Govt. Must Base Contract Estimates On All Relevant Info Available

Tuesday, January 30, 2018 8:49 am
February 2018 - Volume 40 Number 2

The Armed Service Board of Contract Appeals recently questioned "What did the government know and when did it know it?" on a project involving subsurface material estimation. In the end, the Board determined that the government improperly withheld information that would have helped bidders make more accurate bids.

In Appeal of: Burnham Associates, Inc., 2017 ASBCA No.60780 Lexis 450 (Dec. 13, 2017), Burnham Associates, Inc. (Burnham) performed on a U.S. Army Corps of Engineers (Corps) contract to remove rock from Massachusetts’ Boston Harbor. The government paid Burnham $1,256,250 for removing an estimated 414 cubic yards (CY) of rock. Burnham contended that the more proper estimate was over 500 CY, and it sought an equitable adjustment of $334,464 due to the government’s alleged misrepresentation of rock quantities.

The parties’ contract, awarded July 16, 2012, provided that the Corps would pay contract line item (CLIN) 0002 (dredging and disposal of rock) by: "computing the volume between the bottom surface shown by soundings of the last pre-dredge survey made before dredging begins and the bottom surface shown by the soundings of a post-dredge survey made as soon as practicable after the removal of the material." (Emphasis added.) The parties disputed which of two pre-dredge surveys was "the last."

Based on a March 2011 subsurface survey of Boston Harbor, the solicitation identified seven areas of rock and approximately 525 CY of "payable material," (i.e., the material eligible for payment under the contract) to be removed. Burnham based its bid, particularly the CLIN 0002 price, on this amount. However, a second survey conducted a year later in March 2012 calculated just 430 CY of payable material.

The Corps claimed that, in June 2012, it calculated project quantities based on the 2012, not the 2011, survey. Indeed, the government used the 430 CY amount later to calculate the payment owed to Burnham. (It compared the 2012 pre-dredge amount of 430 CY to the October 2012 post-dredge-work survey showing 16 CY of payable material still remaining at the site; thus, it calculated Burnham was en[..]