                 ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                    )
                                               )
RLB Contracting, Inc.                          )      ASBCA No. 57638
                                               )
Under Contract No. W912P8-07-C-0102            )

APPEARANCES FOR THE APPELLANT:                        Christopher B. Conley, Esq.
                                                      Daniel J. Caruso, Esq.
                                                       Simon, Peragine, Smith & Redfearn, L.L.P.
                                                       New Orleans, LA

APPEARANCES FOR THE GOVERNMENT:                       Thomas H. Gourlay, Jr., Esq.
                                                       Engineer Chief Trial Attorney
                                                      William G. Meiners, Esq.
                                                       Engineer Trial Attorney
                                                       U.S. Army Engineer District, New Orleans

                  OPINION BY ADMINISTRATIVE JUDGE THRASHER

        This appeal involves a Corps of Engineers (Corps) contract with RLB Contracting,
Inc., (RLB) to enlarge a levee in southwest Louisiana using borrow material excavated
from an adjacent ditch and the resulting claim arising from the realignment of the
adjacent ditch. We have jurisdiction under the Contract Disputes Act of 1978 (CDA),
41 U.S.C. §§ 7101-7109. The government concedes entitlement and this decision only
addresses quantum.

                                    FINDINGS OF FACT

The Project Solicitation

        1. The Corps issued Solicitation No. W912P9-07-B-0019 (solicitation) on
2 July 2007 to enlarge the Gordy Levee, part of the Atchafalaya Basin, Levees West of
Berwick, West Bayou Sale (Bayou Sale project) located in southwest Louisiana 1 (supp.
R4, tab 1). The location of the levee and the adjacent borrow ditch was in close
proximity to the Gulf of Mexico and East Cote Blanche Bay (supp. R4, tab 43, Drawing
No. 8) The solicited work consisted of clearing and grubbing, excavating the borrow
ditch, trimming outfall drainage pipes in the existing ditch, constructing compacted fill
levee embankment, removing and replacing culverts under ramps, placing surfacing

1
    The solicitation was for a sealed bid 100% HUB Zone set-aside fixed-price constructi1
         contract.
material on the levee crown and ramps, fertilizing, seeding and mulching, installation of a
new gas line, and other incidental work (supp. R4, tab 1). The largest single performance
requirement of the solicitation, and the work at issue here, was the excavation and
embankment work requiring the contractor to excavate soil from an adjacent ditch and
use that soil to enlarge an existing levee (supp. R4, tab 1 at 02318-a, § 02332). As
originally designed, the levee was required to be constructed to a grade of elevation
+ 12.5' (supp. R4, tab 43, Drawing No. 8).

        2. The excavation and embankment work was addressed in the bid schedule as a
work item for "Embankment, Compacted Fill" at contract line item number (CLIN) 0004
(embankment work), with an estimated quantity of 197,200 cubic yards (CYs) of material
to be placed (supp. R4, tab 1 at 00010-3). The bid schedule contained no separate line
item for the contractor's work in excavating the embankment material from the borrow
source, nor for processing the material prior to placement. Instead, the cost and payment
for this part of the job was included within the embankment work line item. In addition,
Section 02332 provided that the contractor would only be paid for the embankment work
for the amount of cubic yards of material measured and placed on the levee. (Supp. R4,
tab 1 at 02318-1, 02332-3). The specifications did allow for payment of embankment
placed that was the subject of settlement, but only if the contractor installed settlement
gages in accordance with the terms of the contract. The contract provided that the
contractor will forfeit payment for settlement if settlement gages (settlement plates) are
not installed ''in strict accordance" with the specifications and drawings (supp. R4, tab 1
at 02332-4, ~ 1.4.3). RLB elected not to install settlement plates (tr. 1168-70).

