Board of Contract Appeals General Services Administration Washington, D.C. 20405 GRANTED IN PART; DISMISSED FOR LACK OF JURISDICTION IN PART: March 15, 1999 GSBCA 14340 CLARK CONCRETE CONTRACTORS, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Michael Evan Jaffe, Richard J. Webber, and Debra M. Daumit of Arent Fox Kintner Plotkin & Kahn, PLLC, Washington, DC, counsel for Appellant. Gerald L. Schrader and Kevin J. Rice, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman),[foot #] 1 NEILL, and GOODMAN. DANIELS, Board Judge. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The hearing in this case was conducted by Board Judge Joseph A. Vergilio. Judge Vergilio subsequently resigned from the Board, and the case was reassigned to Judge Daniels. The Board afforded the parties an opportunity to recall witnesses so that the newly-assigned judge could hear their testimony, and to make additional presentations. The parties declined this invitation. The Board considered, in writing this opinion, the transcript of the ten-day hearing conducted in the case, the documentary record, and the detailed briefs and reply briefs submitted by the parties. ----------- FOOTNOTE ENDS ----------- While OMNI Contractors, Inc. (OMNI) was in the process of constructing an office building in Washington, D.C., under contract with the General Services Administration (GSA), the agency had the building redesigned to make it more capable of withstanding a bomb blast. The parties attempted to negotiate all costs associated with the blast design changes as those changes were made. The only costs on which agreement could be reached, however, were direct costs associated with the changed work; various costs alleged to have resulted from the impact of the changes were specifically excluded from the modifications the parties made to the contract. The agency's contracting officer denied virtually all of the contractor's claim for those impact costs. The contractor appealed her decision to this Board, and in this opinion, we review the claim in detail. The issues in this case are (a) whether the design changes, which were made by the agency, delayed completion of the project and thus caused the contractor to incur extra costs, and (b) if the agency's actions were responsible for delay and incurrence of costs, what the extent of the contractor's recovery should be. We determine that the agency's actions caused most of the delay contested by the parties and that the contractor has demonstrated entitlement to most of the amount it seeks. Fixing the exact amount of recovery takes us through a lengthy analysis of a vast number of claim elements relating to costs allegedly incurred by OMNI and fourteen different subcontractors (some of which had second-tier subcontractors whose costs form part of the matters to be reviewed). We dismiss for lack of jurisdiction one component of the claim, relating to one subcontractor's alleged loss of productivity. This matter was never presented to the contracting officer and consequently may not be considered in this proceeding. I. General matters A. The contract GSA awarded the contract, for construction of a building to house the Washington Metropolitan Field Office of the Federal Bureau of Investigation (FBI), to OMNI on September 30, 1994. Exhibit A8.[foot #] 2 OMNI changed its corporate name to Clark Concrete Contractors, Inc., on December 30, 1996. The parties modified that contract on May 16, 1997, to reflect this name change. Exhibit 622. Since most of the matters raised in this case occurred prior to the name change, and for simplicity's sake, in this opinion, we refer to the contractor as OMNI. The project was a cast-in-place concrete office building with four basement levels below ground (primarily for parking), eight stories above ground, and a penthouse on top containing the ----------- FOOTNOTE BEGINS --------- [foot #] 2 All exhibits are included in the appeal file for this case. ----------- FOOTNOTE ENDS ----------- mechanical system for the structure. Transcript at 21, 1219. The original contract amount was $49,461,000. Exhibit A8. B. The concrete structure The basic structure of the FBI building consisted of concrete floor slabs supported by concrete columns, embankment walls below ground, and interior shear walls above ground. A slab could be poured only on a surface known as a "deck." The formwork for each deck consisted of vertical scaffolding, horizontal aluminum beams and "stringers" installed across the scaffolding, and plywood laid on top of the aluminum beams. In the basement levels (except for part of B1, the highest basement level), concrete beams -- thicker cross-sections of concrete within the slab which added to the strength of the structure, and which were sometimes referred to as "girders" -- were framed using three-sided plywood forms which projected downward from the bottom of each deck. Each of the concrete beams had to be individually built. In a part of the B1 level, and at the ground and above-ground floors, the design called for concrete beams fashioned through the use of pans. The pans, made of fiberglass, looked like large, inverted wash tubs and were placed on top of the plywood. When the concrete was poured, the areas between the rows of pans became the concrete beams. The columns which supported each floor were framed at the same time as the deck for that floor and were typically poured before the deck was poured. Appellant's Posthearing Brief at 7; Respondent's Reply Brief at 5 (not contesting statements). When a deck had been formed, steel reinforcing bars ("rebar") were placed in the areas where the concrete would be poured to provide structural strength. The concrete was then poured and allowed to cure, after which the underlying formwork was stripped away for reuse at the next level. Some scaffolding was left in place temporarily as "reshoring" to provide additional support until the concrete reached sufficient strength. Appellant's Posthearing Brief at 7-8; Respondent's Reply Brief at 5 (not contesting statements). OMNI divided each floor into several discrete pour areas and generally planned to begin in the northwest corner of a floor and move through contiguous pours, finishing in the southeast corner. Exhibits 552 (pour area illustration), 1122-24, 1157-65. Maximum efficiency in concrete operations on a job such as the FBI building depends on achieving a smooth flow of work. As the scaffolding and aluminum framework in one pour area are completed, plywood and formwork placement should begin in that area, while the erection of scaffolding and the aluminum framework continues for the next area of the slab. The plywood and formwork operation is followed by the placement of rebar, the concrete pour, and the stripping of the formwork. This flow of work proceeds within each floor and also from one floor to the next -- the initial pour areas of the floor above are begun while the work on the floor below is being completed. Appellant's Posthearing Brief at 8; Respondent's Reply Brief at 5 (not contesting statements). C. OMNI's schedule for the project The contract required that all work be completed within 870 days after the contractor's receipt of GSA's notice to proceed. OMNI received this notice on October 25, 1994. Thus, the original contract completion date was March 13, 1997. Exhibits A9, 118. Section 01311 contained the following provision regarding the contractor's schedule for completing the project: Your schedule and bid shall reflect the full performance time specified. Change orders issued during the project will be incorporated into and time extensions will be based on that full duration. The schedule shall be full and complete and include among the items of work submittal time, resubmittal time, adverse weather delays, inspections, corrective time for Deficiencies & Omissions, cleanup and testing. Exhibits A4 at 2, 410 at 2. OMNI began to develop a critical path method (CPM) schedule for the project in the fall of 1994. It completed the schedule in conjunction with its subcontractors and presented the schedule to GSA on April 7, 1995. Transcript at 282-86; Exhibits 8, 1148. In designing the schedule, OMNI took into consideration the contract's requirement that all work, including correction of deficiencies and omissions, be completed by March 13, 1997. The importance of this requirement was reinforced by an FBI representative, who told OMNI that because of that agency's security demands, the contractor would not have access to the building after that date. OMNI determined that to allow sufficient time for correcting deficiencies and omissions, and for remedying minor problems in the work -- tasks which it had found on similar projects had taken at least six months to perform -- it would complete other aspects of this job within 673 days of receipt of the notice to proceed, or by August 28, 1996. Transcript at 287-89, 294-96; Exhibit 1154 at 37-38. After that date, OMNI planned to conduct its own inspections of the work, have GSA inspect, and then make necessary modifications. Exhibit 430 at 119-21. OMNI, as the general contractor, had overall responsibility for construction. It planned to perform the structural concrete work with its own forces, and it did so. Transcript at 320. OMNI expected to complete the concrete work from April to November of 1995. This period was consistent with the contractor's experience on concrete structures of similar size and design. Id. at 16, 20, 27-29, 96-97.[foot #] 3 Assisting GSA at the site was a consulting firm, 3D International (3D/I). 3D/I employees served as GSA's field management team, dealing with day-to-day operations, supervising and assuring quality control. Transcript at 1245; Exhibit 1155 at 13. At the inception of the project, the head of the 3D/I team was Flip Salyer, a civil engineer with a great deal of experience in the construction of concrete buildings. Exhibit 1155 at 6-14. (Mr. Salyer had been, for example, director of construction for the Olympic Village in Barcelona, Spain, where he had supervised the construction of more than sixty concrete structures, three of which were multi-story office buildings.) Mr. Salyer told OMNI that "[t]he Government[']s position" was that the contract provision cited above mandated completion of all work, including punch list items, by the contract completion date. Exhibit 157. After reviewing OMNI's schedule, Mr. Salyer found that "[d]urations [for specified activities] are realistic and interrelate to final completion target dates as specified in the contract." He concluded that "[t]he methodology concerning how elements are to be erected and installed appears to be sound and well thought out. The submission lead times and durations for coordination also compare[] to historical data for quantities of similar size and configuration." Exhibit 139. George Zacharkiw, a consultant who provided scheduling assistance to OMNI during the work and who was qualified as an expert in construction management, construction management of cast-in-place concrete, and scheduling, also believed that OMNI's schedule was "achievable and realistic." Transcript at 391-95, 404-06, 411- 12. ----------- FOOTNOTE BEGINS --------- [foot #] 3 The rate of production of concrete work was also commensurate with the rate the company achieved in constructing a building for the United States Secret Service, which was similar in size and design to the FBI building, shortly after performing its work on the FBI building. Transcript at 77-79. GSA argues that OMNI's schedule for the FBI building was "overly aggressive" by comparison to the schedule for the Secret Service building, but does not explain why; the principal difference between the two schedules, according to the agency's brief, is that the schedule for the Secret Service building was more detailed. Respondent's Posthearing Brief at 56-58. If anything, the comparison shows that the schedule for the FBI building was reasonable, since the Secret Service building was designed with bomb blast protection design features, which required considerable work, while the FBI building was not. (These features of the Secret Service building were similar to those that were inserted into the FBI building piecemeal during construction. Transcript at 79, 1971; see infra Part II.B.) _________ ----------- FOOTNOTE ENDS ----------- GSA was represented on the project by construction engineer Jean S. Hundley. Mr. Hundley had little experience with construction of multi-story, cast-in-place concrete buildings; prior to this project, he had been fully involved in the construction of only one such structure, and it was different from this project in that pans were not used in the forming of the concrete there. Transcript at 1347-50. Mr. Hundley thought that OMNI's original schedule was not reasonably achievable. Id. at 1324. He admitted on cross-examination that he never reviewed the durations on the schedule and that his views were based on merely the "overall look of the project." He additionally admitted that the other project, which OMNI had also built, had been completed in less time than the contract envisioned, with OMNI beating the rate of concrete installation that was planned for the FBI building. Id. at 1350, 1359.[foot #] 4 Mr. Hundley's principal objection to the contractor's schedule was a belief that the position that all deficiencies and omissions had to be corrected by the contract completion date was "unreasonable." All that was required by that date, he thought, was "substantial completion" -- having the building ready for beneficial occupancy. Transcript at 1228-29, 1369-74; Exhibits 12, 16; see also Exhibit 252: "[S]ubstantial completion and the contract completion date of March 13, 1997 are one [and] the same." While continuing to voice this objection, Mr. Hundley designated the proposed schedule "Approved as Noted" on December 5, 1995. In so doing, he stated, "This schedule has been used as the project baseline for logic and is to continue to be used as such." Exhibit 252; Transcript at 1224.[foot #] 5 In its brief, GSA maintains that ----------- FOOTNOTE BEGINS --------- [foot #] 4 In its posthearing brief, GSA attempts to buttress Mr. Hundley's conclusion that the schedule could not be achieved by analysis of the durations of various activities involving concrete work. According to the agency, the durations of the activities are understated because items identified as "frame and pour" do not allow sufficient time for necessary preliminaries to framing and pouring of concrete -- erection of scaffolding, placement of formwork, and placement of reinforcing steel ("rebar"). Respondent's Posthearing Brief at 11-12 (proposed finding of fact 13). As explained by Randall A. Grubb, OMNI's project manager, and Mr. Zacharkiw, this criticism misses the mark because the durations on the schedule are not intended to include the preliminary activities, which would have been performed earlier than the dates shown for framing and pouring. Transcript at 359-60, 414-15. [foot #] 5 On the following day, Mr. Hundley told OMNI that the "project schedule . . . approval action is hereby changed from not approved to returned with comments." Exhibit 53. He explained at hearing that he considered the second letter more appropriate because the contract did not require the contractor (continued...) ----------- FOOTNOTE ENDS ----------- OMNI's proposed schedule "was never approved by [the agency]." Respondent's Posthearing Brief at 70. We find that this assertion is not correct. OMNI has correctly read the contract as requiring completion of all work, including inspections, correction of deficiencies and omissions, and cleanup, by the contract completion date. GSA's contention that contract completion dates are generally understood to mean dates of substantial completion, even if true, fails to take into consideration the specific words of this contract (or the clear purpose behind this provision). We rely on the testimony of OMNI's project manager and expert witness, and 3D/I's highly knowledgeable Mr. Salyer, plus the fact that this contractor met similar schedules on similar buildings both before and after constructing the FBI building, in concluding that the contractor's schedule for meeting this requirement was reasonable. GSA presented no basis for Mr. Hundley's suggestions to the contrary. II. The concrete work A. Progress before blast design changes OMNI's schedule contemplated commencement of structural concrete work on April 3, 1995. Exhibits 655, 1143 at tab II-1. The beginning of that work was delayed by twenty-five days, until April 28, 1995. Id. The parties agree that this delay was concurrent -- excusable and non-compensable. OMNI's claim does not relate to this period of time. Transcript at 1881-83. The concrete phase of the work began, naturally, at the bottom: OMNI had to construct a "mud mat," or foundation mat, at least four feet thick, to serve as the building's foundation; place two to four feet of gravel on this mat; and then pour a slab on grade on top of the gravel. Transcript at 21. The contractor encountered difficulties in placing the gravel and consequently fell thirty-three days additional days behind schedule.[foot #] 6 ----------- FOOTNOTE BEGINS --------- [foot #] 5 (...continued) to submit a schedule to the Government for approval. Transcript at 1469-71. Mr. Hundley also stated, however, that he is "not retracting the [earlier] letter." Id. at 1357. ___ [foot #] 6 OMNI planned to begin placing concrete for the B3 slab no later than May 8. Exhibit 430 (activity 405). Accounting for the previous twenty-five-day delay (see preceding ___ paragraph), the late start date for this activity became June 2. Exhibit 430 (activity 405). The parties agree that the delay should be measured to the day on which the contractor began placing concrete for the B3 slab, July 5. Appellant's Posthearing Brief at 10; Respondent's Reply Brief at 6. July 5 is thirty-three days after June 2. ----------- FOOTNOTE ENDS ----------- OMNI maintains that it then "took steps to accelerate its work to recapture this lost time," and "[b]y mid-August 1995, . . . had begun making-up the lost time." Appellant's Posthearing Brief at 10; see Transcript at 29, 397-99 (testimony of Raymond E. Sowers, Jr., OMNI's concrete operations project manager, and Mr. Zacharkiw). The evidence does not support this conclusion. The contractor acknowledges in its claim that it could not begin to make up time until it received additional formwork, and that receipt of the additional formwork did not occur until August. Exhibit 92 at 15; see also Appellant's Reply Brief at 8 (at the end of August, OMNI "was poised to make up the time lost during the gravel placement" (emphasis added)). During that month, events with far more significance for this case intervened. See infra Part II.B. No one will ever know whether, in the absence of those events, OMNI could have made up lost time and completed its concrete work within the planned period. We do know, though, that by August 18, when the north half of the B2 slab was completed, OMNI had fallen yet an additional thirteen days behind schedule. The job was by then a total of seventy-one days behind OMNI's original projection.[foot #] 7 The basic problem, as reflected in OMNI's internal project minutes, was the contractor's failure to bring sufficient manpower to the job. Exhibit 551 at tabs 36, 38, 41-44. B. Progress after blast design changes Meanwhile, on April 19, 1995, a federal building in Oklahoma City, Oklahoma, had been destroyed by a bomb blast. Following that event, GSA and the architect of the FBI building, Skidmore, Owings & Merrill (SOM), considered alternative methods of modifying the design of the building to improve the structure's ability to withstand detonation of a bomb. Exhibit 138. A series of changes to the design followed, beginning in mid-1995 and continuing through the spring of 1996. Complaint 6; Answer 6. The earliest of these changes, issued in June and July of 1995, required the addition of reinforcing steel in columns and walls at the B4 to B1 (basement) levels of the building. Exhibits 142, 144. OMNI believed that these changes had some impact on its schedule, but agreed to perform the work without being granted additional time. Transcript at 82, 331, 444. The contract amendments which ensued increased the contract price by amounts which "include[] all direct, indirect, and impact costs related to [these modifications]." Exhibits 323, 324. On August 28, 1995, OMNI received the first of the massive changes to the building's design. This change, denominated as PCO 21068, made comprehensive alterations to the design and quantity of rebar in the beams and the slab for the majority of ----------- FOOTNOTE BEGINS --------- [foot #] 7 The as-planned date for late finish of the north half of the B2 slab was June 8. Exhibit 430 (activity 435). The as-built date was August 18. Exhibit 552 (pour area illustration). ----------- FOOTNOTE ENDS ----------- the B1 level. OMNI was working on that level at the time. The change also added reinforcing steel within the columns and steel plating around some of them. It modified the design for much of the rebar, in the process adding about ninety tons, or one-third again as much, of that steel as was originally planned. Exhibit 1157; Transcript at 33-36, 144-46, 157. When PCO 21068 was issued, OMNI already had on site rebar to be used in the concrete for the B1 level. The design modification made this rebar useless. The rebar had to be returned to the firm which supplied it. The supplier's detailing, fabrication, and delivery of substitute rebar took until September 12. Transcript at 34-38, 144-45, 157-58. As a result, OMNI's work on the B1 level was disrupted. The forming crews went far ahead of the work that would normally follow them, and lacking motivation to keep up their pace, became less productive. Still, there was not enough work to keep them occupied, and the contractor eventually had to lay off some of its carpenters. Excess materials piled up on the site and interfered with the smooth flow of work.[foot #] 8 Even after the newly-designed rebar arrived on the site, work continued to be inefficient because movement from the B1 level to the ground floor had been delayed, and installation of the rebar (and all subsequent activities) had to catch up with the forming crews. Additionally, installation of the more dense and complex rebar was more difficult than installation of the originally- designed rebar would have been; it required additional time to complete. Id. at 37-41, 142-45, 149, 157-58; Exhibits 1117, 1155 at 31-32; see also Exhibit 545 at 53. A separate problem with the concrete work on the B1 level occurred at the end of September, at pour area 8. The redesign of the reinforcing steel in that area had left insufficient space for concrete between the rebar and the finished floor. GSA's Mr. Hundley directed the contractor to remedy the inconsistency by raising the level of the slab. The design team rejected this idea as creating clearance problems between doors and the floor, however, and required OMNI to restructure the rebar instead. Resolving this problem delayed work on pour area 8 and caused the contractor to divert its crew to another area while discussions were transpiring (and then back to pour area 8 once a design solution was chosen). Transcript at 147-53, 1153-54; Exhibits 27, 29. In making this finding, we expressly reject GSA's theory that the delay in this area was OMNI's fault. ----------- FOOTNOTE BEGINS --------- [foot #] 8 Because the FBI building was a high security job, all material had to be stored within the enclosed confines of the building site. Transcript at 156-57, 1492-93. Consequently, any changes which decreased storage space within the building had a greater impact on productivity than they would have in most construction projects. ----------- FOOTNOTE ENDS ----------- Concrete work on the ground floor was significantly affected by PCO 21073, which was dated September 1 but not received by OMNI until mid-September. This change added 184 tons of reinforcing steel (fifty-two percent more than originally planned) to the design. It also altered the ways in which virtually all the rebar in the slab would be interlaced and spliced, and affected the size, strength, and encasement of the columns extending from the ground floor to the second floor. In changing the rebar configuration, PCO 21073 created conflicts which generated questions from the contractor, in the form of requests for information, from October through December. Exhibits 1117, 1159; Transcript at 46-47, 159-60, 162-63. During November and December, GSA mandated several other changes in the ground floor design which caused OMNI to revise work it had already completed. Columns which had already been fabricated had to be modified as to size and steel and concrete composition. The loading dock formwork and rebar, which was already in place, had to be dismantled and reconstructed. An opening for ducts carrying electrical cables proved to be too small; it had to be redesigned, requiring OMNI to remove rebar, have different rebar fabricated, and install the new material. These changes not only caused OMNI to duplicate work, but also forced the contractor to move its crews back and forth across the floor, disrupting the normal, productive flow of work. Transcript at 52, 172-89; Exhibits 1014-15, 1022, 1025, 1028. Shortly after issuing PCO 21073, GSA informed OMNI that a one-foot thick poured-in-place concrete blast wall around the perimeter of the ground floor would be added to the design. The agency did not provide the actual changes to the design until early November. OMNI recognized that work on the walls would take much longer than work on the deck, and it understood that the most complex aspects of the walls would be in the lobby area. Knowledge that the blast wall changes would be forthcoming consequently caused the contractor to alter its planned sequence for concrete pours on this floor to begin in the lobby area, so as to allow the most difficult wall construction to begin as soon as possible and thereby minimize the delay which would result from building the walls. Transcript at 47-48, 160-61, 164, 169- 71; Exhibit 1123. (The same problem occurred, for the same reason, on the second floor. Transcript at 216-18.) Problems not of OMNI's making plagued construction involving the blast walls. Generally, the addition of the blast walls increased congestion at the site, as additional crews and materials (particularly wall forms) had to share the space, harming productivity. Because construction of the walls was time-consuming, and was a necessary prerequisite to framing the second floor, it also delayed OMNI's progress to that floor. Transcript at 190-91, 197-98. Addition of the blast walls created specific problems, too. GSA delayed the initial pour on the ground floor slab by two days at the end of October by failing to respond with sufficient promptness to OMNI's request for necessary information about the location of rebar dowels that would project from the concrete slab into the blast walls. Exhibits 188, 193, 199, 1013; Transcript at 49-51. Then at the end of November, when OMNI was ready to make its first pour for the walls themselves, 3D/I had to issue a stop work order because of a design change which had just arrived. OMNI had to move its crew to another location, and return later, with consequent loss of efficiency. Exhibits 1023, 1025; Transcript at 192-95. The addition of the blast walls also affected the framing for the second floor slab. Formwork could not be erected all the way out to the edge of the slab, as planned; OMNI had to leave a gap of eight to ten feet from the outside edge for an inside wall form, and then return and fill in the gap after the blast wall had been poured and its formwork removed. The contractor also had to provide scaffolding outside the blast wall to support the outside edge of the slab. The scaffolding added to the congestion of the site, disrupting the planned work sequence at the plaza. It also prevented OMNI from using an outrigger (a platform at the edge of the slabs) to hoist materials (such as pans) from one floor to another, slowing progress by forcing the contractor to move the materials manually.