Appeal of

CHARLES J. FRANK, INC.

Under Contract No. 102490-96-B-0005
PSBCA No. 4188

APPEARANCE FOR APPELLANT:
Douglas G. Worrall, Esq.

APPEARANCE FOR RESPONDENT:
Mitchell J. Benowitz, Esq.

OPINION OF THE BOARD

            During the earthwork phase of a new post office construction project, Appellant, Charles J. Frank, Inc., encountered rock while excavating for footings and utility trenches.  Its contract with Respondent, United States Postal Service, provided for extra payment for certain rock excavation, and Appellant filed a claim for its work.  Respondent concedes that Appellant is entitled to payment for the additional rock it excavated, but the parties disagree about the amount of rock that was excavated and the applicable rate of pay.  Appellant has filed this appeal from the contracting officer’s partial denial of its claim.

            A hearing was held in Washington, DC, and the parties filed post-hearing briefs.  Both entitlement and quantum are at issue.

FINDINGS OF FACT

            1.  On October 8, 1996, Respondent awarded Appellant a contract to build a post office in Westminster, Maryland.  The base price for the project was $2,599,000.  (Appeal File, Tabs (“AF”) 1, 2A; Stipulation of Facts (“Stip.”) 1, 2).

            2.  The site was known to contain significant amounts of rock, disintegrated rock and rock fragments that would likely make excavation for building footings and utility trenches difficult.  A Geotechnical Engineering Report included in the solicitation described the presence of rock and recommended that the contract include an allowance to pay the contractor extra for rock excavation as such work is more difficult than excavation of non-rock soils (Hearing Transcript, pages (“Tr.”) 34, 106).  The Report included the results of six soil borings, one of which showed rock at 3.5 feet below the existing surface.  (Tr. 38, 41-42; AF 1C, Geotechnical Engineering Report, February 16, 1996, Boring Logs, General Notes for Boring Logs, note 4).

            3.  The contract did not include a definition of rock (Tr. 35; AF 1, 2C).

            4.  The solicitation required that offerors submit an “Add/Alternate” price for rock excavation:

“B.  The work described in this section of the specifications includes, but is not limited to the following:

1.  BASE BID:  Excavating, backfilling and compacting for structures, utilities, pavement, driveways, curbs, gutters, sidewalks or other hardscape.
2.  ADD/ALTERNATE BID:  The contractor shall submit an Add/Alternate Bid for rock excavation.  Rock excavation, including all labor, materials, tools, equipment, loading hauling, dumping off-site disposal, incidentals and operations necessary to complete excavation.
The add/alternate bid shall include 75 cubic yards of rock excavation.
The Contractor shall notify the Contracting Officer if rock is encountered during excavation.  No rock excavation shall be performed without prior approval from the Contracting Officer.”  (AF 2C, Specification 02220-1.2B; Stip. 4).

            5.  Appellant’s Add/Alternate bid, accepted by Respondent as part of the contract, was $11,250 for the 75 cubic yards specified, working out to $150 per cubic yard (AF 2B).  Neither Appellant’s offer nor the contract, however, specifically stated a rate of $150 per cubic yard for rock excavation. 

            6.  The contract required Appellant to hire an independent geotechnical engineer to perform inspection and testing during the earthwork portion of the project (AF 1C, Specification Sections 02110-3.2, 02210-1.5 A.4, 02210-3.8 A, 02220-3.13, 02233-1.4).  In November 1996, Appellant hired Reuling Associates, Inc. (“Reuling”), an independent geotechnical engineering firm, to perform the required testing and inspection (Tr. 28-29, 102).

            7.  On December 18, 1996, Appellant encountered rock while excavating trenches.  On this occasion, and whenever Appellant encountered rock, it called Reuling to the site and also notified Respondent’s architect.  (Tr. 33; AF 27, 29, 30, 31, 38, 39, 42, 44, 45; Appellant’s Exhibit (“AX”) 1).