       3. The solicitation contained the standard contract plans and specifications found
in most levee construction projects but additionally imposed special requirements on the
project that increased the complexity of the scheduling on the contract (app. 2nd supp. R4,
tab 23 at 2). Section No. 02332 of the contract, "Embankment", included the following
requirements:

       a. The specifications provided that the embankment and berms were to be
constructed from the earth obtained from the borrow areas described in Section 02318,
"EXCAVATION," and as shown on the drawings (supp. R4, tab 1 at 02332-8, ~ 1.7.1).

       b. The "borrow area" of the contract was a drainage ditch located to the east of the
levee. Although the distance varied, it was approximately forty (40) feet from the toe of
the levee. The borrow area included a mandatory excavation area between Sta. 501 +00
and Sta. 738+00. (Supp. R4, tab 1 at 02318-1, ~ 1.1) However, levee construction was
not required for the entire length of the borrow area. Levee construction was only
required from Sta. 462+22 to Sta. 596+00. This meant the contractor would construct
approximately 13,400 feet oflevee, but the adjacent ditch from which the mandatory
borrow would be excavated was some 23,700 feet in length. (Supp. R4, tab 43, Drawing
No.8) The levee reach from station 464+00 to station 474+00 (1,000 linear feet) did


                                            2
have additional adjacent borrow, but excavation of that borrow was not mandatory. Also,
as depicted in the contract drawings, there was no adjacent borrow along the levee from
station 474+00 to station 501+00 (2,700 linear feet). (Supp. R4, tab 43, Drawing No.2)

        c. The contract also mandated specific requirements to control the moisture
content of the embankment material. The specifications required the contractor to
perform the "necessary work in moisture control to bring the material" within the
specified moisture content range providing that "[i]fthe material is too wet, it shall either
be stockpiled and allowed to drain and/or the wet material shall be processed by disking
and harrowing, if necessary, until the moisture content is reduced sufficiently." The
contract only allowed placement of borrow material in the levee if it was within+/- 10%
of the optimal moisture content, as established by testing. 2 The contract required that
RLB perform testing to establish the optimal moisture content of the material to be placed
in the levee. (Supp. R4, tab 1 at 02332-8, ~ 1.7.3, at 02332-5, ~ 1.5.1(10); tr. 1/160-61)

       d. The contract drawings identified available processing and stockpiling areas
along the levee reach, but also included certain prohibitions. Drawing 8, Note 1, states
that processing of material on the protected side of the levee was allowed (except within
identified ranges) but subject to certain restrictions. Processing of material could not
exceed 2 feet in height and could be placed no closer than 10 feet from the natural bank
line ofthe ditch. Drawing 8, Note 4, states "PROCESSED MATERIAL AND
TEMPORARY STOCKPILES IN THIS AREA TO BE NO CLOSER THAN 10FT
FROM TOP OF CUT AT ALL TIMES." Drawing 8, Note 5, states "TEMPORARY
STOCKPILES AND PROCESSING MATERIAL SHALL NOT BE ALLOWED OR
PERMITTED IN OR ON ANY CONSTRUCTED LEVEE FILL." (Supp. R4, tab 43,
Drawing No.8)

        e. There were also restrictions on the method used to place material. The contract
required the embankment to be placed in layers and specification Section 02332, ~ 3.2.1,
states in relevant part "Layers shall be started full out to the slope stakes and shall be
carried substantially horizontal and parallel to the levee centerline with sufficient crown
or slope to provide satisfactory drainage during construction." This latter provision

2
    Mr. Boyd explained the concept of optimal moisture content during the hearing
         (tr. 1141-42). It is our understanding that the concept can be summarized as
         follows: Any sample of soil will retain water. For any sample there is a
         percentage of moisture, as a proportion of the weight of the solid material, at
         which it is at its maximum compactibility, as determined by a standard
         compaction test. The point of maximum compactibility is expressed as a figure
         known as the "optimum moisture content." This figure will vary with different
         types of soil. The concept of optimal moisture content and how it was to be
         measured under the contract are not at issue.



