______________________________________________ GSBCA 11772, 11773, 11884, 11885, 11886, 11887, 11889 GRANTED IN PART; 11888 DENIED: October 7, 1994 _____________________________________________ GSBCA 11772, 11773, 11884, 11885, 11886, 11887, 11888, 11889 P. J. DICK INCORPORATED, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. John T. Flynn and Thomas J. Kelleher, Jr., of Smith, Currie & Hancock, Atlanta, GA, counsel for Appellant. Sharon A. Roach, Gerald L. Schrader, Martin A. Hom, Robert C. Smith, and M. Leah Wright, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), BORWICK, and NEILL. BORWICK, Board Judge. Background P. J. Dick, Incorporated, (P.J. Dick), appellant, was awarded Contract No. GS-03P-88-DXC-0069 on September 17, 1988. The contract was for renovation of the basement through the fourth floor of the United States Post Office and Courthouse in Pittsburgh, PA. After award of the contract to appellant, the General Services Administration (GSA), respondent, determined that larger amounts of unexposed asbestos remained on the site than had previously been determined. GSA determined that entering into a supplemental agreement with appellant for the asbestos abatement would be more cost efficient than contracting separately, since it would minimize coordination and delay problems. Appellant agreed to modification of its contract to include asbestos removal and to procure the subcontractors for the job. A Justification and Approval for other than Full and Open Competition under the Competition in Contracting Act, 41 U.S.C. 253(c)(1),was prepared. Thejustification and approvalstated that: [b]y allowing P.J. Dick Contracting to handle the asbestos, the Government would be placing the burden of managing the asbestos on the general contractor therefore encouraging him to be cooperative. This would in effect discourage delay claims. It is anticipated that a supplemental agreement could be issued and if necessary the contractor could be put to work under a Price to be Determined Later directive. Appeal File, GSBCA 11772-73, Exhibit 352. Because of numerous sources of asbestos discovered on the site, twelve requests for proposals (RFPs) were issued for removal of various types of asbestos. The RFPs were numbered RFP 1, 16, 84, 108, 144, 153, 157, 163, 169, 171, 176, and 184. Only RFPs 1, 16, 84, 144, 153, 157, 163, and 169 are before the Board. We conclude the Government is estopped from definitizing RFP 1 and RFP 16 at amounts lower than $511,092 and $615,357.60, respectively, plus appropriate markups. For RFP 153 we conclude that the RFP required the use of full containment procedures for removal of green floor tile asbestos and that no economic duress was exercised by the Government during the negotiations of the final price. The remaining, smaller RFPs involve issues of proof of costs and quantum, which are resolved as stated below. Findings of Fact GSBCA 11772 & 11773: RFP 1 & RFP 16 Competitive procurement 1. The parties agree that the work of removing asbestos was performed by supplemental agreements. Transcript, Vol. 2 at 346.[foot #] 1 Supplemental agreements direct work that are not within the scope of the original contract. Id. at 348. 2. Appellant and respondent agreed that appellant would conduct a separate "competitive procurement" for subcontractor services to remove the additional asbestos. The underlying scope of work for the procurement was described in RFP 1. On January 11, 1989, respondent provided appellant with RFP 1. Appeal File, GSBCA 11772-73, Exhibit 354. In RFP 1, respondent sought a lump sum base proposal for specified quantities of asbestos removal as ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Board held two hearings in these appeals, one in March of 1993 and one in May of 1993. The transcript of the March 1993 hearing is cited as Transcript, Vol. 1 at ___; the transcript of the May 1993 hearing is cited as Transcript, Vol. 2 at ___. ----------- FOOTNOTE ENDS ----------- stated on drawings SK-1 through SK-16. Id. Respondent also sought overtime unit prices for line item numbers 1 through 17, which would be used for upward or downward adjustment of the total lump sum price due to actual field quantity differences exceeding ten percent of stated quantities. Id. 3. The contracting officer stated that appellant would have to take bids from prospective subcontractors, preferably five to ten, but that he wanted appellant to receive at least three bids. Supplemental Appeal File, GSBCA 11772, Exhibit 3; Transcript, Vol. 2 at 49. Appellant was advised by the contracting officer that a unit price contract for the asbestos abatement work was expected. Transcript, Vol. 2 at 54. The contracting officer did not know what procedures appellant was going to use to solicit the asbestos removal subcontractors. Id. at 1035. Solicitation of Asbestos Removal Contractors 4. On January 3, 1989, appellant received a list of four prospective subcontractors from respondent. Appellant's Trial Notebook, Vol. 1, Exhibit 3. The asbestos removal subcontractors submitted lump sum prices as follows: American Environmental Contracting (AEC): $458,844.00 Coady Asbestos Removal, Inc. (Coady): $469,499.68 American Industrial Contracting, Inc. (AIC): $748,000.00 Kleen All of America, Inc. (Kleen): $811,461.00 Id. Subcontractor proposals 5. AEC and AIC did not provide after hours unit prices for all seventeen line items that were included in their proposals. Appeal File, Exhibit 344. AEC's bid was based on non-union hours, even though all bidders were informed that union labor was to be bid for this job. Transcript, Vol. 2 at 522. Coady did not provide quotes for numerous regular and after-hours unit prices. Appeal File, Exhibit 344. 6. Appellant held discussions only with AEC after the proposals were received. Transcript, Vol. 2 at 230. Appellant determined that Coady's proposal was not usable because it did not include the information needed to analyze it. Id. at 66-67. None of the other offerors was contacted to clarify or change its proposal. Id. at 230-31. Government's View on Competitiveness and Price Adequacy 7. On March 3, 1989, the contracting officer prepared a "Record of Conversation" regarding the competitiveness of the asbestos removal subcontractor procurement. Appeal File, GSBCA 11772-73, Exhibit 365. The contracting officer stated that "actual asbestos removal was competitively solicited [--] 5 firms solicited[,] four proposals rec'd." Id. The contracting officer further indicated that a price-to-be-determined-later (PDL) supplemental agreement was to be issued with price settlement occurring thirty days after receipt of an audit. Id. However, the contracting officer left open the possibility that an audit would not be necessary if a cost and pricing analysis could verify competitiveness. Id. 8. The contracting officer testified that he "believed that it [the subcontract] was solicited from enough firms that . . . [it] represent[ed] a market price." Transcript, Vol. 2 at 1131. Further, the contracting officer stated that he had specifically represented to another representative of GSA that the subcontract work for the asbestos removal had been competitively solicited. Id. at 1159. AEC as a Subcontractor 9. AEC's original price was increased from $458,844 to $470,775 because of added bonding costs and the additional encapsulation of 2700 square feet of smoke screen on the track level. Appeal File, GSBCA 11772-73, Exhibit 343. The quotation from AEC, with appellant's markups, was transmitted to the contracting officer as appellant's lump sum bid. Appellant's lump sum bid totalled $615,000, which is apportioned as follows: AEC original price: $458,884 Removal of 2700 sf of [smoke screen]: $ 8,100 Bond Costs: $ 12,140 Overhead: $ 80,000 Profit (10%): $ 55,908 Total: $614,992 (rounded to $615,000) Supplemental Appeal File, GSBCA 11772, Exhibits 14, 15. 10. On February 13, 1989, in response to the contracting officer's request for cost and pricing data for contract modification AS05, appellant submitted its Certificate of Cost or Pricing Data in support of its quotation 1. Appeal File, GSBCA 11772-73, Exhibit 321; Appellant's Trial Notebook, Vol. 1, Exhibit 11. Appellant requested that AEC provide a detailed breakdown of its bid, which was provided by AEC. On February 20, 1989, appellant submitted AEC's breakdown of its bid and its cost or pricing data certificates to respondent. Appeal File, GSBCA 11772-73, Exhibits 335-37. 11. Discussions ensued regarding RFP 1. They resulted in the parties clarifying the scope of the asbestos removal work, and agreeing that respondent would conduct general air monitoring, while appellant would perform personnel monitoring and testing. Transcript, Vol. 2 at 89-90. The final adjustments, when added to the previous proposal amount, totalled $704,361. Appeal File, GSBCA 11772-73, Exhibit 324 at 91. This amount included proposed amounts for removal of asbestos on the fourth floor of the building and added insurance costs. The breakdown of the proposal is as follows: Original Proposal (Lump sum) $615,000 Fourth Floor Work $ 54,152 Insurance $ 15,409 Personnel Monitoring $ 19,800 Total $704,361 Supplemental Appeal File, GSBCA 11772, Exhibit 35. Modification AS05 12. On March 23, 1989, respondent issued contract modification AS05, with the price to be determined later (PDL) in the not-to- exceed amount of $704,361 for work described in RFP 1. Appeal File, GSBCA 11676, Exhibit 8. Modification AS05 provided: GSA accepts the contractor's pricing for the base amount and line items 1 through 19 for progress payment purposes subject to audit and negotiations prior to definitization. GSA intends to open negotiations within thirty days of receipt of an audit. A definitization modification will be issued upon completion of a mutually agreeable price. Id. at 2. Appellant's vice president testified that he understood the term "subject to audit" to mean an audit of the bid, rather than an audit of incurred costs; once an audit of the bid was conducted, the price would be finalized. Transcript, Vol. 2, at 80-81. 13. On March 23, 1989, appellant submitted a second certificate of cost or pricing data. Appeal File, GSBCA 11772-73, Exhibit 320. Appellant and AEC entered into a subcontract with a face value of $511,092. Id., Exhibit 364. The subcontract contained unit prices that were to be used for upward or downward adjustment of the face value. Id. Modification AC17 14. In April of 1989, AEC began performing work under the subcontract with appellant to be billed under modification AS05. Transcript, Vol. 2 at 628. After the work began on modification AS05, on April 25, 1989, appellant notified respondent that additional asbestos had been discovered in the building. Appeal File, GSBCA 11772-73, Exhibit 409. The additional asbestos was black floor tile, which did not have a unit price in modification AS05 because modification AS05 was delineated by Drawings SK-1 through SK-16, which did not reference black floor tile. 15. On April 27, 1989, respondent provided oral notice, which was later memorialized by the contracting officer, to proceed to remove the black floor tile under RFP 16. Appeal File, GSBCA 11772-73, Exhibits 374-75. The price for the removal of the black floor tile was not-to-exceed $300,000. Id. On May 18, 1989, RFP 16 was issued for the removal of the black floor tile. Id., Exhibit 377. RFP 16 required appellant to "[p]rovide credit for demolition of 101,000 SF of black composition floor tile that will be removed as asbestos contaminated material [under modification AS05 ]." Id. On June 20, 1989, modification AC17 was issued with a not-to-exceed price of $300,000. Id., Exhibit 373. Proposal for Modification AC17 16. On June 20, 1989, AEC submitted a proposal to appellant in the amount of $1,010,000 ($10 per square foot x 101,000 square feet) for work to be performed under RFP 16. Transcript, Vol. 2 at 380. On June 30, 1989, appellant transmitted quotation 21 to respondent in response to RFP 16 in the amount of $1,229,494.15. Id. at 406. This amount included AEC's underlying $1,010,000 plus appellant's commissions and markups, less a credit to respondent for removal of the black floor tile by the demolition subcontractor using conventional methods. Id. Appellant advised respondent that it believed that respondent had accepted the unit prices in accordance with modification AS05. Id.; Transcript, Vol. 2 at 125. Appellant also indicated that it expected to be paid in accordance with those unit prices. Id. Contracting Officer's Request for Cost or Pricing Data 17. On July 5, 1989, respondent requested that appellant furnish cost or pricing data for quotation 21. Appeal File, GSBCA 11772- 73, Exhibit 405. Subsequently, appellant transmitted respondent's request for cost or pricing data to AEC. AEC believed that the cost or pricing data were not needed because the work was premised upon a "contract [i.e. lump sum] price" plus the unit prices. Transcript, Vol. 2 at 561. 