Board of Contract Appeals General Services Administration Washington, D.C. 20405 __________________________________________ GRANTED IN PART: December 8, 1999 __________________________________________ GSBCA 14620-SSA J.B. CONSTRUCTION, Appellant, v. SOCIAL SECURITY ADMINISTRATION, Respondent. Thomas M. Finrow, La Mesa, CA, counsel for Appellant. Seth Binstock, Office of General Counsel, Social Security Administration, Baltimore, MD, counsel for Respondent. Before Board Judges PARKER, BORWICK, and DeGRAFF. PARKER, Board Judge. This appeal arises out of a $31,937 fixed-price contract for the removal and installation of carpeting. The work was scheduled to take place during April-May 1996 and actually took place during May-June 1996. Appellant, J.B. Construction, alleges that the change in schedule, and other changes made by the Social Security Administration (SSA), caused appellant to incur additional costs to perform the contract. Appellant also alleges that the changes caused it to incur additional costs on another Government contract and to lose the opportunity to perform a commercial contract. Altogether, appellant claims that SSA owes appellant $38,069.66. As discussed below, we find that J.B. Construction is entitled to an equitable adjustment in the amount of $ 1980. Findings of Fact The Contract Work 1. The contract required appellant to remove an estimated 4562 square meters of carpet and replace it with approximately 4457 square meters of carpet tile and 105 square meters of vinyl tile. The work was to be performed in the Harold Washington Social Security Center in Chicago, Illinois. Appeal File, Exhibit 1. 2. Because the building was occupied, the work was to be performed on weekends: All work shall be completed Friday through Sunday during other than normal business hours. The hours of work for this contract shall be Friday, 6:30 p.m. through Sunday, 4:00 p.m. All work must be completed in stages, on Government scheduled weekends, until completion or as otherwise stated in this contract. All work under this contract must be completed by May 31, 1996. Appeal File, Exhibit 1. The Government estimated that the work would take six weekends and cost about $60,000. Supplemental Appeal File, Exhibit N. 3. The contractor was required to move furniture out of the way and then put it back after installing the new carpet (or vinyl tile): Inspection of Work Being Performed . . . . The Government will also provide a spotter to assure that the contractor returns the furniture to the proper location after the carpet is installed. Appeal File, Exhibit 1 at 4. The equipment (rigging apparatus) for the moving shall be suitable for the type of furniture to be moved and the casters and rollers shall be of a design where the new installed carpet tiles will not shift, lift or buckle when the furniture is moved back to its original position. Id. at 9. 4. The contractor was required to use 3M Blue glue for carpet installation. Appeal File, Exhibit 1 at 6. 3M Blue is a type of glue that releases easily, similar to the glue on a post- it note. The contract did not identify the type of glue used to secure the old carpeting in the building, but it urged prospective bidders to inspect the work site on February 21, 1996, in order to acquaint themselves with all general and local conditions that may affect the price of contract performance. Id. at 17. Appellant did not inspect the work site before preparing its bid. Transcript at 139-40. Appellant s Bid 5. J.B. Construction is a woman owned sole proprietorship. Appeal File, Exhibit 1 at 33. Jill Bailey is the owner of the company. Transcript at 14, 129. Ms. Bailey s husband, William Bailey, is a salaried employee who, as appellant s general manager, supervises all of J.B. s jobs. Id. at 90-91, 129. 6. The solicitation required bidders to bid on two different packages of work. Package 1 consisted of removing and installing carpet tiles from the entire third floor; Package 2 consisted of the same work, minus two areas of the third floor. Appeal File, Exhibit 1. For Package 1 (the package which was ultimately awarded), appellant s written estimate shows that it anticipated using, in addition to Mr. Bailey, two mechanics and two laborers to perform the work over a period of six weekends. Id., Exhibit 6. 7. Appellant s bid of $31,937 for Package 1 was based on, among other things, appellant s assumption that the existing carpeting was held in place by an easily releasable glue, such as 3M Blue, and also that the Government spotter referred to in the solicitation would tell the contractor exactly where to place the furniture when appellant was replacing it after installing the new carpet. Transcript at 34. Although appellant s bid was based on six weekends of work, appellant s general manager thought that the contractor could perform the work in four weekends. Id. at 21. Appellant s Alleged Mistake 8. Because some of the bids received were considerably lower than the Government estimate, SSA requested that several bidders, including appellant, verify their bids. Appeal File, Exhibit 3; Appeal File Supplement, Exhibits A-L. On April 6, 1996, appellant verified its bid for Package 1 and alleged a mistake-in-bid for Package 2. Because SSA did not know whether it was going to award Package 1 or Package 2, SSA decided to resolve appellant s mistake-in-bid allegation. Transcript at 205-08. On April 12, SSA requested that appellant submit documentation supporting its allegation of mistake. On April 26, after reviewing appellant s documentation, SSA denied appellant s request to amend its bid for Package 2. Appeal File, Exhibit 7. 