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The contractor filed an equitable adjustment claim for alleged increased costs associated with heightened COVID-19 safety protocols. The government moved to dismiss the claim. It argued that the RFP it issued asking the contractor to price its compliance with an executive order was never performed, and the government never required the contractor to comply with it. The ASBCA agreed and dismissed the appeal because the contract had not been changed.
Appeal of Walsh Turner Joint Venture II, ASBCA No. 63665
- Background – The government awarded a firm-fixed-price contract to the contractor “Walsh-Turner JV II” for the construction of a new Veteran’s Affairs (VA) medical center.
- Modification and Claim – During the COVID-19 pandemic, the President issued Executive Order 14042 (EO 14042) “Ensuring Adequate COVID Safety Protocols for Federal Contractors.” In response, the agency issued an RFP, advising the contractor that the government would be adding a COVID-19 safety clause to the contract. After the government modified the contract, the contractor submitted a certified claim for $1.7M for increased steel costs it alleged were a result of the heightened COVID-19 safety protocols. The government moved to dismiss the claim for both lack of jurisdiction and failure to state a claim.
- Jurisdiction – The government argued the Board lacked jurisdiction because the contracting party was WTJV II and it was Walsh Turner Joint Venture (with no “II”) that submitted the certified claim and notice of appeal. The Board found the deletion of the “II” was no more consequential than leaving off an “Inc.” The contracting officer’s final decision (COFD) and the claim referred to the correct contract number. There was no serious doubt the parties knew exactly who they were dealing with.
- Failure to State a Claim – The government argued the contractor failed to state a claim for two reasons. First, the issuance of an RFP was a sovereign act because it was to comply with Executive Order (EO) 14042 for COVID-19 protocols. Second, the issuance of the RFP was not a change under the contract, and the appellant was not entitled to an equitable adjustment.
- Constructive Change: The government claimed that an RFP is not a constructive change because it does not constitute a “direction, instruction, or determination changing the work under the contract.” Because the RFP explicitly stated that it was not a notice to proceed, the Board found that it could not constitute a constructive change. The contractor did not (1) perform outside the requirements of the contract and (2) the government did not order any additional work. Thus, the contractor failed to show a constructive change occurred from the RFP. See The Redland Co. v. United States, 97 Fed. Cl. 736, 755-56 (2011)
- Sovereign Act: Because the Board already ruled there was no constructive change, it did not rule on the sovereign act issue.
Larry W. Caudle, Jr. and Brad C. Friend of Kraftson Caudle LLC appeared for the appellant. Michael P. Goodman and James M. Inman appeared for the government.
— Case summary by Joshua Lim, Assistant Editor.
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