18. In response to respondent's July 5th request for cost or pricing data, appellant submitted a letter objecting to the request with a supporting memorandum from appellant's outside counsel. In response to appellant's objections, the contracting officer informed appellant that a failure to submit the cost or pricing data would result in the termination for default of appellant's contract. Transcript, Vol. 2 at 132-33, 1085. The contracting officer advised appellant that preparations for acquiring replacement contractors were being arranged. Id. at 133. Faced with a termination for default, appellant ultimately agreed to submit cost or pricing data by September 6, 1989, but reserved the right to claim a waiver from the requirement. Appeal File, GSBCA 11772-73, Exhibit 403. The September 6, 1989, deadline was later extended to October 5, 1989. Id., Exhibit 400. 19. On August 18, 1989, respondent issued RFP 16(A) for the removal of 127,140 square feet of black floor tile, crediting for the deletion of the standard demolition of 127,140 square feet of black floor tile, which would now be removed under RFP 16(A) as asbestos contaminated material. Appeal File, GSBCA 11772-73, Exhibit 369. RFP 16(A) also instructed appellant to remove twenty-five linear feet of smoke screen. Id. 20. On October 6, 1989, appellant and AEC submitted cost or pricing data to respondent. Transcript, Vol. 2 at 145. Throughout the Fall of 1989, in response to repeated requests from the contracting officer, appellant submitted additional proposals for the asbestos work in various formats. Id. at 146. Audit of Appellant's Cost or Pricing Data 21. On December 18, 1989, the contracting officer requested that all asbestos abatement costs be consolidated into one proposal with defined cost elements and sufficient cost data. Appeal File, GSBCA 11772-73, Exhibits 355-56. On May 10, 1990, appellant submitted to the contracting officer a consolidated quotation for asbestos removal in the amount of $2,583,563.17. Id., Exhibit 367. 22. On June 11, 1990, the contracting officer forwarded the consolidated cost or pricing data submitted by appellant to the Regional Office of the GSA Inspector General - Audits. Appeal File, GSBCA 11884-89, Exhibit 340. The cost or pricing data was audited in two parts: (1) to examine AEC's costs from the beginning of the project through October 13, 1989; and (2) to examine proposed costs for asbestos work not yet performed. Id., Exhibit 384. The auditor from the Inspector General's Office determined that AEC had not submitted accurate, current, and complete cost or pricing data as defined in the Federal Acquisition Regulation (FAR). Appeal File, GSBCA 11772-73, Exhibit 384 at 5. 23. The auditor was provided insurance bills, bonding bills, disposal fee bills, and a payroll register. Transcript, Vol. 2 at 806. The auditor requested time cards for the project, but none were supplied by appellant. Id. Since no time cards were supplied to verify the payroll register, the auditor did not support the labor costs submitted in the cost or pricing data. Id. at 811. Additionally, the auditor found that AEC failed to segregate all of its direct and indirect costs. Id. at 807-08. Further, the auditor disallowed some direct and indirect costs submitted by the contractor, which included costs for advertising, interest, travel, and entertainment. Id. at 807. 24. The auditor determined that the AEC cost or pricing data were deficient. The deficiencies stemmed from inadequate record keeping of proposed labor rates and costs of material, equipment, and union dues. Transcript, Vol. 2 at 816-28. 25. As a result of the cost or pricing data and the alleged lack of sufficient record keeping, the auditor suspected appellant and AEC were engaged in fraudulent activity. Transcript, Vol. 2 at 828. Because of the suspicion of fraud, the auditor contacted the Inspector General's Office of Investigation in February of 1991, to initiate a formal investigation. Id. at 830. In the Spring of 1991, the investigation was dropped, allowing for the settlement of the asbestos modifications. Id. at 900, 1148. Payments by Appellant to Subcontractors 26. On September 21, 1990, the contracting officer informed appellant that it was his belief that appellant was improperly withholding $290,912 in progress payments from AEC. Supplemental Appeal File, GSBCA 11772, Exhibit 103. The contracting officer instructed appellant to: provide a detailed explanation of this situation within three (3) working days. . . . . Furthermore, you are directed to provide GSA with a study of all progress payments released to subcontractors . . . within twenty (20) working days. . . . Failure to comply with this direction will result in a suspension of all progress payments until P.J. Dick corrects payments to its subcontractors. Id. 27. Prior to submission of a response to the contracting officer's request for progress payment information, the contracting officer sent appellant a facsimile which stated: I estimate that P.J. Dick is responsible for at least 80% of the retainage that GSA is withholding and that only a few subcontractors are responsible for the rest. You are directed to provide a detailed explanation of retainage held against all subcontractors to this office. . . . GSA will continue the suspension of progress payments, un[til] this issue is resolved. Supplemental Appeal File, GSBCA 11772, Exhibit 104. The contracting officer alleged that appellant was retaining thirty- six percent of the progress payments due to AEC. Appeal File, GSBCA 11884-89, Exhibit 347. 28. By letter dated September 24, 1990, the contracting officer stated that: GSA is suspending all future progress payments in accordance with the applicable Davis-Bacon & progress payment clauses until P.J. Dick verifies to this office that all subcontractors have received their correct apportionment of progress payments. . . . However, a failure to correct this contractual deficiency within a reasonable time . . . will result in a suspension of all future progress payments and a request for investigation being forwarded to the Inspector General's office. Supplemental Appeal File, GSBCA 11772, Exhibit 106. 29. In response to the contracting officer's request, appellant informed the contracting officer that, in accord with its agreement with its subcontractor, it was retaining ten percent of the progress payments. Appeal File, GSBCA 11884-89, Exhibit 349. Appellant indicated that it was also retaining $54,700 from AEC, pending final resolution and definitization of the asbestos related RFPs. Id. Appellant had concerns that the PDLs might be definitized at amounts less than the originally stipulated maximum amounts. Id. 30. On September 25, 1990, the contracting officer informed appellant that its reasoning for withholding the $54,700 was not acceptable. Appeal File, GSBCA 11884-89, Exhibit 350 at 3 (unnumbered page). Further, the contracting officer stated that GSA would continue the suspension of progress payments until this issue was resolved. Id. On October 1, 1990, the contracting officer provided an additional response to appellant's original refusal to make progress payments to AEC, stating: Your correspondence to date is not an acceptable re- sponse. GSA will continue the suspension of progress payments until the issue is resolved. . . . . GSA will consider taking over subcontractor progress payments, if you fail to adequately respond in a reasonable time. . . . . In accordance with GSAR [General Services Acquisition Regulations] 552.212-74 - NON-COMPLIANCE WITH CONTRACT REQUIREMENTS (APR 1984), I consider your progress payments to subcontractors to be a violation of the applicable progress payment and Davis-Bacon Act regulations and contract clauses. Supplemental Appeal File, GSBCA 11772, Exhibit 113. 31. In response to the contracting officer's October 1, 1990 letter dated October 1, 1990, appellant made the following written request: If, as stated in your letter, you are 'reasonably sure that the contractor was due more than the PDL amount' and that you will 'be increasing the amounts when the PDLs were definitized,' then we request that you confirm to us, in writing, that these PDL amounts will not be reduced and that GSA will hold P.J. Dick harmless from any and all costs incurred as a result of its making payments to AEC against these PDLs. This must include but not be limited to overpayments. Upon receipt of such written direction from the GSA, P.J. Dick will release the amounts withheld. Supplemental Appeal File, GSBCA 11773, Exhibit 90. 32. The contracting officer testified at hearing that he had no authority under the Davis-Bacon act to suspend progress payments. Transcript, Vol. 2 at 1110. The contracting officer testified that a contractor and a subcontractor can enter into their own agreements as long as the progress payments clause is not violated. Id. at 1113. Further, the contracting officer admitted in hearing that at the time he was accusing P.J. Dick of violating the progress payments clause, he really was not sure that any violation had occurred. Id. The contracting officer claimed to have reviewed the subcontractor agreements at one time, but at the time of the review, it was not communicated that appellant's ten percent retainage would violate any regulation. Id. at 1114-15. 33. On October 4, 1990, the contracting officer orally guaranteed to appellant that the AEC portion of the asbestos payment due, $511,092, would not be reduced and that the not-to- exceed amount for the black tile removal, $300,000, would be increased, to an approximate value of $615,000. Transcript, Vol. 2 at 1139-40. The contracting officer transmitted written confirmation of the oral arrangement later in the day on October 4, 1990. The confirmation stated: Reference our conversation of this afternoon, I have determined that GSA will be able to accept at least the amount of the subcontractor's quote ($511,092) plus reasonable commission, bond and insurance costs for [modification] AS05 and that GSA is in negotiation with AEC on [modification] AC17 for the black ACM floor tile. Current offer to AEC is $4.84 per sf for 127,140 sf which equals $615,357.60. . . . . I expect to hold to your promise to release to AEC their correct apportionment of progress payments $744,312, ($511,092 for [modification] AS05 & $263,220 for [modification] AC17) by close of business tomorrow. Supplemental Appeal File, GSBCA 11772, Exhibit 115. 