ASBCA Awards Contractor Compensation for Extra-Contractual Changes

Contract changes, particularly in the construction context, can be flash points for the Government and a contractor. In some cases, the Government will assert that the contract requires the contractor to perform certain work; the contractor, pointing to the same (or another) contractual provision, will argue that the contract does not require it.

These diverging positions can sometimes lead to contentious litigation.

If you’ve ever found yourself in this position (or perhaps find yourself there currently), you’ll probably find a recent decision from the ASBCA, GSC Constr., Inc., ASBCA No. 59046 (July 11, 2019), illuminating. There, the board addressed various changes that the Government allegedly made to the contract, but for which it did not compensate the contractor. In some cases, it agreed with the contractor that compensation was owed; in one instance, it did not.

The task order, issued by the Army, required the contractor to “construct a combined Central Issue Facility . . . for permanent party troops and soldiers in Advanced Individual Training” at Ft. Sill, Oklahoma. The task order amount was $11,951,460 and the task order incorporated the contractor’s proposal and twelve amendments.

The contractor alleged that during construction the Government required it to perform additional work beyond the contractual requirements in four different areas: a potable (domestic) water line, a fire protection loop, a sanitary sewer main, and a truck turnaround. Let’s see how ASBCA analyzed each issue, focusing on key contract language for each.

Potable (Domestic) Water Line. On this issue, contractor contended that the Government owed it for relocating a main waterline. The ASBCA looked at the contractual language, which noted that the “the Government will provide the primary or main water pipe distribution.” ASBCA held that this specification “does not say that [the contractor] would relocate the water main; indeed, to the extent it addresses a water main at all, it points to the government as the responsible party.” Thus, ASBCA awarded the contractor $97,000 for relocation of the water main.

Fire Protection Loop. Here, the contractor argued that the contract required the Government to route the fire water line to 5 feet from the building. The Government pointed to a contract drawing stating that the “contractor . . . will route fire waterline.” ASBCA held that both the contract and the contractor’s proposal obligated the contractor to furnish the fire protection loop. It thus denied this part of the contractor’s appeal.

Sanitary Sewer Main. With respect to the sewer main, the contractor argued that the Government improperly required it to install a sewer main. The contractor argued that the contract only required it “design and construct the sanitary sewer service line between the sanitary sewer main to 5 feet from the building, including cleanout or manhole.” The Government, on the other hand, regarded construction of the sewer main as part of the contractor’s obligation as the “infrastructure” and “design/build contractor” and pointed to a drawing depicting the sewer main (but which did not state who would install it). ASBCA looked at the clear language of the specification and agreed with the contractor that the contract did not oblige the contractor to install a sewer main. It thus awarded the contractor $80,000 for the installation of the sewer main.

Truck Turnaround. During performance, the Government ordered the contractor to redesign and reconstruct a truck turnaround because it alleged that a 53-foot shipping container was unable to maneuver to the loading dock. In its analysis, ASBCA didn’t even reach the contractual terms because the Government did not provide any first hand evidence that the truck turnaround, as constructed by the contractor, did not meet the contract’s specifications. As a result, ASBCA awarded the contractor approximately $93,000 for this additional work.

This is a good decision for contractors, especially ones involved in construction. The contract specifications are your friend, as long as they are clear. If the contract doesn’t require you to perform work, the Government cannot obligate you to perform additional work without compensation. Conversely, if the contract makes you responsible for certain work, you won’t get extra money for doing what you already promised to do.

Questions about this post? Need help with a government contracts legal matter? Email us or give us a call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.