Board of Contract Appeals General Services Administration Washington, D.C. 20405 DENIED: September 9, 1999 GSBCA 14643 GRIFFIN SERVICES, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Kent C. Dugmore, Sandy, UT, counsel for Appellant. Adele Ross Vine, Office of Regional Counsel, General Services Administration, Kansas City, MO, counsel for Respondent. Before Board Judges DANIELS (Chairman), PARKER, and WILLIAMS. DANIELS, Board Judge. Griffin Services, Inc. (Griffin) is responsible, under a contract with the General Services Administration (GSA), for maintaining a chiller at a Government building in Kansas City, Missouri. Several hundred pounds of refrigerant escaped from the chiller. The parties have asked us to decide which of them is responsible for the cost of replacing the lost refrigerant. Findings of Fact 1. For many years, GSA maintained, through the efforts of its own personnel, the mechanical equipment at a complex of Government buildings in Kansas City. Transcript at 89.[foot #] 1 During the 1990's, as the agency ----------- FOOTNOTE BEGINS --------- [foot #] 1 The court reporter provided the Board with two transcripts of the hearing held in this case. One transcript consists of full-size, 8-1/2 by 11 inch pages; the other is a "Multi-Page" version with four pages on each sheet of paper. The (continued...) ----------- FOOTNOTE ENDS ----------- employees who did this work resigned and retired, but were not replaced, GSA began to contract for performance of the work. Id. at 317, 384. 2. Among the contracts awarded by the agency was one entered into on February 8, 1995, with Griffin, for mechanical maintenance at the federal building located at 2306/2312 East Bannister Road in Kansas City, which houses an Internal Revenue Service Center. Appeal File, Exhibit 1 at 1, 59, 93; Transcript at 394. The contract covers a three-year period, beginning on March 1, 1995, and allows the agency, at its option, to keep the arrangement in effect for two additional three-year periods. Appeal File, Exhibit 1 at 8, 12, 59; Transcript at 89. On January 20, 1998, GSA exercised its option for the period from March 1, 1998, through February 28, 2001. Appeal File, Exhibit 1 at modification PO13. This contract requires Griffin to "operate[], maintain[], and repair[] . . . all mechanical, electrical, plumbing, and utility systems installed at the complex/building(s)," including "air-conditioning equipment and systems." Id. at 23-24; see also id. at 93-94. 3. The contract includes various provisions which establish general standards to which the contractor will be held in the performance of this work. In one place, it provides that as a "minimum level of work and services that are to be provided," "the Contractor will be required to take all steps and measures which would be taken by a prudent building owner to maximize the life expectancy of the property." Appeal File, Exhibit 1 at 9. Additionally, under the heading "Acceptable maintenance and repair," the contract states: All mechanical, electrical, and utility s y s t e m s [ f o o t # ] 2 a n d t h e facility/building(s) shall be repaired, maintained and operated at the highest level of efficiency compatible with the current energy conservation requirements, and maintained at an acceptable level throughout the contract performance period. An "acceptable level" of maintenance and repair is defined as the level of maintenance and repair which will preserve the facility/building(s), equipment and systems in unimpaired operating condition; i.e., above the point where deterioration will begin -- thereby diminishing the normal life expectance [sic] of the equipment. ----------- FOOTNOTE BEGINS --------- [foot #] 1 (...continued) pagination of the two versions is unfortunately not the same. We cite to the full-size transcript. [foot #] 2 Curiously, but of no relevance to this case, although the contractor is required to operate, maintain, and repair plumbing systems as well (see Finding 2), these systems ___ are not covered by this standard. ----------- FOOTNOTE ENDS ----------- Id.; see also id. at 98. In yet another place, a "Quality standards" paragraph says: The Contractor shall be responsible for ensuring that the required services in this contract meet the requirements of the contract. All work performed under this contract shall be of the highest quality and in keeping with the best practices of the industry. Services rendered under this contract shall be of sufficient quality to ensure timely provision of services, optimum satisfaction of tenant agencies and adequate protection of the Government's assets. Id. at 57. 4. In another general, standard-setting requirement, the contract also provides: Government publications and forms applicable to this Contract are listed below. The Contractor is responsible and required to follow these publications as a part of this contract and to use the forms to the extent required by the Contract. It is the intent of this contract to require the Contractor to follow all the rules, regulations and laws in the operation, maintenance and repairs that the Government managers and their employees are and would be required to follow in the performance of their jobs. Appeal File, Exhibit 1 at 12. The "list of publications are [sic] located in Section J, Exhibit 6 -- Publications." Id. That exhibit begins, "This contract throughout references various laws, regulation[s], handbooks, orders and memorandum[s]. All such references are incorporated as part of this contract and mandatory to be followed in the accomplishment of this contract. The following is a partial list of these requirements." Id. at 108. A list thirteen pages long follows. It includes a single publication of the American Society for Heating, Refrigerating and Air Conditioning Engineers, Inc. (ASHRAE), "ASHRAE No. 62, Standard on Ventilation for Acceptable Air Quality." Id. at 119. The contract contains no other mention of ASHRAE or any of its publications.[foot #] 3 ----------- FOOTNOTE BEGINS --------- [foot #] 3 In a separate portion of the contract, entitled "Safety," the contractor is "required to follow . . . those consensus standards and other guidance documents currently affecting fire protection, safety and health, and environmental management," including "consensus codes and standards developed by groups such as American Society for Testing and Materials (ASTM), American National Standards Institute (ANSI), National Fire Protection Association (NFPA) and the Underwriters Laboratories, INC. [sic]." Appeal File, Exhibit 1 at 11. ----------- FOOTNOTE ENDS ----------- 5. Among the regulations with which Griffin is required to comply are those issued by the Environmental Protection Administration (EPA) establishing standards that implement the Clean Air Act, 42 U.S.C. 7401 et seq. Appeal File, Exhibit 1 at 84(g)-(h). One of these regulations is part 82 of title 40, Code of Federal Regulations, "Protection of Stratospheric Ozone," which governs the release into the environment of certain substances used as refrigerant in comfort-cooling appliances and refrigeration equipment. The regulation provides, generally, that owners or operators of large comfort-cooling appliances must have leaks repaired "within 30 days after discovery, or within 30 days after when the leaks should have been discovered if the owners intentionally shielded themselves from information which would have revealed a leak," "if the appliance is leaking at a rate such that the loss of refrigerant will exceed 15 percent of the total charge during a 12-month period." 40 CFR 82.156(i)(5), (9) (1997) (included in Appeal File, Exhibit 7). EPA does not mandate that refrigerant holding cylinders or tanks be on site and in quantity to recover all the refrigerant in a system at all times; they need to be brought to a site only in time to meet the thirty-day requirement. Appeal File, Exhibit 9. 