                                              3
effectively placed the toe of the levee 10 feet from the top of the ditch excavation. (Supp.
R4, tab 1 at 02332-10)

       f. The specifications also specifically limited the work area under construction at
any given time. The specifications required only 2,500 Linear Feet (LF) could be
dewatered at one time and only 4000 LF of levee could be under construction at one time,
which was reduced to 2,000 LF during hurricane season. (Supp. R4, tab 1 at 02332-10,
-11, ~ 3.2.2)

RLB's Bid

        4. RLB was formed in 2000 by its president, Mr. Randy Boyd, specifically to
provide Corps dredging support of the intercoastal waterway dredging, levees and shore
protection or, as Mr. Boyd stated in his testimony, specializing in wet dirt work (tr. 1134).
However, prior to this job, RLB had no experience with construction of a flood control
levee or with the optimal moisture content requirements that were included in this
contract (tr. 1152, 149). Although Mr. Boyd formed RLB in 2000, during his testimony
he described in detail his extensive personal experience working on dredging and levee
construction projects dating back to 1976 (tr. 1135-38). Mr. Boyd prepared RLB's bid on
the Bayou Sale project beginning with a review of the plans and specifications to develop
a preliminary estimate (tr. 1138-39). After developing a preliminary estimate, based upon
the solicitation documentation, he visited the site to develop an approach to the job- the
method of operations to perform the required excavation and levee construction
(tr. 1/39-40). Mr. Boyd concluded that the soil to be excavated was some of the best soil
that he had ever encountered in southern Louisiana. (Tr. 1140) Mr. Boyd roughly
estimated that 75% of the material would be sufficiently dry while the remaining 25%
would be wetter material coming from the bottom of the ditch (tr. 1141). When
determining how the work would be performed and the associated costs, Mr. Boyd
believed there were two primary restricting parameters that had to be followed:
(1) optimal moisture content of levee fill material; and (2) incremental areas ofthe levee
that could be worked on at one time (tr. 1/53).

Estimate of Optimum Moisture Content

        5. Mr. Boyd explained in his testimony that the moisture level of the excavated
material was critical to the success of this project because it directly determined the
amount of work required to achieve the project's optimal moisture content (tr. 1153). He
estimated the optimal moisture content of the excavated soil to be between 20% and·
22%. The soil sample moisture contents provided in the plans implied the average
moisture content of excavated material to be between 20%-30%. (Tr. 11167-68)
However, the material could not be placed upon the levee unless it was within 10% of the
optimum moisture content (supp. R4, tab 1 at 02332-8, -9, ~ 1.7.3). Mr. Boyd also
testified he reviewed the drawings included in the solicitation plans and specifications as


                                              4
part of preparation ofRLB's bid (tr. 1144-45). The drawings included core volumes and
samplings taken at the project site showing the moisture content of the soil at the location
of the individual samples. Although the drawings were prepared in October 2006, the
dates associated with the samples indicate they were taken in the 1987-88 time frame
(supp. R4, tab 43).

Direct Placement Strategy

        6. Mr. Boyd determined the worksite would have to relocate at various times
during performance because of the contract requirements that construction of the levee
could only be performed in 4,000 foot sections during non-hurricane season and only
2,000 foot sections the remainder of the year (tr. 1/53-54). Given these two parameters
and other information, Mr. Boyd developed a plan of operation upon which RLB's bid
was based, referred to as "direct placement." By using the design templates of the
borrow pit and levee construction, Mr. Boyd was able to determine where he had to
excavate and how much material would be excavated. As to the location, he explained
that his review of the plans and specifications indicated that the levee ran from
approximately Sta. 464 to Sta. 596 but the borrow excavation was mandatory between
Sta. 50 1 and Sta. 741. His review also revealed the borrow was parallel to the levee
between Sta. 501-596. As a result, he determined the most economical and efficient
way to complete the job would be to take borrow material directly from the
borrow and directly place it on the levee within these locations and then haul
material to the levee between Sta. 596-741 where this would not be possible. He
concluded that the best method of operation was to utilize a long reach (100 foot boom),
large bucket 88-B dragline to excavate the drier material on the far bank of the ditch and
place it directly on top of the existing levee in incremental lifts. Mr. Boyd planned to
excavate the remaining wet material with excavators and process it as needed on the
existing levee berm. (Tr. 1151-54)