34. The contracting officer testified about the representations made to appellant on October 4, 1990: JUDGE BORWICK: Okay, fine. Wouldn't a reasonable businessman looking at this, after all that has gone on, assume that you are going to definitize at this amount. CONTRACTING OFFICER: Yes, or higher. JUDGE BORWICK: Or higher. CONTRACTING OFFICER: [Y]es. That was the intent of that. Transcript, Vol. 2 at 1132-33. In addition, the contracting officer, when asked whether he expected appellant to rely on what was stated in the October 4 confirmation and release money to AEC, replied, "Yes. I expected P.J. Dick to rely on this memo . . . that it's accurate. It displays my intention at the time." Id. at 1178-79. 35. The contracting officer, in the confirmation letter, indicated that the entire amount of AEC's subcontract under modification AS05 was to be paid even though the fourth floor work had not been completed. Transcript, Vol. 2 at 189. Subsequently, because the fourth floor work had not been completed, the contracting officer and appellant agreed to pay AEC $263,228 for removal of black floor tile (modification AC17) in accord with the confirmation letter, but appellant would not make further payments on modification AS05. Transcript, Vol. 2 at 190. 36. Appellant subsequently paid AEC $100,435, as well as revised apportioned payments. Transcript, Vol. 2 at 191. Appellant continued to hold ten percent retainage against monies due under modification AS05, but held no retainage against modification AC17. Retainage for modification AS05 amounted to $44,858. Id. at 193. 37. On October 29, 1990, appellant submitted a revised quotation for modification AS05 in the amount of $563,099.10. Appeal File, GSBCA 11772-73, Exhibit 390. In the revised quotation, appellant proposed a $9,482 credit for the elimination of standard removal of the black floor tile, rejected the contracting officer's offer of a seven percent of commission, and proposed a ten percent commission. Id. The revised proposal contained a certificate of cost or pricing data from AEC. Id. 38. On October 29, 1990, appellant submitted a revised quotation for modification AC17 in the amount of $714,042.12. Appeal File, GSBCA 11772-73, Exhibit 389. In its revised quotation, appellant rejected the contracting officer's offer of a seven percent commission and proposed a commission of ten percent. The revised proposal for modification AC17 contained a certificate of cost or pricing data from AEC. Id. 39. On December 20, 1990, the PDL maximum amount for RFP 16(A) was increased in modification ACG4 to allow appellant to bill for work completed while the parties negotiated a final price. Appeal File, GSBCA 11676, Exhibit 160.[foot #] 2 The amount of the increase, when added to the underlying not-to- exceed amount of $300,000, represented the amount of appellant's revised proposal for modification AC17 of $701,054. Id. 40. The contracting officer agreed that he would accept appellant's proposed quotation price with an eight percent markup if he could get his people to agree and the audit verified alleged costs. Transcript, Vol. 2 at 1144. On January 8, 1991, appellant submitted another revised quotation for modification AC17 in the amount of $701,053. Appeal File, GSBCA 11772-73, Exhibit 388. The revised quotation indicated that the quotation applied only to modification AC17 and that acceptance of the quotation would constitute a definitization of modification AC17. Id. On December 7, 1990, the contracting officer raised the obligation level of the PDL funding for modifications AS05 and AC17. Transcript, Vol. 2 at 1146. 41. The contracting officer increased the obligational levels of the PDLs to the negotiated amounts because "it was the agreement that we had among the parties that we should come to the best price available." Transcript, Vol. 2 at 1146. Appellant was paid the negotiated amounts and with an eight percent markup in January of 1991. Id. at 211. The negotiated final paid price for modification AC17 was $701,053.98. Id. 42. On May 23, 1991, the contracting officer indicated that he did not consider the prior agreements on modifications AS05 and AC17 to be final. Appellant's Trial Notebook, Exhibit 68. Appellant refused to negotiate further with the contracting officer. Id. On July 18, 1991, the contracting officer informed appellant that he possessed the audits and that there was no ----------- FOOTNOTE BEGINS --------- [foot #] 2 All dockets in the P.J. Dick appeals were consolidated for hearing and decision; many of the relevant documents are contained in appeal files for dockets not covered by this decision. ----------- FOOTNOTE ENDS ----------- reason why payments could not be resolved quickly. Transcript, Vol. 2 at 215. 43. On October 17, 1991, a meeting was held where the contracting officer offered $784,887 for all asbestos work for both modifications AS05 and AC17. Transcript, Vol. 2 at 418. The contracting officer's offer was rejected. Appellant's Proposal 44. A contracting officer's decision was requested on revised quotation 1, in response to modification AS05. On March 16, 1992, the contracting officer issued a decision unilaterally definitizing modification AS05 of RFP 1 in the amount of $277,877.35, stating as justification that appellant failed to provide cost or pricing data in support of its costs. AC17 was definitized at $265,171.67. For modification AS05, appellant was paid $552,860.94. Transcript, Vol. 2, at 211. For modification AC17, appellant was paid $701,053.98. Id. Compare Complaint at 47 with Answer at 46-47. Quantum Modification AS05 45. For modification AS05 of RFP 1, appellant's claim for relief totals $562,517.61. This figure is broken down as follows: AEC's request covering AS05 $511,092.00 Stipulated Credit $(10,000.00) Appellant's Commission (10%) $ 50,109.20 Appellant's Bond Costs $ 3,908.02 B&O Tax $ 3,330.66 Liability Insurance $ 4,077.73 TOTAL $562,517.61 Modification AC17 46. For modification AC17 of RFP 16, appellant's claim for relief totals $701,053.98. This figure is broken down as follows: Black Tile removal (127,140 sq. ft. at $5/sq. ft.)$635,700.00 Appellant's Commission (8%) $ 50,856.00 Appellant's Bond Costs $ 4,867.68 B&O Tax $ 4,148.54 Liability Insurance $ 2,190.60 Additional Liability Insurance $ 3,291.16 Total $701,053.98 GSBCA 11886: RFP 153 47. On October 26, 1990, respondent issued RFP 153 for the removal of asbestos floor tile (green floor tile) on the fourth floor to accommodate core drilling activities. Modification ACG3 directed appellant to proceed with Item 1 of the RFP at a price to be determined later in an amount not-to-exceed $90,000. Appeal File, GSBCA 11676, Exhibit 159. The parties agree that on or about November 21, 1990, GSA increased the scope of RFP 153 to include the removal of all asbestos-containing floor tile on the fourth floor. See Complaint, 6, Answer, 5-9, GSBCA 11886. The asbestos removal work covered by modification ACG3 was to be performed in conformance with the asbestos removal requirements of modification AS05. 48. On December 12, 1990, negotiations ensued between the contracting officer and AEC to determine a price for the removal of the green floor tile on the fourth floor of the building. A price of $4.65 per square foot was agreed upon by the parties. 49. On December 14, 1990, AEC confirmed its understanding of the agreement reached on December 12, 1990, regarding the price for removal of green floor tile on the fourth floor, stating, "Floor tile removal shall be performed for $4.65 per square foot. This is to be an all inclusive price to cover any and all requirements and costs associated with the work. This price shall not be adjusted upward or downward for any reason." Supplemental Appeal File, GSBCA 11772, Exhibit 145. 50. On December 18, 1990, modification ACH2 was signed by the contracting officer, with an effective date of December 12, 1990. Appeal File, GSBCA 11676, Exhibit 167. ACH2 increased the PDL maximum amount for RFP 153 from $90,000 to $134,733. Id. 51. The contracting officer alleges that the $4.65 price included "full containment" of the removed asbestos. Transcript, Vol. 2 at 1152. Full containment involves enclosing the entire area for asbestos removal with two layers of polyethylene sheeting and placing that enclosed area under negative air pressure. Transcript, Vol. 2 at 1008. 52. Appellant alleges that the $4.65 price included only containment as required by Allegheny County, the local governmental authority. Allegheny County only requires "critical containment" of the removed asbestos. Critical containment involves covering the areas where air or asbestos particles might escape with a layer of polyethylene sheeting. Transcript, Vol. 2 at 1008. The removal of the fourth floor asbestos was performed by appellant using only the "critical containment" process. Transcript, Vol. 2 at 597, 1152. 53. Appellant's project coordinator attended the negotiations for removal of the green floor tile. The project coordinator testified that: Mr. Jackson [AEC representative] told Mr. Newberg [the contracting officer] he would be willing to remove the green floor tile from the fourth floor for $4.65 a square foot. . . . . Mr Newberg's [the contracting officer's] response was, that includes full containment. Mr. Jackson [AEC representative] responded, that includes whatever the county -- whatever Allegheny County requires, whatever it takes. Mr Newberg put his hands in the air and said, Boy, Odie, you drive a hard bargain: 4.65. And they shook hands at $4.65 a foot . . . . . . . . . . . for the green floor tile. Transcript, Vol. 2 at 412. 54. However, the project coordinator stated, with regard to whether full containment or critical containment was required, "Well, I don't believe it was certain and there were also situations where if pipe insulation or ceiling plaster, those types of materials were to be removed, that would have to be done under full containment. So there was some uncertainty." Transcript, Vol. 2 at 207. 55. Respondent's resident engineer testified that the AEC representative stated, while in private, "[W]ell, the best I can do is $4.65 . . . out of his $5.00 price per foot for asbestos tile." Appellant's Hearing Exhibit 34 at 157. The resident engineer testified that upon returning to the negotiation, with regard to the $4.65 price, that, "I heard Newberg [contracting officer] acquiesce. . . . They all shook hands on it, all of them. . . ." Id. at 159. There is a dispute of fact as to whether, during negotiations, the contracting officer allowed AEC to use critical containment rather than full containment procedures. Based on the testimony of the contracting officer, and the uncertainty of P. J. Dick's project coordinator whether full containment was required, Finding 54, we find as fact that he insisted on use of full containment procedure for the removal of the asbestos. 56. The AEC representative testified that at the time of this negotiation, outstanding monies were owed by the Government to AEC. Transcript, Vol. 2 at 509-10. He maintained that because of the outstanding money, AEC was forced to work and forced to accept the $4.65 per square foot price. Id. 57. Continuation Form 1137 relating to the removal of the green asbestos tile stated that work "shall be in conformance with the asbestos removal requirements of modification AS05 ." AS05 incorporates by reference the contract's Section 02085, Asbestos Abatement Procedures. Appeal File, GSBCA 11772-73, Exhibit 322 at 2. Section 02085 requires that sealing of openings and fixtures "shall be accomplished with two polyethylene sheets secured in place utilizing any method deemed appropriate by the Construction Engineer." Id. at Part 3.01(A). All vertical surfaces and ceilings for which no asbestos is to be removed shall be covered with two polyethylene sheets. Id. at Part 3.01(E), (F). Finally, all fixed objects and equipment shall be covered with two polyethylene sheets secured in place. Id. at Part 3.01(G). 