then to test the system to make sure that it worked. Finding 5. As discussed earlier, the term "install" includes making all connections needed to insure proper use and operation. Finding 3. The record shows that appellant did not properly "install" the electrical portions of the system. According to the Condition Report prepared after Ward Marine had worked on the system, several of the solenoid valves, the oil content monitor, and other devices had been wired incorrectly. Finding 6. The system did not operate properly and another contractor had to be brought in to complete the job. There is nothing in the record to indicate that the system required "electrical troubleshooting" or other work beyond the scope of the contract. Having failed properly to perform the requirements, appellant cannot now complain that the Government failed to pay for the work. Additional Asbestos Removal Appellant claims additional costs for removing asbestos- containing materials located in overhead ceiling panels. Respondent counters that Modification 4 was intended to cover all asbestos removal outside of those areas identified on the Asbestos Survey Report and maintains that the documents exchanged in the course of negotiating the modification show the intent to compensate appellant for the additional asbestos removal. By signing the bilateral modification, respondent argues appellant released the Government from all further claims relating to the issue. We agree with respondent. The contract specialist stated in her sworn declaration that the purpose of Modification 4 was to upgrade the HVAC system by installing new control air piping between 46 HVAC air mixing boxes and thermostats. A cost proposal from appellant included labor and material expenses for asbestos removal in the amount of $35,593. Findings 8, 9. The contract specialist stated that, on February 14, 1994, she received a revised cost proposal from appellant in the amount of $9,819, which also included the costs for asbestos removal. Modification 4 was negotiated and signed by both parties that same day in the amount of $9,819. Id. Appellant argues that the price agreed upon in Modification 4 did not include additional asbestos removal. We disagree. Appellant gave the Government its estimate for installing the new piping for the HVAC system. This estimate included costs for labor and materials for the additional asbestos removal that would be required. By negotiating, and signing, bilateral Modification 4, which requires appellant to remove the asbestos ceiling panels in order to do the work, appellant agreed to do the work for the stated price. Appellant cannot now claim additional compensation. Overtime Appellant claims its costs for overtime due to alleged delays caused by slow Government responses to four Condition Reports. First, appellant argues that the Government's delay in responding to appellant's request to install brass pipe fittings instead of bronze pipe fittings for item 4 (the Reverse Osmosis Feed Tank) and item 12 (the Oily Water Separator System) resulted in the loss of ten days. After appellant had installed brass valves for items 4 and 12, the COTR informed appellant on February 2, 1994, that the valves were unacceptable because the contract specified bronze valves. See Findings 2, 11. On February 3, 1994, Appellant transmitted by facsimile an explanation of its use of brass fittings. The COTR issued a memo on February 7, 1994, stating that the brass fittings were not authorized. Appellant now claims its costs for the overtime expenses incurred to correct the pipe fittings, arguing that the overtime was due to the Government's delay in responding to appellant's requests to use the brass fittings. We deny appellant's claim. If appellant had installed bronze valves at the outset as the contract required, there would have been no delay, and no reason for overtime to correct appellant's own mistakes. Appellant also contends that the Government's delay in responding to an additional asbestos findings report resulted in the loss of four days, and that the Government's decision concerning pilot house repairs resulted in the loss of six days. However, the delays concerning the repairs for the pilot house and for the additional asbestos removal resulted in Modification 2. That bilateral modification states as follows: The change in delivery dates, price, or cost and fixed fee described above is considered to be fair and reasonable and has been mutually agreed upon in full and final settlement of all claims arising out of this modification and any other modifications or change orders indicated above, including all claims for delays and disruptions resulting from, caused by, or incident to such modifications or change orders. Appeal File, Exhibit 3. Based on this language, appellant cannot seek additional compensation for delays which resulted in this modification. Finally, appellant argues that the slow Government response for the approval of installation of new galley equipment resulted in the loss of fourteen days. At the January 18, 1994, progress meeting, appellant requested approval from the COTR to disassemble the galley equipment, take it through the hatch, and reassemble it to a satisfactory working condition, in accordance with the specifications. See Finding 13. Appellant did not receive an affirmative answer until January 31, 1994. Appellant has convinced us that it was required to pay overtime to complete the contract in a timely manner and that the cause of some of the overtime was delay by the Government. Appellant is awarded $3,783.55 in overtime costs for this item. See id. Decision The appeal is GRANTED IN PART. Appellant is awarded a total of $5,083.55, plus interest in accordance with the Contract Disputes Act, 41 U.S.C. 611 (1988). _________________________ ROBERT W. PARKER Board Judge I concur: _________________________ ALLAN H. GOODMAN Board Judge