6. The contract imposes additional, more precise requirements on Griffin, as well. "The Contractor shall furnish all supplies, materials and equipment necessary for the performance of the work required by this contract unless specified herein" (such as by being furnished by the Government). Appeal File, Exhibit 1 at 48; see also id. at 20. "The contractor is [also] responsible for the day-to-day inspection and monitoring of all work performed to ensure compliance with the contract requirements." Id. at 22. Air-conditioning machines with large chillers, in particular, are to be monitored frequently. One contract provision says those which are not included in a "refrigeration plant watch" are "to be toured twice daily, one tour for start-up and second for operational check." Id. at 32. Another paragraph says these machines are to be toured "twice per shift." Id. at 34. "When the compressor is running, make routine inspection of pressures, temperatures, fluid levels, fluid flow, etc. . . . If refrigerant leaks are suspected, check with leak detector. Add refrigerant and oil as needed." Id. at 33. In addition, the contractor is "responsible for establishing an effective system for accomplishing . . . maintenance and repair," including preventive maintenance. Id. at 37. "Preventive maintenance," as to chillers, includes adding refrigerant when necessary. Id. at 99. 7. The contract provides for an allocation, between GSA and Griffin, of costs of repair. Repairs are divided into three categories: maintenance, minor, and major. Repairs are "work required to prevent a breakdown of equipment and/or system or to put it back in service after a breakdown or failure." A "maintenance repair" is one for which "the cost for labor, materials and parts is expected to be $10,000.00 or less." Maintenance repairs are the responsibility of the contractor. A "minor repair" is one for which "the expected cost is between $10,000.00 and $25,000.00 for labor, material and parts." Griffin is responsible for $10,000 of the cost of each minor repair. A "major repair" is one for which "the cost is expected to exceed $25,000.00 for labor, materials and parts." GSA is responsible for major repairs. For each of the categories, the "dollar threshold applies to each individual repair job that may be required." Appeal File, Exhibit 1 at 39-41; see also id. at 98. 8. The contract directs Griffin to proceed differently with repairs, depending on the category within which a matter falls. A maintenance repair is to be "immediately perform[ed] . . . when [it is] required in order to ensure continuity of operations or to return equipment and/or the system to service as soon as possible. . . . The delay of any repair shall be brought to the attention of the [GSA] Field Office Manager and/or COR [contracting officer's representative]." "Any minor repair work shall be immediately reported to the COR, but work shall NOT be performed unless directed to do so by the CO [contracting officer] and/or the COR." Major repairs "shall be immediately reported to the COR but the work shall not be performed. Major repairs are not a part of this contract and may be performed by Government employees or other Contractors." However, GSA may authorize Griffin "to perform part of a major repair." Appeal File, Exhibit 1 at 39-41. 9. The contract also contains three provisions called to our attention by GSA which allow the agency to make Griffin responsible for certain costs. Respondent's Brief at 16-17. Under the heading "Contractor responsibility," the instrument states: If any of the services[[foot #] 4] do not conform with the contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, at no increase in contract amount. . . . If the Contractor fails to promptly perform the services again or to take the necessary action to ensure future performance in conformity with contract requirements, the Government may (1) by contract or otherwise, perform the services and charge to the Contractor any cost incurred by the Government that is directly related to the performance of such service or (2) terminate the contract for default. ----------- FOOTNOTE BEGINS --------- [foot #] 4 The contract defines the term "services" to include "services performed, workmanship and material furnished or utilized in the performance of services." Appeal File, Exhibit 1 at 22; see also id. at 55 (same definition, except ________ ___ that a comma appears after the word "workmanship"). ----------- FOOTNOTE ENDS ----------- Id. at 23. Another clause allowing GSA to impose costs on Griffin is entitled "Protection of Government buildings, equipment and vegetation." It reads: The Contractor shall use reasonable care to avoid damaging existing buildings, equipment, and vegetation on the Government installation. If the Contractor's failure to use reasonable care causes damage to any of this property, the Contractor shall replace or repair the damage at no expense to the Government as the Contracting Officer directs. Id. at 84(p). The third provision, included in a "Contract Deduction Table," says that if the contractor "[fails] to complete minor repairs within the time period specified by the Contracting Officer's Representative (COR) or any approved extension," "[t]he Contractor will be held liable for excess costs incurred by the Government to complete any minor repair which the Contractor fails to complete within the required time period." Id. at 66. 10. Yet another clause which makes Griffin responsible for certain costs is FAR 52.236-7, Permits and Responsibilities (Nov 1991), which states in part: "The Contractor shall . . . be responsible for all damages to persons or property that occur as a result of the Contractor's fault or negligence." Appeal File, Exhibit 1 at 90. 11. The dispute which is the subject of this appeal involves a Westinghouse high-pressure chiller which was installed in the building during 1980. Transcript at 22, 295, 370-71. This chiller is relatively inefficient, so it is used only when the outside temperature is very hot, to supplement more efficient air conditioning units in the building. Id. at 21. The chiller is generally taken off-line in mid-October, when the temperature cools to the point that supplemental chilling is no longer necessary. Id. at 20. The chiller uses R-12 refrigerant, and when it is fully charged, it holds 2,365 pounds of this substance. Appellant's Exhibit 39 (entry for Nov. 25, 1997). 12. Mark Thomas, Griffin's project manager for the work, characterized the chiller as "a big leak." Transcript at 34. He testified, "[T]here were more welded joints, flair fittings, [and] couplings on this thing than you can shake a stick at," and each of these points was susceptible to leaking. Id. at 34-35. Ted Correl, a GSA air conditioning and equipment mechanical supervisor who had been responsible for operating the chiller from the date of its installation until 1994, agreed that the machine leaked refrigerant on a regular basis. Id. at 295, 298. Every spring, GSA personnel who had worked on the machine told Mr. Thomas, they had had to "drop . . . a few hundred pounds of gas into this thing." Id. at 44-45. 13. Each party presented, at our hearing in this case, a witness who was highly experienced in working with large chillers. Griffin's expert witness was Aubrey McStay, the firm's vice president of operations. Transcript at 208-11. GSA's was Gene Ramirez, a mechanical engineer who is the agency's refrigerant program manager for the four-state region which includes Kansas City. Id. at 331-34, 377-78, 382.[foot #] 5 Both of these witnesses agreed that the Westinghouse chiller in question was not unusual, in terms of leaking refrigerant, for a machine of its age and design. Id. at 211-12, 217-18, 404-05, 462-63. Mr. McStay explained that "when you have hundreds of . . . little fittings all over the cabinet and the compressor," as this chiller has, any one can leak at any time. Id. at 213. 14. There is no mechanism on the chiller through which the refrigerant level inside may be observed. Transcript at 47. Nevertheless, Griffin personnel made consistent efforts to determine whether the machine was leaking refrigerant. While the machine was operating, they performed a visual check for leaks every two hours and a more detailed check once a week. When the unit was shut down for the season, they made a comprehensive examination. In the spring, they performed a further analysis. Id. at 30-32, 35-36. Griffin used two different means of checking for leaks -- electronic leak detection and soap bubbles. The latter technique involves misting an area with dishwashing soap and watching to see whether (and how quickly) bubbles form. Id. at 36-39. According to Mr. Thomas's uncontested testimony, bubble tests are fairly reliable indicators of leaks. Id. at 47. 