58. On November 19, 1990, Ferry Electric, one of appellant's subcontractors, advised P. J. Dick that it "proposed to perform" the layout work for $93. Appeal File, GSBCA 11884-89, Exhibit 414. Sherry & O'Leary, another subcontractor, also submitted an estimate for other layout work on the fourth floor to appellant by letter dated December 12, 1990. The estimate for that work totalled $2,427.02. 59. On January 2, 1991, appellant submitted quotation 155 in response to RFP 153 in the amount of $270,185.36. Appeal File, GSBCA 11884-89, Exhibit 414. AEC's portion of quotation 155 totalled $191,742.75. Id. Ferry Electric's $93 layout proposal and Sherry & O'Leary's $2,427.02 proposal were included as part of quotation 155. Id. The contracting officer denied the claims of Sherry & O'Leary and Ferry Electric because these subcontractors reasonably should have known that there was asbestos-containing material (ACM) in the area and, therefore, should not have initiated their layout work before removal of the ACM. Id. 60. Appellant's quotation included $.60 per square foot of carpet removed from the fourth floor, because the fourth floor carpet adhered to the asbestos floor tile when removed. This contaminated the carpet with asbestos. Appellant concluded that the $.60 charge was in addition to the underlying price of $4.65. 61. The independent government estimate (IGE) of January 18, 1991, contained a per square foot cost of $2.92 based on actual labor performed in removing 41,235 square feet of tile and actual costs of worker protection. Appeal File, GSBCA 11884-89, Exhibit 414 (Memorandum to Contracting Officer of January 25, 1991, from Kenneth Berman). 62. Appellant has been paid $106,159.06 for work performed under RFP 153. Appeal File, GSBCA 11884-89, Exhibit 414 (modification AOY4). On March 20, 1992, the contracting officer's final decision definitized the amount to be paid under RFP 153 as $106,159.06 because appellant failed to provide adequate cost or pricing data to support its costs under this contract modification. Claims 63. Appellant claims that the $4.65 per square foot price should be honored by the contracting officer. In the alternative, should the $4.65 per square foot price not be the contract price, appellant urges that a rate based upon the unit prices of modification AS05 should be the basis for calculating appellant's recovery. Appellant claims it is owed for removal of 7,983 square feet of carpet at $0.60 per square foot. Appellant also claims that the $4.65 price was agreed upon under conditions of economic duress. 64. Appellant's claim also included costs for two subcontractors: Ferry Electric's claim of $93 for laying out areas where the floor tile was to be removed for core drilling; and Sherry & O'Leary's claim of $2,427.02 for costs associated with layout work to facilitate asbestos tile removal. The subcontractor claims are for work allegedly performed prior to the time the contracting officer determined that all the floor tile would be removed. GSBCA 11884: RFP 84 65. On December 23, 1989, the contracting officer issued RFP 84 for the removal of asbestos-contaminated tape at various locations, the removal of the sub-basement transformer vault shed roof, the core drilling of asbestos floor tile, and the removal of asbestos pipe insulation. Appeal File, GSBCA 11884-89, Exhibit 413. On February 1, 1990, modification AC76 was issued, with an effective date of January 4, 1990, directing appellant to proceed with items 1 through 3 and 6 of RFP 84. Id., GSBCA 11645, Exhibit 79. Modification AC76 was issued with a price to be determined later in an amount not-to-exceed $19,000. Id. Items 4 and 5 were combined into item 4B. Appeal File, GSBCA 11884-89, Exhibit 413 (AEC's letter of Feb. 21, 1990) at 2. 66. On February 21, 1990, appellant submitted quotation 87 in response to RFP 84 in the amount of $48,150.94, of which AEC's portion of the quotation totaled $39,242.92. Appeal File, GSBCA 11884-89, Exhibit 413 (AEC's letter of February 12, 1990). Work on items 1, 3, and 4B had already been completed; thus AEC's quote was based on actual costs of performing those items--that is, its actual material costs, labor hours worked at the hourly rate, and its actual asbestos disposal costs. Id. (AEC's cost letter of February 13, 1990). AEC also submitted estimated labor, material, and disposal costs for line items 2 and 6. Id. For line items 1, 3, and 4B, the actual base cost was: Actual Line Item Base Cost 1 $11,188.02 3 $ 6,738.82 4B $ 713.49 Id. (AEC's letter of Feb. 12, 1989). For line items 2 and 6, appellant's estimated base cost was: Line Item Base Cost 2 $ 6,237.92 6 $ 1,310.21 The Government's estimated base cost was: Line Item Base Cost 2 $ 2,990.90 6 $ 1,356.00 Compare Appeal File, GSBCA 11884-89, Exhibit 413 (AEC's letter of Feb 12, 1989) with id. (Government estimate of Dec. 29, 1990). 67. On March 20, 1992, the contracting officer unilaterally definitized modification AC76 for work to be performed under RFP 84 in the amount of $25,964.64. He maintained he could not accept appellant's estimates because appellant had not submitted cost or pricing data to support the quotations. Complaint, GSBCA 11884, attachment (Contracting Officer's decision dated March 20, 1992.) Appellant, sought a total of $43,996, broken down as follows: AEC Claim: $39,243.00 P.J. Dick commission (10%) 3,924.00 P.J. Dick bond (1.92%) 829.00 AEC Supplemental Appeal File, Exhibit 434, Tab 47; Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 109. It sought the difference--$18,031.36--between the amount claimed and the amount definitized. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 109. 68. On February 19, 1993, the contracting officer denied appellant's claim for $18,031.36, as the definitized value of $25,964.64 represented the "fair and reasonable compensation for the work performed." Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, Exhibit 1. GSBCA 11885: RFP 144 69. On September 4, 1990, respondent issued RFP 144 for removal of asbestos pipe insulation at various locations. Appeal File, GSBCA 11884-89, Exhibit 412. Modification ACE7, dated September 14, 1990, directed appellant to proceed with items 1 through 10 of RFP 144. Modification ACE7 was issued with a price to be determined later in an amount not-to-exceed $20,000. 70. On March 15, 1991, appellant submitted quotation 179 for $22,574 for AEC's performance of the work. Appeal File, GSBCA 11884-89, Exhibit 412. The IGE was a base cost of $16,050. Id. at letter dated April 15, 1991. Appellant submitted its actual costs for line item 11 of RFP 144, but estimated costs for line items 1 through 10. On March 20, 1992, the contracting officer definitized the final price for RFP 144 at $12,498.17. He said that P.J. Dick failed to provide adequate cost or pricing data to support its costs. Appeal File, GSBCA 11884-89, Exhibit 412. Later, appellant claimed it was owed $12,809.83, which is the difference between the estimated cost of performance of RFP 144-- $25,308[foot #] 3--and the amount definitized, $12,498.17. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 116 and Exhibit 1. 71. On February 19, 1993, the contracting officer denied appellant's claim for $12,809.83, finding that the amount definitized was fair and reasonable compensation for the modification. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, Exhibit 1. GSBCA 11887: RFP 157 72. On November 28, 1990, RFP 157 was issued for the removal of asbestos contaminated acoustical ceiling, wall material, pipe insulation, carpet tiles, and vinyl floor tiling in various locations. Appeal File, GSBCA 11884-89, Exhibit 411. Contract modification ACH4, dated December 18, 1990, directed appellant to perform items 1 through 5 of RFP 157 at a price to be determined later in an amount not to exceed $33,000. Appeal File, GSBCA 11645-46, Exhibit 169. 73. The IGE for RFP 157's base cost was $19,782. Appeal File, GSBCA 11884-89, Exhibit 411 at GSA's April 15, 1991 memorandum. Appellant's base bid for the work was $18,742. Id. Appellant's base bid was derived by taking AEC's base bid for the work before overhead, commissions, profit, and insurance, and adding mark ups to it. Id. at AEC March 21, 1991 letter. AEC's base bid itemized all material and equipment costs associated with RFP 157, i.e., AEC bid its actual disposal, material, and equipment costs. Id. AEC also bid its actual labor hours and stated its labor rates. Id. AEC's base bid is calculated as follows: Material and Equipment: $6,953.00 Total Payroll Costs: $9,620.82 Disposal of ACM: $2,169.82 ----------- FOOTNOTE BEGINS --------- [foot #] 3 This figure represents AEC's estimated costs of $22,574 plus P. J. Dick's commission of ten percent and bonding costs of 1.92 percent. Appellant's Post-Hearing Brief, GSBCA 11885 at 3. ----------- FOOTNOTE ENDS ----------- Total Base Bid: $18,743.64[foot #] 4 Id. AEC's base bid is $1,039 ($19,782-$18,743) lower than the IGE. With AEC's overhead, profit, insurance, and commissions added to its base bid, its total bid to appellant was $28,091.62. Id. Appellant then added its commission (10%) and insurance, bond, and B&O tax (2.104%) to AEC's total bid. The final figure submitted to the contracting officer by appellant for all work performed under RFP 157 totalled $31,551. Id. at March 18, 1991 P.J. Dick letter. 74. The final IGE stated that the final cost for the work to be performed under RFP 157, with markups, should total $32,641.88. Appeal File, GSBCA 11884-89, Exhibit 411 at December 12, 1990. Appellant's total bid of $31,551 was $1,130.88 lower than the final IGE of $32,641.88. Id. The Chief of the Design and Construction Division for GSA Region 3 recommended to the contracting officer that "appropriate markups be added the PJ Dick's base cost [$18,742.00] to determine the negotiation range," for RFP 157. Id. at GSA's April 15, 1991 letter. 75. On March 30, 1992, the contracting officer unilaterally definitized modification ACH4 of RFP 157 in the amount of $15,553.23. Appeal File, GSBCA 11184-89, Exhibit 411. 76. Later, appellant claimed that GSA owed it $15,940.84, i.e., the difference between $31,494.07[foot #] 5 and $15,553.23, the amount definitized. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 135. On February 19, 1993, appellant's claim for $15,940.84 was denied by the contracting officer for the same reasons given for the denial of the claim for RFP 84. Finding 68; Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, Exhibit 1. GSBCA 11888: RFP 163 77. On December 18, 1990, RFP 163 was issued for the removal of various chase walls, which enclosed piping suspected of containing asbestos insulation.[foot #] 6 Demolition was to be performed while the area "was under containment for other asbestos removal." The modification also provided that "the proposal shall include costs for demolition by asbestos ----------- FOOTNOTE BEGINS --------- [foot #] 4 The discrepancy with the appellant's base bid of $18,742 is due to rounding. [foot #] 5 That figure is the sum of AEC's base bid plus P.J. Dick's ten percent commission and P.J. Dick's stipulated markup of 1.92 percent for bond, insurance, and B&O tax. [foot #] 6 The removal of the asbestos around the pipes was covered by other RFPs. Appeal File, GSBCA 11884-89, Exhibit 415. ----------- FOOTNOTE ENDS ----------- workers and proper disposal of asbestos material." Appeal File, GSBCA 11884-89, Exhibit 415. The contracting officer directed appellant under modification ACH7 to proceed with the work in RFP 163 with a price to be determined later not-to-exceed $5,500. 