       7. The plans and solicitation stated that the excavated material would yield
approximately 197,200 CYs of compacted, in-place material. Mr. Boyd concluded that
approximately 232,000 CYs of material would be excavated to yield the government's
estimated 197,200 CYs of compacted levee fill material. By calculating the average
moisture content of that excavated material utilizing the Corps moisture reports contained
on Sheet 15 of the plans and specifications he calculated a pit-to-fill ratio of 1.18. 3
(Tr. 1/217-18)




3
    The pit-to-fill ratio is the ratio of excavated dirt required to place one cubic yard of dirt
         on the levee. The wetter the dirt, the higher the ratio, and more dirt required to be
         excavated to place the same amount of dirt.

                                                 5
Bid Price

        8. RLB's total bid was $3,348,141.80. RLB's bid preparation documents show
that RLB calculated a unit price of$10.04 perCY to perform the embankment work.
(Supp. R4, tab 38 at 10, Bid Item 4) The bid component for CLIN 0004, Embankment,
Compacted Fill was $1,774,800.00 based upon a government estimate of 197,200 CYs at
a unit price of $9 CY (R4, tab 7). Mr. Boyd acknowledged that, while he computed
RLB's price perCY for the embankment work to be $10.04, he only bid that line item at
$9.00 perCY. He testified that it was his practice to "shop monies around" through the
bid schedule, in ways that were best for the company, for cash flow reasons (tr. 1/81-83,
194-97).

Independent Government Estimate

        9. RLB was the apparent low bidder at $3,343,000 (app. 2nd supp. R4, tabs 41-47).
The independent government estimate (IGE) for the project was $4,824,244, including a
unit price of $17.90 per CY for the work under CLIN 0004, "Embankment, Compacted
Fill" (R4, tab 8). Due to the discrepancy between the IGE and the contractor's bid price,
on 10 August 2007 the contracting officer (CO) sent a letter to RLB requesting that it
review and verify its bid "in order to prevent an unconscionable award" (R4, tab 9). By
letter of 14 August 2007 RLB informed the CO that it had reviewed its bid and found it to
be free of errors and valid as submitted (R4, tab 10).

Contract Performance

        10. On 30 August 2007 the Corps awarded Contract No. W912P8-07-C-0102
(contract) to RLB in the amount of$3,343,000 and the specified time of performance was
397 calendar days from receipt of a Notice to Proceed (NTP) (R4, tab 11). 4 Shortly
thereafter the NTP was issued on 11 September 2007 (R4, tab 12). Ms. Sheila Enclade
was the CO that participated in the bid evaluation and awarded the contract (tr. 1193).
Contract administration was delegated to Mr. Ted Eilts, as administrative contracting
officer (ACO) (supp. R4, tab 45). Although responsible for administration of the
contract, Mr. Eilts only visited the site twice during the project (tr. 3/5-6). Mr. Larry
Hayes was the project engineer on the project (app. 2nd R4, tab 49 at 17; tr. 3/6). 5
Although responsible for the day-to-day, on-site, oversight of the project, he was absent



4
  Modification No. A00002 increased the time of performance due to weather by 93
       calendar days and $59,500 and Modification No. P00001 by 82 calendar days due
       to added scope of work and $290,000 (R4, tabs 3, 5, 6).
5
  Mr. Hayes died shortly before the hearing. His testimony is derived from his deposition
       included in the Rule 4 file (tr. 3/139-40).

                                            6
for the first nine months of the project (app. 2nd supp. R4, tab 49 at 33). 6 As a result,
Mr. Chaisson, the quality assurance representative, was the only Corps representative on
the job site and involved with performance of the contract on a daily basis (id. at 18, 33).