9. On April 30, 1996, SSA awarded the contract for Package 1 to appellant, at a price of $31,937. Appeal File, Exhibit 8. SSA s award letter indicated that performance would begin on Friday, May 10, even though there were not six weekends between May 10 and the scheduled contract completion date of May 31. Change In Completion Date 10. At a pre-performance conference held in Chicago on May 6, SSA informed appellant that the work would start on May 17. Appeal File, Exhibits 10, 11. Appellant, however, had already brought its crew to Chicago in anticipation of starting work on May 10. Transcript at 48. Appellant s project manager (Mr. Bailey) told appellant s crew that there would be a week of unpaid downtime for the period May 10 through May 17. Thus, the only expenses appellant incurred for that week were for food, lodging and miscellaneous items for the crew. These expenses totaled $1980. Id. at 117. 11. Because it wanted to give appellant the full six weeks to perform the work, SSA told appellant that SSA would extend the contract completion date and asked appellant to provide documentation for any additional compensation requested as a result of the change. Appellant responded that it could finish the work by the original completion date by working on weeknights at an additional cost of $23,310, or it could complete the work by June 23 by working only on weekends at an additional cost of $13,140. Appeal File, Exhibit 15. SSA did not feel that working on weeknights in an occupied building was feasible, and on May 14, SSA sent appellant a letter changing the contract completion date to June 23. This gave appellant six weekends to complete the work. SSA s letter also expressed concerns about several of the additional costs described in appellant s letter. Id., Exhibit 14. After considering appellant s response to SSA s cost concerns, SSA rejected appellant s request for additional compensation due to the change in contract completion date. Id., Exhibit 27. Memorial Day Weekend 12. In 1996, Memorial Day fell on Monday, May 27. The contracting officer directed appellant to work over the Memorial Day weekend but did not require appellant to work on Memorial Day itself. Transcript at 146, 221. Consistent with its longstanding but unwritten policy, appellant paid its crew double-time wages for the entire Memorial Day weekend, including Monday. Id. at 147. The El Toro Contract 13. In a handwritten attachment to its bid, appellant mentioned that it was currently performing a screen maintenance contract for the El Toro Marine Corps Air Station. Appeal File, Exhibit 1 (last three pages). The El Toro contract was being supervised by Mr. Bailey, the same person who was supervising the SSA contract work. Transcript at 14, 91. When it became apparent that the SSA contract would have to be performed during June, appellant hired two employees, at a total cost of $4408.03, to replace Mr. Bailey on the El Toro contract. Id. at 91. The cost for the two employees was less than the amount appellant would have paid Mr. Bailey for work on the El Toro contract. Id. at 151. The Holiday Skate Center Contract 14. In its claim, appellant informed SSA that, as a result of the change of contract dates which required appellant to work during June 1996, appellant was unable to perform a $43,193 commercial contract. Appellant claimed that it lost $17,055.36 in profits when its contract to remove and install ceramic tile at the Holiday Skate Center was canceled. Performance Problems 15. Appellant began work on the SSA project on May 17, 1996, and performed over six weekends. The work required more labor hours than appellant anticipated. First, moving the furniture back to its original position took longer than appellant anticipated. Appellant had assumed at the time it prepared its bid that a Government spotter would point out to appellant the exact place for each piece of furniture. Transcript at 34. Instead, the actual process was that appellant would return the furniture to what it believed was the original position and then a Government spotter would arrive, take measurements, and have the crew move the furniture until it was returned to its exact original spot. Id. at 66-70. Appellant believes that the contract did not require it to figure out the exact location to which the furniture was to be returned and claims $3438.35 in additional labor costs for this item. Id. at 170. 16. Second, the work took more man-hours than appellant had estimated because the previously installed carpet tiles were harder to remove than appellant anticipated. Transcript at 62- 63. As discussed above, appellant had assumed in its bid estimate that the tiles would be held in place by an easily releasable glue, such as 3M Blue. The tiles were in fact adhered to the floor by a regular multi-purpose adhesive that did not release easily when pulled. Id. at 63. Although appellant claims that this situation caused it to increase its crew from five to seven people (at an additional cost of $4509), the record shows that appellant had already decided to increase the crew prior to beginning performance of the contract. Appeal File, Exhibits 13, 15. 