15. In 1995, Griffin's first year of performing maintenance under the contract, the company tested the fitness of the Westinghouse chiller before bringing it on line for the cooling season. It found that the machine was 355 pounds low on refrigerant. GSA supplied the refrigerant, and Griffin added it. During the cooling season, the contractor found no leaks in the machine. Transcript at 28-30; Appellant's Exhibit 11 at 1-3. 16. During 1996, Griffin repaired leaks at several places on the chiller: the vane control solenoid, suction elbow victaulic connector, liquid line coupling braze joint, pressure relief valves, compressor motor terminal plug, oil sight glass and sump cap, and discharge line victaulic gasket. The system lost about four hundred pounds of refrigerant, which Griffin ----------- FOOTNOTE BEGINS --------- [foot #] 5 Mr. Ramirez was specifically qualified as an expert. Order (Mar. 23, 1999) at 2. Mr. McStay was not, but he was treated as one by both parties during the hearing and we consider him to be one in this opinion. ----------- FOOTNOTE ENDS ----------- replaced at its own cost. Appeal File, Exhibit 2 at 8[foot #] 6; see Respondent's Brief at 20. 17. In the fall of 1996, after the chiller was shut down for the season, Griffin detected slight leakage of refrigerant at two or three fittings where pipes were joined with a clamp-type mechanism. Transcript at 42-44. Mr. Thomas concluded, based on his past experience with chillers, that the leaks were so insubstantial that they could be addressed during spring maintenance. Id. at 45-46. In January or February of 1997, Griffin removed the refrigerant from the machine to perform maintenance on it. Id. at 50. The chiller proved to be about three hundred pounds low on refrigerant. Id. at 52; Appeal File, Exhibit 2 at 8. The contractor repaired these leaks, but as soon as it fixed one problem, it would find another. Transcript at 51. Leaks were discovered at the fittings, on pressure relief valves, on some of the controllers in the control cabinet, and all over the oil sump container. Id. at 59. During the spring, as it was performing this work, Griffin found that the machine's expansion valve had cracked. Id. at 61-62. New expansion valves were unavailable, and at GSA's direction, the contractor had this valve replaced with one which had been used. Id. at 62-65. By June, the machine had been fully tested and appeared to be tight. Griffin replaced the necessary refrigerant at its own cost. Appeal File, Exhibit 2 at 8. It put the chiller on line, and the machine functioned well throughout the cooling season. Griffin did not detect any leaks during this time. The chiller was last operated for the season on October 8, 1997. Transcript at 66-68. 18. After shutting down the chiller for the 1997 cooling season, Griffin checked it for leaks, using both an electronic leak detector and soap bubble tests. On October 16, the contractor found a leak on a fitting. Mr. Thomas believed that the leak was "very small" and took no action regarding it. Transcript at 69, 135; Appeal File, Exhibit 2 at 2. Thirteen days later, during normal rounds, Griffin employees noticed some oil -- less than a pint -- under the expansion valve which had been replaced the previous spring. Transcript at 71, 117; Appeal File, Exhibit 2 at 2. As is common, the neoprene rubber gasket which was installed around the connection between the valve and the machine had arrived soaked in oil to maintain its flexibility, and it had been lubricated further so that it could more readily be eased into place during the installation. ----------- FOOTNOTE BEGINS --------- [foot #] 6 Exhibit 2 of the Appeal File consists of two letters. The first (pages 1-4 of the exhibit), dated December 4, 1997, is from Mr. Thomas to Arthur Gendreau, who was GSA's contracting officer's representative for most of the time involved in this dispute. The second letter (pages 5-10), dated March 9, 1998, is fromRichard Rushton, Griffin's Vice President - Operations, to T. J. Hewitt, the GSA contracting officer responsible for this contract. The pages of the exhibit are not numbered. ----------- FOOTNOTE ENDS ----------- Transcript at 43, 228-29, 322. Mr. Thomas found a small leak at this gasket. He thought that the oil on the floor was not associated with the leak, however, but rather, was lubrication oil which had congealed on the gasket while the chiller was on- line and had dripped from the gasket after the machine had been shut down and returned to room temperature. Id. at 71, 118; Appeal File, Exhibit 2 at 2. The action of soap bubbles in the area was similar to what had been observed during 1996. Transcript at 113-14, 118. In Mr. Thomas's judgment, "The combined leakage at the suction line [fitting] and the expansion valve was significantly less than what we experienced in relation to all the leaks we discovered in the fall of [19]96." Appeal File, Exhibit 2 at 2. The project manager testified that after October 29, Griffin continued to test for leaks, and found that the one in the area of the oil spot had stopped. Transcript at 87. 19. Mr. Thomas testified that if he had believed that a major leak was present, he would have hired a service company to take immediate action to pump the remaining refrigerant into its own storage cylinders, repair the leak, and replace the refrigerant which had been lost. He did not think that such an effort was necessary, however, since the leaks seemed minor -- less than the amount prescribed by the EPA as requiring prompt action, fifteen percent of the total charge during a twelve-month period. Transcript at 74-75, 129; see Finding 5. Mr. McStay agreed that this decision was prudent, since a leak that would involve a large quantity of oil, and consequently refrigerant, "would just be incredibly obvious," and no such problem was apparent. Transcript at 458; see also id. at 224-25. Further, Mr. McStay said, in his experience, he had never seen a refrigerant leak that involved a significant amount of oil "that would leak and then stop leaking. I can only conclude that that oil must [have been] from some other source, for example, residual oil from the maintenance procedure that . . . replaced . . . the valve." Id. at 460. Mr. Thomas also acknowledged that he could have stored the refrigerant in the machine's condenser until the leaks had been repaired. Transcript at 77; see also id. at 343-44 (Ramirez's testimony that the machine is designed to allow such storage), 299-300 (Correl's testimony that when GSA was responsible for maintenance of the machine, it or a service contractor sometimes took such action). Mr. McStay opined that the condenser, while acceptable as an emergency storage facility, was not suitable for long-term storage, since it had two to three hundred connections which were susceptible to leaking. Id. at 461-62. Mr. McStay thought that based on Mr. Thomas's explanation of the facts involving the leaks, no emergency was present. Id. at 470. 20. Mr. Thomas was not completely unconcerned about the leaks discovered in October, however. In early November, he decided that because they appeared to him similar to past years' leaks, if the problems were not fixed promptly, they could lead to the loss of another two hundred pounds of refrigerant. Transcript at 72; see also id. at 74 ("We didn't at that point believe that [the leaks] were any more aggressive in nature than anything we had seen in the past."). Knowing that repairs could not begin until the refrigerant was removed from the chiller, he contacted companies in Kansas City that rented cylinders in which the refrigerant could be stored while repairs were undertaken. He was not able to rent from these companies, on a long-term basis, quantities of cylinders capable of storing the chiller's entire charge of refrigerant. Id. at 73, 128. He then decided to buy storage cylinders, and to do so most economically by ordering them directly from a manufacturer. Id. at 73, 129. (Mr. Thomas did not explore the possibility of purchasing cylinders from a vendor in the Kansas City area. Id. at 129. Such containers were available there at the time. They could have been bought; alternatively, their use could have been secured by hiring a service contractor to pump the refrigerant into its own cylinders. Id. at 425-26.) The cylinders were ordered on November 7th, shipped on the 19th, and arrived on the 24th. Appeal File, Exhibit 2 at 3, 10; Appellant's Exhibit 39 (entry for Nov. 24, 1997). 