78. On May 21, 1991, appellant submitted quotation 197 in response to RFP 163 in the amount of $38,859, of which $35,725.89 was AEC's portion of the quote. Appeal File, GSBCA 11884-89, Exhibit 415 (AEC's letter of February 19, 1991). AEC quoted $35,725.89 as "itemized estimated costs for work completed under RFP 163." In its quote, appellant submitted estimates for the base cost of the work, including 650 hours of labor by asbestos workers. The final IGE for RFP 163 was $8,850. Id. at January 3, 1991, Estimate. The contracting officer unilaterally definitized modification ACH7 for RFP 163 in the amount of $16,252.83. Appeal File, GSBCA 11884-89, Exhibit 415. We take AEC at its word, and conclude, even though the quote was submitted after the work under RFP 163 was performed, that the quotation was based on estimates rather than actual costs. 79. Later, appellant claimed that GSA owed it $23,800.17, i.e., the difference between $40,053[foot #] 7 and $16,252.83, the amount definitized. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 146. GSA took a credit of $3,527 for contract demolition deleted by the modification. Appeal File, GSBCA 11884-89, Exhibit 415. Appellant does not challenge the credit; it seeks $20,273.17 (the difference between the claim and the credit). Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, 146. On February 19, 1993, appellant's claim was denied by the contracting officer for the same reasons given for the denial of the claim for RFP 84. Finding 68; Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, Exhibit 1. GSBCA 11889: RFP 169 80. On January 24, 1991, respondent issued RFP 169 for asbestos removal at various locations. The cost for AEC's actual labor, material, and disposal of ACM came to $48,873.36. Appeal File, GSBCA 11884-89, Exhibit 416. Application of overhead and profit brought the total to $65,399.88[foot #] 8. A bonding ----------- FOOTNOTE BEGINS --------- [foot #] 7 That figure is the sum of AEC's quotation plus P.J. Dick's ten percent commission and P.J. Dick's 1.92 percent bond. Appellant's Post-Hearing Brief at 3. [foot #] 8 This figure was calculated by adding total payroll costs, disposal costs and material costs from AEC's bid to appellant. The figures are as follows: Total Payroll: $32,625.36 Disposal of ACM $ 3,070.50 Material Costs: $13,177.50 (continued...) ----------- FOOTNOTE ENDS ----------- fee and insurance brought AEC's total to $73,247.87. Id. On February 20, 1991, appellant submitted quotation 175 in response to RFP 169 in the amount of $82,268, of which AEC's portion of the quotation totalled $73,247.87. Id. 81. On February 21, 1991, modification ACL1 directed appellant to proceed with RFP 169 at a price to be determined later in an amount not-to-exceed $35,000. Appeal File, GSBCA 11676, Exhibit 193. On March 30, 1992, the contracting officer unilaterally definitized modification ACL1 of RFP 169 in the amount of $40,554.01. Id. GSBCA 11884-89, Exhibit 416. 82. On January 5, 1993, appellant submitted a claim for $41,614, which was the difference between $82,168 and the amount definitized. The latter figure is the sum of AEC's costs and its markups plus P. J. Dick's commission of ten percent and bond cost of 1.92 percent. Appellant's Post-Hearing Brief at 3. On February 19, 1993, appellant's claim for $41,614 was denied by the contracting officer. Amended and Consolidated Complaints, GSBCA 11772, 11773, 11884-89, Exhibit 1. Contracting officer's calculations of quantum for all subject RFPs 83. The contracting officer, in arriving at a final price for each RFP, calculated a total price for all the RFPs and apportioned it based upon the percentage of price proposed by the contractor. Respondent's Trial Notebook, Exhibit 12 at 6 (unnumbered page). The contracting officer's calculations are as follows: Asbestos Disposal Costs: $ 84,131.70 Labor: $310,899.33 Materials: $153,619.29 Bare Cost: $548,640.32 Subcontractor Overhead (21.65%): $118,780.63 Subcontractor Profit (10%): $ 66,742.09 Subtotal: $734,163.04 Subcontractor Bond Cost (2.6%): $ 19,088.24 Subcontractor Insurance (9.4%): $ 69,011.33 Total: $822,262.61 Id. 84. Each individual figure was calculated as follows: ----------- FOOTNOTE BEGINS --------- [foot #] 8 (...continued) Overhead @ 21.65% $10,581.08 Profit @10% $ 5,945.44 __________ Total: $65,399.88 See Appeal File, GSBCA 11884-89, Exhibit 416, AEC's letter of ___ February 11, 1991 at 2-3. ----------- FOOTNOTE ENDS ----------- Asbestos Disposal Costs: Disposal costs were based on actual ACM disposed of multiplied by AEC's proposed unit prices for disposal. Respondent's Trial Notebook, Exhibit 12 at 6 (unnumbered page). For each RFP examined by a Government estimator, the disposal costs matched the cost quoted by AEC in its invoices. Compare AEC's Supplemental Appeal File, GSBCA 11772, Exhibit 112 with Appeal File, GSBCA 11884-89, Exhibits 411-13, 415-16. Labor: The contracting officer multiplied the number of hours worked according to certified payrolls by AEC's proposed labor rate of $20.34 for regular hours and $30.61 for overtime hours. Respondent's Trial Notebook, Exhibit 12 at 6 (unnumbered page). For each RFP examined by the estimator, the payroll costs matched the cost quoted by AEC in its invoices. Compare AEC's Supplemental Appeal File, GSBCA 11772, Exhibit 112 with Appeal File, GSBCA 11884-89, Exhibits 411-13, 415-16. Material: The contracting officer determined material costs to average twenty-eight percent of bare cost. Respondent's Trial Notebook, Exhibit 12 at 6 (unnumbered page). That estimate appeared to be based on the calculations of David Taylor, the GSA estimator. AEC's Supplemental Appeal File, GSBCA 11772, Exhibit 112; Transcript, Vol. 2 at 1007. Material costs were taken from AEC's invoices for each RFP upon which the estimator based calculations. Compare AEC's Supplemental Appeal File, GSBCA 11772, Exhibit 112 (estimate of Mr. David Taylor) with Appeal File, GSBCA 11884-89, Exhibit 413.[foot #] 9 These figures were based primarily upon AEC's actual costs. Specifically, the material costs for RFPs 84, 157, 169 and 176, and parts of 144 and 108, were based on actual material costs. See AEC Supplemental Appeal File, GSBCA 11772, Exhibit 112. The contracting officer performed the following calculation to determine material cost: Material = Bare Cost - Labor - Disposal. Respondent's Trial Notebook, Exhibit 12 at 6 (unnumbered page). ----------- FOOTNOTE BEGINS --------- [foot #] 9 For example, AEC quotes $4,062 in actual material costs for performing item 1 of RFP 84, Appeal File, GSBCA 11884-89, Exhibit 413, and that figure is listed in the Government's initial calculation as one component--identified as being the material cost of RFP 84--for the total material costs for performing the asbestos work. AEC's Supplemental Appeal File, GSBCA 11772, Exhibit 112. ----------- FOOTNOTE ENDS ----------- Bare Cost: The contracting officer performed the following calculation to determine Bare Cost: (Labor + Disposal)/.72. Id. Subcontractor Overhead: The contracting officer applied the rate that AEC proposed for its overhead (21.65%). Subcontractor Profit: The contracting officer applied the rate that AEC proposed for its profit (10%). Subcontractor Bond: The contracting officer applied the rate that AEC proposed for its bond costs (2.6%). Subcontractor Insurance: The contracting officer applied the rate that AEC proposed for its insurance costs (9.4%). Id. 85. The contracting officer then took the total of $822,262.61 and multiplied it by the ratio of AEC's proposed price for each RFP as it relates to AEC's cumulative proposed price for all RFPs. The calculations are as follows: RFP# Prop. Amt % of Total Proportionate Actual 1 $479,084.00 30.14% $247,856.92 16 $635,700.00 40.00% $328,883.13 84 $ 39,242.93 2.47% $ 20,302.56 108 $ 31,412.21 1.98% $ 16,251.29 144 $ 22,574.00 1.42% $ 11,678.79 153 $191,742.75 12.06% $ 99,199.24 157 $ 28,092.00 1.77% $ 14,533.56 163 $ 35,726.00 2.25% $ 18,483.06 169 $ 73,248.00 4.61% $ 37,895.16 171 $ 40,543.00 2.55% $ 20,975.16 176 $ 3,236.00 0.20% $ 1,647.16 184 $ 8,755.00 0.55% $ 4,529.45 $1,589,355.89 $822,262.61 86. The contracting officer then made separate calculations to apply P.J. Dick's commission and bond rates. The contracting officer accomplished this by placing the figures from the "Proportionate Actual" column in the table above into the "Marked Actual" column in the table below. Then he multiplied the figures in the "Marked Actual" column by the commission[foot #] 10 and bond rates. After applying ----------- FOOTNOTE BEGINS --------- [foot #] 10 The commission of ten percent is the percentage approved for AS05 by the contracting officer in his decision of March 16, 1992. Finding 86. The contracting officer used the (continued...) ----------- FOOTNOTE ENDS ----------- P.J. Dick's commission and bond rates, he added the values of the first three columns to arrive at the value at which he definitized each RFP, as stated in the "Definitized Value" column. The results of the contracting officer's calculations are as follows: Marked PJD Definitized RFP Actual "Profit" PJD Bonds Value 1 $247,856.92 $24,785.69 $5,234.74 $277,877.35 16 $328,883.13 $16,444.16 $6,630.28 $351,957.57 84 $ 20,302.56 $ 1,015.13 $ 409.30 $ 21,726.99 108 $ 16,251.29 $ 812.56 $ 327.63 Definitized 144 $ 11,678.79 $ 583.94 $ 235.44 $ 12,498.17 153 $ 99,199.24 $ 4,959.96 $1,999.86 $106,159.06 157 $ 14,533.56 $ 726.88 $ 293.00 $ 15,553.23 163 $ 18,483.06 $ 924.15 $ 372.62 $ 19,779.83 167 $ 37,895.16 $ 1,894.76 $ 763.97 $ 40,554.01 171 $ 20,975.16 $ 1,048.76 $ 422.86 Definitized 176 $ 1,647.16 $ 83.71 $ 33.75 Definitized 184 $ 4,529.45 $ 226.47 $ 91.31 Definitized Totals: $822,262.60 $53,505.98 $16,814.76 Respondent's Trial Exhibit 12 (Contracting Officer's Decision of March 16, 1992). 87. A rate of ten percent "profit" was approved by the contracting officer for RFP 1, with a rate of five percent "profit" for the remaining RFPs. A bond rate of 1.92 percent was approved by the contracting officer for all RFPs. Only the RFPs with final dollar amounts in the "Definitized Value" column are currently before the Board. Those RFPs are 1, 16, 84, 144, 153, ----------- FOOTNOTE BEGINS --------- [foot #] 10 (...continued) term "profit." Id. However, pursuant to the Equitable ___ Adjustments clause in the contract, GSAR 552.243-71 (1984), the contractor is entitled to a maximum ten percent commission (not profit) for work performed by other than his own forces. Appeal File, GSBCA 11676, Exhibit 1, 1, Construction Contract Clauses (Fixed Price), 69 at 29-30. ----------- FOOTNOTE ENDS ----------- 157, 163, and 169. Respondent's Trial Exhibit 12 (Contracting Officer's Decision of March 16, 1992). 