         11. On 20 September 2007, a preconstruction conference was held at the Corps'
Lafayette Area Office. The record of that meeting states Mr. Boyd "explained that he
planned on bringing in a large dragline and excavating the borrow area first, starting at
Sta. 501+00 and continuing to Sta. 741+00. He would then drop back and start
processing the material and constructing the levee." (R4, tab 13 at 2) On 19 October
2007, RLB prepared and submitted to the government a construction schedule showing
that it planned for the embankment work, including excavation, to commence on
27 November 2007 and to end on 4 October 2008, a stated duration of 300 days (supp.
R4, tab 29 at 3).

Realignment of the Center Line

        12. In December of2007, before excavation work commenced, Mr. Hayes,
provided verbal direction to realign the center line of the existing drainage ditch (R4,
tab 18). 7 Rather than excavate the borrow ditch according to the excavation template
included in the contract drawings, Mr. Hayes advised RLB to excavate through the center
line of the same, existing drainage ditch, to 15 feet on each side of the center line of the
ditch. {Tr. 2/240-41) This realignment shifted the center line of the ditch in a westerly
direction, moving it closer to the center line of the levee. As the original specifications
and plans provided that the contractor would use borrow material from the ditch to build
the levee embankment, this change reduced the quantity of borrow material available to
complete the levee. (Supp. R4, tab 66 at 13-16) The realignment order was not formally
reduced to writing at that time and, in fact, was not formally addressed by the Corps until
issuance of a unilateral modification three years later after RLB's claim was filed (R4,
tab 14)8 •




6
  Mr. Hayes was involved in a car accident in January 2008 and did not return to the
         project until March 2008. Upon his return he was detailed to assist in Corps
         emergency projects in other geographic locations until the end of September.
         (App. 2nd supp. R4, tab 49 at 29-31)
7
  It is uncertain from the record exactly why the Corps realigned the ditch. The reason
         for the realignment is not relevant for purposes of this appeal; it is undisputed
         Mr. Hayes gave the order during this time period.
8
  The Corps orally ordered the realignment in December 2007. RLB' s REA was filed
         29 September 2009 and converted into a claim on 17 November 2009 (R4, tabs 3,
         5). Modification No. P00002 was not issued until 8 December 2010 (R4, tab 14).

                                             7
Deletion of the Drawings Borrow Template: CIN-001

        13. Shortly after the realignment order, Mr. Hayes realized that the template on
the drawing cross sections did not match the typical of the excavation. As a result, he
forwarded CIN-001 to Mr. Boyd for his signature on 3 December 2007. CIN-001 was a
bilateral modification that deleted the borrow template shown on the cross-sections of the
existing levee in drawings 22 through 26 and stated that the contract time and price
would not be affected by the change. (App. 2nd supp. R4, tab 6) Having not heard from
Mr. Boyd by late January, Mr. Hayes called him on 25 January 2008. Mr. Boyd stated
that having begun excavation he would wait and see if any impacts result from the
change before he would sign the modification. (App. 2nd supp. R4, tab 7) Mr. Eilts
testified that the purpose ofCIN-001 was to correct mistakes in the drawings provided in
the contract (tr. 2/263-65). He further testified that CIN-001 had nothing to do with the
realignment of the ditch and the contractor would still be able to perform the required
work because necessary information remained in the typical section drawings
(tr. 2/265-66). In contrast, Mr. Boyd testified the impact of the realignment, when
combined with this change, was: (1) loss of approximately half of dry dirt that was
supposed to be excavated; (2) addition of considerably more wet dirt; (3) loss of
processing area to dry the new, wetter dirt; and (4) overlap ofthe newly aligned
excavation pit with the toe of the newly constructed levee, meaning the excavation pit
would undercut where RLB was supposed to construct the new levee. (Tr. 11102-06)
Summing up the impact he stated, "[T]he difference in this job and the change that was
made in this job, is we were traded our dry dirt for that wetter dirt, and then asked to do it
for no change. And it is an extreme difference." (Tr. 11112)

Excavation

       14. RLB executed an agreement with a subcontractor, Weeks Marine, Inc., to
perform the excavation work (supp. R4, tabs 20, 21 ). The subcontractor commenced
excavation operations at Station 50 1+00 as planned (findings 6, 11 ), using a long boom,
large bucket dragline (88-B) on 5 February 2008 (supp. R4, tab 22, Daily Log 2/5/08).
The same day, RLB also began the direct placement operation, placing excavated borrow
material on the levee (supp. R4, tab 19, Contractor Quality Control Report (QCR)
No. 132, Block 3, "Work performed today").