21. Meanwhile, Griffin's operations logbook -- a shift-by- shift diary of events occurring on the job -- contains three entries which appear to be relevant to the matter in dispute. An entry on November 6 states, "Put down oil dry under vic[[foot #] 7] leak on Westinghouse (spreading)." An entry on November 9 says, "Westinghouse chiller -- put oil dry down to contain OIL leak[;] dump oil pan - X2 - keep eye on." A second entry on November 9, for the second shift on that day, says, "Changed bucket under chiller (oil)." Appellant's Exhibit 39 (entries for Nov. 6, 9, 1997). 22. As soon as the storage cylinders arrived, Griffin began pumping refrigerant from the chiller into them. Transcript at 73-74. Mr. Thomas remembers that all the refrigerant was recovered in an hour and a half. Id. at 96. Contemporaneous documentation by Griffin employees shows, however, that recovery was not complete until the following day, November 25. Appellant's Exhibit 39 (entry for Nov. 25, 1997); Respondent's Exhibit 4. Griffin has estimated the amount recovered variously as six hundred, six hundred fifty, and seven hundred pounds. Id.; Transcript at 77; Appeal File, Exhibit 2 at 3. A "refrigerant removal incident" report prepared by Griffin employees and dated November 24-25, 1997 states: "Reason Leak happened? Failed Victolic [sic] couplers & several minor leaks." ----------- FOOTNOTE BEGINS --------- [foot #] 7 The manufacturer of the fittings where leaks had been observed on both October 16 and October 29 was Victaulics, and the fittings have been referred to throughout our proceedings as "Victaulic fittings." See Transcript at 42; see also Finding ___ ________ 16. ----------- FOOTNOTE ENDS ----------- Respondent's Exhibit 4; see Transcript at 93- 95.[foot #] 8 23. Mr. Thomas did not inform anyone at GSA about Griffin's fall 1997 activities involving the Westinghouse chiller until he had decided to buy the storage cylinders. At that point, he told the COR, Arthur Gendreau, about the discovery of the leaks and of his efforts to obtain the storage vessels. Transcript at 76, 182-83. Mr. Gendreau expressed no concern. Id. at 183. The absence of communication was in keeping with the parties' practice. Mr. Gendreau did not expect Griffin to keep him informed about maintenance repairs it was performing. Id. at 171. As explained by Mr. Thomas, the COR had said that as long as a repair would cost less than $10,000, the contractor was "to just handle it. They trusted our judgment, had all their confidence in me to just take care of it." Id. at 55. "And as long as I was taking care of business and keeping the plant functional, that was fine by [the COR]." Id. at 57. The lack of concern on Mr. Gendreau's part was also consistent with his belief that Mr. Thomas was "[v]ery competent" and that Griffin "provide[d] quality service." Id. at 166, 184. Similarly, Mr. Correl, the GSA employee who had been responsible for operating the chiller from the date of its installation until 1994, testified that Griffin maintained the chiller better than GSA personnel had when they were responsible for maintenance. Id. at 318. 24. As soon as recovery operations were complete, Mr. Thomas informed Mr. Gendreau that a significant loss of refrigerant -- on the order of 1700 pounds -- had occurred. Transcript at 78, 102. Upon learning of this occurrence, Mr. Gendreau asked Mr. Thomas for a letter recommending a course of action. Id. at 78. Mr. Thomas responded on December 4 with a summary of past events, a list of four options (including repair and recharging of the chiller, at a cost of $35,000), and a ----------- FOOTNOTE BEGINS --------- [foot #] 8 The record also contains an "Accidental or Unintentional Venting Report" by a Griffin employee which is dated November 5, 1997, and states that 1525 pounds of refrigerant were vented because "Valitiac [sic] gasket on high side came loose." Respondent's Exhibit 5. We give no weight to this report, which we do not consider credible. Neither party called the author of the report to question him about it. We find compelling the testimony of Mr. Thomas and Mr. McStay that the date on the report must have been incorrect; since the chiller did not have a gauge for measuring its contents, no one could have known the extent of loss until the recovery of remaining refrigerant was complete -- nearly three weeks after this date. See Transcript at 101, 242. Additionally, the record ___ contains no evidence on which we could accept the report's conclusion that the loss came entirely from a leak at the gasket on the "high side," where the October 16 leak occurred. ----------- FOOTNOTE ENDS ----------- recommendation that the Westinghouse chiller be replaced with a new, energy-efficient machine. Appeal File, Exhibit 4 at 1-4. 25. GSA's first response, at the end of 1997, was to ship nine hundred pounds of R-12 refrigerant to Kansas City, to be used in the Westinghouse chiller. Transcript at 79. Griffin has characterized this action as an effort to share costs, Appellant's Brief at 10, and GSA has not taken issue with the assertion. Mr. Gendreau later told Mr. Thomas not to use the refrigerant, however, because GSA was considering holding Griffin responsible for the entire cost of the lost refrigerant. Transcript at 79. On February 19, 1998, Mr. Gendreau, Mr. Ramirez, Ms. Hewitt, and other GSA employees met to discuss the issues surrounding the refrigerant loss. Id. at 341, 419-20. They concluded that the substance had escaped the chiller through a series of small leaks and one major leak. Id. at 341. They also decided to have the machine repaired, with financial obligations of Griffin and GSA to be determined later. Id. 26. The group's conclusion as to the source of the problem is consistent with Mr. Ramirez's expert testimony. The agency's refrigerant manager believes that there must have been slow leaks through which refrigerant escaped at a rate of about 1.7 to 2.7 pounds per hour. A leak at this rate is not sufficient to be perceptible to the eye or to be heard by someone who works in machine rooms, according to Mr. Ramirez. Leaks continue until the pressure inside a chiller is equal to the atmospheric pressure outside the machine, and there is no reason to think that the leaks would stop short of this point, he explained. Furthermore, an oil leak is especially significant, since oil molecules are much bigger than refrigerant molecules; if oil passes through a hole, refrigerant surely will, too. The oil on the floor very likely came from the leak, Mr. Ramirez suggested, since a gasket is not coated with as much as a pint of oil when being installed. Generally, this witness testified, the industry standard is that an operator of air conditioning equipment who notices a leak should make a plan of action for addressing it. He opined that Griffin's decision not to proceed rapidly to take the refrigerant out of the chiller was the critical factor in causing the significant loss. Transcript at 344-61. 27. No other GSA witness provided any fact or opinion testimony about the problem. Mr. Gendreau, the COR, acknowledged that he has no experience in working with air-conditioning systems and is not familiar with how the Westinghouse chiller functions. Transcript at 153, 168-69. Mr. Ramirez acknowledged that he did not examine the chiller at times relevant to this dispute and is not familiar with it. Id. at 334, 382; see also id. at 200-01. Both Mr. Gendreau and Mr. Correl testified that GSA relies on its inspector in the building in question, Alan Parker, for information about how the Westinghouse chiller is being maintained. Id. at 154, 305. Mr. Ramirez testified that Mr. Parker had suggested to him that the chiller must have had many leaks. Id. at 335-40. Mr. Parker was on leave for several weeks during the fall of 1997, however, id. at 132-33, and GSA did not call him as a witness, so we have no reason to believe that he has any knowledge about specifics relevant to this dispute. 