[foot #] 9 Exhibits 550 at 50-53, 1120; Transcript at 200-02, 213-16, 230- 31. Design changes issued on November 14 extensively altered work on the second floor. PCO 21125 added a one-foot thick concrete blast wall around the perimeter of the building, running from the second floor to the third. PCO 21126 doubled the amount of rebar in the second floor slab, added new east-west girders in the slab, and changed the columns between the second and third floors. Exhibits 260, 1117, 1161, 1162; Transcript at 204-05. In coping with these modifications, OMNI had to alter its use of shoring and reshoring in two ways: first, reengineering what it had planned to use, and second, increasing the amount necessary. Transcript at 212-13; Exhibits 1105-07. The changes to the rebar design were especially troublesome. Requiring the rebar for the east-west girders to be interlaced with the rebar for the north- south beams increased the complexity of the installation ----------- FOOTNOTE BEGINS --------- [foot #] 9 The agency has already paid for a portion of the inefficiencies related to the inability to use an outrigger. In a contract modification addressing the addition of the blast wall on the second floor, the agency agreed to pay the contractor for the direct cost impacts of the changed scope of work. Resulting labor inefficiency was expressly excluded from the agreed-upon amount, "with the exception of the stripping of formwork premium agreed for the second and third floor slabs." The "stripping premium" "was the cost to move stripped slab forms from one floor to the next because the blast wall prevented the use of an extension platform." Exhibit 575 at unnumbered pages 1, 2, 24. ----------- FOOTNOTE ENDS ----------- considerably. Mandating that rebar extend further from one pour area into others before the concrete could be poured confused the coordination between carpenters and rebar installers, as the carpenters first had to hurry to prepare more floor space than planned for the rebar men, then wait for the latter to catch up so work could progress to the next floor. Increasing the space in which rebar had to be laid before an area of concrete could be poured also made the operation more congested because it limited storage space adjoining work areas. Transcript at 63-71, 205-11, 1161-62. Further changes in the design of the columns running from the second floor to the third -- in February 1996, after the columns had been fabricated -- additionally delayed progress on the second floor blast walls and the speed with which OMNI could move to the third floor. Id. at 222-26; Exhibit 1161. On the upper floors of the building, the blast changes were less significant. New east-west girders were added to the third, fourth, and fifth floor slabs, and the amount of rebar in each of these slabs was roughly doubled. No new girders were added to the sixth, seventh, and eighth floor slabs, but the amount of rebar in each of those slabs nonetheless increased by more than fifty percent. Transcript at 61-62, 226-28; Exhibit 1117. For the first time since constructing the B2 level, on the third and higher floors, OMNI followed its originally-planned sequence of northwest-to-southeast concrete pours. Exhibit 552 (pour area illustration); Transcript at 229-30. The added amount and complexity of the rebar continued to impair productivity, however. Where new girders crossed previously-designed beams, rebar had to be threaded individually through other rebar running perpendicular to it. Because of the limited space available, OMNI could not make up time by increasing rebar crew size. The slow rate of progress on rebar installation, and the new requirement to have rebar for one pour area extend further into other pour areas before concrete could be poured, continued to disrupt the planned coordination between the carpenters laying the decks and the rebar crew and preclude quick movement from one floor to another (as on lower floors also impacted by the blast changes).[foot #] 10 Transcript at 63-67, 69-72, 98- 100, 113-14, 228-29, 232-33, 400-04, 406, 429-31, 1163; Exhibit ----------- FOOTNOTE BEGINS --------- [foot #] 10 As GSA points out, on each of the upper floors, OMNI planned to begin pouring concrete on the north part of one floor immediately after completing the pours on the north part of the floor below, but the contractor actually did not begin pouring concrete on any floor until after it had completed the pours on both the north and south parts of the floor below. Respondent's Posthearing Brief at 54; Exhibits 430 (activities 575, 585, 610, 620, 640, 655, 680, 685, 715, 720, 750, 755), 1167. The agency does not explain, however, how this change might have been related to any action of the contractor independent of the need to proceed differently in light of the changes in rebar construction mandated by the design modifications. ----------- FOOTNOTE ENDS ----------- 550 at 232-34. A contributing factor to OMNI's inefficiencies throughout the late summer and fall of 1995, statements by both Mr. Salyer and Mr. Hundley show, was SOM's unreasonably slow response to the contractor's submittals and requests for information. Both men were concerned that the architect did not even compile a schedule of drawings and responses to correspondence from the contractor. Transcript at 1440-50; Exhibits 1000, 1012, 1019, 1023, 1027, 1029, 1031-32, 1155 at 36-50. See, e.g., Exhibits 1155 at 46 ("Construction had caught up with the documents . . . That means day-for-day delay on items that are not answered. Manpower, material, equipment standing either idle or working inefficiently." (Salyer)); 1012 at 1 ("OMNI has indicated that the contractors needed the [blast wall] designs yesterday to . . . prevent construction impact. This is critical." (Hundley)); 1019 at 1 ("This is a serious matter in that it is compounding efforts and problems confronting the Government field management and is exposing the Government to unnecessary cost." (Hundley)). As late as December 18, Mr. Hundley remained concerned that the succession of blast changes was "extravagant," in that it was escalating "cost[s] beyond our means." He urged the architect to submit a complete package of all blast changes and to advise the agency regarding the budgetary impact of the changes. Exhibit 1031. OMNI originally planned to finish its concrete operations as early as November 9 and no later than November 27, 1995. Exhibit 430 at 3 (activity 850 (early & late finish dates)); Transcript at 221. The contractor did not finish the concrete work until July 28, 1996. Exhibit 1055. III. Reasons for delay in completion of concrete work According to an analysis performed by 3D/I, and concurred in by the firm's Flip Salyer, the changes to the B1 and ground floors (but not the addition of the blast walls) added forty-five work days (sixty-three calendar days) to the time required to complete the concrete work on those floors. Exhibit 1155 at 58- 59 & tab 8. GSA's Mr. Hundley believed that this impact was of no importance because OMNI had allocated so much time to correction of deficiencies and omissions that it could easily perform both that effort and the additional concrete work by the original contract completion date. Transcript at 1382-85. Thirty days were lost to work due to bad weather during the period of time beginning on August 28, 1995, and ending on February 26, 1996. These days were, in 1995, September 22, 25, and 26, October 5, November 1, 2, 7, 14, and 15, and December 11, 14, and 19-22; and in 1996, January 2, 8-12, 15, 16, 19, and 24, and February 2, 5, 6, 16, and 20. Exhibits 10 at 259, 263; 92 at tab II-4. OMNI had anticipated, in its schedule for the job, that only seventeen adverse weather days would occur during this period -- two in September, three in October, four in November, four in December, two in January, and two in February. Exhibit 13 at 2. Also, one day of work was lost on October 16 due to a large demonstration in the city. Exhibit 10 at 168. The number of days lost to work due to bad weather during the remainder of the concrete work was equal to the number OMNI had anticipated. Respondent's Posthearing Brief at 52; Appellant's Reply Brief at 18 (not contesting assertion). Saturday work had not been planned for the project, but OMNI performed work on concrete on some Saturdays, constituting approximately seven days of effort (roughly, full days (days with a full complement of personnel) on November 4, 1995, and February 10, 1996; three-fourths of a day on each of December 16 and 30, 1995, and March 23 and 30, 1996; half a day on April 13, 1996; and one-fourth of a day on each of February 17 and 24, March 9, April 27, and May 11, 1996). Exhibit 10 at 187, 229, 240, 279, 285, 291, 303, 315, 321, 334, 346, 358. GSA maintains that the addition of the ground floor blast walls extended the period of concrete work by two days. Respondent's Posthearing Brief at 48-49. This conclusion seems incredible on its face, given the amount of work entailed and the design and redesign problems associated with it. As the contractor points out, the agency's calculations are in part based on inconsistencies with statements it makes elsewhere in its brief. Appellant's Reply Brief at 17-18. Concrete pours were originally scheduled to begin on the ground floor slab on June 20 and on the second floor slab on July 12, twenty-two days later. Exhibit 430 (activities 505, 540). They actually began on the ground floor on October 27 and on the second floor on December 29, sixty-three days later. Exhibit 1166. Although we cannot ascribe all forty-one days of delay to blast wall construction, since some of the extra time must have been attributable to the design-induced extra work on the ground floor and a bit is attributable to bad weather, the large number of days involved indicates that blast wall construction was the cause of significant delay in the progress of the concrete work. Similarly, GSA says that the addition of the second floor blast walls extended the concrete work by four days. Respondent's Posthearing Brief at 50. OMNI had scheduled concrete pours to begin on the third floor slab fourteen days after they began on the second floor slab (July 26 and 12, respectively), and the pours actually began on the third floor forty-five days after they began on the second (February 12 versus December 29). The considerable amount of work associated with the second floor blast walls must have caused a significant portion of the thirty- one days of delay in progress of the concrete work. See Exhibits 430 (activities 540, 575), 1166, 1167. As explained below, no alternative explanations for the delay have been persuasively advanced. These GSA contentions as to the limited nature of the Government's responsibility for delay are consistent with the testimony of the agency's expert in construction scheduling, Barrington Consulting Group vice president Greg Crider. See Transcript at 1876-1928. Mr. Crider acknowledged, however, that any delay resulting in resequencing of concrete pours because of blast design changes should be at the Government's cost. Id. at 1913. The witness also acknowledged that the design changes which required the contractor to place additional rebar into contiguous pour areas before concrete could actually be poured in a particular area, slowed progress from one floor to another. Id. at 1949-50, 1958-59. GSA asserts that factors others than those described above in this part and in Part II were responsible for the delays in completing the concrete work. We find that these factors did not contribute to the delay.[foot #] 11 First, the pan forms initially sent to the site did not fit properly. Respondent's Posthearing Brief at 40; Exhibit 551 at tab 48. The record contains no evidence, however, as to the impact this problem might have had on the progress of the work. To the contrary, Bob Sloper, OMNI's concrete superintendent on the job, testified that he never found himself waiting for pans. Exhibit 550 at 116. Second, GSA notes that some concrete on the B1 level did not cure as quickly as expected. Respondent's Posthearing Brief at 42-44; Transcript at 131. The record contains unrebutted testimony, however, that cure problems never impacted the stripping of forms or any other aspect of the progress of the concrete work. Transcript at 1150-52, 1181-82; Exhibit 550 at 203-05. There is ample evidence of other reasons for slower- than-expected progress on the B1 level. See supra Part II.B. Third, GSA maintains that OMNI's use of two tower cranes to hoist materials contributed to inefficiencies in the work because neither of the cranes could reach the entire site. The agency also notes that on three occasions a crane broke down, leaving craftsmen without materials with which to work. Respondent's Posthearing Brief at 62; Transcript at 1493, 1522-23. Actually, each crane was capable of carrying materials to ninety percent of ----------- FOOTNOTE BEGINS --------- [foot #] 11 In this regard, we note the testimony of Allyn E. Kilsheimer, executive vice president of KTLH Engineers, P.C., which was a subcontractor to OMNI for the provision of various types of concrete testing, inspection, and consulting services on the project. Mr. Kilsheimer has been involved in the design of eight billion dollars worth of concrete work all over the world, including more than two hundred concrete office buildings in the Washington, D.C., area, over the past thirty-seven years. Transcript at 1141. We consequently consider him highly knowledgeable about this kind of work. When asked whether, in light of the blast design changes, OMNI could have completed the concrete work sooner than it actually did, Mr. Kilsheimer responded negatively and added, "I was surprised that he got it done in the time that he got it done." Id. at 1175-76. ___ ----------- FOOTNOTE ENDS ----------- the site, Transcript at 1994-94, 1999-2000; Exhibit 1172; the only breakdowns cited occurred in July 1995, before the blast changes began, Respondent's Posthearing Brief at 62 n.91; and the agency explains neither how the use of these cranes made work inefficient nor how the contractor could have hoisted materials more efficiently. Fourth, GSA alleges that concrete consolidation problems, see infra Part V.A.2, adversely affected productivity. Respondent's Posthearing Brief at 73. Although such problems existed, and some of them were attributable to the contractor's actions, the agency has not shown how they may have affected the time at which concrete work was compled. There is no indication in the record that filling voids in the concrete was on the critical path. GSA asserts that other delays were caused by OMNI's having allowed insufficient time in the schedule to perform various aspects of the work, by the contractor's not having followed its planned sequence for concrete pours on some floors, and by "additional miscellaneous construction problems." Respondent's Posthearing Brief at 34-35, 38, 39, 45. The agency does not support these contentions by any citations to evidence, however. Nor did the agency elicit any testimony in support of the contentions. GSA also points out that it mitigated the impact the blast changes had on the time necessary to complete the concrete work. The agency approved OMNI's requests to order additional wall forms and pans at Government expense, use overtime on a select basis, use a concrete mix which would provide high early strength, and reduce the winter heating requirements for concrete operations. Exhibit 551 at tabs 52-54, 57; Respondent's Posthearing Brief at 58-59. The contractor concedes that "[t]he additional pans and the concrete mix change assured that formwork cycling would not be a source of delay to the work." Appellant's Reply Brief at 19. The contractor correctly explains further, however, "What these measures could not do . . . was to prevent the (blast change induced) increase in start-to-start times between each pair of upper floors." Id. at 19-20. OMNI maintains that it "implemented a plan to recapture" the time lost in placing the layer of gravel between the mud mat and slab-on-grade. Appellant's Posthearing Brief at 60. The evidence it points to in support of this assertion is that after losing the time, the contractor brought more formwork to the job site and added manpower. Id. at 9-10. The additional equipment and labor was necessary simply to avoid falling further behind. We can find no credible evidence in the record supporting the theory that but for the blast design changes, OMNI would have completed the concrete work remaining after August 28, 1995, by November 9 of that year, as originally planned. The only credible evidence of contractor work which might have made up for any time that it fell behind its schedule is the fact that some unscheduled Saturday work was performed. Considering all the factors discussed above, we assign responsibility for the delay in completion of the concrete work as follows: OMNI is responsible for the seventy-one days of delay incurred before the massive blast design changes began. Since the number of seventy-one days is judged against the contractor's early start and finish schedule, this means that ignoring all other factors, the contractor would have finished the concrete work by Friday, January 19, 1996. The unusually bad weather during the winter of 1995-96 meant that OMNI was prevented from working on seventeen days between its scheduled early finish date and the date we have calculated, though it had projected losing only eight days to weather. The contractor made up two days, by January 19, by working unscheduled Saturdays. Adding nine days for unusually bad weather and subtracting two for Saturday work, we conclude that but for other factors, OMNI would have completed the concrete work by Tuesday, January 30.[foot #] 12 OMNI actually completed the concrete work on July 28. It made up five additional days by working unscheduled Saturdays; thus, it would have finished on August 2 but for this extra effort. Because GSA has not persuaded us that any delays after the major blast changes began should be attributed to actions of the contractor, we apportion all the delay from January 30 to August 2 -- 185 days -- to the agency.[foot #] 13 IV. Contractor's claim On March 20, 1997, OMNI presented a certified claim to the contracting officer, maintaining that it and its subcontractors were due $11,772,567 in compensation for previously unreimbursed impact and indirect costs relating to the Government's imposition of blast design changes on the project. The contractor detailed this amount as follows: ----------- FOOTNOTE BEGINS --------- [foot #] 12 No further adjustments for weather and Saturday work need be made. Between January 19 and January 30, OMNI's schedule took into consideration nearly one day of bad weather and one such day occurred; no Saturday work occurred. [foot #] 13 According to Peterson Consulting LLC's George Zacharkiw, who testified on behalf of OMNI, the extended duration of structural concrete activities on the project was entirely attributable to the blast changes. Transcript at 395-96; Appellant's Posthearing Brief at 32. Barrington Consulting Group, Inc.'s Greg Crider, who testified as GSA's expert in construction scheduling, concluded that these changes caused a delay of only seventeen work days (with weekends added, twenty- three calendar days). Transcript at 1900-01, 1910-12, 1915-18; Exhibit 658. As this paragraph makes clear, we do not agree with either of these witnesses. ----------- FOOTNOTE ENDS ----------- OMNI work (including overhead) $ 4,919,910 Profit (10 percent) 491,991 Subtotal 5,411,901 Subcontractor costs 5,618,499 OMNI commission (10 percent) 561,850 Subtotal 6,180,349 Total of above figures 11,592,250 Bond, builder's risk insurance (1 percent) 115,922 Subtotal 11,708,172 Excess general liability (.55 percent) 64,395 Total amount of claim $11,772,567 Exhibit 92 at 1-6. On July 30, 1997, the contracting officer issued her decision on the claim. Exhibit 115. In it, she determined that "[t]he claimant has not met its burden of proving that the claimed additional performance and costs were caused by the blast changes. . . . The Government contends that the formwork operation and the failure to maintain a clean work site (resulting in unnecessary concrete consolidation) caused the impact." Id. at 1-2. Consequently, she denied the claim "except for the $224,463 paid and 48 day time extension issued by [contract modification] PC21, issued together with this final decision." Id. at 1. By the hearing on the merits of the case, in July 1998, the contractor had reduced the amount of its claim. In its posthearing brief, the contractor has reduced the amount a bit further. The contractor now states its claim as $3,955,996 resulting from its own costs and $3,281,760 resulting from subcontractor costs. Appellant's Posthearing Brief at 37, Subcontractor Appendix. Applying to these costs the markups for commission (on subcontractor costs), profit, bond, and insurance which were both used in the original claim and asserted in the appellant's posthearing brief with regard to the contractor's own costs, the total amount currently sought is $8,085,372. V. Damages stemming from costs incurred by the prime contractor The contractor's claim for damages resulting from the impact of the blast changes on itself includes the following components: Additional labor $1,788,302 Crane equipment and operator 296,234 Form rentals 468,000 Increased concrete material costs 80,362 Added contract administration/materials 995,526 Additional general conditions 327,572 Subtotal 3,955,996 Profit (10 percent) 395,600 Subtotal 4,351,596 Bond, builder's risk insurance (1 percent) 43,516 Subtotal 4,395,112 Excess general liability (.55 percent) 24,173 Total $4,419,285 Appellant's Posthearing Brief at 37. The markup for profit is in the same percentage as was paid by GSA in change orders during the project. Transcript at 468.[foot #] 14 We examine below each element of this claim, in the order in which the various elements are presented by the contractor. In doing so, we consider all of GSA's particularized objections. We recognize that the agency continues to adhere generally to the contracting officer's position that "[t]he claimant has not met its burden of proving that the claimed additional performance and costs were caused by the blast changes. . . . The Government contends that the formwork operation and the failure to maintain a clean work site (resulting in unnecessary concrete consolidation) caused the impact." As the findings above show, we have already rejected this position as a general proposition. We discuss specific aspects of the position in conjunction with various parts of the claim. A. Additional labor The claim for additional labor consists of three components: labor inefficiency ($1,181,508); concrete consolidation work ($320,517); and overtime premium ($73,571). To each of these figures, the contractor has added a markup of 13.5 percent -- 10.84 percent for field overhead and 2.66 percent for general and administrative expenses. Appellant's Posthearing Brief at 38. These markups were used in all change orders during the project. Transcript at 477; Respondent's Reply Brief at 25. With the markups, the amounts are $1,341,012 for labor inefficiency, $363,787 for concrete consolidation work, and $83,503 for ----------- FOOTNOTE BEGINS --------- [foot #] 14 The amount now sought, $4,419,285, is only about eighty percent of the amount originally claimed ($5,496,083, including markups similarly calculated). Similarly, the amount now sought relating to subcontractor work, $3,666,087, is only about fifty-eight percent of the amount originally claimed ($6,276,484 with markups). The decreases follow an extensive review of the claim by the Barrington Consulting Group, Inc., for GSA. See Exhibit 551. Many of the reductions were made in ___ direct response to comments by Barrington. As we discuss the specifics of the claim, we analyze only the sums currently sought, as noted in OMNI's posthearing brief. ----------- FOOTNOTE ENDS ----------- overtime premium. 