88. The contracting officer used this apportionment method, claiming that P.J. Dick failed to negotiate reasonable settlements for each modification despite repeated attempts by the Government to negotiate. See Appeal File, GSBCA 11884-89, Exhibits 411-16 (Record of Change Order Negotiations). Discussion and Decision We consider first the contracting officer's methodology in definitizing the modifications. He summed AEC's proposals for performing each RFP, then derived the percent each proposal represented of the total proposal. Finding 85. For example, the contracting officer determined that AEC's proposed price for RFP 84 was 2.47 percent of the total of the amounts proposed. Finding 85. He then applied that percent to what he considered the total cost of performing all the RFPs--$822,262.61--derived by the methodology described in Findings 83 and 84, and arrived at an AEC price of $20,302.56. Finding 85. Application of P. J. Dick's markups brought the definitized price to $21,726.99. Finding 86. The contracting officer's methodology is inconsistent with the parties' conduct in issuing, performing, and seeking to negotiate a price for each RFP. Finding 88. We also find the contracting officer's methodology to be imprecise and unreasonable as it pertains to any individual RFP. In deriving the so-called "total bare cost" of $548,640.32, Finding 83, the contracting officer derived material costs by a ratio which had no relation to the actual material costs of each RFP as they were performed. Finding 84. The use of the ratio assumes that AEC and P. J. Dick would have the same proportionate material costs across every RFP, regardless of the size and difficulty of the job. The use of a ratio to definitize each RFP also assumes that AEC (and P.J. Dick) would incur costs for each RFP at the same proportionate rate, regardless of the size and difficulty of the job. These are unproven assumptions. There is no reasonable basis for this unusual apportionment method. As to the RFPs other than modifications AS05 and AC17, actual costs submitted by the contractor, if sufficiently documented and reasonable, are the favored method of determining a reasonable price for work completed. Indeed, respondent had enough confidence in AEC's actual costs to make those costs the basis for its apportionment exercise. Finding 84. Recently, our appellate authority showed a preference for "reasonable computation [of damages] from actual figures," Dawco Construction Inc. v. United States, 930 F.2d 872, 880 (Fed. Cir. 1991), and held: The issuance of a change order request should signal to the prudent contractor that it must maintain records detailing any additional work, just as should the [sic] encountering of differing site conditions. The Claims Court has not identified, nor has Dawco presented us with, any justification why such precision, or something sufficiently close, could not have been accomplished as to Dawco's other costs, including any additional overhead. Therefore, Dawco's inability to substantiate the existence, to any degree of certainty, of costs beyond those incurred by [a subcontractor], precludes resort to the "jury verdict method." . . . . Clearly, the "actual cost method" is preferred because it provides the court, or contracting officer with documented underlying expenses, ensuring that the final amount of the equitable adjustment will be just that- equitable-and not a windfall for either the government or the contractor. Id. at 881-82. See generally Delco Electronics Corp. v. United States, 17 Cl.Ct. 302 (1989), aff'd, 909 F.2d 1495 (Fed. Cir. 1990) (table). As to estimates: Where actual cost data is not available, estimates of the costs may be used. Such estimates should be prepared by competent individuals with adequate knowledge of the facts and circumstances. Estimates should also be supported with detailed substantiating data. Delco Electronics Corp., 17 Cl. Ct. at 321. See also Cocoa Electric Co, Inc., ASBCA 33921R, 94-1 BCA 26,298, at 130,801 (board adopted Government estimates of labor hours for construction work). Of course, contractors have the burden of establishing the upward adjustment to the contract price. Crestmont Cleaning Service and Supply Company, Inc., ASBCA 42385, 91-3 BCA 24,090, at 120,559-60. See generally Computer Based Systems, Inc. v. Department of Commerce, GSBCA 10668-COM, 92-2 BCA 24,783. Modifications AS05 and AC17 are special cases, as the contracting officer had agreements with P.J. Dick and AEC regarding these modifications. The apportionment methodology, used by the contracting officer to definitize all the RFPs, ignores the agreements that the contracting officer, P.J. Dick, and AEC entered into when negotiating these modifications. We first address these special cases--modifications AS05 and AC17-- and then consider the remaining RFPs. GSBCA 11772 and 11773: RFP 1 (modification AS05 ) & RFP 16 (AC17) Discussion Appellant alleges that the contracting officer's definitiza- tion prices for modifications AS05 and AC17 were unreasonable, because the contracting officer guaranteed that these prices would not be definitized below a set point, and he also negotiated, settled, and paid the negotiated price. Further, appellant contends that since the contracting officer failed to definitize at least at the minimum promised, the unit prices of modification AS05 ($12.65 per square foot) should be applied to modification AC17 as the basis for determining a reasonable price for appellant's work under modification AC17. We conclude that the Government is estopped from definitizing the prices for modification AS05 below the guaranteed minimum and that the Government negotiated, settled, and paid appellant for modification AC17, which represented the definitization of modification AC17. However, contrary to appellant's alternative position, the unit prices for modification AS05 were never intended to apply to modification AC17. Estoppel The Government is estopped from definitizing modification AS05 below a base price of $511,092. The contracting officer transmitted a facsimile that supports appellant's position; the contracting officer also gave testimony which also supported appellant's position. Specifically, the contracting officer: 1) stated that GSA would accept at least the amount of the subcontractor's quote ($511,092) plus reasonable commission, bond, and insurance costs for modification AS05, Finding 33; 2) admitted that a reasonable businessman would assume that the contracting officer would definitize at or above the stated dollar amounts in the facsimile for modification AS05, Finding 34; 3) intended appellant to rely on the facsimile, and so testified that he expected the contractor to rely on it, Finding 34; 4) instructed the contractor to make progress payments, based on the dollar amounts listed in the facsimile, to the subcontractor in exchange for the guaranteed minimum definitization prices, Finding 33; and 5) paid appellant $552,860.49 in accord with the guarantee, Finding 44. For modification AC17, the contracting officer: 1) stated that the offer to AEC for modification AC17 was $615,357.60, Finding 33; 2) instructed appellant to make progress payments under modification AC17 in lieu of the $615,357.60 offer to AEC, Finding 40; 3) paid appellant $701,053.98 for work performed under modification AC17, which in reliance upon appellant subsequently made payments to AEC for work performed under modification AC17, Findings 36, 40, 44; and 4) as part of the $701,053.98, included an eight percent commission markup for appellant, Finding 41. In spite of the guarantees and the payments of negotiated amounts to appellant, the contracting officer definitized modification AS05 at $277,877.35 and modification AC17 at $265,171.67. The contracting officer's calculations are set forth above. See Findings 83-87. Oral and written statements of the contracting officer may bind the Government. In Kozak Micro Systems, Inc., the Board held that: (i) where Government officials acting within the scope of their authority make statements to contrac- tors, . . . (ii) the statements interpret and are not inconsistent with contract or solicitation provisions or with statute, and (iii) the recipients of these statements reasonably rely on them, the Government is estopped from acting contrary to its representation. Kozak Micro Systems, Inc., GSBCA 10519, 91-1 BCA 23,342, at 117,060, reconsideration denied, 91-1 BCA 23,593, aff'd, 989 F.2d 1201 (Fed. Cir. 1993) (table). In the instant case, the contracting officer acted within his authority by accepting at least the amount of the subcontractor's quote of $511,092 for modification AS05 . Appellant's position that these figures be honored by the contracting officer is not inconsistent with the terms of the contract. Appellant reasonably relied on the contracting officer's acceptance and released payments to subcontractors. Under this contract, asbestos removal work was an out-of-scope modification, Finding 1; consequently, appellant was not under a pre-existing contractual duty to perform the work. It could have politely declined the task of removing asbestos, delaying its contract performance while the Government labored to procure and administer a separate contract for asbestos removal. When appellant agreed to perform the work, it expected finalization of payment without undue difficulty. Finding 12. When the Government issued the modification on a PDL basis, it introduced major uncertainties into the process. Finally, appellant reached an agreement with the Government for a payment of at least $511,092 for AEC's work, plus reasonable commission, bond, and insurance costs. Finding 33. The contracting officer testified that he intended appellant to rely on the acceptance, as it displayed his intention at the time. Further, the contracting officer stated, and we agree, that a reasonable businessman would have expected the final definitized price to be at these amounts or higher based upon his representations. Since the contracting officer's written acceptance was an authorized act, not contrary to the contract provisions, upon which appellant reasonably relied, the Government is estopped from acting contrary to the written acceptance to appellant. Kozak. For modification AC17, the contracting officer's payment of $701,053.98 to appellant was within his authority and indicative of the parties' agreement. The contracting officer's acceptance of an eight percent commission rate was also within his authority. Further, appellant relied upon the contracting officer's statements and subsequently released payments to subcontractors to enable them, particularly AEC, to perform the work. Since the contracting officer's acceptance of the $701,053.98 was an authorized act, not contrary to the contract provisions, upon which appellant reasonably relied, the Government is estopped from acting contrary to the acceptance to appellant. Kozak.