28. Following the February 19 meeting (see Finding 25), Mr. Gendreau wrote on February 25 to Mr. Thomas: I have consulted with our technical and legal staff regarding this issue and it is their belief, knowing the Westinghouse chiller's maintenance history of leaks, prompt recovery action on your Company's part would have averted the major loss of the refrigerant. I concur with our technical staff in their observation that a significant delay of time elapsed between the leak and actual recovery operations contributed greatly to your estimated repair cost of $35,000.00.[[foot #] 9] Therefore, I am categorizing this breakdown as maintenance repairs. Maintenance repairs are defined as work required to prevent a breakdown of equipment and/or system or to put back in service after a breakdown or failure when the cost for labor, materials and parts is expected to be $10,000.00 or less. It is my decision your company must assume full responsibility in repair costs to the Westinghouse chiller system. Appeal File, Exhibit 3. 29. Griffin Vice President Rushton replied in a March 9, 1998, letter to GSA contracting officer Hewitt. He first noted that the COR's letter recognized that repair costs would exceed $25,000, and maintained that under the contract, this required categorization of the matter as a major repair. He then "strongly refute[d] any implication that our on-site team behaved in any manner other than one which would have been taken by a prudent building owner." According to Mr. Rushton, Griffin had "no reason to believe that the refrigerant loss was high, or that the rate of loss would rapidly accelerate." The company took "[a]ll appropriate steps . . . to ensure the [storage cylinders] arrived as quickly as possible." "Indeed," he said, "the actions taken were with the expectation that the Government would not be involved in the repair costs" because those would be less than $10,000 and therefore associated with maintenance repairs. Thus, he concluded, there was no basis for the COR's "implication" that ----------- FOOTNOTE BEGINS --------- [foot #] 9 Elsewhere in the letter, Mr. Gendreau stated that "[a]t today's market price," the cost of one component of the repairs, replacing the refrigerant, was $26,640. Appeal File, Exhibit 3 at 1. ----------- FOOTNOTE ENDS ----------- Griffin had acted in a careless manner. He agreed to repair the chiller and replace the refrigerant, but said that the company would seek from the agency reimbursement of the costs involved. Appeal File, Exhibit 2 at 5-7. 30. On April 16, 1998, a telephonic conference was held to discuss financial responsibility for the repair of the chiller and the replacement of the lost refrigerant. Appeal File, Exhibit 4 at 3. Participants included Messrs. Rushton, McStay, and Thomas of Griffin and Mr. Ramirez and Ms. Hewitt of GSA. Transcript at 113, 423. Following the meeting, on April 28, Ms. Hewitt wrote to Griffin "in response to your April 16, 1998, telephone request for the Contracting Officer's Final Decision." Appeal File, Exhibit 4 at 1. She asserted the relevance to this matter of several contract provisions -- the mandate that the contractor "take all steps and measures which would be taken by a prudent building owner to maximize the life expectancy of the property" (Finding 3); the requirements that the contractor immediately perform maintenance repairs and immediately report minor repair work to the COR (her underlining) (Finding 8); and the stipulation that the contractor comply with Clean Air Act requirements (Finding 5). Id. at 1-2. She then concluded: Griffin failed to report the refrigerant leak to the COR upon discovery. Griffin failed to provide the necessary equipment needed to recover refrigerant from the chiller. Griffin failed to repair the leak within 30 days (from October 16, 1997 to November 25, 1997). Griffin failed to take measures a prudent building owner would take to ensure maximum life expectancy of the property in accordance with the contract. After leaks were discovered in the chiller, Griffin failed to provide immediate repair service which includes recovery of refrigerant, as specified in the contract. Therefore, Griffin Services Incorporated is responsible for the full cost of repairs to the chiller including the replacement cost of the refrigerant. This is the final decision of the Contracting Officer. Id. at 3. 31. Also after the April 16, 1998, meeting, Griffin repaired the leaks in the Westinghouse chiller, checked the machine to ensure that it kept the appropriate pressure, and purchased and installed sufficient refrigerant to fully charge the machine. Transcript at 124-26. The chiller ran without event through the 1998 cooling season. Id. at 344. 32. Griffin appealed the contracting officer's April 28, 1998, decision to this Board on June 25, 1998. In March 1999, in preparation for the hearing in this case, the presiding judge noted that although the Contract Disputes Act requires that "[a]ll claims by a contractor against the government relating to a contract shall be in writing," 40 U.S.C. 605(a) (1994) (emphasis added), the "claim" upon which the contracting officer had issued her decision had been made orally. He asked Griffin to resubmit its claim in writing. A letter from Mr. Rushton to Ms. Hewitt, undated but received by her no later than March 25, 1999, states: "A claim is hereby submitted to the Contracting Officer under the provisions of the Contract Disputes Act, 41 U.S.C. Sec. 605(c), in the amount of $26,365.68 to cover the cost of repairs to the Westinghouse Chiller. The claim includes both materials including R12 Refrigerant and labor costs. A final decision is requested." At the hearing, Mr. Rushton testified that the amount claimed is the precise cost, in terms of materials and labor, that Griffin incurred to restore the proper amount of refrigerant to the chiller. Transcript at 281. He also asked that GSA pay overhead and profit markups on this amount. Id. at 284-86.[foot #] 10 Although Griffin's counsel represented that the contractor has provided all documentation it has in support of the claim, id. at 288, 290, Griffin has supplied no such documentation.[foot #] 11 Ms. Hewitt testified that her decision of April 1998 applies equally to the written claim as to the one made orally. Transcript at 433. Discussion Griffin was responsible, under the contract in question, for operating, maintaining, and repairing mechanical, electrical, plumbing, and utility systems at a federal building in Kansas City, Missouri. Finding 2. One piece of equipment in one of the systems in the building was a Westinghouse chiller. Finding 11. On November 24 and 25, 1997, Griffin pumped the refrigerant in that chiller into storage cylinders. In so doing, the contractor discovered that less than thirty percent of a full charge of refrigerant remained in the machine; evidently, more than seventy percent of the refrigerant had somehow escaped. Finding 22. The question posed by this appeal is whether Griffin or GSA, the Government agency which had contracted for Griffin's services, is liable for the cost of replacing the lost refrigerant. In attempting to answer this question, both parties have focused on the contract provision which allocates costs of repairs. (Replacing refrigerant in a chiller is one of the ----------- FOOTNOTE BEGINS --------- [foot #] 10 In its brief, Griffin says that it "wishes to revise its claim to $26,268.87, of which $25,668.87 relates to refrigerant costs and materials." Appellant's Brief at 13. [foot #] 11 GSA has supplied invoices showing that Griffin actually paid $24,187.65 for 1695 pounds of R-12 refrigerant, shipped to Kansas City. Respondent's Reply Brief at Attachments. Neither party has submitted any evidence as to the labor costs Griffin incurred in putting this refrigerant into the chiller, or in repairing the machine's leaks during the spring of 1998. ----------- FOOTNOTE ENDS ----------- contractor's maintenance duties. Finding 6.) The provision says that a repair for which the cost of labor, materials and parts is expected to be $10,000 or less ("maintenance repair") is the financial responsibility of the contractor; a repair for which the cost is expected to exceed $25,000 ("major repair") is the responsibility of the agency; and a repair for which the cost is expected to be between these figures ("minor repair") is to be split, with the contractor paying the first $10,000 and the agency paying the rest. Finding 7. This allocation is designed for repairs which are the fault of neither party. Other provisions of the contract make the contractor responsible for the cost of repairs which are caused by its actions or inactions, and using this provision to make the contractor an insurer against damage caused by the Government would be inappropriate. Griffin Services, Inc., GSBCA 11171, 92-1 BCA 24,556, at 122,533 (1991). Griffin maintains that there is no way of telling how or why the refrigerant escaped from the chiller. If we were to accept this position, we would impose on GSA the cost of replacing the substance, since the expected cost of the repair was more than $25,000 ($35,000 for fixing and recharging the chiller, of which $26,640 was the anticipated cost of the refrigerant itself). See Findings 24, 28. GSA has also attempted to use this contract provision as justification for imposing the cost on the other party. The agency's theory is that the loss of refrigerant must have been caused by many leaks -- at least three, possibly four, or several, according to various versions of the supposition -- and that each caused some of the refrigerant to escape. Dividing the total demonstrated cost of replacing the refrigerant ($24,187.65, Finding 32n.11) by the number of leaks yields a figure of less than $10,000 per leak, so, according to GSA, the cost was Griffin's responsibility. See Respondent's Brief at 19, 30; Respondent's Reply Brief at 7. We see several problems in this approach. Most fundamentally, the contract provision, which applies to no-fault repairs, does not apply to the agency's position that Griffin's own actions (or inactions) caused the refrigerant to leave the chiller. If the provision were to apply (that is to say, if we agreed with Griffin that no fault had been proven), other problems would still plague GSA's approach. The record contains no evidence that there were more than two leaks in the machine -- the ones discovered by Griffin on October 16 and October 29. See Finding 18. Dividing the cost by two would yield a figure between $10,000 and $25,000, so GSA would bear some of the cost. In any event, we do not read the provision as making any division appropriate; the replacement of refrigerant was a unitary action and cost. Additionally, the provision speaks of costs which are "expected," so to determine into which category a repair falls, one must look to the amount which is anticipated before the repair takes place, not the one which is proved after the fact.[foot #] 12 To accept GSA's position that the refrigerant loss was caused by Griffin, we must find a duty which the contractor owed to the agency and which it did not perform in an acceptable manner. From among the melange of performance standards contained in the contract, three are relevant to this case. The first two are related to each other. (1) The contractor's work "shall be of the highest quality and in keeping with the best practices of the industry." Finding 3. GSA seizes on this sentence as imposing a very high standard. The very next sentence, however, says, "Services rendered under this contract shall be of sufficient quality to ensure timely provision of services, optimum satisfaction of tenant agencies and adequate protection of the Government's assets." Id. Provision of services and satisfaction of tenant agencies are not at issue here, since the chiller was planned to be off-line for the entire relevant time period. Refrigerant inside chillers is undeniably a Government asset, though. For the purposes of this case, then, the "highest quality" of services and "best practices of the industry" mean simply that the contractor's services must have been of "sufficient quality" to ensure "adequate protection" of the refrigerant. (2) The contract makes Griffin "responsible for all damages to persons or property that occur as a result of the Contractor's fault or negligence." Finding 10. This provision requires Griffin to act in a non-negligent way and sets forth the consequences which will result from failure to meet this standard. One of those consequences is that Griffin will be responsible for all resulting damages to "property." Because the ----------- FOOTNOTE BEGINS --------- [foot #] 12 We find additional problems with GSA's application of this contract provision in the letters sent to Griffin by the contracting officer's representative and the contracting officer herself. The COR believed that because the repairs were expected to cost $35,000, they were "maintenance repairs" for which the contractor was fully responsible. Finding 28. The provision defines "maintenance repairs" as those with an expected cost of $10,000 or less, however; the agency is fully responsible for "major repairs" anticipated to cost more than $25,000. See Finding 7. The contracting officer thought that ___ Griffin should have "immediately perform[ed] maintenance repairs" ___________ and "immediately report[ed] minor repair work to the COR." ______________________ Finding 30. The provision requires that maintenance repairs be "immediately perform[ed]" only "when they are required in order to ensure continuity of operations or to return equipment and/or the system to service as soon as possible." Finding 7. Because the leaks occurred in the fall and the chiller was not scheduled to go on line again until the following summer, there was no need to fix the machine to ensure continuity of operations or to return it to service quickly. Neither party has suggested that a minor repair (expected cost, between $10,000 and $25,000) was involved here. ----------- FOOTNOTE ENDS ----------- term "property" is used in this clause without qualification, we understand it to both real and personal property, owned by anyone, including the Government. Thus, the provision requires Griffin to compensate GSA for loss of refrigerant belonging to the agency, if the loss results from the contractor's fault or negligence. The third standard to which the contract holds Griffin is a regulation promulgated by the Environmental Protection Administration (EPA) in implementation of the Clean Air Act, "Protection of Stratospheric Ozone." This regulation requires Griffin to have leaks in the chiller repaired within thirty days after they are discovered (or should have been discovered) "if the appliance is leaking at a rate such that the loss of refrigerant will exceed 15 percent of the total charge during a 12-month period." Finding 5. The Westinghouse chiller, when fully charged, holds 2,365 pounds of refrigerant. Finding 11. Fifteen percent of this amount is 355 pounds.[foot #] 13 ----------- FOOTNOTE BEGINS --------- [foot #] 13 The contract contains other standards to which GSA calls our attention, but which we consider inapplicable to the loss of refrigerant. The contractor must "take all steps and measures which would be taken by a prudent building owner to maximize the life expectancy of the property." Finding 3. The term "property" is not defined here, but reading this standard in conjunction with another one, regarding acceptable maintenance and repair, see id., we understand it to encompass the building ___ ___ and the equipment and systems within the building. There is no evidence that leaking refrigerant might have decreased the life expectancy of the building. Nor is there evidence that it could have decreased the life expectancy of any equipment or system within the building. Indeed, the chiller was off line for the season at all times relevant to this dispute. See Findings 11, ___ 17, 31. The contract also requires that Griffin provide an "acceptable" level of maintenance of the chiller. Finding 3. "Acceptable" is "the level of maintenance and repair which will preserve the facility/building(s), equipment and systems in unimpaired operating condition; i.e., above the point where deterioration will begin -- thereby diminishing the normal life expectance [sic] of the equipment." Id. There is no evidence, ___ however, that a lack of refrigerant in a chiller which is not operating might cause any deterioration to the chiller. The contract additionally requires Griffin to follow all publications listed within the document. Finding 4. At the same time, however, the contract says that what follows is only a "partial