            8.  Respondent’s architect visited the site on a number of occasions (Tr. 118, 123; AF 27, 38; AX 1), but she disagreed with Appellant’s classification of the excavated material as “rock” within the meaning of the contract’s Add/Alternate clause.  Respondent’s architect considered rock to be “hard, unrippable material, greater than ½ cubic yard in size, requiring blasting or hammering” or “solid bedrock” (AF 22, July 31, 1997) or “unrippable, solid material of greater than ½ cubic yard which cannot be dislodged by a D-8 Caterpillar tractor, or equivalent, equipped with a hydraulically operated power ripper” (AF 20, August 28, 1997).  At the hearing, Respondent proposed a definition of rock that is used for certain limited purposes in standard specifications of the Maryland Highway Department: unmovable or unrippable rock or boulders with a volume greater than ½ cubic yard (Tr. 110, 113-119, 123; Respondent’s Exhibit (“RX”) 1; Compare Tr. 137-143).

            9.  In the field of geotechnical engineering, whether material is considered rock (if not otherwise defined) is determined in a number of ways, but primarily by visual observation of the material, by determining the material’s hardness by standard penetration tests or other methods and by noting the type of equipment or methods the contractor must employ to remove the material (Tr. 26, 34, 41-42, 47, 64-65; AF 1C, Geotechnical Engineering Report, Section 5.4).  The need to use a heavy tracked backhoe to remove material as opposed to the lighter rubber-tired backhoe commonly used to excavate trenches is an indicator that the material is rock (Tr. 31-33, 48; AF 1C, Geotechnical Engineering Report, section 5.4; AX 2, 3).  Appellant brought a large, tracked backhoe to the site to remove the rock it encountered (Tr. 47-49, 53, 90; AF 32).  The tracked backhoe was also used for other, non-rock excavation on the site (Tr. 64, 92).

            10.  When the parties discussed a potential claim for additional rock removal, Respondent, through its architect, expressed the requirement that Appellant support any claim for compensation based on excavation of rock on the assessment, certified measurement and documentation by an independent geotechnical engineering firm (Tr. 28, 102; AF 17, 18, 40, 43).

            11.  In Reuling’s February 18, 1997 daily report, its on-site representative calculated the amount of rock that had been excavated from the trenches up to that date (Tr. 49; AF 4F; AX 1).  The technician’s determination was made after the excavation had been completed by visually inspecting the walls of the trenches for signs of rock, and then calculating the volume of rock that had been excavated from the trench (Tr. 31, 33, 45, 54, 59, 77-78; AF 41; AX 9).  The calculations were supported by his sketches of end-on, trapezoidal cuts of each trench showing the rough dimensions of the trench cross-section and the amount of rock that had been removed as determined by his interpolation of the rock remaining in the trench walls (Tr. 77).  The volume of rock was determined by multiplying the area of the rock cross-section by the length of rock he observed within the trench.  This volume figure in cubic feet was divided by 27 to determine the number of cubic yards.  The result of this process, verified by Reuling’s principal, was that 249 cubic yards of rock had been excavated up to the date of the report.  (Tr. 57-58, 77, AF 4F, 25, 36; AX 1).  There is no evidence that Reuling’s technician observed any of the rock removal, and Reuling’s principal, who testified at the hearing, did not personally observe these trench excavations (Tr. 49, 64, 65, 67, 76), but the passage of a short period of time between the excavation and the technician’s observation and measurement using this method does not affect the accuracy of the measurements (Tr. 76-77; AX 9).

            12.  The contract specifications described the requirements for trenching for utilities, and established maximum trench widths depending on the size of the pipe to be placed in it (Tr. 127; AF 1C, Specification 02220-3.4 L and O).  The record does not reflect the size of pipes placed in any of the trenches at issue.^[1]

            13.  On February 25, 1997, Appellant excavated rock in the amount of .89 cubic yards (Tr. 127-128; AF 4E, 25).

            14.  On February 28, 1997, Appellant encountered rock in its excavation for a building footing, but Respondent’s architect authorized Appellant to leave it in place and to allow the footing to rest on the solid rock, so it was not excavated (Tr. 128-129; AF 4D, 25, 30D, 30E, 31; AX 1).