1. Labor inefficiency OMNI's first item of claimed damages for additional labor, labor inefficiency resulting from the blast design changes, focuses on four work activities: the forming of the floor slabs, the stripping of the floor slabs, the combined forming and stripping of the columns, and the combined forming and stripping of the stairs. For each of these activities, OMNI uses a "measured mile" analysis which compares the productivity in a period which was essentially not impacted by blast changes to productivities in periods which were impacted to one degree or another by those changes. Transcript at 473, 476-81; Exhibits 1053-55. GSA, citing the testimony of Scott Gray of Barrington Consulting Group, Inc., who was the agency's expert witness on costs and monetary damages on construction projects, challenges this characterization of the methodology used to calculate this component of the claim; the agency says the methodology is more properly termed a modified total cost method. Respondent's Reply Brief at 19; Transcript at 1630. Mr. Gray's concern is that the calculations are really of actual productivity as compared to budgeted productivity -- or, more precisely (though less elegantly), that OMNI seems to have juggled numbers so as to secure payment which it had expected to receive per man-hour on the job. Transcript at 1630-35, 1662-65. The purpose of a measured mile analysis is to permit a comparison of the labor costs of performing work during different periods of time, so as to show the extent to which costs increased from a standard during periods impacted by certain actions. See U.S. Industries, Inc. v. Blake Construction Co., 671 F.2d 539, 547 (D.C. Cir. 1982); Stroh Corp. v. General Services Administration, GSBCA 11029, 96-1 BCA 28,165, at 141,132. GSA is correct in asserting that the work performed during the periods compared by OMNI was not identical in each period. We would be surprised to learn that work performed in periods being compared is ever identical on a construction project, however. And it need not be; the ascertainment of damages for labor inefficiency is not susceptible to absolute exactness. See Electronic & Missile Facilities, Inc. v. United States, 416 F.2d 1345, 1358 (Ct. Cl. 1969). We will accept a comparison if it is between kinds of work which are reasonably alike, such that the approximations it involves will be meaningful. We conclude, as explained below, that OMNI has generally used a measured mile analysis consistent with this objective, but that some of the adjustments made in the course of the analysis are not justified. This conclusion makes unnecessary any exploration of the accuracy of Mr. Gray's musings that the adjustments were rooted in the contractor's budget. a. Forming of floor slabs To determine the labor inefficiency costs resulting from the blast changes in the forming of the concrete floor slabs, OMNI identifies as an unimpacted period the time from the beginning of formwork until August 28, 1995, the date on which the contractor received the first of the massive blast design changes. The time from August 28, 1995, to March 10, 1996, when the forming of the third floor slab was completed atop the added blast wall, is a highly impacted period. The time from March 10 to July 7, 1996, when slab forming activities ended, is a lesser impacted period. Transcript at 480-81; Exhibit 1055. OMNI achieved the following productivity rates: during the unimpacted period, .048 man-hours per square foot; during the highly impacted period, .113 man- hours per square foot; and during the lesser impacted period, .065 man-hours per square foot. Transcript at 481-82; Exhibit 1064. In comparing the productivity achieved in the unimpacted period with that achieved in each of the impacted periods, OMNI makes an adjustment which it characterizes as ten percent. Appellant's Posthearing Brief at 39. As presented at hearing, the adjustment was that during the impacted periods, a productivity rate of .042 man-hours per square foot, rather than the .048 obtained during the unimpacted period, should have been achieved. Transcript at 483-84; Exhibit 1064. In its posthearing brief, OMNI has changed the adjustment to a rate of .045 man-hours per square foot. Appellant's Posthearing Brief at 39 n.8, Attachment A. Neither of these adjustments is ten percent; the first is 12.5 percent and the second is 6.25. OMNI subtracts the adjusted (expected) productivity rate from the actual rate for each impacted period to determine a "loss of productivity rate." It multiplies this figure by the quantities of slab formed in each period to find a number of lost man-hours, and multiplies that number by the average labor rate of $24.27 per hour for the members of the forming crews to find a total labor inefficiency cost for forming slabs. From the total, OMNI subtracts $14,077 in change order payments it received during contract performance for additional forming work. The net amount calculated at hearing was $437,370; per the contractor's brief, it is $409,605. Transcript at 484-88; Exhibit 1064; Appellant's Posthearing Brief at Attachment A. The justification given by OMNI for the adjustment is that the work in the unimpacted period was at the basement levels, whereas as most of the work in the impacted periods was above ground, and "[t]he productivity that would normally be achieved in above-ground floors is 10% better than below-ground productivity." Appellant's Posthearing Brief at 39. The applicability of this principle to the entirety of the highly impacted period is questionable, since much of the work done during that time was on the B1 and ground floors, which, by the terms used by the parties, were below ground, Transcript at 594, 1633; only the second and third floor work performed during the period was "above grade." More important, the validity of the thesis is called into doubt by the evidence in the case. The basis for the idea is the testimony of OMNI concrete manager Sowers, who said that forming slabs below ground should have been ten percent less productive than it was above ground because below, material movement was encumbered by the walls. Transcript at 56-58. Barrington Consulting Group's Mr. Gray challenged this estimate. He believed, from reviewing OMNI's bid and budget for the project, that the contractor thought above- grade formwork would be either seven or thirty-nine percent more costly than similar work below grade. Id. at 1635-36; Exhibit 666. Under cross-examination, Mr. Gray acknowledged that he had no independent knowledge on which to challenge Mr. Sowers's statement, and that OMNI's bid actually assumed the same productivity for each activity throughout the building, regardless of the floor on which the activity would take place. He additionally acknowledged that the seven percent figure is more likely to be accurate than is the thirty-nine percent figure, since it is based on construction techniques actually employed on the job and the higher number is not. Transcript at 1724-32. Mr. Gray's answers on cross-examination leave without support his contention that OMNI expected the same sort of slab formwork to be more expensive above grade than below grade. They do cause us to conclude, however, that Mr. Sowers's estimate is not reasonable. We consequently find that no adjustment is appropriate. Redoing OMNI's calculations, without adjustment, the measured mile calculation of the costs incurred by OMNI in forming slabs due to blast design changes would be $381,864. In addition to questioning the distinction between above- grade and below-grade work, GSA also maintains that various aspects of the comparisons inherent in OMNI's measured mile approach are not reasonable. For example, the agency asserts that comparing work on basement levels (where the unimpacted period work occurred) with labor on the ground floor and the B1 level (which took place during the highly impacted period) is inappropriate; the contractor, according to the agency, should have anticipated more man-hours per square foot on these levels. It is true that concrete work at the ground level is more complex than at any other floor in a building, both generally and with specific reference to this project. The building gets smaller there, and many columns are placed differently from where they were on lower floors. In addition, because the elevation between the B1 and ground levels was much greater than the elevations between lower floors, framing at the ground level required more labor and materials. Exhibit 550 at 63-65; Transcript at 1326. The ground floor was also the only one with loading docks, planters, and bollards (protective devices that prevent access by vehicular traffic), structures which required special framing. Transcript at 1222, 1864-66. Two factors persuade us that no adjustments to the measured mile should be made in light of these facts, however. First, the unimpacted period included some especially demanding work, too. The building contained sloping ramps from one basement level to another, and framing these ramps presented difficulties not present at upper floors. Transcript at 1736. Three of those four ramps were poured during the unimpacted period. Exhibit 552 (pour area illustration showing B0.5 level poured after this period). In addition, the basement levels contained more difficult beams than did the ground floor. Transcript at 579, 581. Further, whatever special problems may have been posed by work on the B1 level would have affected the unimpacted period as well as the highly impacted period since nearly half of the forming work on that level occurred before the blast design changes began. Id. at 583-84. Second, the highly impacted period included the work on the second and third floors, which both parties agree should have been relatively uncomplicated (per the original design). Overall, there is no reason to believe that the highly impacted period, containing as it did some work which should have been more difficult than the work of the unimpacted period and some work which should have been easier, should have posed more difficulties than did the unimpacted period. GSA also notes that the forming work in the unimpacted period involved plywood frames, whereas most of that kind of work in the impacted periods involved fiberglass pans, see supra Part I.B, and the agency objects to the measured mile comparison for reasons stemming from this fact. One such argument is that the pans "increase[d] the square footage of surface area formed, including vertical surface areas," so for the pan-formed areas, the square footage of the pans should be added to the square footage of the plywood on which they sat before any comparison is made. Respondent's Reply Brief at 20. This position does not make sense. OMNI's methodology compares productivity on a per- square-foot basis, without regard to vertical dimensions,[foot #] 15 and placing the pans on the ----------- FOOTNOTE BEGINS --------- [foot #] 15 As Mr. Gray noted, OMNI did include some beam sides in its calculations of area formed. Transcript at 1650-51. The amount is very small, however -- by Mr. Gray's calculations, less than four percent of area formed. See Exhibit 674. Thus, ___ any manipulations in the calculations to treat beam side forming differently from slab forming would have minimal impact on the total costs involved. Further, contrary to Mr. Gray's assumption that excluding the beam side area from OMNI's "measured mile" calculation would decrease the cost derived, Transcript at 1652- 54, it would actually increase that figure a little. The beam sides are vertical surfaces, so to maintain comparisons of horizontal area formed, they must be excluded from the amounts of area formed. Although taking this step would decrease the productivity rate for the unimpacted period slightly (from .048 to .050 man-hours per square foot, by decreasing the area while keeping hours constant), it would decrease the productivity rate (continued...) ----------- FOOTNOTE ENDS ----------- plywood did not increase the square footage of the area being formed. Transcript at 488-92, 592-98. Mr. Gray presented a different measured mile calculation which he considered more accurate than OMNI's. It separates forming activities into three groups, plywood slab forming, beam forming, and pan forming. Using this methodology, the total labor inefficiency in the three groups taken together is $234,673.[foot #] 16 Transcript at 1655-61, 1766-67; Exhibit 674. The principal difficulty with this technique is that no slabs were formed with pans during the unimpacted period.[foot #] 17 To remedy this problem, Mr. Gray used what OMNI calls the "lesser impacted period" as his unimpacted period for analyzing pan forming. His justification for doing so is a statement in OMNI's claim, "The blast changes for these floors [four through eight] were issued enough in advance, and, as a result, OMNI was able to plan and execute its work without the disruption it had experienced through the third floor as a result of the piecemeal issuance of the blast changes." Transcript at 1659; Exhibit 92 at 15. We do not read this statement to acknowledge that there were no blast change disruptions on the upper floors. Such disruptions did exist, see supra Part II.B, and while they were clearly much less substantial than those on lower floors, a comparison such as Mr. Gray's that does not account for them suffers from a significant infirmity. Although no perfect comparison involving different construction techniques on different floors during different periods of time could be devised for this project, we find that ----------- FOOTNOTE BEGINS --------- [foot #] 15 (...continued) for the highly impacted period more (from .113 to .125 man-hours per square foot), since most of the beam sides to be excluded were on the ground floor, which was formed during the latter period. The greater difference between the productivity rates in these two periods offsets the decrease in area formed during the highly impacted period and the decrease in difference between productivity rates when comparing the unimpacted period to the lesser impacted period. Eliminating the beam sides from the total square footage involved in the calculations would change our figure of $381,864 to $386,284. [foot #] 16 Due to a change in the wage rate, which was not incorporated into these calculations, Mr. Gray acknowledged that the amount should be increased. Transcript at 1660-61. The amount of the increase is fifteen cents an hour times 9,729 "lost" man-hours, or $1,459. [foot #] 17 Another difficulty is that, as mentioned in the preceding paragraph, Mr. Gray's calculations involving pans double-count the square footage of the areas where the pans were placed. ----------- FOOTNOTE ENDS ----------- the measured mile proposed by OMNI is the most reasonable one advanced. Aside from its adjustment for above-grade work, we conclude that this is the fairest means proposed for measuring labor inefficiency in slab forming caused by the blast changes. It is true that this approach involves a comparison of work involving plywood forms with work involving fiberglass pans. The evidence presented in this case shows, however, that forming plywood frames is more labor intensive, and thus more time consuming, since these frames must be built by hand to fit particular beam configurations. Further, because the beams constructed with plywood frames have different elevations (whereas the beams constructed with pans are at a uniform level), installing scaffolding and aluminum beams below them is more complicated. Transcript at 58-60, 111-12, 612, 1870; Exhibits 1138, 1154 at 97. Thus, to the extent that this comparison might skew the results, it does so in a way which favors the Government. This is so because the unimpacted period's inherently less efficient work is the basis against which the impacted periods' work, which should have been more efficient, is contrasted. We award $381,864 for this element of the claim. b. Stripping of floor slabs The second element of OMNI's labor inefficiency claim is the stripping of floor slabs. As with the forming of the slabs, OMNI uses a measured mile approach. For stripping, the unimpacted period is from the beginning of the project to October 1, 1995, when OMNI began stripping the B1 floor; the highly impacted period is from October 1, 1995, through March 17, 1996, when the contractor began stripping the fourth floor slab; and the lesser impacted period is from March 17 to July 28, 1996, the end of stripping operations. Transcript at 492; Exhibit 1055. The productivity rates for stripping slabs in these periods were as follows: during the unimpacted period, .059 man-hours per square foot; during the highly impacted period, .147; and during the lesser impacted period, .108. OMNI makes an adjustment to the expected productivity rate during the impacted periods, about which we say more below. After making the same sorts of calculations it made for slab formation, OMNI concludes that it incurred $677,710 in costs of labor inefficiency resulting from the impact of the blast design changes on stripping slabs. Recognizing that it has already been paid $10,490 of this amount in a change order, the contractor determines its net labor inefficiency slab stripping costs yet unpaid were $667,220. Transcript at 492-97; Exhibit 1069. GSA makes many of the same arguments regarding this element of the claim as it made as to the previous element. For example, it again suggests that we double-count the square footage of the areas on which pans were placed. We reject this idea for the same reasons expressed above. The agency's principal challenge is to the adjustment factor. OMNI's expert in construction scheduling, productivity, and damages analysis, David R. Tortorello of Peterson Consulting LLC, testified that the ability, above grade but not below, to use an outrigger to move materials easily from one floor to another should have made stripping the slabs on this job fifty percent more productive above ground than below. Transcript at 494-95. Relying on this testimony, OMNI used, as the baseline from which to compare the productivity rates in the impacted periods, a rate of .032 man- hours per square foot, rather than the rate actually achieved in the unimpacted period, .059 man-hours. We note that as with the adjustment in the slab forming analysis, OMNI's mathematics in selecting the adjustment factor are not correct; the productivity rate fifty percent more efficient than .059 man-hours per square foot is .039 man-hours per square foot, not .032. Thus, even if Mr. Tortorello's statement (which was not challenged, so we accept it) were the only consideration relating to the difference in efficiency between the unimpacted and impacted periods, we could not use the .032 figure in OMNI's calculations.[foot #] 18 Another consideration is applicable to the situation, however. The unimpacted period involved stripping of plywood frames, whereas the impacted period involved stripping primarily of fiberglass pans. The record contains evidence that stripping pans (including cleaning them) takes longer than stripping plywood frames, and took especially long on this project because the OMNI workers used crowbars rather than compressed air or nitrogen to strip pans on several floors, until they learned of the more efficient technique. Exhibit 550 at 44, 158-59; Transcript at 452, 1503-04. The extent to which extra time to strip pans offset the savings from being able to move materials from one floor to another more efficiently cannot be calculated on the basis of the record. Since we have no sound basis to make any particular adjustment to the actual productivity rate achieved during the unimpacted period, we use that actual rate as the standard against which to calculate the slab stripping labor inefficiency costs. Substituting .059 man-hours per square foot (the actual rate during the unimpacted period) for .032 man-hours per square foot (the number used, without support, in OMNI's calculations) as the baseline for each impacted period, but leaving all other aspects of the calculation as presented by the contractor, we conclude that OMNI incurred $467,189 in slab ----------- FOOTNOTE BEGINS --------- [foot #] 18 OMNI has apparently had second thoughts about using .032 itself; in its posthearing brief, it has included a revised calculation of stripping labor inefficiency costs which substitutes .042 for .032 as the baseline against which to compare productivity rates in the impacted periods. Appellant's Posthearing Brief at 43 n.10, Attachment B. OMNI does not explain the derivation of the numbers and formula it used in calculating the new figure, and we are not certain what that derivation is. ----------- FOOTNOTE ENDS ----------- stripping labor inefficiency costs for which it has not been reimbursed. c. Forming and stripping of columns OMNI also uses a measured mile approach in determining labor inefficiency costs in forming and stripping of columns. The approach results in a figure of $120,137. Less $6,798, to account for change order hours paid through contract modifications associated with PCOs 21058, 21068, and 21109, and $23,139, to account for inefficiency costs paid through contract modifications associated with PCOs 21026 and 21027, the total amount claimed for this element is $90,200.[foot #] 19 Transcript at 498-503; Exhibits 1055, 1070-71. GSA's only quarrel with this portion of OMNI's claim is that some of the costs should be deducted because they are attributable to inefficiencies which were the product of actions of the contractor. Respondent's Reply Brief at 23. GSA has proved no such actions. See supra Part III. d. Forming and stripping of stairs OMNI's measured mile calculation of labor inefficiency costs in forming and stripping of stairs results in a net amount of $14,483 -- $21,386 less $6,903 already paid through contract modifications associated with PCOs 21026 and 21027. Transcript at 503-04; Exhibits 1055, 1072-73. GSA does not contest this amount. The amounts we award for these four components of the labor inefficiency aspect of the claim total $953,736. Adding markups of 10.84 percent for field overhead ($103,385) and 2.66 percent for general and administrative expenses ($25,369), the total allowed for labor inefficiency is $1,082,490. 