[foot #] 11 Mutual Assent Respondent argued that there was no meeting of the minds and no mutual assent for binding prices. Instead, respondent proposes that appellant be paid under the theory of quantum meruit. We disagree. The contracting officer placed a minimum amount that appellant was to receive under RFP 1 in exchange for ----------- FOOTNOTE BEGINS --------- [foot #] 11 The Kozak holding is consistent with the _____ Supreme Court's holding in Office of Personnel Management v. ____________________________________ Richmond, 496 U.S. 414 (1990). The decision in OPM was rendered ________ ___ in a context very different from this or the Kozak case. In OPM, _____ ___ the claimant was seeking to secure benefits pursuant to a Government employee's advice that was contrary to statute; here, as in Kozak, appellant asks that the Government be held to _____ statements which the Government official made within the scope of his authority and discretion under the contract. Thus, as in Kozak, our appellant is attempting only to secure the benefits of _____ what it contends is its bargain; it is not trying to gain funds under conditions which Congress has precluded. ----------- FOOTNOTE ENDS ----------- release of retainage to AEC. The parties were able to agree that $511,092 plus contractor markups for RFP 1 was what appellant was entitled to as a minimum. Respondent agreed to pay, and subsequently paid, appellant $701,053.98 for modification AC17. Based upon the agreed minimum price for modification AS05 and the settled price for modification AC17, we find that appellant and respondent had a meeting of the minds and mutually assented to those prices. Respondent's argument that appellant is entitled to only quantum meruit recovery is unpersuasive. Appellant is therefore entitled to payment under the contract as amended. Unit Prices After the work began on modification AS05 , appellant notified respondent that additional asbestos--black floor tile-- had been discovered in the building. Finding 14. Unit prices for black floor tile were not included in modification AS05 because the scope of modification AS05 was defined by Drawings SK-1 through SK-16, which did not reference black floor tile. Therefore, the black floor tile was not included within the scope of work of modification AS05. Id. Appellant's argument that work performed under modification AC17 should be subject to the unit prices set forth in modification AS05 is unpersuasive. Appellant is entitled to $511,092, minus a $10,000 stipulated credit, which includes AEC's markups, as the base price for modification AS05 of RFP 1. Appellant is entitled to $701,053.98, the final price for modification AC17. Markups & Final Price For modification AS05, we apply appellant's markups as follows: P.J. Dick Commission: 10% Bond Rate: 1.92%[foot #] 12 With appellant's markups, the final price for modification AS05 is $561,784.26. Decision These appeals are GRANTED IN PART. Appellant is entitled to $1,262,838.24 as the total of the definitized prices for modifications AS05 and AC17. ----------- FOOTNOTE BEGINS --------- [foot #] 12 For all the subject RFPs, the parties stipulated that appellant is entitled to be paid 1.92 percent of the final adjusted contract price, including profit (they mean commission, see n. 9), bonding, liability insurance, and the B&O ___ tax. See Stipulations Regarding Project Delays and Quantum of ___ May 24, 1993. "The 1.92% rate is to be applied to any contract adjustment. . . ." Id. ___ ----------- FOOTNOTE ENDS ----------- GSBCA 11886 Discussion RFP 153 Full vs. Critical Containment Appellant and respondent reached agreement on a price for the removal of the asbestos floor tile--$4.65 per square foot. Finding 48. There is a dispute as to whether the price included total containment or critical containment. We find that the contract supports the respondent's view that full containment was required. Further, appellant's witness did not convince us that the contracting officer waived the full containment requirement. Contract requirements Section 02085, as incorporated by reference, requires that sealing of openings and fixtures be accomplished with two polyethylene sheets secured in place utilizing any method deemed appropriate by the construction engineer, that all vertical surfaces and ceilings for which no asbestos is to be removed shall be covered with two polyethylene sheets, and that all fixed objects and equipment shall be covered with two polyethylene sheets secured in place. Finding 57. Full containment requires two layers of polyethylene, while critical containment requires only one layer of polyethylene. Findings 51, 52. We conclude from the language of the contract that requiring two layers of polyethylene sheeting on these surfaces and fixed objects is functionally equivalent to full containment. Finding 57. Therefore, based upon the language of Section 02085, appellant was required to perform the asbestos removal under full containment procedures as part of the underlying contract. Alleged waiver by the contracting officer The contracting officer did not waive the contract requirement for full containment during the negotiations with AEC. Appellant's project coordinator testified that AEC agreed to remove the asbestos in accord with "whatever Allegheny County requires, whatever it takes." Finding 53. He testified that "there was some uncertainty" as to whether full or critical containment was required. Finding 54. We have examined the testimony of the project coordinator and are not convinced that his comments regarding oral statements made at negotiations are definite enough to establish that the contracting officer agreed to critical containment. Further, appellant has not established that the contracting officer waived the requirements of the contract (Section 02085) requiring full containment because, at best, there was some uncertainty on the part of appellant whether full or critical containment was required. Finding 54. The contracting officer, moreover, testified that the agreement included full containment. Finding 51. We have found as fact that the contracting officer did not waive the requirement for full containment. Finding 55. Price Reduction The Government is entitled to strict compliance with the contract requirements. Caddell Construction Company, Inc., GSBCA 9196-R, et al., 91-1 BCA 23,478, at 117,783. This rule ensures that public funds will not be improperly expended. Id. Strict compliance can be enforced by rejecting the work or requiring a price reduction for nonconforming work. This rule is applied to construction contracts. Id. The Government agreed to $4.65 per square foot of green floor tile removed under full containment procedures. The contractor did not use full containment procedures, but instead used critical containment procedures. Government estimates, based upon actual costs associated with the work, show that critical containment procedures are less costly than full containment procedures. Therefore, the Government is entitled to a price reduction for appellant's failure to use full containment. Caddell Construction. Appellant did not submit its actual costs associated with the removal of 41,235 square feet of asbestos, but merely took 41,235 square feet multiplied by $4.65 to arrive at its price. The contracting officer's definitized figure was premised upon an apportionment method we have deemed unreasonable. See discussion above. The IGE for RFP 153 was that $2.92 was the appropriate price for removal using critical containment, and $3.85 was the rate for removal using full containment. Finding 61. The IGE is based upon actual costs associated with the work performed under RFP 153. Id. The preferred method of proving costs is through the submission of actual cost data. Dawco. Since the IGE is premised upon actual costs associated with the work performed under RFP 153, and appellant has provided us with no better estimates of the values involved, we use the IGE figures as the measure of appellant's recovery. Id. Since AEC only used critical containment, we use the $2.92 square foot rate for the quantum of this change. AEC removed 41,235 square feet of asbestos. Multiplying the $2.92 rate by the 41,235 square feet totals $120,406.20. Addition of P.J. Dick's ten percent commission ($12,040.62) and 1.92 percent bond ($2,542.98) results in a final price of $134,,989.79. Appellant has been paid $106,159.06 for work performed under this RFP. Finding 62. The difference totals $28,830.73. We note, with regard to the commission percentage for this RFP and for the others discussed below, that the contracting officer gave appellant only five percent. He did so because he considered that "the risk [to P.J. Dick] was essentially non- existent." Appeal File, GSBCA 11884-89, Exhibit 413, Contracting Officer's Decision, Record of Change Order Negotiations. We disagree with the contracting officer's analysis. Profit and commission are to be determined by a variety of factors, including contractor effort, general management, and contract cost risk. FAR 15.905-1. See I. Alper Co. v. General Services Administration, GSBCA 11335, 92-3 BCA 25,038. P.J. Dick was faced with negotiating and managing AEC's asbestos-removal, a difficult task, given the hazardous nature of the work. P.J. Dick's management of this task was made more difficult by respondent's withholding progress payments, Finding 28, the refusal to definitize modifications, particularly modifications AS05 and AC17, at agreed-upon amounts, Finding 42, and the continued expansion of the asbestos removal effort from one to eventually twelve RFPs. While most of the hardship fell on AEC, P.J. Dick suffered hardship, too. We hold that a ten percent commission is appropriate on all RFPs involved in this decision. Economic Duress Appellant claims that the $4.65 price that AEC agreed upon for removal of the green floor tile was made under conditions of economic duress. Our circuit court has indicated that "[e]conomic pressure and 'even the threat of considerable financial loss' are not duress." Systems Technology Associates, Inc. v. United States, 699 F.2d 1383, 1387 (Fed. Cir. 1983). "Economic duress may not be implied merely from the making of a hard bargain." Id. "Some wrongful conduct must be shown, to shift the responsibility for bargains made by plaintiff under stress of financial necessity." Id. The coercive nature of the act and the defeating of the will of the party coerced is dispositive as to the wrongfulness to the conduct. Id. The AEC representative testified that at the time of negotiations, GSA owed outstanding monies to AEC. Further, he maintained because of the outstanding money, AEC was forced to work and forced into accepting the $4.65 per square foot price. Finding 56. However, appellant's project coordinator testified that the AEC representative proposed the $4.65 price. Further, the contracting officer merely agreed to AEC's proposed price. The contracting officer did not coerce AEC into the agreement. The project coordinator testified that the AEC representative stated that "he would be willing to remove the green floor tile. . . for $4.65 a square foot." Finding 53 (emphasis added). In fact, the project coordinator testified that the contracting officer told the AEC representative that he "drive[s] a hard bargain." Id. Respondent's resident engineer testified that the AEC representative stated, while in private, "well, the best I can do is $4.65 . . . out of his $5.00 price per foot for asbestos tile." The resident engineer testified that, upon returning to the negotiation, with regard to the $4.65 price, "I heard Newberg [contracting officer] acquiesce. . . . They all shook hands on it, all of them. . . ." Finding 55. We are not convinced by the testimony that AEC agreed to the $4.65 per square foot price because of outstanding monies owed by the Government. We find that testimony not to be credible in light of the private representation that AEC could agree to $4.65 per square foot and the willingness of AEC to offer the contracting officer this price. Appellant has not shown that the contracting officer's conduct in the negotiations was wrongful or coercive, or that AEC's will was defeated during the negotiations. Systems Technology Associates, 699 F.2d at 1387. Appellant's argument is unpersuasive. Unit Prices Appellant argued that the unit prices for modification AS05 should be used to determine the amount of its entitlement. The unit prices for modification AS05 were never intended to apply to any of the RFPs except RFP 1. Appellant's argument for application of the unit prices for modification AS05 is unpersuasive. Ferry Electric Appellant claims that it is entitled to $93, plus markups, for initial layout work performed by one of its subcontractors, Ferry Electric. Appellant alleged that Ferry Electric performed this work prior to the time the contracting officer determined that all the floor tile would be removed. Since all the green floor tile had to be removed, says Ferry Electric, it had to lay out the areas