            15.  During the week of March 10, 1997, Appellant encountered and excavated an additional 78.5 cubic yards of rock (AF 4C, 25, 29; AX 1).

            16.  On March 24, 1997, Appellant encountered and excavated an additional 28 cubic yards of rock (AF 4B, 25, 27).

            17.  On July 3, 1997, Appellant encountered and excavated an additional 10.91 cubic yards of rock (Tr. 129; AF 4A).

            18.  The total amount of rock that Appellant excavated on the project was 367.3 cubic yards (See Findings 11, 13-17, above).  On March 25, 1998, Reuling formally certified that Appellant had excavated a total of 368.49 cubic yards of rock, which mistakenly included the rock identified on February 28 which was not excavated (Finding 14).  (Tr. 49, 56-59; AF 4).

            19.  Appellant was entitled to payment of $11,250 for excavation of the first 75 cubic yards of rock (Tr. 16, 22-23).  This amount is not in dispute and is not part of this appeal.

            20.  Appellant excavated 292.3 cubic yards of rock from the site in addition to the 75 cubic yards specifically included in the Add/Alternate clause (Findings 11, 13, 15-18). 

            21. The parties understood the contract to provide that Appellant would be paid for all rock over 75 cubic yards that it excavated (Tr. 96-97; AF 2D, 7, 20).

            22.  None of the rock excavated by Appellant was hauled from the site.  Appellant was permitted to dispose of all of it by using it as fill on the project.  (Tr. 6; Stip. 26; AF 20).

            23.  On December 18, 1997, Appellant filed a claim for $44,025 representing the extra 293.49 cubic yards of rock excavation it claimed multiplied by $150 per cubic yard (Tr. 98; AF 11, 12, 24; App. Br. p. 5; Resp. Br. p. 18).

            24.  In a February 27, 1998 final decision, the contracting officer allowed Appellant payment for excavation of 174 cubic yards of rock beyond the 75 stated in the Add/Alternate clause.  He accepted the 249 cubic yards of rock excavated as verified by Reuling on February 18, 1997 (Finding 11), and after deducting the 75 cubic yards specifically included in the Add/Alternate clause, allowed 174 cubic yards.  However, the contracting officer concluded that Appellant was only entitled to $80 per cubic yard, and not the $150 derivable from the Add/Alternate clause, because Appellant had not hauled the excavated rock off site.  (AF 2D, 7).

            25.  For excavating rock beyond the first 75 cubic yards and reusing the excavated material on site, $80 per cubic yard is a reasonable price (Tr. 14, 130-131; AF 20, 22).

            26.  Appellant filed a timely appeal from the contracting officer’s partial denial of its claim (AF 5).

DECISION

            Appellant argues that it excavated 368.49 cubic yards of rock, the amount measured and certified by Reuling Associates, Inc., during the project, and that it is entitled to payment for the 293.49 cubic yards in excess of the 75 specified in the Add/Alternate clause of the contract at the rate of $150 per cubic yard.  Respondent concedes that rock in excess of 75 cubic yards was excavated and that Appellant is entitled to be paid for it.  However, Respondent contends that Appellant’s claim overstates the amount of rock excavated and that Appellant is entitled to be paid for such excavation at $80 per cubic yard.