2. Concrete consolidation OMNI also claims that it incurred additional, heretofore uncompensated losses in productivity due to problems with consolidation of concrete. Consolidation is the process by which concrete, while still wet or plastic, is vibrated in order to concentrate it around the steel rebar to fill all the spaces and achieve proper bonding. Incomplete consolidation leaves in the concrete voids or "honeycombing," which must be repaired by dry finishing. Transcript at 72-73. ----------- FOOTNOTE BEGINS --------- [foot #] 19 The contractor acknowledges that its claim includes costs relating to PCO 21026, but notes that the proof it presented at hearing excludes all costs relating to both PCO 21026 and PCO 21027 for which reimbursement was made. Appellant's Reply Brief at 9 n.9; see also Transcript at 501-02. ________ ----------- FOOTNOTE ENDS ----------- The record contains evidence of two causes of incomplete concrete consolidation on this project. First, the blast design changes required the contractor to install far more rebar than planned in the concrete -- in some places, to a density which exceeded the tolerances specified in the American Concrete Institute Code. The density of the rebar impeded the flow of concrete through and around the steel, and thus the ability of the wet concrete to fill all the spaces within the formwork. OMNI asked permission to mitigate the problem by using smaller aggregate in the concrete, but with limited exceptions, GSA denied the request due to a concern that the use of smaller aggregate would lead to infirmities in the structure of the building. OMNI made a special effort to vibrate the concrete thoroughly, but an excessive number of voids occurred nonetheless. Transcript at 72-73, 85-86, 235-38, 1158-59, 1186, 1195, 1860-62. The second cause of incomplete concrete consolidation was the contractor's having left debris -- primarily trash (such as coffee cups and lids) and construction materials (such as scraps of wire cut from places where rebar was tied together) -- in the forms where concrete was to be poured. Id. at 83-84, 1274-75, 1302-03, 1305, 1310, 1498, 1506, 1861. The record does not contain conclusive proof as to what percentage of the consolidation problems was caused by the addition of rebar and what percentage was attributable to the contractor's failure to clean the forms sufficiently. The testimony we find most helpful on the matter (as well as most disinterested) is that of Allyn E. Kilsheimer, executive vice president of KTLH Engineers, P.C. Mr. Kilsheimer, who has great experience in evaluating such work, see supra note11, testified that debris was a major problem, causing substantial honeycombing, in only three places on the project. Transcript at 1199. OMNI frames its claim for additional labor costs incurred in dry finishing work to correct concrete consolidation problems as follows. The total costs incurred on the project for dry finishing were $599,028. Of this amount, $435,393 were incurred by OMNI and $163,635 by Anthony Construction Services, an OMNI subcontractor. OMNI's budget for dry finishing work was $114,876. Subtracting the budgeted amount (expected costs) from the costs actually incurred by OMNI itself leaves $320,517. This is the amount by which OMNI was over budget for this work. Because the blast design changes were responsible for all of the additional concrete consolidation problems, resulting in the need for the extra dry finishing work, GSA is obligated to pay the amount. (OMNI excludes Anthony's costs because it considered some of that firm's work unacceptable; OMNI took over dry finishing work itself and made necessary corrections to Anthony's work.) Transcript at 507-11; Exhibits 1075-77. There are problems with the contractor's approach to this element of the claim. First, dry finishing work on the project consisted of two sorts of work, rubbed finish and point-and- patch, but $114,876 was the budgeted amount for only point-and- patch; OMNI's documents do not show any budgeted amount for rubbed finish. Exhibit 1076 at CLK42277-78. According to GSA cost expert Scott Gray, OMNI's bid actually included about $150,000 for both aspects of dry finishing work. Transcript at 1679. The latter number is more likely to be realistic since Anthony's schedule of values for work it performed, which was almost entirely in the basement (most of which was completed before the significant design changes started), shows a total of $123,715. See Exhibit 451 at CLK24500-01. Furthermore, OMNI's approach assumes that all of the additional dry finishing work was caused by the blast changes, and thus, that none of it was caused by the debris the contractor allowed to remain in the formwork when the concrete was poured. Because we have found that some of the work was necessary because of debris remaining in the formwork, but do not know for sure how much of the work falls into this category, we may resort to a "jury verdict" to determine the percentage if the evidence is sufficient for us to "make a fair and reasonable approximation of the damages." Dawco Construction, Inc. v. United States, 930 F.2d 872, 880 (Fed. Cir. 1991), overruled on other grounds, Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (in banc) (citing WRB Corp. v. United States, 183 Ct. Cl. 409, 425 (1968)); see also Vehicle Maintenance Services v. General Services Administration, GSBCA 11663, 94-2 BCA 26,893, at 133,892. The evidence is sufficient for the making of such an approximation. Debris was a significant problem in three places on this twelve-story (four basement levels, eight floors above) building. Three places is but a small part of the whole; thus, we make a reduction of only five percent of the claimed amount to account for it. Using $150,000 as the expected cost of dry finishing work and attributing five percent of the unexpected costs to the unreasonably large amounts of debris in three places on the project, the total amount of dry finishing costs attributable to the blast changes becomes $271,123. With the standard 13.5 percent markup, the total increases to $307,725. Mr. Gray devised a measured mile scheme for determining the amount that completion of dry finishing work should have cost in the absence of the blast changes. Transcript at 1684-86; Exhibit 685. This attempt suffers from four significant infirmities. (1) The baseline overstates the cost of work in the "unimpacted period" by adding to the numbers from Anthony's schedule of values the costs OMNI incurred to correct Anthony's mistakes. (2) The effort assumes a single cost for dry finishing work, although the schedule of values shows that one of the components of this work, rubbed finish, is twice as expensive as the other, point-and-patch. See Exhibit 451 at CLK24500-01. (3) The importance of the second error is magnified by the fact (asserted in Appellant's Posthearing Brief at 48 and not contested in Respondent's Reply Brief) that the upper floors, for which Mr. Gray's approach constructs costs, involved only the less expensive point-and-patch work. (4) Mr. Gray made no assumption as to the quantity of dry finishing which should have been necessary in the absence of problems caused by the design changes and the debris left in the formwork. We therefore find that Mr. Gray's methodology is not useful in calculating dry finishing costs caused by the blast changes. GSA has presented us with no better method than OMNI's total cost approach for calculating a meaningful amount for this element of the claim. We consequently award the amount we have calculated using OMNI's approach, $307,725, for this element. 3. Overtime OMNI incurred $73,571 in overtime costs relating to the categories of labor listed in the first part of the additional labor portion of the claim -- labor inefficiency in forming and stripping slabs, columns, and stairs -- and in forming and stripping the blast walls. Transcript at 505-07; Exhibit 1074. The contractor contends that none of this overtime would have been necessary, but for the blast design changes.[foot #] 20 GSA maintains, based on testimony by Mr. Gray, that a small amount of overtime is routinely worked on concrete construction jobs, and has shown that on three similar projects built by OMNI, on average, ten percent of this contractor's formwork activities were performed on an overtime basis. Transcript at 1686-88, 1801-03; Exhibit 683. The agency additionally suggests that any Saturday work to make up for time lost due to the contractor's having fallen behind schedule would have been overtime. Deducting ten percent from the overtime amount claimed by OMNI leaves $66,214 (with 13.5 percent markup, $75,153). We award the latter amount. B. Crane equipment and operator OMNI rented two cranes to assist in its concrete operations. The cranes were scheduled for demobilization shortly after the concrete operations had concluded. One crane remained on the site until June 21, 1996, and the other until August 15, 1996. OMNI maintains that the cranes had to stay there much longer than planned because of the impact of the blast design changes. The contractor claims $296,234 as the costs of equipment rental and labor, and hoist cable replacement, during the extended period of time. OMNI calculates this amount as follows: Given the initial ----------- FOOTNOTE BEGINS --------- [foot #] 20 OMNI acknowledges that some amount of overtime labor is normal for a concrete project, and says that this element of the claim takes that into consideration in that it encompasses less than half of the contractor's total overtime costs on the FBI building. Appellant's Posthearing Brief at 82. The total of overtime costs incurred is irrelevant to this element, since the element relates to overtime costs for specific activities. OMNI is claiming all of those overtime costs. ___ ----------- FOOTNOTE ENDS ----------- twenty-five day delay in concrete operations, which extended the time for concrete work until early December 1995, the cranes should have been demobilized on January 8, 1996. After that date, OMNI incurred $179,218 in costs for renting the cranes, $75,797 in costs of crane operator labor, and $11,616 to replace a hoist cable which broke in April 1996. From the total of these three figures, $266,631, OMNI deducts $5,632, which it says is the amount of crane-related costs incorporated in previous contract modifications. The contractor then adds its standard markups for field overhead and general and administrative expenses. Transcript at 520-28; Exhibits 1078-81. GSA would deduct from the costs for rental, labor, and cable replacement an additional amount which Mr. Gray believes represents crane-related costs incorporated in contract modifications not considered by OMNI, $56,270. Respondent's Reply Brief at 25.[foot #] 21 Mr. Gray noted that the contract price adjustment made in contract modification AS05 included a markup of 3.5 percent for "small tools," including 2.98 percent labeled "hoisting," and "hoisting," in OMNI's bid, related to a crane. He evidently used the 2.98 percent figure in calculating the amount he cited. Transcript at 1692-93 (referencing Exhibit 461). OMNI states (without contest) that other contract modifications included a markup for "small tools"; that this markup varied from one to five percent; and that the other markups were not divided into components such as hoisting. OMNI suggests that any markups for hoisting may relate to the large costs the contractor incurred over budget for hoisting costs of electricity and maintenance. Appellant's Posthearing Brief at 49-50. The record contains no testimony explaining for what the "hoisting" markup in modification AS05 was supposed to provide compensation, so any assumption on our part would be mere speculation. Without any knowledge of the meaning of the term in the modification, or any basis for believing that a hoisting markup was included in any other change orders, we find no reason to follow GSA's suggestion. We do, however, make an adjustment to the amount of this element of OMNI's claim. We have found that the contractor was responsible for delays in completion of concrete work through January 30, 1996. See supra Part III. The contractor asserts, without contest, that demobilization of the cranes should have taken place about a month after completion of the concrete work. Consistent with this assertion, for purposes of the crane equipment and operator element of the claim, we estimate that without the blast design changes, OMNI would have had its cranes off the site by the end of February. We consequently allow only ----------- FOOTNOTE BEGINS --------- [foot #] 21 GSA would also deduct $17,883 in costs which OMNI has already deducted from another portion of its claim, the one pertaining to general conditions. Transcript at 527. Because the net effect of the deduction is the same, no mater where it is taken, we see no need to consider it here. ----------- FOOTNOTE ENDS ----------- those charges which the contractor incurred after that month -- $130,181 in crane rental, $58,300 in operator labor, and $11,616 in cable replacement costs. After totaling these figures ($200,097), we follow OMNI's design in subtracting $5,632 in costs already paid and adding standard markups. The result is $220,718, which we award. See Exhibits 1078, 1080. C. Form rentals OMNI rented more forms (scaffolding and aluminum beams) for a longer period of time than it had anticipated would be necessary to perform concrete work on this project. It also had to pay a small amount more than anticipated to transport the forms to the site. OMNI calculates the resultant additional costs as follows: Actual rental costs were $725,160, and planned costs were $245,263. From the difference, $479,897, subtract $72,362, which OMNI incurred to rent extra forms for the purpose of making up time lost in installing gravel. See supra Part II.A. To the net amount, $407,535, add the additional trucking expenses, $4,800. With standard markups for field overhead and general and administrative expenses, the total claimed is $468,000. Transcript at 528-30; Exhibits 1082-83. GSA correctly observes that this methodology does not account for any delays caused by the contractor (though the $72,362 deduction, which is said to represent costs attributable to planned acceleration to make up for a delay, sort of does so). The agency espouses a different approach to this element of the claim, proposed by Mr. Gray. This technique, using the same numbers that OMNI's Mr. Tortorello determined from reviewing the contractor's records, is based on an average rate incurred by the contractor per day in costs of form rental. The figure, based on costs incurred during the project, but excluding months when OMNI was "ramping-up" or "ramping-down" its forms rental, is $2,158.16. Transcript at 1694-95; Exhibit 689. The agency's approach has the benefit of determining an appropriate amount with specific application to the period of delay, and without having to query whether the deduction OMNI makes is soundly based or not. We have found that in the absence of the blast design changes, OMNI would have finished the concrete work on the project by January 30, 1996. Agency actions delayed completion of this by 185 days. See supra Part III. Multiplying 185 by the daily forms rental cost results in a figure of $399,260. Adding the additional trucking expense and a markup of 13.5 percent yields a total of $458,608 for this element of the claim. D. Increased concrete material costs This element of the claim has two components. The first is an increase in the cost of concrete resulting from a six percent escalation in concrete prices which was effective on January 1, 1996. The added costs of this escalation were $47,113 for concrete which was poured during 1996 (other than for the blast walls -- OMNI was compensated for the cost of concrete in those walls through contract modifications). Transcript at 534-37; Exhibits 1084-85, 1088. We make a reduction from this amount to eliminate the impact of the price increase on concrete poured in January, consistent with our finding that the contractor's own actions would have precluded completion of concrete work before January 30. Because 11.7 percent of the concrete poured during 1996 was poured during this period, we reduce the amount claimed by that percentage, to $41,601. The second component of the increased concrete material costs element of the claim is the cost of admixtures which were added to the concrete during winter and summer months to help in the curing of the concrete. These admixtures were heated water and/or accelerators during the winter and ice during the summer. Heated water cost $2 per cubic meter, accelerators $6 or $11 per cubic meter (depending on which formulation was used), and ice $4 per cubic meter. Multiplying these figures by estimated quantities of materials used, OMNI calculates a total cost of $29,235. The contractor subtracts from this number $5,544, the reduced ice cost from having poured less concrete in the summer of 1995 than had been anticipated. The net amount is $23,691. Transcript at 537-39; Exhibits 1084, 1089. GSA suggests that the admixture component not be paid, because in contract modification AS09, the agency paid $28,700 for a stripping mix to accelerate the work. Respondent's Posthearing Brief at 66 n.104; Exhibit 551 at 101. AS09 does not itself say anything about a stripping mix, and the material supplied with the modification, while mentioning this item, does not explain what it means. No witness explained the meaning of the entry, either. AS09 does say that it "does not resolve the items described on Addendum A," and that addendum includes "winter concrete (additives and heating)." Exhibit 574. Based on this record, we conclude that there is no reason to believe that the payment for the stripping mix encompasses the sorts of admixtures included in the claim. Indeed, the costs of admixtures for winter concrete curing were expressly excluded from the modification. Notwithstanding our determination that this component of the claim has not been previously paid, we think that the amount sought should be reduced. OMNI's claim is premised on the idea that but for the blast design changes, all concrete pours would have been completed by December 4, 1995 -- twenty-five days after the early finish date of November 9. If the concrete work had been done by this date, no winter admixture would have had to be used. We have found that the changes were responsible for only those delays after January 30, 1996. Thus, much of the winter admixture would have had to be used even if the changes had not occurred. The record does not contain sufficient basis for making a reduction in the amount with precision. We calculate the size of the reduction using the following methodology: (1) We assume that concrete pours occurred in equal quantities on every day of the month on which work took place (we know that did not happen, but the assumption helps with the mathematical construct), and that using winter admixtures is three times as expensive as using summer admixtures (the former cost $8 or $13 per cubic meter, the latter $4). (2) We apply dictionary definitions of "winter" and "summer" (seasons bounded by equinox and solstice). (3) We calculate, using OMNI's figures for concrete poured per month, Exhibit 1085, the costs attributable to use of winter admixtures and the costs attributable to use of summer admixtures. (4) We then reduce the number for winter admixtures to account for the portion of the winter during which OMNI is responsible for costs incurred (December 21 to January 30). The result is that GSA is liable for $19,482 of the $29,235 sought. Adding $19,482 to the amount for concrete cost escalation, $41,601, subtracting the $5,544 acknowledged by OMNI, and then adding markups for field overhead and general and administrative expenses yields a total of $63,037 in increased concrete material costs. E. Added contract administration/materials To cope with the ramifications of the blast design changes, OMNI added additional supervisory and management personnel, increased the time commitment of some such personnel who were already assigned to the project, and in some cases substituted more experienced personnel for those originally assigned. OMNI also retained the services of Peterson Consulting LLC to assist with rescheduling of the work and change proposal preparation necessitated by the design changes. The testimony makes clear that the work of these individuals, beyond what was originally anticipated, was required primarily if not entirely because the changes so greatly complicated the job. The changes were so extensive that they effectively forced the contractor to reschedule virtually the entire project, an effort so difficult as to require the services of the consultant. The Government's succession of revisions to the design made coordination with subcontractors and suppliers, as well as OMNI's own forces, a daunting task, different in nature from what it would have been if extra work had simply been added to the contract. Transcript at 73-77, 94-96, 321-26, 336-38, 391-92, 467, 546-49; Exhibit 1154 at 19-21. OMNI divides its additional costs for contract administration into three areas: work of the personnel who provided general contractor services on the project ($212,419); work of the personnel who provided supervisory and management services relating to the firm's concrete division's operations ($376,586); and the services of Peterson Consulting ($380,726). The contractor adds a markup only for general and administrative expenses (2.66 percent), and not for field overhead, because all this work was in the nature of field overhead. Transcript at 540; Exhibit 1090. The general contractor services costs (called "base building" costs by OMNI) consist of the expenses of having a supervisor, rather than an assistant supervisor, assigned to the project, and having the contract manager spend far more time than planned on it; the costs associated with an added project manager and, from time to time, additional field engineers; the rental costs of desks and chairs for the extra personnel; and an additional insurance premium. Transcript at 541-43; Exhibits 1091-92. GSA's only challenge to this component of the claim is that the costs of the contract manager should be excluded because OMNI had included in its bid the costs for such an individual. Respondent's Posthearing Brief at 66 n.105(1). The criticism misses the mark; OMNI has not charged for all of this man's time, but rather, only for the time additional to what it had planned. Transcript at 541-42; Exhibit 1092. The amount claimed, $212,419, with a 2.66 percent markup, is $218,069. We award it. The costs relating to management of concrete operations are those of an additional supervisor; additional time of another supervisor (David Hamm), an added engineer, assistant project manager, safety engineer, and two blast wall foremen; outside engineering services for redesigning the reshoring consequent to the blast design changes; snow removal; and winter protection of concrete. Transcript at 543-46; Exhibit 1093. GSA's challenges to the costs of the additional time for Mr. Hamm and of the added safety engineer, Respondent's Posthearing Brief at 66 n.105(2), (3), are again not well taken. The evidence is that although Mr. Hamm was assigned to the project before the blast changes began, he would not have spent so much time as he did on it if the changes had not occurred; the claim includes only the difference between planned and actual costs. Further, the safety engineer, rather than substituting for another individual with similar duties, actually supplemented the other man's efforts. Transcript at 544-45. GSA also says that we should deduct $44,265 "for added management, superintendent and engineer labor already paid on blast-related modifications." Respondent's Posthearing Brief at 66 n.105(4). The agency does not suggest which of the seventy-four contract modifications, Exhibits 566- 639, were "blast-related" or where in the record we might find evidence that such payments have been made, however. Further, several of the modifications specifically exclude claims for "Additional Contract Administration and Materials: Costs incurred related to additional personnel and not covered in original mark- up." Exhibits 570, 573-76, 584, 610. We consequently have no basis for making the requested deduction. GSA also urges us to deduct $3,992 in concrete winter protection costs, on the ground that such payments have already been made through contract modifications AS09 and AS10. Respondent's Posthearing Brief at 66 n.105(8). The modifications do not say that they cover winter protection, and while winter protection is mentioned in the jumble of papers that accompany the modifications, we cannot tell from those papers how the mention might relate to the modifications. See Exhibits 574-75. Nevertheless, because we have concluded that had the blast design changes not occurred, OMNI would have been performing concrete work through January 30, we reduce the amount sought for winter protection. At hearing, OMNI's cost expert, Mr. Tortorello, testified that the amount for this item should be $41,213. Transcript at 546; Exhibit 1093. OMNI has since reduced the claim by one-fifth, $8,240, to account for the contractor's acceptance of costs occurring before mid-December 1995, rather than November 19. Appellant's Posthearing Brief at 52 n.13. The contractor is responsible for delay costs through January 30, not mid-December. We use the same method as in Part V.D to reduce the amount earlier sought. Because thirty-six percent of concrete poured in "winter" was poured by January 30, we allow sixty-four percent of Mr. Tortorello's figure for concrete winter protection, or $26,376. We allow the entire amount claimed for snow removal, $21,771, because all snow removal noted on OMNI daily job reports during the relevant period occurred after January 30. See Exhibits 10 at 261-303; 1093. The total sought for additional concrete division contract administration and materials, aside from winter concrete protection and snow removal, is $321,842. Without persuasive reason to reduce this figure, we award it. Adding the amounts noted above for the two items in question, the total allowable for additional contract management costs associated with concrete operations is $369,989. With a markup of 2.66 percent, this figure becomes $379,831. Peterson Consulting provided assistance to OMNI in project scheduling (at a cost of $51,314) and change proposal processing (at a cost of $329,412). In support of these figures, Mr. Tortorello presented summaries of his firm's invoices to and payments from OMNI for the services specified. Mr. Tortorello properly excluded from these amounts all charges for work involved in preparing the claim and preparing for an alternative dispute resolution session and the hearing in this case. Transcript at 546-48; Exhibits 1095-96; Herman B. Taylor Construction Co. v. General Services Administration, GSBCA 12915, 96-2 BCA 28,522, at 142,532. GSA urges us to exclude from the amounts allowable for Peterson's services $45,300 for travel expenses, $22,500 for project orientation, and $17,084 as not actually paid by OMNI. Respondent's Posthearing Brief at 66 n.105(5)-(7). The agency does not explain why we should make these deductions from the amount claimed, and it does not direct us to any exhibit which even addresses these matters. Since OMNI's justification for the amount claimed appears reasonable on its face, in light of the documentation furnished and Mr. Tortorello's testimony, and since GSA has provided no justification for making any deductions, we find that OMNI is entitled to the entire amount claimed for payments to Peterson. This sum is $380,726 plus a markup of 2.66, a total of $390,853. F. Additional general conditions The term "general conditions" in this claim refers to job site overhead costs such as project supervision, management, engineering, secretarial assistance, temporary field office trailers, electric and telephone bills, clean-up, and other miscellaneous job expenses. OMNI claims additional costs in this category for both its "base building" (general contracting) and concrete divisions for the periods of time in excess of those it had anticipated working on this project. For the general contracting division, the contractor anticipated performing most of its work from April 2, 1995 -- when concrete operations were to begin -- through August 28, 1996 -- when all work other than inspection and correction of deficiencies and omissions would be complete. (These calculations do not include the period from October 25, 1994, until April 2, 1995, when work preliminary to concrete operations was being performed, or the period from August 28, 1996, until March 13, 1997, when the residual activities were scheduled to occur.) The work scheduled for this period actually occurred from April 30, 1995, through April 30, 1997. (GSA accepted the project on the latter date. Transcript at 333.) For the concrete division, work was expected to begin on April 2, 1995, and end as early as November 9, 1995; it actually began on April 30, 1995, and OMNI accumulated costs for it, for the purposes of this element of the claim, through August 31, 1996. Transcript at 327-29, 549-50; Exhibits 1100, 1103. In calculating general conditions costs for the two divisions, OMNI followed this procedure: It determined, for each relevant category of cost, all costs actually incurred, and then subtracted from the total any cost already included in the additional contract administration claim element. The contractor then divided the combined net amount ($2,576,403 for general contracting, $809,119 for concrete) by the number of days in the period of actual performance (731 for general contracting, 489 for concrete) to arrive at a daily rate ($3,524.49 and $1,654.64, respectively). OMNI then multiplied the daily rate by the number of days of anticipated performance (514 and 245) to arrive at adjusted planned costs ($1,811,577[foot #] 22 and $405,387). The difference between actual and planned costs is $764,826 for the general contracting division and $403,732 for the concrete division. The total of these two numbers is $1,168,558. Transcript at 549-57; Exhibits 1099-1104. OMNI marks up the total for general and administrative expenses by 2.66 percent; the resulting number is $1,199,642. The contractor subtracts from this number field overhead markups ----------- FOOTNOTE BEGINS --------- [foot #] 22 This number should be $1,811,588, eleven dollars more than OMNI says. Subsequent calculations are marred by the slight discrepancy. In light of the way in which we determine the correct amount of this element of the claim, correcting the errors is unnecessary. ----------- FOOTNOTE ENDS ----------- and direct field costs previously received in contract modifications ($616,524). It also subtracts field overhead markups claimed in the claim elements of additional labor, crane rentals, form rentals, and increased concrete material costs ($255,546). The net amount, which OMNI claims, is $327,572. Transcript at 558; Exhibit 1098. GSA has an overarching objection to the general conditions element of the claim. It notes that the contract includes this sentence: "No overhead extension cost will be considered except for a justified extension beyond the initial contract completion date and compensation then will be subject to applicable contract requirements." Exhibits A4 at 3, 410 at 3. The agency says that what OMNI calls "general conditions" is actually an "overhead extension cost," and that it must therefore be disallowed. The contractor, on the other hand, suggests that the sentence must refer to extended home office overhead, and since OMNI does not seek recovery of such an expense in the general conditions element (or any other element) of the claim, the sentence should have no effect on the contractor's recovery. We do not agree with either party's reasoning. The sentence does not include the words "home office," so reading it as if it did would be improper. On the other hand, applying the sentence without further consideration would not be appropriate, either, because the sentence is in direct conflict with another provision of the contract, the Changes clause. That clause provides that if the contracting officer (either directly or constructively) "makes changes in the work within the general scope of the contract, including changes . . . [i]n the specifications (including drawings and designs)," and such a change "causes an increase or decrease in the Contractor's cost of, or the time required for, the performance of any part of the work under this contract, . . . the Contracting Officer shall make an equitable adjustment" in the contract price to compensate the contractor. Exhibit A1 at 80-81. Inclusion of the Changes clause in the contract was required by regulation. 