again, after the removal. Finding 64. The contracting officer determined that Ferry Electric performed the initial layout work after appellant knew that all asbestos- containing floor tile on the fourth floor would have to be removed and denied that portion of appellant's proposal. Finding 59. The estimate--$93--for the proposed work was sent by Ferry Electric to appellant by facsimile dated November 19, 1990. On November 21, GSA increased the scope of RFP 153 to include the removal of all asbestos containing floor tile on the fourth floor. Finding 47. Appellant included Ferry Electric's estimate as part of its quotation 155 of January 2, 1991. Appellant maintains that Ferry Electric had to perform the layout work twice, that is, on top of the contaminated floor tile, and after it was removed. Appellant has not established that Ferry Electric performed the initial layout work before November 21, the date the contracting officer increased the scope of work of RFP 153 to include the removal of all asbestos- containing floor tile. Finding 47. Indeed, on November 19, Ferry Electric only proposed to perform the layout work, Finding 58, and the record does not show that Ferry Electric performed that work before November 21. By November 21, appellant knew the floor tile would have to be removed completely, and appellant should have coordinated its subcontractors' work taking that into account. Therefore, appellant is not entitled to the cost of Ferry Electric's initial work because the initial layout work was not required. Sherry & O'Leary Appellant claims that it is entitled to $2,427.02, plus markups, for initial layout work performed by its subcontractor Sherry & O'Leary, Inc. Appellant's layout claim for Sherry & O'Leary mirrors the claim for Ferry discussed immediately above. We deny the claim for the same reason we denied the claim for Ferry. The estimate for the layout work--$2,427.02--was sent by Sherry & O'Leary to appellant by letter dated December 12, 1990. Appellant received the estimate on December 14, 1990, three weeks after appellant knew that the scope of RFP 153 was increased to include removal of all asbestos-containing floor tile. Finding 47. Appellant should have coordinated the layout work of this subcontractor in light of the increase in the scope of work of RFP 153. Therefore, appellant is not entitled to the cost of that work because appellant should not have allowed Sherry & O'Leary to perform the work, knowing that the scope of RFP 153 had been increased. Decision The appeal is GRANTED IN PART. Appellant is awarded $28,830.73 GSBCA 11884: RFP 84 Discussion The contracting officer denied appellant's claim because appellant allegedly failed to submit cost or pricing data to support its proposed quotation in response to RFP 84. Finding 67. Appellant submitted its actual costs for items 1, 3, and 4B of RFP 84, itemizing all material costs, indicating its labor hours worked and at what hourly rate, and stating its actual asbestos disposal costs. Appellant submitted estimates of its costs for line items 2 and 6. Full cost or pricing data for change orders is only required when the modification is expected to exceed $100,000, FAR 15.804- 2(a)(1)(ii), or under the conditions specified in FAR 15.804- 2(a)(3)(ii). Otherwise, the contracting officer may request partial or limited data to determine a reasonable price. FAR 15.804-6(a)(2). Nothing in the record indicates that the contracting officer requested either full or limited cost or pricing data for RFPs of $100,000 or less. See Findings 10, 17. RFP 84 was not expected to exceed $100,000. Finding 65. Consequently, to the extent that the contracting officer's definitization of this and any other RFPs of $100,000 or lesser value, and the denial of appellant's subsequent claim, was based on alleged lack of cost or pricing data, that determination was erroneous. For RFP 84, appellant submitted adequate limited data, i.e., its actual costs for line items 1, 3, and 4B and estimates for line items 2 and 6. Turning to the quantum due, as noted in our earlier preliminary discussion, we accept the actual costs for line items 1, 3, and 4B, as actual costs are preferred. Dawco. Our review of the record reveals no explanation of how AEC arrived at its estimates for the line items in the smaller RFPs. Absent explanation, we cannot accept the estimates as sufficient proof, where claimant does not explain why actual costs were not used. Delco Electronics. As appellant has failed to meet its burden for those line items, we award appellant a sum equal to the IGE for each line item not proven by actual costs. For line items 1, 3, and 4B, the total actual base cost was $18,640.33. Finding 66. The total IGE for line items 2 and 6 was $4,346.90. The total base cost is $22,987.23. Markups With regard to markups to the base price of $22,987.23, we apply the following rates: Reasonable Rate of Overhead: 21.65% [AEC] Reasonable Profit 10% [AEC] Reasonable Commission: 10% [P. J. Dick] Bond Rate: 1.92% Taking the base bid ($22,987.23) and applying contractor and subcontractor markups totals $34,486.07.[foot #] 13 Appellant is entitled to $34,486.07 as the reasonable price for work contemplated under RFP 84. Appellant has been paid $25,964.64 under RFP 84. The difference totals $8,521.43. Decision The appeal is GRANTED IN PART. We award appellant $8,521.43. GSBCA 11885: RFP 144 ----------- FOOTNOTE BEGINS --------- [foot #] 13 The $34,486.07 figure is calculated by taking the base bid multiplied by the subcontractor markups, then by appellant's markups, and then by the amount allocated for bond costs. The calculations are as follows: $22,987.23 x 1.2165 (AEC Overhead) = $27,963.97 $27,963.97 x 1.10 (AEC Profit) = $30,760.37 $30,760.37 x 1.10 (P.J. Dick Commission) = $33,836.41 $33,836.41 x 1.0192 (Bond Cost) = $34,486.07 The final total with the contractor and subcontractor markups is $34,486.07. ----------- FOOTNOTE ENDS ----------- Discussion Principles and applications contained in our previous discussions apply to this RFP. We award appellant its actual costs for those line items where appellant provided them, and the Government IGE where actual costs were not provided. AEC's actual cost for the work on item 11 of RFP 144 was $4,963.22. The IGE estimated that the base cost for the work performed under RFP 144 was $16,050.00, including the actual cost of item 11. Finding 70. The IGE is further substantiated by appellant's estimate for the base work of $15,090. We find that the Government estimate of $16,050.00 is a fair approximation of the quantum appellant is entitled to for the base cost of the work under RFP 144. Id. Markups With regard to markups to the base price of $16,050.00, we apply the following rates: Reasonable Rate of Overhead: 21.65% [AEC] Reasonable Profit 10% [AEC] Reasonable Rate of Commission: 10% [P. J. Dick] Bond Rate: 1.92% [P. J. Dick] Taking the base bid ($16,050) and applying contractor and subcontractor markups totals $24,078.63.[foot #] 14 Appellant is entitled to $24,078.63 as the reasonable price for work contemplated under RFP 144. Appellant has been paid $12,498.17 under RFP 144. The difference totals $11,580.46. Decision The appeal is GRANTED IN PART. We award appellant $11,580.46. GSBCA 11887: RFP 157 Discussion ----------- FOOTNOTE BEGINS --------- [foot #] 14 The $24,078.63 figure is calculated by taking the base bid multiplied by the subcontractor markups, then by appellant's markups, and then by the amount allocated for bond costs. The calculations are as follows: $16,050.00 x 1.2165 (AEC Overhead) = $19,524.82 $19,524.82 x 1.10 (AEC Profit) = $21,477.30 $21,477.30 x 1.10 (PJ Dick Commission)= $23,625.03 $23,625.03 x 1.0192 (Bond Cost) = $24,078.63 The final total with the recommended base and the contractor and subcontractor markups is $24,078.63. ----------- FOOTNOTE ENDS ----------- Appellant submitted AEC's actual costs for performing RFP 157. Those costs were $18,742. Finding 73. Appellant has proven its actual costs of $18,742, plus reasonable markups. For the markups, we apply the following rates: Reasonable Rate of Overhead: 21.65% [AEC] Reasonable Rate of Profit: 10% [AEC] Reasonable Commission: 10% [P. J. Dick] Bond Rate: 1.92% [P. J. Dick] Taking the base bid ($18,742) and applying the contractor a n d s u b c o n t r a c t o r m a r k u p s t o t a l s $28,117.25.[foot #] 15 Appellant has been paid $15,553.23 under RFP 157. The difference totals $12,564.02. Decision The appeal is GRANTED IN PART; appellant is awarded $12,564.02. GSBCA 11888: RFP 163 Discussion We deny this appeal. Appellant submitted only AEC's estimates for the performance of this work, not its actual costs. Finding 78. The IGE for this RFP was $8,850, considerably less than the amount definitized. Id. Appellant is thus entitled to nothing for this RFP.[foot #] 16 Decision The appeal is DENIED. ----------- FOOTNOTE BEGINS --------- [foot #] 15 The $28,117.25 figure is calculated by taking the base bid multiplied by the subcontractor markups, then by appellant's markups, by the amount allocated for bond costs. The calculations are as follows: $18,742.00 x 1.2165 (AEC Overhead) = $22,799.64 $22,799.64 x 1.10 (AEC Profit) = $25,079.61 $25,079.61 x 1.10 (P.J. Dick Commission) = $27,587.57 $27,587.57 x 1.0192 (Bond Cost) = $28,117.25 The final total with the recommended base and contracting officer's approved markups is $28,117.25. [foot #] 16 This RFP illustrates the anomalies that can result from relying on an apportionment methodology for definitizing the RFPs. ----------- FOOTNOTE ENDS ----------- GSBCA 11889: RFP 169 Discussion Appellant submitted AEC's actual costs--$48,873.36--for RFP 169, itemizing all material costs, indicating its labor hours worked and at what hourly rate, and stating its actual asbestos disposal costs for each line item. Finding 80. We take appellant's base cost ($48,873.36) and apply overhead, profit, and bond rates to arrive at a total price for work contemplated under RFP 169. With regard to markups to the base price, we apply the following rates: Reasonable Rate of Overhead: 21.65% [AEC] Reasonable Rate of Profit: 10% [AEC] Reasonable Commission 10% [P. J. Dick] Bond Rate: 1.92% [P. J. Dick] Application of these rates to the base cost totals $73,321.12.[foot #] 17 Appellant is entitled to $73,321.12 for RFP 169 and has been paid $40,554.00. The difference totals $32,767.12. Decision The appeal is GRANTED IN PART; appellant is awarded $32,767.12. Summary of Decisions For GSBCA 11772-73, the appeals are GRANTED IN PART, appellant is entitled to $1,262,838.24; For GSBCA 11884, the appeal is GRANTED IN PART, appellant is awarded $8,521.43; For GSBCA 11885, the appeal is GRANTED IN PART, appellant is awarded $11,580.46; For GSBCA 11886, the appeal is GRANTED IN PART, appellant is awarded $28,830.76; For GSBCA 11887, the appeal is GRANTED IN PART, appellant is awarded $12,564.02; For GSBCA 11888, the appeal is DENIED; For GSBCA 11889, the appeal is ----------- FOOTNOTE BEGINS --------- [foot #] 17 This figure was calculated by multiplying the base cost ($48,873.36) by the rates, as stated below: $48,873.36 x 1.2165 (AEC Overhead) = $59,454.44 $59,454.44 x 1.10 (AEC Profit) = $65,399.88 $65,399.88 x 1.10 (P.J. Dick Commission) = $71,939.87 $71,939.87 x 1.0192 (Bond Costs) = $73,321.12 Total Price: $73,321.12 ----------- FOOTNOTE ENDS ----------- GRANTED IN PART, appellant is awarded $32,767.12. Amounts awarded shall bear interest in accordance with the Contract Disputes Act of 1978. _________________________ ANTHONY S. BORWICK Board Judge We concur: ____________________ ____________________ STEPHEN M. DANIELS EDWIN B. NEILL Board Judge Board Judge