list" of those publications. The contract also says that Griffin must follow consensus safety and other standards developed by "such groups as" various named entities. Only one publication of the American Society for Heating, Refrigerating, (continued...) ----------- FOOTNOTE ENDS ----------- We have no hesitance in concluding that Griffin did not violate the third standard, the EPA regulation. The record contains evidence of only two leaks in the chiller during the fall of 1997. No one has suggested that the contractor should have found either of these leaks earlier than it did. The first one, discovered on October 16, was "very small." Finding 18. There is no reason to believe that the chiller was leaking, from this spot, at a rate such that the loss of refrigerant would have exceeded 355 pounds during the next twelve months. Thus, the contractor's decision not to fix that leak within thirty days of discovery was not an infraction of the EPA rule. The second leak was discovered on October 29, id., and even if it was so large as to cause refrigerant to escape at greater than the permissible rate, Griffin retrieved all remaining refrigerant from the ----------- FOOTNOTE BEGINS --------- [foot #] 13 (...continued) and Air Conditioning Engineers, Inc. (ASHRAE) is on the partial list, or mentioned elsewhere in the contract, and ASHRAE is not among the named entities. Id. GSA has alleged that Griffin ___ failed to follow the requirements contained in two ASHRAE publications, Guideline 3-1990 and Standard 15-1992, which are not listed in the contract. Respondent's Brief at 26, 31-32. In our view, holding a contractor to requirements not specified in a contract, but referenced only vaguely ("such as") or not at all, would be highly inequitable. How can a contractor be expected to comply with an unknown requirement? We take into consideration ASHRAE Guideline 3-1990 and Standard 15-1992 only to the extent that the contents of those publications may be generally understood as what constitutes a description of "adequate protection" of refrigerant. The contract also contains three provisions, called to our attention by GSA and set out in Finding 9, which allow the agency to make Griffin responsible for certain costs, but which do not apply to the situation before us. One says that if any of Griffin's services "do not conform with the contract requirements," the Government may require the contractor to perform those services again, or may have the services performed by others, either of these actions to be at Griffin's cost. The record does not contain any evidence that GSA ever required Griffin to perform any services a second time, or that GSA had any of the services covered by this contract performed by others. Another provision permits the agency to charge Griffin for repairing damage the contractor caused to "existing buildings, equipment, and vegetation on the Government installation." We have no evidence that the refrigerant which left the chiller, or anything Griffin did with regard to that refrigerant, damaged any building, equipment, or vegetation. Yet another contract provision permits the agency to hold Griffin responsible for excess costs incurred by the Government to complete any "minor repair." Neither party has contended that any repair relating to the loss of refrigerant was "minor," and the record contains no evidence that Griffin ever failed to complete any sort of repair. ----------- FOOTNOTE ENDS ----------- chiller within thirty days of that date, thereby ensuring that within the time prescribed by the EPA regulation, more of the substance would be lost. Finding 22. The fact that the leak was not repaired until the following spring, Finding 31, is immaterial because an off-line chiller which contains no refrigerant cannot damage stratospheric ozone. Whether Griffin violated its contractual requirement to provide services of "sufficient quality" to ensure "adequate protection" of the refrigerant, and/or the requirement that it act in a non-negligent way so as not to damage Government property, is a more difficult question. We recognize, in considering this matter, that according to the GSA employees who were in the best position to know, Griffin, in performing its work under this contract, (a) generally provided quality services through a very competent project manager, and (b) with respect to the Westinghouse chiller in particular, provided better maintenance than the agency had when using its own forces. Finding 23; see also Finding 1. We also recognize that during the three years before 1997, the machine had been plagued with a number of small leaks, and the amount of refrigerant which escaped through these leaks was approximately the amount which may be allowed to leave without requiring (per the EPA regulation) prompt repair. Findings 15-17. This pattern was clearly known to GSA, and it never caused the agency to direct Griffin to take more prompt action to fix leaks. As a result of the pattern and the agency's reaction to it, the contractor understandably developed a disposition not to take immediate action when confronted with a new, apparently small hole in the chiller. With these facts in mind, we think that GSA's first response to the loss of refrigerant -- to split the cost of replacement refrigerant with this excellent contractor, rather than to argue about which party was legally responsible for the loss -- was a very sensible reaction to the problem. See Finding 25. Now that the case has been presented to us, however, we cannot suggest practical compromises; we must resolve a dispute. The agency, as the proponent of the position that the contractor must absorb the cost of refilling the chiller with refrigerant because it failed to comply with contract requirements, bears the burden of proof. Halifax Engineering, Inc., GSBCA 8277, 91-1 BCA 23,427, at 117,507 (1990). We must determine whether, based on a preponderance of the evidence presented, it is more likely than not that Griffin's failure to take prompt action, in contravention of the first and/or second standards set out above, caused the loss of the refrigerant. Griffin; Halifax; Sam McKee, IBCA 1790, 85-3 BCA 18,426; Santa Fe Engineers, Inc., ASBCA 20370, 76-1 BCA 11,806; American Stevedores, Inc., ASBCA 5286, 60-2 BCA 2686. No one will ever know for sure, of course, why the refrigerant escaped. We conclude, however, having considered all the evidence, that the most likely cause of this occurrence was the contractor's failure to take prompt action. The leak discovered on October 29 is of pivotal importance in reaching this conclusion. This is the leak under which Griffin employees found a pool of oil, less than a pint in quantity. Finding 18. We have conflicting evidence as to this leak. Griffin's project manager, Mark Thomas, testified that the discharge from the leak, even when combined with discharge from the leak first observed on October 16, was "significantly less than what we experienced in relation to all the leaks [Griffin] discovered in the fall of [19]96," when the leakage was not a major problem. Id.; see also Finding 17. Mr. Thomas also testified that after October 29, Griffin determined that this leak had stopped. Finding 18. On the other hand, Griffin's operations logbook notes that on November 6 and twice on November 9, oil continued to leak from the chiller at this same spot, and to such an extent that a substance had to be placed on the floor to absorb the oil and a pan which caught falling oil had to be emptied more than once. Finding 21. We consider the contractor's mechanics' contemporaneous notes to be more credible than the project manager's memory nearly a year and a half after the event occurred. We know that in another instance, his memory was not correct. See Finding 22. Additionally, the fact that he began to take steps which would lead to removal of the refrigerant from the chiller only after the October 29 leak was found, Finding 20, persuades us that this leak must have been of greater importance than one would ascribe to a little problem that ended as quickly as it began. We also understand from the expert testimony of GSA mechanical engineer Gene Ramirez that leaks do not stop until the pressure inside the chiller is equal to the atmospheric pressure outside the machine. Finding 26. Thus, it