17. Appellant completed the work on or about June 21, 1996. Transcript at 103. Discussion Appellant claims three types of costs: (1) additional costs incurred as a result of the change in completion date, (2) additional costs incurred because of unanticipated difficulties in performing the contract, and (3) the cost of preparing its claim for equitable adjustment. Additional Costs Due to Change in Completion Date Memorial Day Weekend Appellant claims that the change in contract completion date caused it to incur holiday wage costs in the amount of $4520.68. Appellant paid its crew double-time wages during Memorial Day weekend (Friday, May 24 - Monday, May 27, 1996) in accordance with a longstanding but unwritten policy. Appellant argues that SSA should pay the additional wages because appellant did not anticipate having to work over the Memorial Day weekend. We deny this aspect of the claim. The original contract required that the work be performed Friday through Sunday during other than normal business hours on Government scheduled weekends. Finding 2. The work was to be completed by May 31, 1996. Id. Thus, the Friday, Saturday and Sunday of Memorial Day weekend were always part of the potential work period and should not have been affected by the change in completion date. Although Mr. Bailey stated that appellant could have performed the job in four weekends (and presumably finished before Memorial Day weekend had the schedule not been changed), the evidence shows otherwise. Appellant s written bid estimates were based on six weekends of work. Finding 7. Moreover, the actual performance took six weekends. Finding 15. There is no convincing evidence that appellant could have performed the contract work without working on Memorial Day weekend. Accordingly, the change in the contract completion date could not have caused appellant to incur additional costs for these days. Appellant was not required to work on Memorial Day itself (Monday, May 27) but chose to do so. Thus, there was no change to the contract which could give rise to an equitable adjustment for appellant s labor costs on that day. The El Toro Contract When the contract completion date was changed to June 23, appellant knew that it would be performing two jobs at the same time. Since Mr. Bailey was scheduled to supervise both jobs, appellant was required to replace him on either the El Toro contract or the SSA contract. Appellant elected to hire two employees to replace Mr. Bailey on the El Toro contract and claims $4408.03 for those employees wages. We deny this aspect of the claim because appellant did not incur any additional costs as a result of hiring the additional employees. Regardless of when the SSA contract and the El Toro contract were performed, appellant would have incurred the cost of supervising both contracts. Although appellant, owned by Mrs. Bailey, would have preferred that Mr. Bailey supervise both contracts because his salary adds to the Bailey family income, Mr. Bailey is an employee, not the owner, of J.B. Construction. Since the cost to appellant of the two employees who replaced Mr. Bailey on the El Toro contract was less than the cost of having Mr. Bailey supervise the project, appellant did not incur compensable additional costs. Holiday Skate Center Appellant claims that when the contract completion date was changed, it lost the opportunity to earn $17,055.36 in profits because it was forced to cancel a tile installation contract it had planned to perform during the same time period. We deny this aspect of the claim for several reasons. First, lost profits on other contracts, if they are recoverable at all, are not recoverable in a claim for equitable adjustment under the Changes clause.1 Second, even in a claim for breach of contract, in which lost profits may be awarded: [t]o be recoverable, consequential damages must be foreseeable at the time of contract award. Foreseeable means within the contemplation of the parties at the time of award. Stroh Corp. v. General Services Administration, GSBCA 11029, 96-1 BCA 28,265 (citations omitted). Thus, even if appellant had demonstrated a breach of contract, which it did not, the lost profits of the Holiday Skate Center contract would not be recoverable because they were not foreseeable at the time of award. There is no evidence that SSA even knew that the contract existed, much less that extending the completion date would cause appellant to be unable to perform it. Finally, appellant has not demonstrated that SSA s actions were the cause of the allegedly lost profits. Appellant has not shown why it could not have hired a replacement supervisor on either the Holiday Skate Center contract or the SSA contract, as it did for the El Toro contract. It appears that appellant simply made a business decision to forgo the Holiday Skate Center contract rather than allow it to be supervised by someone other than Mr. Bailey. The Government is not responsible