The solicitation in this case contained conflicting information about how to handle soil conditions. When offerors asked the agency about the discrepancy, the agency’s response was “bid as you see it”—basically, a “do-what-you-feel” response, as if the agency was laid-back hippie, setting out rules for the commune. So the contractor bid as it saw it, and decided to exclude costs for soil mitigation. The agency selected the contractor for award, but then required the contract to mitigate the soil anyway. In finding for the contractor, the board reasoned that the agency’s bid-as-you-see it approach had created a solicitation ambiguity. By accepting the contractor’s proposal, the agency accepted the contractor’ interpretation of that ambiguity—i.e., no soil mitigation. By requiring the contractor to nonetheless mitigate soil, the agency had constructive changed the agreement.
Appeals of ECC International, LLC, ASBCA 58993, 60167, 6028
ECC International had a contract with the Army Corps of Engineers to construct a military policy school and a signal school in Afghanistan. ECC submitted three claims to the government arising from the contract.
First, ECC submitted a claim seeking to recover costs for mitigation of collapsible soil. The quality of soil in Afghanistan was uncertain. The contract required the building of two schools, a military school and a signal school. For the signal school, the contract specified measures to be taken if collapsible soil were discovered, but the military school portion didn’t contain any specifications for collapsible soil. Bidders asked about this discrepancy when the Corps issued the solicitation. The Corps instructed offerors to “Bid as you see it” with regard to collapsible sold.
ECC decided not to include costs for collapsible soil in its bid. Based on its experience in Afghanistan, ECC believed the chances of encountering collapsible soils were low. Indeed, after the Corps awarded ECC the contract, an engineering survey of the site indicated low risk of collapsible soil. Nevertheless, the Corps required ECC to take additional steps to mitigate the risk of collapsible soil . ECC alleged in its claim that this was a change to the contract.
Second, ECC sought to recover costs associated with the period of performance. The contract required ECC to complete construction in 365 days. ECC alleged the Corps not only knew that this schedule was not realistic, but that the Corps failed to cooperate and impeded ECC’s performance in a manner that made the 365-day schedule impossible to achieve.
Third, ECC asserted a claim to recover associated with Defense Base Insurance. Under the contract, ECC was entitled to reimbursement for premiums paid for Defense Base Insurance. Following an adjustment by the insurer, it turned out ECC had overpaid the premiums. The insurer reimbursed money to the Corps. In addition to accepting the remimursemennt, however, the Corps modified the ECC contract and reduced the price owed to ECC by the amount of the reimbursement. ECC thus alleged that the government had recovered twice for the adjustment, once with the reimbursement and second time with the price reduction.
The Corps denied all three claims, and ECC appealed to the ASBCA.
- Collapsible Soil Claim – The board sustained the appeal on collapsible soils. The Corps’s refusal to clarify the discrepancy in the contract and its confusing advice to “bid as you see it.” with regard to soils, created a solicitation ambiguity. The’ acceptance of ECC’s proposal, which expressly excluded costs for collapsible solid, was acquiescence to ECC’s interpretation of this government-created ambiguity. The contract as awarded therefore did not contain a requirement to mitigate collapsible soils. By requiring ECC to mitigate collapsible soils, the government constructively changed the contract. ECC was entitled to recover the mitigation costs.
- Period of Performance Claim –The board also sustained the period of performance claim. The record showed that the Corps knew a 365-day period of performance was unreasonable. Indeed, construction projects in Afghanistan were never completed in that amount of time. Moreover, despite knowing that the performance period was unreasonable, the government did not cooperate with ECC to help the company achieve that schedule. The Corps did not allow ECC to use the austere standards, which would have quickened the pace of construction. It didn’t help ECC gain access to the worksite, which prevented the company from accelerating the schedule. To make matters worse, the Corps refused to grant ECC any extensions of schedule. These actions constitute a breach due superior knowledge and breach of the duty of good faith and fair dealing.
- Defense Base Insurance – The board found that the government had improperly recovered twice on the adjustment to insurance premiums.
ECC is represented by R. Dale Holmes and Amy B. Kirby of Cohen Seglias Pallas Greenhall & Furman, PC. The government is represented by Michael P. Goodman, Sarah L. Hinkle, Michael E. Taccino, Matthew Tilghman, and Kathryn G. Morris of the Army Corps of Engineers.