48 CFR 43.301(d) (1993) (referencing 48 CFR 52.243-4). A broad exculpatory clause such as the sentence on which GSA relies may not be read to exempt an agency from liability for equitable adjustments allowed by mandatory contract clauses unless the language of the exemption is clear and specific, such as to "hang a red flag" to prospective bidders. C. H. Leavell & Co. v. United States, 530 F.2d 878, 891 (Ct. Cl. 1976); United Contractors v. United States, 368 F.2d 585, 598 (Ct. Cl. 1966); Maron Construction Co. v. General Services Administration, GSBCA 13625, 98-1 BCA 29,685, at 147,109-10. Contracts should be read in a fair manner, "so as not to put one side at the mere will or mercy of the other." Leavell, 530 F.2d at 892 (quoting Contra Costa County Flood Control & Water Conservation District v. United States, 512 F.2d 1094, 1098 (Ct. Cl. 1975)). Any interpretation of a Federal Government contract must be especially attentive to this objective, since the contract empowers one party (the Government) to direct the other party (the contractor) to perform changed work without advance agreement on compensation. Thus, we have held that exculpatory clauses which are inconsistent with the purpose of other provisions of contracts "cannot be given their full literal reach." Cherry Hill Construction, Inc. v. General Services Administration, GSBCA 11217, 92-3 BCA 25,179, at 125,476 (quoting United Contractors, 368 F.2d at 598). We have done this with regard to attempted limitations on the Differing Site Conditions clause (Cherry Hill, 92-3 BCA at 125,476-77), the Suspension of Work clause (Pierce Associates, Inc., GSBCA 4163-R, 78-1 BCA 13,078, at 63,862, enforced, Fischbach & Moore International Corp. v. United States, 617 F.2d 223 (Ct. Cl. 1980)), and of most relevance to the matter at issue here, the Changes clause (Stephenson Associates, Inc., GSBCA 6573, et al., 86-3 BCA 19,071, at 96,328). The evidence in this case compels a determination, consistent with these decisions, that the exculpatory provision should not be given its full reach. The provision is a sentence within a section of the contract entitled "Critical Path Method Scheduling." It does not purport to amend the Changes clause, and it is so divorced from that mandatory clause that no one reading the latter would have a clue that any limitation on it is part of the contract. Even the author of the Critical Path Method Scheduling section, Mr. Hundley, did not perceive this section to be an amendment to the Changes clause. When asked the purpose of the section, he responded only that it was to require the contractor "to have a schedule which was for the full duration of the contract." Transcript at 1226-27. Nor did GSA, in increasing the contract price by more than ten million dollars through the seventy-four modifications it made to the contract, ever suggest that compensating OMNI for overhead expenses it incurred in association with performance of work which extended the contractor's responsibilities would be inappropriate; to the contrary, the agency paid for such overhead through the modifications. Exhibits 566-639. Further, GSA has posed no objection to paying overhead costs incurred in conjunction with various elements of OMNI's claim, notwithstanding the fact that these costs were incurred due to the design changes imposed by the agency and the agency admits that the changes had some impact in delaying construction. Indeed, Mr. Hundley, when asked whether OMNI's general conditions costs should be paid by GSA if they resulted from a delay in completion of the building consequent to an agency directive to add two floors to the structure, responded in the affirmative. Exhibit 1174 at 137-38. In these circumstances, we give precedence to the Changes clause in considering the claim for general conditions costs. Because these costs are the product of the delay imposed by the agency, they are allowable to the extent that they are proved. We find that some general conditions costs have been proved. GSA's design changes delayed completion of portions of the work beyond the dates by which, in accordance with OMNI's agency- approved schedule, those portions of the work would otherwise have been completed. OMNI actually incurred additional general conditions costs during the period of delay. We agree with the view of GSA and Mr. Gray, however, that the contractor has performed an inappropriate calculation in determining the difference between actual and planned costs. See Respondent's Reply Brief at 26; Transcript at 1697. The "planned costs" figure is an invention; OMNI has not shown, as it might have with reference to bid or budget documents, what it actually expected to spend for field overhead on this project. Because the "planned costs" figure, and consequently the number for the difference between actual costs and this amount, are unreliable, we do not use them. Instead, we follow Mr. Gray in simply multiplying the daily field overhead rates by the number of days of delay attributable to GSA for the purpose of finding the amount of additional general conditions costs for which the agency is liable. The daily rate for the general contracting and concrete divisions combined is $5,179.13. The number of days of delay, through the end of concrete work, is 185. The product of these two numbers is $958,139. Subtracting $616,524 for field overhead markups and direct field costs previously received in contract modifications and $210,853 for field overhead markups awarded in the claim elements of additional labor, crane rentals, form rentals, and increased concrete material costs,[foot #] 23 the net amount of additional general conditions costs incurred up to the end of the concrete period is $130,762. We find OMNI's method of calculation wanting in one other respect, too. By adding the 2.66 percent markup for general and administrative costs at the outset, and then deducting overhead costs on contract modifications and the various elements of the claim, but not the general and administrative costs associated with them, OMNI is effectively asking to be paid the markup on the deducted overhead costs twice. We do not apply this markup until after all the overhead costs have been netted out. Thus, we increase only the $130,762 figure by 2.66 percent (or $3,478). The total amount of the general conditions element of the claim which we award, for the period through the end of concrete operations, is $134,240. After the concrete operations had been completed, OMNI planned to perform the remainder of the work on the building, exclusive of inspections and correction of deficiencies and omissions, from November 9, 1995, through August 28, 1996, a total of 293 days. The remainder of the work was actually ----------- FOOTNOTE BEGINS --------- [foot #] 23 The field overhead markup (10.84 percent) for each of these claim elements was as follows: additional labor, $139,953 (labor inefficiency in forming slabs, $41,394, in stripping slabs, $50,643, in column work, $9,778, and in stair work, $1,570; concrete consolidation, $29,390; and overtime, $7,178); crane rentals, $21,080; form rentals, $43,800; and increased concrete material costs, $6,020. ----------- FOOTNOTE ENDS ----------- performed from July 28, 1996, through April 30, 1997, a total of 276 days. Because the latter period does not encompass any delay, beyond the number of days scheduled, there is no basis for awarding any additional general conditions costs for the contractor's general contracting division beyond the date on which concrete operations were finished. The total amount sought by OMNI as reimbursement for costs incurred by the contractor itself is $3,955,996. The total we award is $3,330,724. With successive markups (which are uncontested) for profit (ten percent, $333,072), bond and builder's risk insurance (one percent, $36,638), and excess general liability (.55 percent, $20,352), the total award resulting from costs incurred by OMNI itself is $3,720,786. VI. Damages stemming from costs incurred by subcontractors As OMNI's project manager, Randall Grubb, testified, "When you affect the lead trade on the job, in this case, . . . the concrete, and then expect the follow-on trades to be able to absorb what they have out there, it won't happen." Transcript at 328. Many of the follow-on trades in this project have asserted that the delays in the concrete work increased their costs. The list, as presented in OMNI's Subcontractor Appendix to its Posthearing Brief, is as follows: The Poole & Kent Corporation $ 1,245,649 United Sheet Metal, Inc. 185,759 Performance Contracting, Inc. 321,031 The Fireguard Corporation 170,568 Mona Electrical Construction 15,538 Southern Ironworks, Inc. 21,144 Exposaic Industries 233,002 DuPont Flooring Systems (formerly Kemper Carpet) 18,495 Irvine Access Floors, Inc. 127,536 Maryland Applicators, Inc. 258,892 James Myers Company, Inc. 112,031 Harmon, Ltd. 330,387 Hill Enterprises, Inc. 19,539 KTLH Engineers, P.C. 222,188 Total $ 3,281,759 OMNI claims a ten percent commission on each of the amounts claimed by the subcontractors. Exhibit 92 at 3. This commission was awarded on subcontractor costs in modifications made to the contract. Transcript at 469. A. The Poole & Kent Corporation OMNI entered into a subcontract with The Poole & Kent Corporation (P&K) for performance of the mechanical work on this project. Exhibit 1301. The subcontract involved installation of heating, cooling, and plumbing systems for the building. Transcript at 777-80. The start of the mechanical work on each floor was dependent on the completion of the concrete work. In planning this job, P&K anticipated that, in keeping with standard industry practice, each floor would be clean when it began this work. P&K expected to do its work on two floors at a time, with the crews alternating floors. (For example, one crew would be on the ground floor while the other was on the second; when the first crew had finished on the ground floor, it would move to the third, and when the second had finished on the second floor, it would move to the fourth.) On each floor, P&K would have the sheet metal personnel begin, and would have them followed by piping trades installing first the mains (for chilled and hot water, with the pipes for both being put in place and welded at the same time), then the branches. Testing would follow, and insulators would complete the work. Ultimately, the groups of workers, by now familiar with the building, would meet in the penthouse, where they would have been preceded by masons and electricians. The penthouse was the principal mechanical room of the building; it was to contain cooling towers, pumps, chillers, fans, and air handlers. P&K would have a three-month period, beginning in March 1996, more or less to itself in the penthouse to install these pieces of equipment. Transcript at 303-07, 345, 350-51, 786-90, 792, 796, 800, 806, 817, 826, 859-60. OMNI's schedule, which P&K had been involved in writing and which P&K considered realistic, envisioned the mechanical subcontractor's completing its work (other than punch list items and demobilization of management personnel on site) by August 1996. Transcript at 782-83, 806-07. Milton Crawford, P&K's president at the time this job was performed, testified that his firm's labor plan for the project did not contain any errors. Id. at 872, 874. The plan did not reflect any overtime work. Id. at 783-84, 804-05, 847. Reality for P&K on this project was quite different from what the firm anticipated. P&K began its work in June 1995, installing sleeves and inserts in concrete formwork so that after the concrete was in place, the subcontractor could install and hang pipe without having to cut through the concrete. As P&K encountered formwork which (due to blast design changes) contained far greater quantities and complexity of rebar than originally planned, its placement of sleeves and inserts became more difficult. Transcript at 799, 803-04. Once it began its principal effort, the mechanical work, P&K never encountered the expected open work space; from the lowest basement level, excessive amounts of reshoring posed what Tony DeHart, P&K's original project manager, described as a "severe" problem in performing the work. Transcript at 812. The reshoring had to remain in place because of the blast design changes. Id. at 303-07, 350-51. When P&K reached the B1 level, the significant design changes slowed work markedly; other trades came onto the job, interfering with each other's operations.[foot #] 24 Id. at 796-97. In the fall of 1995, as the changes were forthcoming, P&K realized that completion of its work would be delayed considerably. It decided to cope with the impact of delay on procurement of materials by keeping its orders for major equipment in place (so that it would avoid potential problems of not having the equipment whenever installation became appropriate), but withdrawing orders for steel pipe and weld fittings. This decision resulted in P&K's having to pay storage costs for the equipment and higher prices for the pipe and fittings. Id. at 792-94, 811. In December, at OMNI's request, P&K performed work not encompassed within its subcontract, running a temporary gas main into the building; the concrete crews could then use gas-powered portable heaters to aid in their work. Id. at 802-03. The penthouse, where P&K was to perform approximately one- third of its work, did not became available to the mechanical subcontractor until the very end of July 1996. Transcript at 793, 818, 823-24, 867-68. At that time, OMNI directed that the building's heating system be completed by the beginning of November, so that finish work could proceed during the cold- weather months. To meet this deadline, the heating system became P&K's first priority. Id. at 801-02. To get this system operational quickly, P&K had to change its approach to the job. Instead of having trades approach the site in the most efficient manner, and work from the bottom of the building up, the mechanical subcontractor had to install hot water piping (to carry steam up to the penthouse and hot water back down to the floors) ahead of other apparatus, and work from both the bottom up and the top down. This led to considerable inefficiencies, since when the steamfitters later installed chilled water piping, they had to find space for larger pipes where smaller ones were already in place and take extra precautions in working around high-pressure steam pipes. Crews had to demobilize and remobilize frequently, as they returned to places where they had already been. Because the demand for skilled workers was greater than the supply (which it had not ----------- FOOTNOTE BEGINS --------- [foot #] 24 Other subcontractors also complained of this problem of "stacking of trades." See infra Parts VI.B, VI.C, __________ VI.D. Except insofar as the agency's assertion regarding acceleration (see infra Part VI.A.3) may be considered to address _________ this matter, GSA does not contend, in its briefs in this case, that stacking of trades was caused by any managerial errors by OMNI. ----------- FOOTNOTE ENDS ----------- been at the time P&K expected to do its work), the subcontractor had to accept workers who were less skilled than it usually hired. This was an especially severe problem with regard to pipe welders, since the project required high-quality welding. P&K had to have many of its personnel, especially the most skilled welders, work overtime. It also had to provide more supervision on the floors because work was more scattered there than planned. Id. at 818-21, 826-31, 866-67. The penthouse itself became a source of great inefficiencies. Instead of having the space essentially to itself, P&K had to share this constricted area with masons (and the scaffolding they used while they were building walls), fireproofers (who were spraying on material, so P&K had to carefully cover and clean its equipment), electricians, sheet metal workers, and sprinkler installers. Instead of bringing into the penthouse workers who were familiar with the building from having installed piping on the floors below, P&K had to man the job with personnel who were new to the job. P&K had to dedicate one foreman to the penthouse alone. Transcript at 821- 24, 829-31, 861. Although P&K did finish the heating system by early November 1996, it did not complete its work in the building until April 1997. Id. at 826, 838. Describing what happening to P&K on this project is one thing; measuring the resulting financial impact on the company is more difficult. P&K has presented its claim in several different ways, continually making modifications, and even in writing its brief, it is internally inconsistent in asserting how much money it should be paid. We consider the last statement made in the brief to be the definitive list of components of P&K's claim. See Appellant's Posthearing Brief, Subcontractor Appendix (Subcontractor Appendix) at 31. Our analysis follows that list. 1. Sleeves and inserts 2. Lost productivity in basement P&K's claim includes $3,179 as the lost productivity resulting from having to work around redesigned rebar to place sleeves and inserts in concrete formwork and $70,574 relating to lost productivity in the basement. While contract performance was ongoing, P&K asked OMNI to increase payments by the sum of these two amounts consequent to GSA's issuance of PCO 21073. Exhibit 1300 at VI.7. P&K project manager DeHart testified that having to work around the reshoring which remained in the basement due to the blast design changes "probably impacted us about 25%." P&K's request for additional payments was based on the assumption that the changes had impacted labor costs by only fifteen percent, however. Mr. DeHart identified the request to OMNI for an increase in payments as including the costs resulting from both the sleeve and insert difficulties and the lost productivity in the basement. Transcript at 794-96, 799-800, 803-04. GSA has not advanced any reason for not awarding the two amounts. We allow them. 3. Lost productivity in penthouse To assess the impact of unanticipated conditions on productivity in areas above the basement levels, P&K used a manual published by the Mechanical Contractors Association of America (MCA). This manual was the same one P&K used, with reference to labor rates, in constructing its bid for the project. P&K has used it on other projects to measure similar impacts, and the publication is generally accepted in the mechanical industry for this purpose. Transcript at 844, 852-55. We have previously accepted the use of this manual for this purpose as well. Stroh Corp., 96-1 BCA at 141,132; see also Fire Securities Systems, Inc., VABCA 3086, 91-2 BCA 23,743, at 118,902. The manual lists various types of impacts and, for each, a percentage of labor costs which represents loss of labor productivity under each of minor, average, and severe impacts. Exhibit 1300 at X(2).2-5. P&K president Crawford testified that based on his knowledge of this project and his long experience in mechanical work, he believed that his company sustained a sixty percent loss of productivity in the penthouse due to the following factors listed in the MCA manual: stacking of trades, twenty percent loss (average impact); concurrent operations (stacking of contractor's own forces an inability to rotate crews and bring experienced workers to the penthouse), fifteen percent (average); dilution of supervision, five percent (half of minor impact, since P&K mitigated this problem by adding more supervisors); site access, five percent (minor); out-of-sequence work (called "reassignment of manpower" in the manual), ten percent (average); competition for labor (a category not in the manual, but clearly one with an impact on productivity on this job), five percent.[foot #] 25 P&K had planned to devote 8,624 labor hours to work in the penthouse. Sixty percent of this figure is 5,174.4 hours. P&K actual devoted 5,432 more hours than planned to work in the penthouse. P&K calculates the dollar impact of lost productivity in this space by multiplying 5,174.4 by the blended hourly rate it paid to workers on this project, $20.74. The product, $107,317, constitutes this component of the claim. Transcript at 858-73; Exhibit 1300 at V.44-49. GSA endorses the objection to this method of calculation made in testimony by the agency's expert on costs and monetary damages on construction projects, Scott Gray of Barrington Consulting Group. Mr. Gray recommended using a comparative analysis of actual productivity on the job, and using a measured mile methodology, he constructed such an analysis. Mr. Gray's ----------- FOOTNOTE BEGINS --------- [foot #] 25 Mr. Crawford believed that the percentages he selected for the impacts of concurrent operations and out-of- sequence work understated the actual impacts, but P&K nonetheless based its claim on the percentages stated. Transcript at 863, 868. ----------- FOOTNOTE ENDS ----------- "measured mile" uses work performed by P&K through October 31, 1996 as an "unimpacted period." Transcript at 1711-12; Exhibit 700. Although we agree with Mr. Gray that a comparative productivity analysis would as a general proposition be a better means of determining lost productivity, we find his effort of no use here. Mr. Gray knocked the underpinnings from his own analysis when he acknowledged, on cross-examination, that he did not know whether the work P&K performed during his base period was really unimpacted or whether it was comparable to the work the firm performed in the penthouse. Transcript at 1817-18, 1821, 1825. Mr. Gray's "unimpacted period" was actually heavily impacted by the factors cited by Mr. Crawford. Further, the work performed by P&K was different in different parts of the building; the basement involved almost exclusively plumbing, whereas the penthouse involved no plumbing at all. See id. at 851, 1816. The record contains no evidence on the basis of which we could conclude that overall, the work in the two areas was comparable. There is no justification for accepting Mr. Gray's analysis. The reference to the manual's impact estimates remains the best way presented of measuring P&K's lost productivity on the job.