Contractor’s motion for summary judgment seeking a ruling on the sufficiency of data supporting its damages claim for increased costs is denied. The board found that numerous factual issues precluded summary judgment. First, the contractor’s data was based only on estimates, and the contractor had not explained why it was unable to track its actual costs. Second, the estimated labor hours the contractor claimed exceeded the actual labor hours it worked. Third, the contractor had not provided any evidence of it anticipated costs to serve as a baseline. Fourth, the contractor had not established that the standards it based its estimates on were reliable.
Eastco Building Services had a blanket purchase agreement with the General Services Administration to provide operations and management services at three federal buildings. After completing the contract, Eastco submitted a claim to GSA seeking a $758,000 contract adjustment for managing extra equipment in the buildings that were not listed in the solicitation. GSA denied the claim, and Easto appealed to the CBCA.
Eastco and GSA moved for summary judgment on entitlement. The board denied both motions. Thereafter, Eastco filed a second summary judgment motion, asking the board to find that its cost data was sufficient to support it damages claim.
The board first questioned the nature of Eastco’s second summary judgment motion. On the one hand, it seemed that Eastco sought a ruling on quantum. But from the arguments in the motion, it appeared to the Board that Eastco was seeking summary judgment on the case as a whole—that is, on entitlement and quantum. Eastco assumed in its motion that it was entitled to recover for every piece of equipment that was not listed in the solicitation. The board noted, however, that Eastco was not permitted to obtain a quantum award by simply assuming entitlement. The board opined that it would view the motion as simply a request for partial summary judgment as to whether Eastco’s proposed quantum support was sufficient to support a damages award.
The board found that factual disputes precluded summary judgment on Eastco’s proposed quantum support. First, Eastco had not adequately explained why it had not kept better records of the extra maintenance work performed by its employees. Once a contractor is aware of a potential claim against the government, it has an obligation to maintain records to track its actual increased costs. Eastco had only provided estimates of its costs. It did not provide any detailed information about what its employees had to do to manage the extra equipment. The board noted that there may be instances where tracking costs in impracticable. But it is the contractor’s burden to establish impracticability and the inability to prove actual costs.
Easto contended that it was a small business in the unsophisticated building maintenance industry and thus did not have an accounting system capable of tracking contemporaneous costs. But the board didn’t buy it. Eastco only had to find some kind of contemporaneous way to track costs even it was basic. It should have been obvious as soon as performance began that Eastco would have to maintain extra equipment. Yet, it appeared the company had taken no steps to track any of the alleged extra costs. Without better, more concrete evidence, the board had no basis to grant Eastco summary judgment.
The board also found that Eastco’s estimates conflicted with its actual cost records. Eastco employees had spent 43,029 labor hours working on the contract. Eastco’s quantum claim, however, estimated that its employees had spent over 68,000 labor hours on the contract. The board opined that Eastco simply could not rely on the 68,000 labor hours as an estimate in establishing quantum. An estimate cannot be divorced from Eastco’s actual experience on the job.
Additionally, Eastco had not provided any documents to show the amount of work it originally anticipated to perform under the contract. The board reasoned that evidence of Eastco’s initial assumptions about the work required would inform the reasonableness of its quantum estimates. The absence of such evidence made it difficult to establish quantum.
Finally, the board found that it could not grant summary judgment because the it was not clear that the standards Eastco relied on for its estimates—GSA’s Time Standards—were reliable or appropriate. The board had little information about the standards other than that GSA published them 25 years ago and at some point abandoned them.
Eastco is represented by Todd J. Canni, Michael R. Rizzo, and Alexander B. Ginsberg of Pillsbury Winthrop Shaw Pittman, LLP. The government is represented by Kristi Singleton and Brett A. Pisciotta of the General Services Administration.