for the consequences of appellant s business decision. Idle Crew ____________________ 1The Changes clause contained in the contract provides: If any such change causes an increase or decrease in the cost of . . . the work under this contract, the ____________________ Contracting Officer shall make an equitable adjustment in the contract price . . . . Appeal File, Exhibit 1 at 26 (incorporating by reference the clause found in section 52.243-1 of the Federal Acquisition Regulation (FAR)). Appellant was told that work on the contract would start on May 10 and brought its crew to Chicago to begin work on that date. SSA later changed the starting date to May 17, after appellant s crew had already arrived in Chicago. SSA does not contest appellant s claim for $1980 for the costs of keeping its crew in Chicago during the week of May 10-17, and we award appellant that amount. Unanticipated Performance Difficulties Moving Furniture Appellant claims $3438.35 in additional wage costs for performing extra work moving furniture. According to appellant, the contract required SSA to provide a spotter to point out to appellant exactly where to return the furniture after installation of the new carpet. The actual procedure used, which appellant characterizes as a change, was that appellant s crew returned the furniture to what it believed to be the original location, and then a Government spotter would arrive, take measurements, and have appellant s crew move the furniture until each piece was returned to its exact original spot. Finding 15. Appellant believes that the contract did not require it to return the furniture initially to its original location without Government help, and claims the additional wage costs for the extra time involved doing so. We deny this aspect of appellant s claim. The contract required appellant to return the furniture to its original position after installing the carpet. Finding 3. One of the contract clauses which discussed this requirement was entitled Inspection of Work Being Performed, and provided as follows: The Government will also provide a spotter to assure that the contractor returns the furniture to the proper location after the carpet is installed. Id. This provision does not, as appellant maintains, require the Government to assist appellant in replacing the furniture or relieve appellant of responsibility for replacing the furniture in the exact location from which it was taken. It means simply that the Government, as part of its inspection of the work being performed, will provide someone to assure that the contractor does what he is supposed to do, i.e., return the furniture to its proper location after the carpet is installed. When the spotter required appellant to move the inexactly replaced furniture until it was back in its proper place, he was carrying out the terms of the contract, not changing them. Removal of Old Carpet Tiles Appellant claimed that it incurred additional labor costs in the amount of $4509, and travel costs in the amount of $404.84, because the previously-installed carpet tiles were harder to remove than appellant expected. Appellant assumed that an easily releasable glue had been used on the tiles to be removed because the contract required appellant to install the new tiles using 3M Blue glue. Appellant claims that its unanticipated work in removing the tiles, which were adhered with a regular multi- purpose adhesive, was a change to the contract for which it should be compensated. Appellant is not entitled to any additional costs for tile removal. The contract did not say with what type of glue the previously installed tiles were adhered. What it did say was that prospective contractors should inspect the work site before bidding in order to acquaint themselves with all general and local conditions that may affect the price of contract performance. Finding 4. There is no evidence to suggest that a reasonable carpet installer, upon reading the solicitation, would have expected that the old tiles would be adhered with an easily releasable glue, rather than a general purpose adhesive. The record shows that appellant made a business decision not to inspect the work site prior to bidding. Appellant cannot now be heard to complain that the conditions were not as it imagined them to be. Claim Preparation Costs Appellant asks us to award costs totaling $1753.40 for preparing its claim for equitable adjustment. Appellant has not demonstrated entitlement to these costs. Claim preparation costs incurred in connection with preparing and presenting an equitable adjustment claim after contract performance are not allowable as a component of equitable adjustment under a contract, when liability is not apparent and there is not shown a demonstrable benefit to the performance of the contract. Atlas Construction Co., GSBCA 7903, et al., 90-2 BCA 22,812. This is the situation here. Decision As discussed above, the appeal is GRANTED IN PART. Appellant is awarded the sum of $1980, plus interest in accordance with the Contract Disputes Act, 41 U.S.C. 611 (1994). ________________________ ROBERT W. PARKER Board Judge We concur: ________________________ ________________________ ANTHONY S. BORWICK MARTHA H. DeGRAFF Board Judge Board Judge