[foot #] 26 GSA also suggests, with regard to this component of P&K's claim and several other subcontractor claims, that whatever portion of the sum sought is attributable to acceleration (as opposed to delay) of work is the responsibility of OMNI alone, since GSA never ordered any acceleration of work. Respondent's Posthearing Brief at 79-80. We reject this position. The acceleration resulted from GSA's insistence that notwithstanding the delays which had occurred, the project had to be finished promptly; the agency did not extend the original contract completion date until April 29, 1996, and even then, the extension was only thirty-six days, of which twenty-two were attributed to unusually bad weather. Exhibit 586. (The agency extended the date by another twelve days on July 30, 1997, well after the previous end date had passed. Id.) Because (a) OMNI's ----------- FOOTNOTE BEGINS --------- [foot #] 26 One of P&K's second tier subcontractors, Performance Contracting, Inc., calculated its costs of lost productivity by using a measured mile methodology. Transcript at 912-15; Exhibit 1363; see infra Part VI.C. GSA argues that if _________ Performance Contracting, whose job was to insulate the pipes installed by P&K, was able to find an unimpacted work period, P&K should have been able to do so, as well. Respondent's Reply Brief at 28. The fact that the pipes on which the two firms worked were identical does not mean that the conditions under which the firms' work took place was identical, however. Performance Contracting established that its work was done under conditions in which the subcontractor was able to perform in accordance with its plan on a significant amount of contiguous piping in space which was adequately prepared. Transcript at 913-14. The record contains no evidence that similar conditions were present for P&K's work. ----------- FOOTNOTE ENDS ----------- schedule was reasonable, see infra Part I.C; (b) there is no cause for believing that OMNI would not have met that schedule (aside from the slippage prior to the inception of the Government's design changes), see infra Parts II, III; and (c) GSA refused to allow time extensions commensurate with the delays resulting from those changes, any acceleration in work is properly viewed as having been a necessary consequence of the delays. We therefore consider the acceleration effects as part and parcel of the delay impacts, rather than as a separate matter. Stroh Corp., 96-1 BCA at 141,130. We do, however, make a reduction in this component of P&K's claim, consistent with GSA's suggestion that we hold the agency responsible for only the part of the costs which is attributable to the number of days by which the agency's actions delayed completion of the project. The cause of P&K's lost productivity in working in the penthouse is OMNI's not having completed the concrete work on that level of the building until the end of July 1996 (as opposed to November 1995, as planned). We have determined that OMNI was responsible for seventy-five days of that delay (eighty-two days until January 30, 1996, less seven days attributable to the five days of Saturday work the contractor put in after January 30, which made up for days lost earlier) and that GSA was responsible for 185 days. But for OMNI's having fallen behind schedule, P&K would have had five and one-half months to complete the heating system before the onset of winter in 1996, and the mechanical subcontractor might have been able to get the system operational and do its other work in a more efficient way. But for GSA's having imposed the blast design changes, however, P&K would have had nine months to finish the heating system and almost surely could have worked the job as planned. Because GSA is responsible for only seventy-one percent of the delay that bedeviled P&K's penthouse work, we hold the agency liable for only seventy-one percent of the lost productivity in that area, or $76,195.[foot #] 27 ----------- FOOTNOTE BEGINS --------- [foot #] 27 Two notes about this conclusion: First, GSA suggests (and this seems inconsistent with the agency's position that it should be responsible for only those damages which derive from agency-caused delays) that apportioning the responsibility for delay costs is impermissible because OMNI and GSA share responsibility for the delays. This suggestion is not well taken. The agency cites in support of its argument Kelso v. Kirk Brothers Mechanical Contractors, Inc., 16 F.3d 1173 ----------- FOOTNOTE BEGINS --------- (Fed. Cir. 1994), and Blinderman Construction Co. v. United ________________________________________ States, 695 F.2d 552 (Fed. Cir. 1982). In both of these cases, ______ damages were not awarded because the court was not able to apportion responsibility for concurrent delays. Here, we are dealing with two separate periods of delay, each of which was clearly caused by the actions of one of the parties -- first, OMNI fell behind its schedule (during which period OMNI has not (continued...) ----------- FOOTNOTE ENDS ----------- 4. Lost productivity on floors Mr. Crawford testified that the impact of unanticipated conditions on P&K's work on the ground through eighth floors "wasn't as dramatic as [it was in] the penthouse." Transcript at 873. He estimated a ten percent loss of productivity on all work on these floors from concurrent operations, dilution of supervision, and out-of-sequence work, and a five percent loss from competition for labor on two-thirds of the work. These factors, consequently, had an impact of 3,307.75 lost productive hours. Multiplying this number by the blended labor rate of $20.74 per hour yields $68,603, which is the amount of this component of P&K's claim. Id. at 873-74; Exhibit 1300 at V.49- 51. We make two reductions to this amount. First, because the actual number of hours P&K worked in addition to those planned, 2,360, is less than the calculated figure, 3,307.75, we base our allowance on the former figure. See Exhibit 1300 at V.51. The purpose of the calculation is to arrive at a number which reasonably represents the total hours lost due to inefficiency resulting from the delays. Where the derived number is greater than the real one, and no other factors are shown as having affected productivity, we conclude that the calculation must have overstated the impact. Thus, the cost of lost labor productivity on floors ground through eight was 2,360 hours times $20.74 per hour, or $48,946. As with the claim for lost productivity in the penthouse, since P&K incurred these costs due to delays of OMNI as well as GSA, we find that GSA is liable for only seventy-one percent of P&K's costs, or $34,752. ----------- FOOTNOTE BEGINS --------- [foot #] 27 (...continued) asserted any Government-caused delays), and then GSA made numerous, sequential changes in the design of the building (during which period GSA has presented no persuasive evidence that OMNI contributed to the delay). Apportioning responsibility is not only possible, but also sensible. Second, we apply our reasoning in apportioning responsibility for the delay in the construction to numerous components of the claim regarding subcontractor costs, holding the agency liable for only seventy-one percent of costs incurred by the subcontractors. The reasoning does not apply to the first two components of the P&K claim because the costs sought there were incurred as a result of the blast design changes alone, not any delay. ----------- FOOTNOTE ENDS ----------- 5. Overtime P&K seeks reimbursement for the costs of overtime it paid its workers and supervisors after July 21, 1996, less the small portion of these costs it has already recovered.[foot #] 28 The costs are based on the assumption that each hour worked was at a blended wage rate -- $24.20 per hour for supervisors, $20.74 for other workers. The total amount is $73,828. Transcript at 847-50; Exhibits 1300 at V.4-9, 1318 at 1-2. Because P&K did not plan to perform any overtime work on this project, all overtime resulted from the unanticipated conditions. Because GSA was responsible for seventy-one percent of the delay, and the overtime costs were necessitated by the delay, GSA is responsible for seventy-one percent of these costs, or $52,418. 6. Lost productivity - overtime Using the MCA manual, P&K calculates costs of lost productivity due to having to work personnel overtime on the project by multiplying a stated percentage by the numbers of hours so worked, and then multiplying that product by an hourly wage rate. P&K used the percentage for minor impact of overtime work, ten percent, for all hours except for those in which extended overtime was worked; the subcontractor used the percentage for average impact, fifteen percent, for hours in the latter category. The hourly wage rates it used were the ones stated in the previous paragraph. The total cost of lost productivity due to working overtime, per the calculation presented, was $104,194. Transcript at 853-55; Exhibit 1311. According to Mr. Crawford, application of the percentages suggested by another industry manual, published by the Business Roundtable, would have resulted in a figure of $115,719. Transcript at 855-56; Exhibit 1300 at V.10- 24.[foot #] 29 Because P&K uses the MCA manual in pricing jobs, it used that manual for this component of the ----------- FOOTNOTE BEGINS --------- [foot #] 28 P&K also incurred costs of $2,231 in overtime pay to workers who were installing sleeves and inserts in concrete formwork from November 1995 to June 1996. Transcript at 805, 834-35; Exhibit 1300 at VI.75-77. P&K's claim does not include these costs. [foot #] 29 At one point in its brief, the contractor maintains that it is entitled to the number calculated with reference to the Business Roundtable manual. Subcontractor Appendix at 9 nn.3-4. This assertion is inconsistent not only with the brief's summary of the P&K claim, id. at 31, but also ___ with Mr. Crawford's testimony that P&K is not relying on the figure derived from the Business Roundtable publication, Transcript at 856, and that the smaller number is the one claimed, id. at 846 (referencing Exhibit 1319). ___ ----------- FOOTNOTE ENDS ----------- claim. Transcript at 856. GSA has not challenged this part of the claim. We allow seventy-one percent of it, or $73,978. 7. Increased supervision To cope with the unexpected nature of the job, P&K brought more supervision than planned to the site. The number of actual additional hours of supervisory hours worked, times the blended hourly supervisory wage rate, equals $77,851. Transcript at 856- 57; Exhibits 1300 at V.25-37, 1318 at 3-4. GSA, in a cryptic note to its brief, says that P&K's claimed additional supervision costs are actually "foreman costs . . . recorded on its books as direct labor" and are "accordingly . . . duplicative of the P&K inefficiency claim." Respondent's Posthearing Brief at 68 n.116(c). As the contractor says in response, the two components of the claim are quite different -- this one is based on wage costs associated with actual, additional hours worked, and the inefficiency components are based on the application of MCA manual factors to hours from the initial labor plan. Appellant's Reply Brief at 23 n.15. We award seventy-one percent of the amount paid for additional supervision, or $55,274. 8. Payroll burden P&K incurred costs on this job for payroll taxes, fringe benefits, workers compensation, general liability insurance, umbrella insurance, and small tools which resulted in a total burden on payroll of 60.86 percent. Transcript at 874-75; Exhibit 1300 at V.52. GSA has not contested this rate. P&K applies this rate to labor costs described in categories 3 through 7 above. It seeks $262,789 for this component of the claim. Because we have reduced the amounts on which the sum is based to $292,617, we allow 60.86 percent of this amount, or $178,087. 9. Storage P&K paid $28,450 to rent warehouse space in which it stored major equipment it purchased for installation in the penthouse. Transcript at 832-33; Exhibit 1300 at IV. GSA has not argued that the decision to buy this equipment at the appropriate time according to the initial schedule, and keep it on hand so that it could be installed at the earliest possible opportunity, was unwise. We allow seventy-one percent of the cost, or $20,200. 10. Material cost escalation Prices of steel pipe and weld fittings P&K purchased for use on this project were $12,193 higher when the subcontractor actually bought them than they would have been if P&K had purchased them in accordance with the original schedule. Transcript at 831-32; Exhibit 1300 at III. GSA has not contested this component of the claim. We allow seventy-one percent of it, or $8,657. 11. Increased field overhead P&K incurred $989,558 in field overhead costs on this job. It seeks reimbursement of the proportionate amount of these costs which is attributable to the delay in completion of its work, beyond the date originally anticipated in OMNI's schedule, or $271,796. Transcript at 876-80, 894; Exhibit 1315. P&K has reduced this component of its claim by $27,982, to reflect the fact that in contract modification PC21, GSA has paid that amount in P&K field overhead costs. Subcontractor Appendix at 28; see Exhibit 586. We allow seventy-one percent of $271,796, or $192,975, less $27,982 a net amount of $164,993. 12. Markups for home office overhead, profit, and bond premium P&K claims three markups on all of the above amounts home office overhead (3.03 percent, Transcript at 880; Exhibit 1316); profit (ten percent, applied as well to home office overhead, Exhibit 1319); and bond (one percent, applied as well to home office overhead and profit, Exhibit 1319). GSA does not object to these markups. The total amount of the three markups, per P&K, is $137,515. We do not allow any markup on the items described in categories 1 and 2, since the total amount of P&K's request to OMNI for reimbursement of costs in these two categories clearly includes markups for overhead, profit, and bond premium. We calculate the total markup, on the other amounts we have allowed, to be $96,137. 13. Gas piping for winter concrete P&K asked OMNI to pay $24,671 for running a temporary gas main into the building in the fall of 1995 so that the concrete workers could have heat. OMNI paid this amount. Transcript at 802-03, 813; Exhibit 1300 at VI.3-5. Because OMNI was behind schedule before the major blast design changes began and has not convinced us that but for the changes, it would have finished the concrete work before the onset of winter, we find that OMNI would have needed heat in the building even if GSA had not mandated the changes. We therefore conclude that GSA is not liable for this component of the claim. 14. Markup on second tier subcontractor claims P&K subcontracted the sheet metal part of its work to United Sheet Metal, Inc., and the insulation portion of its work to Performance Contracting Inc. Transcript at 781, 942-43. P&K claims markups for profit (five percent) and bond premium (one percent, applied as well to profit) on the claimed costs of these two companies. Transcript at 882; Exhibit 1319. GSA does not contest these markups. Because we award $131,889 based on United Sheet Metal's costs, see infra Part VI.B, and $227,932 based on Performance Contracting's, see infra Part VI.C, the additional markup for P&K is $21,769. The total amount awarded consequent to the claim elements identified with regard to P&K is $856,213. B. United Sheet Metal, Inc. United Sheet Metal, Inc. (USM), the second tier subcontractor responsible for fabrication and installation of ductwork on the project, like its first tier subcontractor, P&K, expected to be able to perform its work in an efficient and productive manner. For USM, this meant fabricating the ductwork at its own shop, transporting the material to the job site as soon as it was made, preassembling and sealing large sections on the floor slabs, and raising those sections into place in the ceiling using mechanical lifts. USM expected that as the supplier of the physically largest and most bulky components of a building system, it would be the first trade into each space and would consequently have an unobstructed area in which to work. In particular, it anticipated that the concrete work would have been completed, the slabs clean, and the reshoring removed. Transcript at 942-45, 948-49. According to OMNI's schedule, USM was to begin installing ductwork as early as September 21, 1995, and no later than October 17 of that year. The project was not ready for USM to begin work at those times, however. Transcript at 945, 950; Exhibits 1401 at 2, 1403. In mid-September, and again in November 1995 and January 1996, USM and P&K raised concerns to OMNI about when, given the obvious delays in progress at the site, ductwork installation might begin. USM explained that scheduling was critical, since fabrication had to occur two to three weeks before installation, and storage of the large sections of ductwork was difficult because it required immense amounts of space. OMNI passed along the inquiries to 3D/I, the consulting firm which served as GSA's field management team on day-to-day operations. 3D/I, on behalf of GSA, directed in October that fabrication continue as planned and refused in November to alter its position. Transcript at 950-62; Exhibits 1403-10. Pursuant to this direction, USM continued to fabricate and store ductwork for this project. Transcript at 953, 958. The sheet metal subcontractor was at last able to start its work at the site on March 11, 1996, but because much reshoring remained in place, materials were still being stored on many of the floors, other trades were mobilizing onto the site as soon as they could work there, and walls and other obstructions were in place, USM could not perform its work as planned. Instead of being able to prefabricate many of the long duct runs on the floor and raise them into place with a lift, this subcontractor had to install one piece at a time and have workers connect them while standing on ladders. USM had to add an additional foreman to its workforce to cope with having to work at several places in the building at the same time, instead of being able to move through the building as planned, and having to redesign some of the ducts as a consequence of the blast design changes. Transcript at 946-48, 972-74, 980-81. Although USM had planned to complete virtually all its work by the end of June 1996, it was not able to finish even the rough-in work until January 1997. Id. at 968, 984-85, 993; Exhibit 1401 at 1. USM has identified four areas in which its costs were affected by the delay in the site becoming available to it and the impact of unexpected working conditions. First, USM maintains that it incurred $52,505 in costs of storage and extra handling of material. Second, the subcontractor asserts that a wage rate increase which took effect on June 30, 1996, pursuant to a collective bargaining agreement, added about $18,161 in wages paid after that date. (The actual number is higher, but USM restricts its claim to this amount.) Third, USM spent $5,013 to orient its additional foreman to the project. Fourth, this subcontractor estimates, based on its production reports and a comparison to other, similar jobs, that it incurred labor inefficiency costs of $110,080. All of these amounts include markups. The total sought is $185,759. Transcript at 963-82; Exhibits 1400, 1413-15. GSA does not address this claim in its briefs. The agency has given us no reason to question any of the costs, all of which appear reasonable and adequately explained. Consistent with our conclusion that GSA is responsible for seventy-one percent of the delay impacts on the subcontractors, we award seventy-one percent of the amount sought based on USM's costs, $131,889. C. Performance Contracting, Inc. Performance Contracting, Inc. (PCI), as a second-tier subcontractor (to P&K), was responsible for insulating the building's plumbing and heating, ventilation, and air conditioning systems. Transcript at 781, 900. PCI planned to perform its work by starting in the lower levels as soon as P&K's work had been tested and approved, and moving up through the structure, completing areas and cleaning up after itself as it went. Id. at 900, 904-05. Although the start of PCI's efforts on the project was very much delayed, once this subcontractor came onto the job in earnest, it was able to work productively. During August, September, and much of October 1996, PCI encountered a significant inventory of work and was able to proceed in a logical and reasonable manner. In this period, PCI was approximately twenty-six percent ahead of its estimate of labor costs. As P&K's crews had to move back and forth through the building, however (for example, installing hot water pipes and then returning to the same areas to install chilled water pipes), the insulator's crews who followed them were also forced to work in a less efficient way. For a spell, little work became available to PCI and this subcontractor had to reduce the number of personnel on the job. Then in December 1996 and January 1997, large portions of work were released for insulation, requiring PCI to increase its manpower and work unscheduled overtime. The presence of other trades in areas where PCI was working also reduced the efficiency of the work. Because PCI had to work in so many parts of the building at once, its foreman, who had been a working foreman, had to devote all his time to supervision. Instead of finishing its work by August 1996, PCI did not complete its part of the project until April 1997. Transcript at 901-11, 913, 938; Exhibits 1356-57, 1363. PCI has identified four cost impacts it suffered as a result of performing its work the way in which it actually did, as opposed to the way it planned: loss of labor productivity ($241,883), additional supervision ($11,572), material escalation ($2,868), and labor escalation ($3,975). With successive markups of 10.9 percent for overhead, ten percent for profit and 1.1 percent for general liability insurance, the total impact costs claimed are $321,031. Transcript at 912-26, 930-35, 939-40; Exhibits 1359-64, 1366. GSA does not address this portion of the claim in its briefs (except to commend PCI's use of a measured mile to calculate its cost of lost labor productivity, see supra note 26). This part of the claim, as presented and explained, appears reasonable; we have no reason to question any of the costs. Consistent with our conclusion that GSA is responsible for seventy-one percent of the impacts of delay on the subcontractors, we award seventy-one percent of the amount sought consequent to costs incurred by PCI, $227,932. D. The Fireguard Corporation OMNI subcontractor The Fireguard Corporation (Fireguard) designed and installed the fire sprinkler protection system in the FBI building. Transcript at 696; Exhibit 1451. The difficulties which befell Fireguard in performing its work on the project mirror those which troubled subcontractor P&K and its second-tier subcontractors. Fireguard considered the project to be a typical office building and consequently planned to perform the job as it generally does in such structures, working one floor at a time with a two-man crew, starting at the bottom. As usually happens, Fireguard would follow the trades which installed ductwork and plumbing. On a floor-by-floor basis, it would deliver materials to the site and rough-in sprinkler mains, lines, and heads. Once the ceilings were installed, it would return to each floor to center sprinkler heads in ceiling tiles. Fireguard planned this job on the standard assumption that when its turn came, it would have a clear, open floor on which to work. It expected that once the job was underway, its project manager's presence would be required only occasionally. Transcript at 697-99, 705, 708, 721. Fireguard's president, Ben Bonanni, testified that "[t]he actual work was greatly more difficult than typical projects that we had done in the past." Transcript at 720. On basement levels B4, B3, and B2, reshoring remained in place due to the blast design changes. This "had a terrible effect on the work," according to Fireguard's project manager, Mark Combs. The subcontractor had planned to install sprinkler piping in twenty- one foot lengths. The reshoring was positioned every eight feet or less, however, so Fireguard had to cut the piping to shorter lengths and work around the obstructions. Above the B2 level, floors were not always ready when Fireguard had anticipated; to continue its work, the subcontractor had to move around the building, doing work out of sequence. Because work could not be performed as originally envisioned, Fireguard had to add more personnel to the job and work some unplanned overtime, and its project manager and field superintendent had to spend more time than planned there. Additionally, delivery of materials had to be on a day-by-day, rather than floor-by-floor basis, greatly increasing the number of deliveries. The presence of other trades in areas in which Fireguard was working and unusual amounts of materials on the floors also made work less efficient. Because the work was performed considerably later than originally scheduled, and prices for necessary materials increased in the interim, Fireguard had to pay more than anticipated for materials as well. Id. at 303, 306-07, 699-705, 709, 711, 726-27. Fireguard has identified the following cost impacts of its having performed its work under conditions changed greatly from those on the basis of which it prepared its bid: lost productivity on basement levels B4-B2, $23,440; lost productivity on higher floors, $26,634; additional project management, $33,945; additional supervision, $8,486; additional design costs, $4,896; overtime premium, $7,711; overtime inefficiency, $3,917; additional cartage, $13,913; material escalation, $7,024; and successive markups for overhead (16.4 percent), profit (ten percent), and bond cost (2.5 percent), $40,602. Transcript at 706-11, 713-17, 722-37; Exhibits 1450, 1456-64, 1466, 1468-70; Subcontractor Appendix at 52 n.6. GSA has two objections to these amounts. First, it urges us to disallow any overhead, because the overhead amount was based on "an Eichleay calculation" (referring to the method for determining a contractor's recovery of extended home office overhead during a period of suspension of work, see West v. All State Boiler, Inc., 146 F.3d 1368, 1372-73 (Fed. Cir. 1998); Wickham Contracting Co. v. Fischer, 12 F.3d 1574, 1580-81 (Fed. Cir. 1994)) and Fireguard did not provide data required for making