       15. On 12 June 2008 a meeting was held between RLB, Mr. Boyd, and the Corps'
Mr. Eilts and Mr. Hayes to discuss RLB's concerns about the realignment of the
centerline of the ditch and the effects that realignment was having on the contract work.
RLB stated that there were design conflicts and cost issues that needed to be resolved
because the realignment basically took away the area between the ditch and the levee that
RLB had intended to use for drying the excavated wet soil. RLB further stated that this,
in tum, required the wet material to be hauled two or three miles away from where it had



                                              8
been excavated, dried and hauled back again to where it had come from to be placed into
the levee. (R4, tab 18)

        16. RLB also asked for specific direction on the area where it was currently
working constructing the levee and excavating the ditch from Sta. 522+00 to Sta.
545+00, as this section, as well as others, had not yet been addressed by the Corps. The
Corps advised RLB that, from Sta. 522+00 to Sta. 545+00 the levee should be
constructed to full template, steepen the side slope of the ditch, and leave a 5' berm
between the top of the ditch excavation and the toe of the levee. However, this direction
was only provided for Sta. 522+00 to Sta. 545+00. Mr. Boyd was told the Corps
personnel would have to review whether to provide the same direction on the entire
levee from Sta. 501+00 to Sta. 596+00 where the levee parallels the ditch and
directed RLB to not proceed further until the Corps had time to review the impacts of
the realignment. (R4, tab 18) The discussion then shifted to Mr. Boyd's request for
direction concerning excavation ofthe ditch between Sta. 596+00 and Sta. 741+00. The
Corps directed RLB not to excavate the ditch between these stations until it could
evaluate the impact of the realignment of the ditch on the levee. Mr. Boyd stated
excavation of this area was critical because of the need to dry the borrow material,
which requires excavation and placing of this material on the berm so it could begin to
dry. (!d.)

         17. On 20 June 2008, Mr. Boyd met with Mr. Hayes and Mr. Chaisson in an
attempt to receive direction on how to proceed on the project between Sta. 596+00 and
Sta. 741 +00 as discussed in the 12 June 2008 meeting. Mr. Hayes stated he had forgotten
about getting back to Mr. Boyd with information on the issue. Mr. Boyd offered a
non-monetary solution to the realignment issue based upon relaxing some of the
restriction in the manner of performance of the contract. Mr. Hayes requested Mr. Boyd
submit the idea as a request for information. (R4, tab 18) As requested, Mr. Boyd
forwarded a letter to Mr. Hayes dated 23 June 2008, referencing the 20 June meeting
stating:

             By realigning the ditch, the area between the levee toe and
             existing top of bank has been reduced substantially. This area
             is now at a width too small to allow adequate placement of
             the wet material from within the ditch for processing. To
             resolve this issue we request that the 2000' working limit of
             levee construction be waived and that we be allowed to place
             materials on the levee under construction at their insitu
             moisture content. This will allow borrow material to be
             processed on the levee section under construction. By




                                            9
             allowing the levee under construction to be used as a
             processing area, it will replace the area taken from us by the
             realignment of the ditch.


(Supp. R4, tab 52)

        18. Not having }ward from Mr. Hayes, Mr. Boyd followed up on his letter by
calling Mr. Hayes on 3 July and then again on 10 July stating he needed to know where
to construct the ditch from Sta. 596+00 to Sta.741 +00. Mr. Hayes stated that he
would call the next day and let Mr. Boyd know where the ditch limits would be located.
As of 18 July 2008, there was still no response from Mr. Hayes. (R4, tab 18)

       19. On 18 July 2008, RLB sent a letter to Mr. Eilts summarizing the meetings and
phone calls attempting to obtain guidance from the Corps on how to proceed on the
project and requested guidance on specific outstanding issues:

             At this time we are working in other areas between stations
             501+00 and 596+00 to keep the ditch excavation
             progressing. We are proceeding with the same direction as
             we were given from station 522+00 to 545+00. It is our
             understanding that you concur with this progression .