Amount of Rock Excavated

            Appellant argues that the parties agreed to the use of Reuling Associates, Inc., as an independent testing agency for purposes of measuring the rock and that Respondent is now bound by the rock excavation quantities Reuling certified.  The method of determining the amount of rock excavated was discussed early in the project, and Respondent’s architect directed that Appellant’s claim for compensation based on rock excavation be supported by the certified results of measurement and calculations by an independent testing/inspection agency (Finding 10).  However, the contract did not provide that the certified findings of an independent geotechnical firm would be conclusive with respect to the amount of rock excavated, and Respondent did not state any agreement that the measurements of the testing agency (Reuling) would be accepted as the final word.  The Reuling-certified figures are thus not conclusive on the amount of rock excavated.

            Appellant contends that even if the certified quantities are not conclusive, Reuling’s classification of the excavated material as rock and its calculation of the quantities removed were correct.  Nowhere in the contract is “rock” specifically defined (Finding 3).  Appellant presented credible expert testimony of a qualified geotechnical engineer that in the excavation industry whether material is considered rock is commonly determined by visual inspection, by testing for hardness by standard penetration tests or by evaluating the equipment or methods necessary to remove the material (Finding 9).^[2]

            Appellant’s quantity figures were based on visual classification of the material.^[3]  Reuling’s technicians inspected the sides of the trenches, identified rock visible in the trench walls and calculated the volume of rock that likely existed and was removed from between the trench walls (Finding 11).  Appellant has demonstrated that this is an acceptable method within the excavation industry of measuring the quantity of rock excavated.  Furthermore, Respondent required the use of an independent geotechnical testing firm to assess and measure the rock excavated (Finding 10) and does not dispute that Reuling was such a firm.  It is incumbent on Respondent to demonstrate that the results of Reuling’s work should not be accepted, and Respondent has offered little evidence that would challenge the accuracy of the measurements of the trenches or the amount of rock found in them.^[4]

            Respondent contended that certain of the trenches were wider than the specifications would have required or authorized and, thus, that Appellant seeks compensation for rock removal that was not necessary to the performance of the work.  However, to support this argument, Respondent relied on a drawing detail that was not included in the record.  What appears to be a similar provision to limit the size of trenches appears in the specifications (Finding 12), but Respondent has offered no testimony or evidence regarding the application of that provision to the trenches and pipes at issue.  Thus, Respondent has not shown that the trenches were larger than permitted by the contract.

            Accordingly, we find that rock in the amount of 367.3 cubic yards was excavated by Appellant on the project, 292.3 cubic yards more than the 75 cubic yards addressed specifically in the Add/Alternate clause (Finding 20).

Applicable Rate for Excavation of Additional Rock

            The parties agree that Appellant is entitled to payment for rock excavated beyond the 75 cubic yards identified in the Add/Alternate clause (Finding 21).  However, Appellant contends that the $150 per cubic yard rate derivable under the Add/Alternate clause governs payment for all rock excavation, and Respondent contends it only governs payment for the first 75 cubic yards of rock excavated.  Appellant has not persuaded us that the Add/Alternate clause requires that it be paid $150 for all rock excavation.  The solicitation did not seek a unit price bid for all rock excavation, but only asked offerors to propose a total price for excavation of 75 cubic yards of rock.  The $150 per cubic yard “rate” argued by Appellant is not stated in the contract and is only obtained by dividing Appellant’s Add/Alternate bid by the 75 yards covered by the clause.

            Even if we were to find the Add/Alternate clause ambiguous with respect to the applicability of the $150 per cubic yard rate, Appellant’s contentions would not prevail.  For Appellant’s interpretation of the clause to be accepted, Appellant must demonstrate that when preparing its offer it interpreted the Add/Alternate clause to provide for payment of $150 per cubic yard for all rock excavation and that it relied on that interpretation in preparing its offer.  See Fruin-Colnon Corp. v. United States, 912 F.2d 1426, 1430 (Fed. Cir. 1990); Edward R. Marden Corp. v. United States, 803 F.2d 701 (Fed. Cir.  1986); Lear Siegler, Inc./Management Services Div., ASBCA No. 30147, 88-2 BCA ¶ 20,642 at 104,350-351, aff’d 867 F.2d 600 (Fed. Cir. 1989); Sharon F. Graves, PSBCA No. 3399, 94-2 BCA ¶ 26,788.  Appellant presented no evidence regarding its interpretation of the clause when preparing its price proposal.  Thus, it has not met its burden of demonstrating that the rate of $150 per cubic yard should be applied to all rock excavation.^[5]