such a calculation. Respondent's Posthearing Brief at 66 n.108. Although the original claim for costs relating to Fireguard's performance included an amount based on the Eichleay formula, the current claim does not. Fireguard now seeks instead, as compensation for overhead costs incurred, a markup of 16.4 percent on labor and material costs. It has provided an accounting of how it calculated that percentage. The accounting is modified in response to an issue raised by agency counsel at hearing. Transcript at 734-35, 740-41; Exhibits 1456, 1470; Subcontractor Appendix at 52 n.6. GSA has not suggested that this revised calculation is flawed. The agency's second objection to Fireguard's claim is that it is based on the theory that GSA is responsible for all of the delay in the progress of the concrete work, although OMNI should share some of the responsibility. Respondent's Reply Brief at 28-29. As we did with regard to the P&K portion of the claim, we allow all of the claim for Fireguard's lost productivity on work on levels B4 through B2, since the design changes were the sole cause of the problems there, but only seventy-one percent of the remaining portions relating to Fireguard, since these costs resulted from the delay, twenty-nine percent of which was OMNI's responsibility. The total awarded is $130,024. E. Mona Electrical Construction Subcontractor Mona Electrical Construction (Mona) performed virtually all the electrical work in the FBI building. Transcript at 623. When OMNI filed its claim with the contracting officer, the portion attributed to Mona's costs was more than one million dollars. Exhibit 92 at 4. Some of the matters encompassed in this portion of the claim have been resolved, Exhibit 636, and Mona seeks very little of the sum in this proceeding. Mona was concerned that if it canceled orders for electrical generators, switch gears, paralleling equipment, and lighting fixtures for which long lead times were necessary, it would be unsure of having the items when installation became appropriate. It therefore kept the orders in place and paid to have the items stored until they were needed on the site. The cost of the storage was $12,201. Mona also performed all electrical work involved in the relocation of trailers which would have been removed from the site before the time of relocation if construction had proceeded in accordance with the original schedule. The cost of this labor was $3,337. Transcript at 623- 29; Exhibits 1500-01. GSA makes two comments specifically about Mona's claim. The first is that Mona's calculation of extended home office overhead is inappropriate. Respondent's Posthearing Brief at 67 n.115. This criticism does not pertain to the amounts claimed at hearing or in the contractor's posthearing brief, Subcontractor Appendix at 55-56; it is clearly off-point. The second comment is that the amounts for storage and trailer relocation labor should be reduced to reflect shared responsibility for the delay in construction progress. Respondent's Reply Brief at 29. We award seventy-one percent of the amount claimed, or $11,032. F. Southern Ironworks, Inc. Southern Ironworks, Inc. (Southern), fabricates structural steel for steel buildings and had a subcontract with OMNI to fabricate and erect the steel for the penthouse of the FBI building. It was required by the subcontract to supply the steel, cut it to size, weld it together, and place it in the building. It entered into an agreement with Williams Steel Erection Company (Williams), which thereby became a second-tier subcontractor, for the erection of the steel. Transcript at 747- 48, 757-58. Southern was originally scheduled to deliver the structural steel to the site on October 1, 1995, and begin erection immediately. Under this schedule, the subcontractor would not have had to store any of the steel. Because of the delays in the concrete work, Southern did not deliver its first shipment of steel until June 12, 1996. It had to store and re-handle the steel, which weighed 148 tons, in the interim. The cost of storage was $5,920, and the cost of rehandling the material was $8,160. Transcript at 312, 748-54; Exhibit 1800A. Williams also incurred unexpected costs because of the delay. The crane it had planned to use was not available in June 1996, and Williams incurred $1,720 in additional costs in renting another crane. Its costs of workers compensation insurance was $2,717 higher than it would have been if the work had taken place prior to December 1, 1995. Williams had to duplicate the process of getting its personnel security clearance badges to enter the work area, at a cost in lost time of $640. Williams added successive markups of fifteen percent for general and administrative expenses and ten percent for profit to these amounts, and calculated its additional costs to be $6,422. Transcript at 758-66; Exhibit 1805. Southern added a ten percent commission to Williams' charges. Thus, the total amount of Southern's additional costs for erection of the structural steel is $7,064, and the total amount of its costs claimed for all activities relating to the steel is $21,144. Transcript at 753- 54; Exhibit 1801A. GSA does not quarrel with any of these amounts; it urges us only to reduce the total to reflect the agency's responsibility for but a part of the delay. Respondent's Posthearing Brief at 75. We do this by awarding seventy-one percent of the claim, or $15,013. Of this amount, $9,997 is attributable to costs incurred by Southern, $4,560 to costs incurred by Williams, and $456 to Southern's commission on Williams's costs. G. Exposaic Industries OMNI entered into a subcontract with Exposaic Industries (Exposaic) to fabricate and erect the pre-cast concrete skin of the FBI building. Exposaic subcontracted the erection part of this work to Skyline Steel Erectors (Skyline). Transcript at 641, 672-73. Erection of the pre-cast concrete was originally scheduled to occur from September 20, 1995, to February 20, 1996. The job was clearly not ready for these subcontractors to begin their work in accordance with this schedule, and although they inquired on several occasions as to when it would be ready, OMNI and GSA were unable to give them a definite answer. Id. at 687- 88. (This is not surprising, given the succession of design changes which GSA issued during the fall of 1995, each contributing to the delay and some compounding it by mandating alterations to work already performed. See supra Part II.B.) Erection of the pre-cast skin did not actually begin until April 29, 1996, and did not end until the end of September of that year. Transcript at 642, 661, 674, 678, 691. Exposaic's regular practice, and the one it anticipated following when it constructed its bid for this project, is to manufacture fifty to sixty percent of the pre-cast panels, and store them temporarily in its yard, before starting the erection process. As erection progresses, Exposaic continues fabrication and ships panels to the job site when they are needed. The panels are very heavy; Exposaic moves them within its yard, and loads them onto trailers for shipment to the job site, with cranes. Transcript at 641-43, 647-48. Exposaic used its most efficient crane, one with a fixed location in the yard, to perform this function with regard to the materials for the FBI building. There was no space at the job site for storage of Exposaic's materials. Consequently, the panels which were initially constructed remained on forty-two percent of the area served by the fixed crane until they were shipped to the site, depriving the subcontractor of the ability to use that percentage of the area served by that crane during that time. Id. at 643- 46, 664; Exhibit 1551. (Exposaic could have moved the panels to other parts of its yard, but in light of the uncertainty of the length of time before the materials could be sent to the job site, and the high cost of moving them, the subcontractor decided not to move them. Transcript at 664-67. The record does not contain any basis for finding that this decision was unwise.) Exposaic also stored other panels it manufactured for this job elsewhere in its yard. Id. at 648-50; Exhibit 1552. When the FBI building was finally ready for erection of these panels, Exposaic was busy working on fifteen other projects -- five more than it had been performing when work on the FBI building would have occurred if all had gone as planned. The subcontractor's equipment for moving the panels to the site -- cranes to load the materials and trailers to transport them -- were occupied with the other jobs, so Exposaic had to rent an additional crane and numerous extra trailers to perform under its subcontract with OMNI. Its employees were busy as well, and it had to have them work overtime to load the materials. Transcript at 650-58. OMNI claims that GSA should pay forty-two percent of the fair rental costs of Exposaic's fixed crane for eight months, a total of $34,778. It also claims the fair rental cost of the areas away from the crane which were used for storage ($7,000) and depreciation on racks on which the material was stored ($5,326) for a period of eight months. The claim additionally seeks reimbursement of the costs Exposaic incurred in renting the additional crane to move the pre-cast panels ($17,556), in renting additional trailers to deliver the product to the job site ($20,572), and in overtime premium pay of laborers who loaded the panels on trailers and their supervisors ($6,930). Exposaic acknowledges that it has already been compensated by GSA for some of the cost of the crane rental ($11,704) and the trailer rental ($7,143); thus, the claims for those items are only $5,852 and $13,429, respectively. Exposaic applies successive markups of ten percent for overhead and ten percent for profit to each of the claimed amounts. Transcript at 644, 647, 649-58, 668-70; Exhibits 1550, 1555-57, 1559. GSA's sole particularized comment about Exposaic's part of the claim is, "The only reasonable cost confirmed by Barrington was $46,254 for rental of additional cranes." Respondent's Posthearing Brief at 66 n.107. We do not understand the import of this comment; Exposaic's portion of the claim involves rental of only one additional crane, and the amount of that claim is much less than the agency references. We do make two reductions from the amounts sought, however. The amounts for the fixed crane, storage of panels, and depreciation of racks used for storage are all based on an eight-month delay. Exposaic's participation in the project was delayed from the end of September 1995 to the end of April 1996 -- seven months, not eight. Thus, we reduce these amounts by one-eighth, to $30,431, $6,125, and $4,660, respectively. Then we reduce these amounts further, and all other amounts claimed (which appear reasonable) other than markups, by twenty-nine percent in keeping with our conclusion that GSA is obligated to pay for only seventy-one percent of the delay costs. The total we find attributable to costs incurred by Exposaic, after applying the markups which this subcontractor employs, is $57,927. Exposaic's second-tier subcontractor, Skyline, had planned to use a very large crane, a 4100 Manitowoc mobile tower crane, on this project. An immense crane was necessary because of the limited access to the site. Transcript at 673, 691. Because the 4100 is expensive and requires a specially trained operator, Skyline attempts to schedule jobs for its use on an almost continuous basis. Skyline planned to have this crane in operation on a project in Reston, Virginia, through early September 1995, move the crane to the FBI building for use between September 20, 1995, and February 20, 1996, and then move it again to Patuxent Naval Air Station, Maryland, for use beginning in March 1996. When the FBI project was not ready for erection of the pre-cast concrete skin in September 1995, Skyline left the 4100 in Reston until October, when the owner of the property on which it was located ordered Skyline to remove it from that site. Skyline then moved the 4100 to the Naval Air Station site, which had much open space. The crane remained idle until January 1996, when Skyline assembled it and used it to help another contractor take down its crane at no charge. Then Skyline used the 4100 to install panels which could as efficiently (with one small exception: the smaller crane would have had to be moved four times to do the work the 4100 could do while stationary) have been erected with a smaller crane; the smaller crane and its operator sat idle while this was happening. Finally, on March 20, Skyline began using the 4100 at the Naval Air Station for the purpose for which it had brought the crane to that site. It completed the work there in mid-May and moved the crane to the FBI building on May 17.[foot #] 30 Id. at 674-81, 688-89. Skyline did not use the 4100 on any of its other jobs, because it already had cranes at those sites and substituting the big crane for a smaller one would have had no economic benefit. Transcript at 678. Finding another project on which to work would have been difficult, since a crane like this one is too big to be used on many jobs and is usually scheduled at least six months in the future. Skyline did nonetheless attempt to rent the 4100 during the time the crane was sitting idle; it was unsuccessful. Id. at 677-78, 687. The subcontractor was also unable to find productive work for the operator of the crane. Nevertheless, it thought that laying off the operator would be imprudent. George Claessen, who was Skyline's vice president at the time the FBI building was being constructed, testified that only four or five people in the Washington metropolitan area are capable of operating a 4100. Id. at 682. He explained, "[T]here's certain people you do not lay off in the construction industry. . . . You don't lay off crane operators. . . . A crane operator, especially one of this skill, you just don't find anywhere. And you lay him off and he'll go off to your competition . . . . And you know, six months down the road, when it's time to erect the FBI job, then you won't be able to find . . . that operator or even one with comparable talent who can run the 4100." Id. at 683. OMNI seeks reimbursement for the costs Skyline incurred by not having the 4100 in use at the FBI site from September 20, 1995, to February 20, 1996, as planned. The subcontractor calculates that this period of time encompassed 105 working days. It values the crane itself at $600 per day (though Mr. Claessen noted that an Army Corps of Engineers manual says that the worth of a comparable crane is more than twice this amount). The cost to Skyline of the crane operator was $282 per day. Both of these figures were used by agreement with GSA in other contract modifications on this job. The total of the two costs, $882 per day, times 105 days, is $92,610. Skyline subtracts from this amount the estimated amount it saved by using the 4100 instead of the smaller crane at the Naval Air Station -- $880, the cost of moving the smaller crane four times. With successive markups of thirty percent for overhead (the percentage used on other ----------- FOOTNOTE BEGINS --------- [foot #] 30 Because the FBI building was ready for erection of the pre-cast concrete on April 29 and Skyline could not move the 4100 to the site until its work was complete at the Naval Air Station, GSA paid for another huge crane to be shipped from Norfolk, Virginia, to be in use at the site until the 4100 arrived. Transcript at 678-79, 691-92. ----------- FOOTNOTE ENDS ----------- contract modifications on this project) and ten percent for profit, the total is $131,174. Transcript at 679-86; Exhibits 1600, 1603. Exposaic has claimed a ten percent commission on Skyline's amount. Subcontractor Appendix at 68. GSA has not contested Skyline's rationale or calculations, and both appear reasonable to us. Because the amounts sought result from the construction delays, and GSA was responsible for seventy-one percent of those delays, we award seventy-one percent of the sums sought -- $93,134 based on Skyline's costs and $9,313 in commission to Exposaic. When combined with the $57,927 we have allowed based on costs incurred by Exposaic itself, the total amount awarded for costs by Exposaic and its second-tier subcontractor is $160,374. H. DuPont Flooring Systems (formerly Kemper Carpet) OMNI entered into a subcontract with Kemper Carpet (Kemper) for the supply and installation of carpet tile, vinyl composition tile, resilient tile, and vinyl base on this project. Kemper has been purchased twice since the subcontract was signed and is now owned by DuPont Flooring Systems. Transcript at 630-31. The subcontract required Kemper to have its materials delivered to the job site by April 1, 1996. To meet this deadline, Kemper had to order the materials from its supplier by the end of December 1995. Kemper did place its order by this date. The building was not ready for tile installation by April 1, 1996, however. Kemper had to store the materials in a warehouse for nine months, until the building was ready. In so doing, the subcontractor incurred costs of $18,495 -- $9,000 for warehouse rental, $3,600 to insure the materials while they were in the warehouse, $1,100 for double-handling of the materials (Kemper had initially planned to have the tiles delivered directly from the supplier to the job site, thus requiring only one delivery cost), and markups of twenty-five percent on the above costs for overhead ($3,425) and ten percent on those costs for profit ($1,370). Transcript at 631-40; Exhibits 1750-53. If Kemper had waited until after December 31, 1995, to order its materials, a price increase would have caused the cost of the materials alone to have climbed by about $38,000, nearly twice the costs actually incurred. Transcript at 639. GSA has not challenged any aspect of the claim for this subcontractor's costs, other than to disavow responsibility for the entirety of the period of delay during which the materials were stored in the warehouse. We conclude that Kemper acted prudently to mitigate the cost of the delay and that because GSA was responsible for seventy-one percent of the delay period, it should pay seventy-one percent of the costs which resulted from the delay, which were, for Kemper, $13,131. I. Irvine Access Floors, Inc. OMNI subcontractor Irvine Access Floors, Inc. (Irvine) was responsible for supplying and installing raised access flooring in the FBI building. Raised access flooring is a type of flooring under which computer, communications, and electrical wiring may be run. The particular flooring specified for this building was rated for heavy duty and had to be specially made. The manufacturer required that the flooring be ordered thirteen to sixteen weeks before delivery could be promised. Transcript at 308, 1051-53. The subcontract between OMNI and Irvine provided for delivery of the flooring to the site in January 1996. In the early fall of 1995, OMNI and Irvine realized that the building would not be ready for installation of the access flooring in January, so they did not place an order for manufacture of the flooring as planned. In January, however, the two firms decided not to wait any longer to place the order; they were concerned that delays in either the production of the steel required to make the flooring or the production of the flooring itself could result in the material not being available when installation was necessary. Further, postponing the placement of the order would not result in any cost savings, since escalation in the price of the product to Irvine and storage costs were about equal. Irvine incurred three varieties of unanticipated costs because of the delays in the construction: $51,954 in costs resulting from price escalation to the date on which orders were placed; $40,347 in storage charges; and $35,235 in freight and handling costs above what Irvine would have paid if the materials had been delivered directly from the manufacturer to the job site, as planned. All these figures include Irvine's markups. Transcript at 1053-73; Exhibits 1855A, 1859A. GSA's only comment about the components of the claim relating to Irvine's costs is that a reduction commensurate with OMNI's responsibility for the overall delay in construction should be made. We award seventy-one percent of the costs claimed, or $90,551. J. Maryland Applicators, Inc. Maryland Applicators, Inc., had a subcontract with OMNI to furnish and install drywall and other materials on this project. Exhibit 1905. OMNI's claim, as presented to the contracting officer, included $219,670 related to a claim of this subcontractor. Exhibit 92 at 4. The material submitted as part of OMNI's claim included a letter from Maryland Applicators to Clark Construction Group which states: The following is Maryland Applicators' cost impact due to blast modifications. 1. Material - Total Escalation: $153,024.00 . . . . 2. Damage to metal framing throughout building due to framing being exposed for a prolonged period before drywall was hung. . . . Cost incurred for this item: $32,882.00. 3. Capitol Insulation has submitted the attached claim. Capitol Insulation $30,695.00 Maryland Applicators 10% 3,070.00 $33,764.00 TOTAL ADDITIONAL COSTS DUE TO BLAST IMPACT: $219,670.00 Id., tab 19 at 1. The remainder of the material in the claim pertaining to Maryland Applicators consists of a certification from that company and documentation which appears intended to support the amounts for material escalation, metal framing damage, and Capitol Insulation. Id., tab 19 at 2-9. Capitol Insulation Services, Inc. (Capitol) was a second-tier subcontractor which performed perimeter insulation. Transcript at 1118, 1133. Resolution of these three issues is not complicated. (1) Under the subcontract between OMNI and Maryland Applicators, the subcontractor's materials for this job were to be on site by December 1, 1995. The orders Maryland Applicators placed for these materials provided for delivery on or about that date and escalation of prices if delivery were to occur later. Transcript at 1102, 1105; Exhibit 1905 at 39. Maryland Applicators did not actually begin its work on the project until May 1996. Transcript at 1111. The parties and Maryland Applicators have stipulated that "Maryland Applicators incurred $75,134 in material escalation costs arising from delays, acceleration and/or disruptions associated with the Project." Exhibit 1916 at 1. Because GSA was responsible for seventy-one percent of the delay, we award seventy-one percent of this amount, $53,345. (2) OMNI presented no testimony regarding the metal framing damage matter, did not explain the meaning of the documents in the claim which appear to relate to this matter, and did not mention the matter in its posthearing brief. We conclude that OMNI has abandoned this component of the claim and consequently deny it. (3) David Procida, Capitol's vice president, testified that because of the delay in his firm's beginning work on this job (from late summer 1995 to August 1996), Capitol incurred estimated escalation costs of $12,970 for non-standard material it needed to perform its work and $6,036 for wages of personnel who installed that material. He also testified that the company's standard markup for overhead and profit is twenty percent. With that markup, Capitol's cost resulting from the delay was $22,807. Transcript at 1133-37; Exhibit 1913. GSA agrees that these costs were both reasonably incurred and attributable to the delay. Respondent's Posthearing Brief at 67 n.114. GSA is responsible for seventy-one percent of the delay costs -- here, $16,193. At hearing, testimony and documentation were presented in support of a request for reimbursement in the amount of $160,951 to compensate OMNI for labor inefficiency costs allegedly incurred by Maryland Applicators. Transcript at 1100-05, 1110- 24; Exhibits 1901-05, 1908-11. In its posthearing brief, OMNI pursues this amount as a measure of Maryland Applicators' labor inefficiency. Subcontractor Appendix at 75-78. GSA urges us to dismiss for lack of jurisdiction the request for reimbursement relating to Maryland Applicators' alleged labor inefficiency, on the ground that this matter was not included in the claim which was presented to the contracting officer for decision. In support of this position, the agency cites Santa Fe Engineers, Inc. v. United States, 818 F.2d 856 (Fed. Cir. 1987). Respondent's Posthearing Brief at 67 n.114, 80-81. In response, OMNI notes that its claim included many components pertaining to labor inefficiency of subcontractors, and that the contracting officer's decision denies those components of the claim collectively. Thus, says OMNI, the reimbursement it seeks as a result of Maryland Applicators' labor inefficiency is the same relief sought from the outset -- "an equitable adjustment compensating [the contractor] for the additional costs by reason of changed work and delays" -- and addressed by the contracting officer. The quoted portion of the last sentence is a snippet from Hyman-White, Joint Venture, GSBCA 9632, 90-3 BCA 23,124, at 116,094 n.3. In support of its position, OMNI cites this case and also references Stroh Corp. Appellant's Reply Brief at 29-30 & n.20. In Santa Fe Engineers, the Court of Appeals for the Federal Circuit explained that when a claim is before a board of contract appeals, "a contractor may increase the amount of his claim, but may not raise any new claims not presented and certified to the contracting officer." 