_______________________________________________________ CROSS-MOTIONS FOR SUMMARY RELIEF DENIED: April 5, 1996 _______________________________________________________ GSBCA 13496 JOHN J. KIRLIN, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Charles F. Mitchell, General Counsel of John J. Kirlin, Inc., Rockville, MD, counsel for Appellant. Scarlett D. Grose, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, HYATT, and DeGRAFF. DeGRAFF, Board Judge. The parties filed cross-motions for summary relief. Because there are material facts in dispute and neither party is entitled to relief as a matter of law, the motions are denied. Background John J. Kirlin, Inc. (Kirlin) and the General Services Administration (GSA) entered into a contract for central heating plant renovations. The parties signed this contract modification, with the second sentence crossed out: The contractor's signature in Block 15B indicates this agreement to perform the work described in this contract modification as an increase to this contract in the amount of $156,650. Settlement of this change ------------------------- order includes all direct, indirect, and impact costs. ------------------------------------------------------- The contract time was extended by 188 calendar days extending the contract completion date from November 26, 1993 to June 3, 1994 and the contractor agreed that there will be no indirect delay and impact costs to the government due to this time extension to the contract. The government also agreed that all liquidated damages and or actual damages associated with this contract extension will be waived. The work involved in this change order is to provide all labor, material, and equipment to perform the following work. Provide all labor, material and equipment for the following additional work: 1) A Boiler Control System including Microprocessor Control System (MCS) computer, two touch screens, two trackballs, an ADS panel, and two CRT consoles. All equipment listed shall be provided and installed in accordance with specification applicable requirements. 2) Resume work on the final connections to the existing controls with the new DCS controls on Boiler #3 & #4. This work was previously stopped per the letter to the contractor dated May 3, 1993. One boiler will be released at one time. The work shall start on #4 first. After #4 boiler is completed and ready for operation, #3 boiler will be released. 3) Provide necessary credit for deleting the two new completely enclosed front control panels and providing the control panels front only. The line through the second sentence is initialed by an unknown person or persons. Appellant's Exhibit 1. We do not know when the sentence was stricken. Kirlin submitted a claim to the contracting officer on February 16, 1995. Kirlin claimed that, due to the extension of the contract's completion date, it was due an equitable adjustment of $535,025 to the contract price. Appeal File, Exhibit 11. In a letter dated October 6, 1995, the contracting officer denied the claim. The contracting officer stated that the costs claimed by Kirlin were not direct costs of the change order. According to the contracting officer, 1) some of the claimed costs (extended warranty costs) were simply incurred later than originally anticipated and were not additional direct costs; 2) other claimed costs (impact costs of subcontractors) were not direct costs of the change order and Kirlin had agreed not to claim these costs; and 3) Kirlin's claimed costs were associated with other change orders and were due to Kirlin's own delay. Appeal File, Exhibit 12. Kirlin filed this appeal on December 15, 1995. In its complaint, Kirlin states that its performance was delayed by events beyond its control and, as a result, the parties entered into the contract modification quoted above. Kirlin states that, by signing the modification, it did not agree to waive any "extended" direct costs that were incurred due to the extension of the contract's completion date or due to events that occurred before the modification. Kirlin states that it incurred "extended" performance costs of $535,025 due to the delay that is the subject of the modification. Complaint 2, 3. Discussion Kirlin filed a motion for summary relief. Kirlin asks us to decide that the language of the modification does not bar Kirlin's claim for direct delay and impact costs (Kirlin also refers to these as "extended direct performance costs") due to delays associated with the modification and due to delays which occurred before the modification was executed. Kirlin repeatedly misquotes the language of the modification, and then argues that the plain language of the modification, as misstated by Kirlin, does not bar its claim. GSA opposed Kirlin's motion for summary relief and filed its own motion for summary relief. GSA argues that the clear language of the modification establishes that Kirlin is not entitled to the relief it seeks. GSA's focus is upon the sentence that states, "The government also agreed that all liquidated damages and or actual damages associated with this contract extension will be waived." GSA argues that this sentence cannot mean that GSA agrees to give up both liquidated damages and actual damages, because liquidated damages take the place of actual damages. GSA reads this sentence as clearly saying that GSA agreed that it would give up its claim for liquidated damages and that Kirlin would give up its claim for actual damages related to the modification. Alternatively, GSA argues that the language of the modification is ambiguous and that its interpretation of the language is the only reasonable reading of the modification. In support of this argument, GSA asserts that Kirlin was responsible for delay related to Boilers 1 and 2, GSA was responsible for delay related to Boilers 3 and 4, and the modification was meant to memorialize the parties' agreement that neither one would seek any costs from the other due to the concurrent delay. GSA supports its assertion with a detailed affidavit from its project manager. In its statement of genuine issues filed in opposition to GSA's motion, Kirlin states that the parties never agreed that the extension of time would be at no cost to GSA. Kirlin supports its statement with a brief affidavit which says simply, "The Statements made in Kirlin's Statement of Genuine Issues in Response to GSA's Cross-Motion for Partial Summary Relief are true and correct." In its reply to GSA's opposition to its motion for summary relief, Kirlin raises a new argument in support of its position that the modification language is clear. Kirlin points out that only the second sentence of the modification mentions direct costs, and this sentence was deleted from the modification. Kirlin never addresses GSA's argument that the waiver of "actual damages" means Kirlin's damages. Both parties' motions for summary relief are denied. We do not agree with either party that the language of the modification is clear, and the uncontested material facts do not enable us to determine the intent of the parties when they signed the modification. We reject Kirlin's argument that the language of the modification is clear, because the argument is based upon Kirlin's misstatement of that language. We do not know what Kirlin quoted in its motion, but it was not the modification. Also, Kirlin's reading of the modification is not supported by the deletion of the second sentence. Neither party has established whether the deleted sentence is associated only with the preceding sentence, which is unrelated to the time extension, or whether the deleted sentence is associated with the succeeding sentences of the modification, which are related to the time extension. Also, we do not know when the sentence was crossed out or who agreed to the deletion. The sentence relied upon by GSA in support of its argument that the meaning of the modification is clear states that GSA agrees that liquidated damages and actual damages associated with the contract extension would be waived. Although GSA is correct that liquidated damages take the place of actual damages, the sentence does not state clearly what was going to be waived by which party. The parties put forward different interpretations of the modification's language and, as far as we can determine at this time, each interpretation is consistent with the remaining language of the contract. GSA offers evidence of the parties' intent when they agreed to the modification, but GSA's evidence is countered, just barely, by Kirlin. We do not know who drafted the language contained in the modification, and we do not know whether the non-drafter reasonably interpreted the modification's language when the modification was signed. Summary relief at this juncture is not possible. The parties will have to establish what they intended when they entered into the modification. If Kirlin is correct that it did not waive its claim for direct costs, it will then have to establish that the costs it requests are direct costs. We mention this because Kirlin uses the word "extended" to describe its costs, and this term is one that is customarily used to describe indirect costs, not direct costs. Also, the parties will have to establish whether there was concurrent delay, and Kirlin will have to prove the amount of direct costs that it incurred as the result of the modification. If GSA is correct that Kirlin waived its claim for direct costs, then Kirlin is not entitled to any recovery. Decision The parties' motions for summary relief are DENIED. ______________________________ MARTHA H. DeGRAFF Board Judge We concur: _____________________________ ______________________________ ANTHONY S. BORWICK CATHERINE B. HYATT Board Judge Board Judge