would appear to be highly improbable that a leak, especially one large enough that oil can exit through it, would start and stop overnight. We rely on the expert testimony of Mr. Ramirez in finding that an oil leak in a chiller is especially significant. Since oil molecules are much bigger than refrigerant molecules, if oil passes through a hole, refrigerant surely will, too. Finding 26. Generally, Mr. Ramirez testified, the industry standard is that an operator of air conditioning equipment who notices a leak should make a plan of action for addressing it. Id. He referred to a standard text, which states: "If you find a leak of any kind -- refrigerant, water, steam -- stop and repair it. Record. Leaks are costly and may be dangerous. . . . [E]very leak found must be repaired. . . . A Freon leak is intolerable: It not only wastes expensive gas but, if not corrected, will certainly lead to worse problems." Transcript at 364-65 (quoting Sheldon J. Fuchs (ed.), Complete Building Equipment Maintenance Desk Book (1982) at 206, 213-24). ASHRAE Guideline 3-1990 is to like effect: " It is important that all leaks are noted and repaired immediately. . . . When a leak is located, that part of the system should be isolated to minimize the loss of refrigerant. If isolation is impractical, the refrigerant charge should be pumped into the system receiver or other suitable container. The repair can then be undertaken." Respondent's Exhibit 14 at 7, 9. Given the special significance of an oil leak, an operator who encounters one should be expected to pay close attention to these general rules. Unfortunately, in this one instance, Griffin proceeded to deal with the problem too slowly. The project manager recognized that before any action could be taken to repair the chiller, he would have to pump the remaining refrigerant into storage cylinders. Finding 20. To do this, of course, he would first have to secure a necessary quantity of such cylinders. When he was unable to rent enough containers in Kansas City, he decided to buy them directly from the manufacturer. Id. While this decision may have resulted in obtaining cylinders most cheaply, it was not prudent insofar as concerns the contract requirement that Griffin's services be of "sufficient quality" to ensure "adequate protection" of the refrigerant.[foot #] 14 The cylinders were not ordered until nine days after the oil leak was discovered, and they did not arrive (and thus were not put to use) until seventeen days after that. Id. Waiting more than a week to place an order for the tanks may or may not have been reasonable; we do not know precisely what transpired relative to the leak during that period. Even if the initial wait was reasonable, however, the decision to secure the cylinders from a distant source was not. At the same time that the contractor was ordering containers, its own employees were noting that the chiller was leaking in earnest. Findings 20, 21. Containers could have been purchased in town, or a service company could have been hired to pump the refrigerant into its own containers. Finding 20. Choosing either of these options would have allowed Griffin to stem the flow of refrigerant from the chiller more promptly on the date the cylinders were ordered. Additionally, the refrigerant could have been pumped into the condenser for at least temporary storage there. Finding 19. Although, as Griffin says, the condenser may have been susceptible to leaking, id., a container which might leak could hardly have been a less attractive choice than the place where the refrigerant was at the time -- a container that did leak. Not selecting one of these alternatives was penny-wise but pound-foolish. ----------- FOOTNOTE BEGINS --------- [foot #] 14 We appreciate Griffin's position that because the contractor thought the leaks were small, replacement of lost refrigerant would be a contractor responsibility because it would cost less than $10,000. Findings 19, 29. We agree with Griffin that in light of this view of the situation, and the pattern of practice between the parties as to provision of information about such maintenance repairs, Mr. Thomas's decision not to inform the COR about each leak as soon as it was discovered was not blameworthy. See Finding 23. This judgment does not affect our ___ ultimate conclusion as to responsibility for the cost of refrigerant replacement, however. ----------- FOOTNOTE ENDS ----------- In reaching this conclusion, we have considered Griffin Vice President Aubrey McStay's capable expert testimony. Mr. McStay testified that significant leaks of refrigerant can be heard and/or smelled, and that because there is no evidence that anyone heard or smelled refrigerant escaping from this chiller, it is unlikely that any leak here was significant. Transcript at 222- 23, 258. We find compelling, in response to this testimony, Mr. Ramirez's expert opinion that a slow leak, sufficient, over a period of weeks, to discharge as much refrigerant as was lost here, is not necessarily detectable by people working in a machine room. Finding 26. Mr. McStay also based his conclusion that there was no catastrophic loss from the October 29 leak on the assumption that, as Mr. Thomas had testified, that leak stopped shortly after it was discovered. Finding 19. We have found this testimony by the project manager not credible. Mr. McStay also considered possible a theory advanced by Mr. Thomas, that large quantities of refrigerant might have escaped through the chiller's pressure relief valves. These valves vent to the outside, so a contractor working inside the building would not be likely to see refrigerant leave through them. Id. at 60, 82, 225-27. Mr. McStay noted that after such a discharge, pressure relief valves reset themselves, so the fact that they appear normal does not mean that a discharge did not occur. Id. at 456- 58. Although we cannot say for sure that a large quantity of refrigerant did not escape through these valves, we consider such a possibility improbable. As Mr. Ramirez noted, Griffin has presented no facts which would indicate a cause for pressure inside the chiller to have risen to the point at which the relief valves would have opened. Id. at 359-60. Additionally, the alternative explanation that the culprit was leakage from the gasket at the expansion valve discovered on October 29 is quite likely to be correct.[foot #] 15 ----------- FOOTNOTE BEGINS --------- [foot #] 15 We have also considered Griffin's theory that GSA must bear some responsibility for the contractor's predicament of having to devote considerable time to repairing leaks in this excessively leaky chiller. Griffin says, "GSA's failure to inform appellant of the chiller's long history of maintenance, particularly the frequent loss of refrigerant, constitutes a constructive change in the contract thereby ____________________ entitling appellant to receive an equitable adjustment in the contract price." Appellant's Brief at 13. This argument suffers from two difficulties, one jurisdictional and the other substantive. First, Griffin has not made a claim to the contracting officer for an equitable adjustment, so this matter is not properly before us. Second, this chiller was not unusual, in terms of leaking refrigerant, for a machine of its age and design. Finding 13. All equipment in the building was available for inspection prior to the time Griffin submitted its bid for this contract. Appeal File, Exhibit 1 at 94. Before entering into the contract, Griffin had every reason to expect that it would have to maintain just the sort of machine with which it was saddled. ----------- FOOTNOTE ENDS ----------- Griffin's slow reaction to the oil leak was not in compliance with the contract requirement that its services be of sufficient quality to ensure adequate protection of the refrigerant. The escape of the refrigerant was consequently Griffin's fault. Although the evidence is that Griffin has generally performed its contractual duties well, the contractor failed in this one instance and is therefore responsible for replacing the refrigerant lost as a result of its action. Decision The appeal is DENIED. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ ______________________________ _ ROBERT W. PARKER MARY ELLEN COSTER WILLIAMS Board Judge Board Judge