818 F.2d at 858. Where a new claim has not been presented to the contracting officer (and where certification is a statutory prerequisite, has not been certified), the contracting officer has not had an opportunity to review the claim first, and thus, the board does not have jurisdiction over it. Id. at 858-59; see 41 U.S.C. 605(a), (c) (Supp. II 1996). A claim, the Court has stated elsewhere, is "a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim." H.L. Smith, Inc. v. Dalton, 49 F.3d 1563, 1565 (Fed. Cir. 1995) (quoting Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987)). Whether a matter placed before a board is a new claim or part of the claim presented to the contracting officer consequently "turns on whether the matter raised before the Board differs from the essential nature or the basic operative facts of the original claim." Stroh Corp., 96-1 BCA at 141,130 (quoting Trepte Construction Co., ASBCA 38555, 90-1 BCA 22,595, at 113,385). Where the appellant supports the same matter earlier presented to the contracting officer through a different legal theory, the board has jurisdiction to consider the issue; where the matter in dispute requires proof of circumstances different from those relating to the one presented to the contracting officer, however, the matter is a new claim and the board may not review it. Hyman-White, 90-3 BCA at 116,094 n.3 (citing SMS Data Products Group, Inc. v. United States, 19 Cl. Ct. 612 (1990)). We conclude that Maryland Applicators' alleged costs resulting from a loss of labor efficiency are a very different matter from the company's asserted costs resulting from damage to metal framing throughout the building due to exposure for a prolonged period before drywall was hung, or from either of the other two matters raised in OMNI's claim which relate to this subcontractor. The testimony and documentation relied on by OMNI in support of the request for reimbursement of labor inefficiency costs is entirely different from the proof which supported the other two elements of the Maryland Applicators portion of the claim as to which the contractor presented evidence, and bears no relation to any damage caused by exposure. That other components of the claim pertained to other subcontractors' labor inefficiency, and that the contracting officer addressed those components in her decision, does not have any bearing on whether the matter of Maryland Applicators' putative labor inefficiency was ever presented to the contracting officer. Thus, we dismiss this part of the claim for lack of jurisdiction. The total awarded, with regard to costs incurred by Maryland Applicators and its second-tier subcontractor, Capitol, is $69,538.[foot #] 31 K. James Myers Company, Inc. OMNI entered into a subcontract with James Myers Company, Inc. (Myers) to perform waterproofing, roofing, and some other work on the FBI building. The waterproofing work was to occur on the foundation subgrade walls; at the planters, plazas, and ramp locations on the ground level; and in the penthouse's mechanical room. The roofing work was to take place at various levels of the building and above the penthouse on the top of the building. Much of the waterproofing and roofing involved heating a rubberized asphalt substance over indirect heat in a double- ----------- FOOTNOTE BEGINS --------- [foot #] 31 We note that OMNI's claim includes a ten percent commission for Maryland Applicators on the portion of the claim relating to Capitol's costs. Exhibit 92, tab 19 at 1. In its posthearing brief, however, OMNI does not seek such a markup. Subcontractor Appendix at 75-80. Consequently, we conclude that OMNI has abandoned the request for the markup and do not award any amount for it. ----------- FOOTNOTE ENDS ----------- jacketed melter, then applying a membrane of this substance in layers over concrete surfaces. Transcript at 1010-13, 1031; Exhibit 2102. Myers planned to begin this work in May 1995, with waterproofing work on the foundation, and after completing the waterproofing there and at the ground level, moving its equipment and personnel to the roof areas. Under this design, all work would be completed by April 1996. Like other subcontractors, Myers premised its plans and its bid on the assumption that unobstructed work spaces would be made available to it, so that it could perform its work in a continuous operation. Transcript at 1013-14, 1018, 1029; Exhibit 2100. At first, Myers's work went as envisioned. As the subcontractor approached the ground level, however, GSA began issuing blast design changes and the work slowed significantly. Myers was able to complete its efforts on the foundation in March 1996. It was unable to move on to the plazas and the planter area, however; those spaces were cluttered with other trades' equipment and materials. The spaces did not become available to Myers until August 1996, and Myers could not finish its work there until December of that year. Transcript at 1017-18. Meanwhile, the roof areas, where Myers was supposed to begin its work in March 1996, did not become available until varying times from August to December 1996. Myers could not start in any roof area until all concrete work there had been completed and the pre-cast concrete skin installed; in some places, it had to wait for structural steel work and some wood framing and gutter work to be completed, as well. Myers did not have unobstructed access to areas at the top of the penthouse, where it needed to take field dimensions and have panels manufactured to fit, until February 1997. Clutter was also a problem on roof surfaces; the terraces were often the only spaces at the upper levels of the building in which other subcontractors could store their equipment and materials, and because Myers had to make an entire terrace waterproof at once, it could not work in an area until all items had been removed. Myers was working on the site until April 1997; thus it spent nearly twice as much time there as it had planned. Transcript at 1019-28. Myers has identified four cost impacts resulting from the differences between planned and experienced working conditions on the job. (1) Because the subcontractor was not able to use the same melting kettle for waterproofing on the ground level and for roofing above, it had to bring a second kettle onto the job, and because the roofing work was scattered, it had to bring on yet another kettle to melt substances at the upper levels. The cost of the additional melting kettles was $60,590. (2) Myers had to keep supervisors on site for much longer than planned, at a cost of $18,423 (including the cost of the vehicles which the company provides for supervisors). (3) Wages paid to personnel on the job increased on July 1, 1996, pursuant to a collective bargaining agreement. The cost of labor escalation was $5,441. (4) Because the delays left Myers with insufficient time to perform its work at the planned rate, the subcontractor was forced to pay its employees premium wages for some overtime work. The time for manufacture of panels at the top of the building was especially compressed, and Myers paid the overtime costs incurred by the maker of these items, Milgo Industrial Inc., so that it could complete the work by April 1997. Total overtime costs to Myers were $27,578. The above costs for labor include a burden for fringe benefits, insurance, and other costs, equal to the average burden Myers paid for work in the District of Columbia during the relevant time period. All the above costs include markups for overhead (23.63 percent) and profit (ten percent). Transcript at 1027-48; Exhibits 2124-28, 2135. GSA says that its cost consultant, Barrington, "was unable to confirm the costs claimed for [Myers's] additional labor, material and equipment." Respondent's Posthearing Brief at 67 n.112. The agency does not make any specific objection in its briefs, however, to any of the costs asserted above through the testimony of Richard W. Myers, a Myers project manager, and in OMNI's brief. GSA also complains that "Myers calculated lost overhead using a disfavored modification of Eichleay." Id. This comment is off-point. Myers has not claimed any extended home office overhead, as a contractor might through the use of the Eichleay formula. See supra Parts VI.D, VI.E (rejecting GSA comments as to claimed costs of subcontractors Fireguard and Mona). The only overhead Myers claims is a standard markup, representing the firm's actual overhead costs for its fiscal year ending June 30, 1997. Transcript at 1042-43; Exhibit 2124 at 2. All the claimed costs are supported by evidence presented in this case. Since they all result from the delay in construction, we award seventy-one percent of them, or $79,543, reflecting GSA's share of the responsibility for the delay. L. Harmon, Ltd. Subcontractor Harmon, Ltd. (formerly known as Harmon Contract W.S.A., Inc.) (Harmon) was responsible for furnishing and installing all the exterior windows and all the exterior natural stone products on the FBI building. Transcript at 1079- 80. Harmon pre-assembles and pre-glazes all its window systems at its shop. It assigned a 62,000 square foot portion of the facility to this project, for fabrication to begin on September 28, 1995, and end on March 1, 1996. Harmon had agreed with OMNI to begin hanging the windows on the building on December 4, 1995, and complete that work by the end of March 1996. Stone work on the building would precede installation of the windows by about a month. Transcript at 1080-81; Exhibit 2031. Due to the delays in the portions of the construction which had to be completed before Harmon began installing windows, Harmon did not begin fabrication until April 1, 1996. The space assigned to this job in the company's facility remained idle until that date. According to the uncontested testimony of Dennis Lawrence, a Harmon project executive, Harmon's work requires long lead times, and especially because of the uncertainty as to when this project would be ready for windows to be hung, the company was unable to make use of the space for another customer. The shop work continued until August 30. Stone work began at the building in mid-June; the windows were installed from June 22 through October 31. A portion of the facility had to be used for storage of completed window units from August 31 until all units had been hung. Transcript at 1083-84; Exhibit 2031. The financial impact of the delay on Harmon was considerable. The subcontractor absorbed the costs of rental of the 62,000 square feet of warehouse space, utilities for that space, a proportionate amount of the plant supervisor's wages, and the entire pay of the project manager for this job (whom Harmon was not able to reassign) from September 29, 1995, through April 1, 1996. The total cost was $185,442. Harmon also had to absorb the costs of the portion of the space used for storage from August 31 to October 31, 1996 -- $17,703. As a result of work being postponed until after wage increases had taken effect, Harmon incurred labor escalation costs of $68,354.[foot #] 32 The project manager for the stone work was reassigned to a job in another city, and according to Mr. Lawrence's uncontested testimony, the costs of coordinating efforts between him and his successor were $12,212. With markups for overhead, profit, and bond,[foot #] 33 the total amount of the claim deriving from costs to Harmon is $330,387. Transcript at 1084-92; Exhibits 2027R, 2030R. GSA's only comment specifically regarding this component of OMNI's claim is, "Harmon did not make available all the data requested by Barrington. Based on the data available and certain ----------- FOOTNOTE BEGINS --------- [foot #] 32 Harmon divided this portion of the claim as follows: escalation of wages of shop labor, $7,777; of field labor on window installation, $29,603; of field labor on stone work, $18,174; and of project management, $12,800. Transcript at 1088-91; Exhibits 2027R, 2030R. [foot #] 33 Overhead claimed is seven percent on window costs (except for the project manager's wages, for which overhead is included in the calculation of warehouse and labor escalation costs) and ten percent on stone costs; profit claimed is ten percent on all costs, including overhead; and a bond markup of one percent is claimed on only the stone costs and overhead and profit associated with them. Transcript at 1090; Exhibits 2027R, 2030R. This is an unusual way of marking up a claim for overhead, profit, and bond costs, but GSA raises no objection to it and we find it reasonable. ----------- FOOTNOTE ENDS ----------- estimates, Barrington calculated a daily rate of $709 warehouse costs, extended supervision and extended project management." Respondent's Posthearing Brief at 67 n.109. The adequacy of the data Harmon made available to Barrington is now irrelevant; we decide the matter on the basis of the evidence presented to us and the applicable law. The largest portion of the Harmon claim is based on a daily rate of $997 for these same items. Mr. Lawrence explained the derivation of this rate fully and presented invoices showing the rent and utility bills Harmon paid for the space. Transcript at 1087-88; Exhibit 2038. Neither Barrington witnesses in testimony nor GSA in its brief have provided us with any evidence supporting a daily rate of $709 or any reason to question the rate of $997. We rely on the only evidence available, Mr. Lawrence's testimony and Harmon's documentation, in finding that the costs claimed were incurred and were reasonable. All of these costs resulted from the delays in construction, and GSA is responsible for seventy-one percent of those delays. We therefore award seventy-one percent of the claimed amount, or $234,575. M. Hill Enterprises, Inc. OMNI's subcontract with Hill Enterprises (Hill) called for fabrication and installation of architectural millwork and plastic laminate work. Transcript at 997-98. Hill normally schedules its work so that one job begins as another is ending. It planned to start the FBI job in early September 1996 and finish it by the end of October, then begin a very large job at Loudoun County (Virginia) Hospital in November. The delays on the FBI project pushed Hill's work there back to November, after the hospital project had started, so the subcontractor had to perform both jobs at the same time. Id. at 998-99. Hill was unable to hire additional personnel as a means of fulfilling both obligations. Its shop space was limited. It was reluctant to take on additional field personnel because it did not want to risk sacrificing quality (and possibly damaging expensive millwork) by hiring individuals with uncertain skills. Consequently, the subcontractor had to direct its personnel (and those of a sister company, F&H Diversified Services, Inc.) to work many overtime hours. While both jobs were running concurrently, Hill (including F&H) spent $7,439 in overtime premium wages for work on the FBI project and $6,548 in overtime premium wages for shop work on the Loudoun Hospital project. With successive markups of twenty-seven percent for general and administrative expenses and ten percent for profit, the costs claimed relating to these expenses total $19,539. Transcript at 1000-06; Exhibits 1701-03. GSA believes that it should not be liable for any of the costs incurred by Hill in working on Loudoun Hospital because those costs "did not benefit the . . . GSA contract" for construction of the FBI building. Respondent's Posthearing Brief at 67 n.110. We view the matter otherwise: Hill had to pay its employees overtime wages to work on the Loudoun project because (and only because, as far as our record indicates) construction delays on the FBI project resulted in the firm's having to perform both jobs at the same time. Requiring Hill to absorb the costs would be unfair because the expenses were not incurred due to any fault of Hill's, and requiring the hospital to pay for them would be inequitable because they were not incurred due to any fault of the hospital's. The costs are directly attributable to the delays on the FBI job. Since GSA is liable for seventy- one percent of the delay costs, it must pay $13,873 of these expenses. N. KTLH Engineers, P.C. OMNI entered into a subcontract with KTLH Engineers, P.C. (KTLH) for the provision of various types of testing, inspection, and engineering consulting services. Specifically, KTLH was to review and approve sheeting and shoring methods and shop drawings, review and approve installation methods and techniques, inspect and approve the subgrade for the four-foot-thick foundation mat, inspect formwork before concrete was placed, inspect placement of rebar, test cylinders of the poured-in-place concrete, and observe the concrete as it was being placed. Transcript at 319, 1141-44. As detailed in part II.B, supra, because of blast design changes made by GSA, the concrete work on this project was much more extensive and time-consuming than planned. Consequently, KTLH's work required much more time of its personnel over a considerably longer period than expected (fifteen months as opposed to the planned six). Transcript at 1164. Allyn E. Kilsheimer, KTLH's executive vice president, testified as to the cost impact the difference between planned and actual performance had on this subcontractor. He explained that he based KTLH's bid on two factors: first, the quantities of concrete and reinforcing steel which OMNI told him it would use in constructing the building, the kinds of formwork and amounts of each it would employ, and the number of concrete pours it expected to make; and second, KTLH's unit prices for the performance of the various tasks which would be assigned to the subcontractor. In developing a claim, he determined, from knowledge of differences between actual and expected quantities of concrete and rebar used on the job, changes in use of formwork, and increases in numbers of concrete pours, the additional time required for his personnel to perform their work; then he multiplied the additional time for each of the functions by the unit rate on which the bid was premised. Transcript at 1169-71. Mr. Kilsheimer applied this methodology in calculating the following amounts: inspection of additional reinforcing steel, $38,658; inspection of additional concrete, $10,859; inspection of added blast wall formwork, $2,275; additional time on job, $66,943; and additional testing of cylinders,[foot #] 34 $103,452. The total amount of the claim, as to the value of KTLH's additional work, is $222,187. Transcript at 1170-77; Exhibit 1650. Mr. Kilsheimer testified that KTLH has not been paid for any of the work encompassed by this claim. Transcript at 1177-79. GSA raises two objections to the claim for reimbursement of costs deriving from KTLH's additional work. First, it complains that "KTLH provided to Barrington no basis for its claimed estimates and no data to support the accuracy of the claimed amounts." Respondent's Posthearing Brief at 67 n.113. As we have observed with regard to claim components relating to other subcontractors, whatever this subcontractor told the agency's cost expert prior to the hearing is now ancient history. Agency counsel barely questioned Mr. Kilsheimer about his justification for the amounts claimed, so as far as our record is concerned, this witness's testimony is uncontroverted and serves as a sufficient basis on which to make an award. GSA's second objection goes to the figure for additional testing of cylinders. The contract required that one set of six cylinders be filled from each seventy-five cubic meters of concrete or fraction thereof which were poured, and that the cylinders be broken and the concrete in them tested at intervals to determine whether it was meeting required strengths as it cured. Transcript at 1147-49, 1152-53. Mr. Kilsheimer testified that KTLH's bid was premised on the assumption that the subcontractor would test 2,400 cylinders, and a greater number -- about 4,600 to 4,700 -- were actually tested. Id. at 1164, 1166, 1176. There were two reasons for KTLH's having to test at least 2,200 more cylinders than planned: more concrete than anticipated was poured (especially because of the addition of the concrete blast walls) and more pours were made than originally planned. The extra, smaller pours necessitated the use of more cylinders because they resulted in more fractional quantities of seventy- five cubic meters of concrete being poured. Id. at 1164-66. The agency maintains, "The record shows that [the $103,452 in] extra costs [for testing of cylinders] were due to the increased number of pours, but the increased number of pours was not due entirely to the blast changes or any other wrongful Government action." Respondent's Posthearing Brief at 57 n.113. This statement is correct. OMNI concrete manager Raymond Sowers testified that OMNI increased the number of pours on the ground floor from eight to twelve because "the pour sizes that we originally submitted . . . were too large." Transcript at 164. Mr. Sowers and one of his assistants acknowledged that in ----------- FOOTNOTE BEGINS --------- [foot #] 34 A cylinder, in this context, is a plastic-coated cardboard container into which concrete is poured. Each cylinder is later broken and the concrete in it is tested. Transcript at 1147. ----------- FOOTNOTE ENDS ----------- response to a comment from the agency's structural engineer, the contractor revised its plans for the pours before the ground floor blast design changes were issued. Id. at 164-65, 258; Exhibit 1123. Neither party has provided any evidence as to how many additional cylinders were filled as a result of OMNI's making four more pours than originally planned on the ground floor. (Nor is it apparent that such evidence could be produced, since the contractor revised its pour sequence for that floor two more times in response to the sequential blast design changes, further increasing the number of pours. See Exhibit 1123.) Because we have no firm evidence as to the percentage of KTLH's extra inspection work which resulted from OMNI's error, we use the jury verdict methodology (as we did in reducing the portion of the claim regarding OMNI's concrete consolidation costs) to approximate that percentage. Clearly, GSA's directive that OMNI construct two stories of one-foot-thick blast walls resulted in the contractor's pouring much more concrete than it had originally planned. The amount of additional concrete was so great that it must have resulted in the need for the great majority of the additional cylinder inspections. The ground floor was not the only floor on which additional pours were made after the design changes were mandated, and the contractor appears to have made at least three extra pours on that floor alone due to the changes. See Exhibit 1123. Based on this information, we conclude that about ten percent of the additional cylinder testing resulted from four additional concrete pours having been made on the ground floor because an error in plans made by OMNI. The remainder of the extra work resulted from the design changes. We grant recovery of ninety percent of the amount claimed, or $93,107. Mr. Kilsheimer's testimony as to the amounts claimed for inspection of reinforcing steel, concrete, and formwork added to the structure by the agency's design changes is uncontroverted. We award all of these amounts, totaling $51,792. The other component of the claim relating to KTLH's costs, for additional time spent on the job, is based on delays in construction, rather than changes in design. Having concluded that GSA was responsible for seventy-one percent of the delays, we award seventy-one percent of this component, or $47,530. The total amount awarded for costs incurred by KTLH is $192,429. O. Markups The total amount awarded for all subcontractor costs is $2,226,117. GSA poses no objection to the provision in OMNI's claim which seeks a ten percent commission on these costs, and such a commission was awarded on such costs in modifications made to the contract. See Transcript at 469. We grant $222,612 in commission. Nor has the agency objected to the markups sought for bond and builder's risk insurance (one percent) and excess general liability (.55 percent). We grant these markups, as well -- $24,487 and $13,603, respectively. The total for subcontractor costs and contractor's commission on these costs is $2,486,819. VII. Summary In the following table, we show the amounts claimed by OMNI and the recovery granted by the Board: Claimed Awarded OMNI costs Additional labor $1,788,302 $1,46 5,368 Crane equipment and operator 296,234 220,7 18 Form rentals 468,000 458,608 Increased concrete material costs 80,362 63,03 7 Added contract administration/ materials 995,526 988,7 53 Additional general conditions 327,572 134,2 40 Subtotal 3,955,996 3,330 ,724 Profit (10 percent) 395,600 333,0 72 Subtotal 4,351,596 3,663 ,796 Bond, builder's risk insurance (1 percent) 43,516 36,63 8 Subtotal 4,395,112 3,700 ,434 Excess general liability (.55 percent) 24,173 20,35 2 Total $4,419,285 $3,720,786 Subcontractor costs The Poole & Kent Corporation $1,245,649 $ 856,2 13 United Sheet Metal, Inc. 185,759 131,889 Performance Contracting, Inc. 321,031 227,9 32 The Fireguard Corporation 170,568 130,0 24 Mona Electrical Construction 15,538 11,03 2 Southern Ironworks, Inc. 21,144 15,01 3 Exposaic Industries 233,002 160,3 74 DuPont Flooring Systems (formerly Kemper Carpet) 18,495 13,13 1 Irvine Access Floors, Inc. 127,536 90,55 1 Maryland Applicators, Inc. 258,892 69,53 8 James Myers Company, Inc. 112,031 79,54 3 Harmon, Ltd. 330,387 234,575 Hill Enterprises, Inc. 19,539 13,87 3 KTLH Engineers, P.C. 222,188 192,4 29 Subtotal $3,281,759 $2,22 6,117 Commission on subcontractor costs 328,176 222,6 12 Subtotal $3,609,935 $2,44 8,729 Bond, builder's risk insurance (1 percent) 36,099 24,48 7 Subtotal 3,646,034 2,473 ,216 Excess general liability (.55 percent) 20,053 13,60 3 Total $3,666,087 $2,486,819 Total of all parts of claim $8,085,372 $6,20 7,605 Decision The appeal is GRANTED IN PART. We award to Clark Concrete Contractors, Inc., $6,207,605, rather than the $224,463 allowed by the contracting officer, plus interest in accordance with the Contract Disputes Act, 41 U.S.C. 611 (1994), from the date on which the contracting officer received the claim. This decision resolves all matters presented to the Board under docket number GSBCA 14340 except the request for reimbursement of costs allegedly incurred by subcontractor Maryland Applicators, Inc., due to a loss of labor efficiency. That matter is DISMISSED FOR LACK OF JURISDICTION. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ EDWIN B. NEILL ALLAN H. GOODMAN Board Judge Board Judge