            That does not mean, however, that Appellant may not recover.  See Dawco Constr., Inc. v. United States, 930 F.2d 872, 880 (Fed. Cir. 1991); David Sahagian, PSBCA Nos. 3385, 3416, 94-2 BCA ¶ 26,688; Golden West Builders, PSBCA No. 3378, 93-3 BCA ¶ 26,195.  Respondent concedes that Appellant is entitled to be paid for all rock excavated, but Appellant failed to produce any evidence of what would be a reasonable price for excavation of rock beyond 75 cubic yards.  However, evidence was presented through Respondent’s witnesses that $80 per cubic yard was a reasonable price for rock removal (Finding 25), and Appellant did not controvert Respondent’s evidence.  Accordingly, Appellant may recover for rock excavation in excess of 75 cubic yards at the rate of $80 per cubic yard.

Conclusion

            Appellant is entitled to recover for 292.3 cubic yards of additional rock excavated at the rate of $80 per cubic yard.  The appeal is sustained in the amount of $23,384.^[6]  Appellant is entitled to Contract Disputes Act interest on that amount from December 18, 1997 (Finding 23), until paid.

Norman D. Menegat
Administrative Judge
Board Member

I concur:
James A. Cohen
Administrative Judge
Chairman

I concur:
David I. Brochstein
Administrative Judge
Vice Chairman

[1]  The copy of Reuling’s February 18, 1997 field report reflecting the measurements of the trenches appearing originally in the Appeal File (at Tabs 4F and 36) gave no hint of the size of pipe to be placed in the trenches shown, thus making it impossible to apply the specifications’ formula for limiting trench size.  At the hearing, Respondent’s counsel offered as a substitute for the copies in the Appeal File, which were faint and difficult to read, a better copy of the February 18 field report.  The substituted copy contains unidentified notations, such as “15" CPP,” for each trench drawn on the field report, which notations do not appear on the copies of the reports in the Appeal File.  These notations may refer to pipe sizes, but the source and meaning of the notations was never explained, and they were not given any weight in deciding this appeal.

[2]  Respondent’s definition of rock (Finding 8) is rejected.  It was not shown that the circumstances under which that definition was used in Maryland standard highway specifications had any application to this project, and there was insufficient showing that the proposed definition was commonly used in the excavation industry.

[3]  Appellant argued that its use of a heavy tracked backhoe to remove the material demonstrated that it was rock.  However, there was no testimony from anyone familiar with the excavation that the quantities of material Appellant calls rock could not have been removed without the use of the tracked backhoe, and the equipment was also used for non-rock excavation (Finding 9).

[4]  There was no testimony at the hearing from anyone who actually observed and so classified the material.  The reports of Reuling Associates, Inc., were prepared by a technician or technicians who did not testify.  However, the reports were admitted into the record without objection and had been verified by the firm’s principal, who did testify, and the figures were certified by Reuling to be correct, as required by Respondent.  (Findings 10, 11, 13-18).

[5]  As Appellant has not shown that it relied at the time of bid on the interpretation it now urges, we need not address whether its interpretation falls within the zone of reasonableness, the second element that Appellant would have to prove to have its interpretation accepted.  See WPC Enterprises, Inc. v. United States, 323 F.2d 874, 877 (Ct. Cl. 1963); Lear Siegler, Inc./Management Services Div., ASBCA No. 30147, 88-2 BCA ¶ 20,642 at 104,350, aff’d 867 F.2d 600 (Fed. Cir. 1989).

[6]  Any amounts previously paid pursuant to the contracting officer’s final decision partially allowing the claim are to be credited against this amount.