             ...At this time we have not received any direction on how to
             proceed from station 596+00 to 741+00. This lack of
             direction is delaying the progress of the project ...



             ... To date I have not received a call from Mr. Hayes nor
             have we received any direction for [sic] the Corps on where
             they want the limits of the ditch. We must have this
             information to understand the impacts that have been caused
             by the realignment of the ditch.

In closing Mr. Boyd requested:

             [T]hat you develop a change order that reflects these
             changes, including what dimensions the ditch is to be
             excavated to from station 501 +00 to 596+00 and from
             station 596+00 to 741+00. The quantities ofmaterial that
             will be excavated will then need to be reviewed. Please
             evaluate whether this change will affect the quantity of


                                            10
               material available for levee construction increasing or
               decreasing this construction. Once complete, we request you
               issue this in the form of a request for proposal so we can then
               evaluate the impact to our work caused by this change. Be
               advised that until RLB has an understanding of what work is
               to be achieved under the contract we cannot address the RFP
               issued on the project for additional work removing certain
               pipelines and constructing the levee in areas where these
               pipelines exist outside our contract.

(R4, tab 19)

       20. The Corps responded by letter on 7 August 2008, advising RLB that, for the
excavation between Sta. 596+00 and Sta. 738+00, it should use the chart on Drawing
No. 8 of27 to establish the west toe of the borrow ditch and, if necessary, that the
bottom width of the borrow ditch could vary to establish the west toe of the borrow ditch.
(R4, tab 20)

Reduction in Height ofLevee and Overbuilt Direction

       21. By letter of 15 August 2008, RLB acknowledged it had received the direction
it needed on the excavation of the realigned ditch but informed the Corps that, under the
new design criteria, there would not be sufficient soil to construct the levee desired by the
Corps. RLB offered to price a proposal for completing the levee with borrow material to
be obtained from an offsite source. (R4, tab 21)

        22. On September 19, 2008, RLB sent a letter to the ACO stating, "[T]his is to
alert you about concerns regarding our ability to complete the construction of the levee
on this Project with the remaining materials available in the borrow area furnished by the
Government." That the realignment of the borrow ditch "did impact our performance,
not only as a result of the reduction of material, but also reducing our drying area
requiring us to haul material further down site for drying." RLB also asserted the
realignment of the borrow ditch had reduced the amount of borrow material available to
build the levee. (Supp. R4, tab 13)

       23. The Corps did not accept Mr. Boyd's 15 August 2008 suggestion to obtain
additional borrow material offsite but instead, on 15 April 2009, directed RLB to
complete the ditch excavation and raise the levee to a minimum elevation of +8', rather
than the originally designed elevation of+ 12.5'. The Corps also directed RLB to remove
the embankment on the north end of the levee that had been overbuilt on the side slopes
and to use that material on the lower end of the levee to bring the entire levee up to the
minimum height of +8'. (R4, tab 22) Mr. Boyd testified that the directive forced him to
change his plan of operation. Rather than using the intentional overbuild on the newly


                                             11
constructed levee's side slopes for the final lifts to create the levee crown, RLB was
forced to pick the extra dirt up and haul it several miles down range for utilization
elsewhere in the levee. This resulted in excess labor, equipment usage, and a delay in
time. (Tr. 11115-19)

Final Government "As-Built" Survey

        24. The embankment work was completed and equipment demobilized by 30 July
2009 (R4, tab 23). The last pay estimate indicates RLB was compensated a total of
$3,037,450.00 for its work. This figure includes $1,234,800.00 for placement of 137,200
CY of "Embankment, Compacted Fill" under CLIN 0004 (R4, tab 24 at 6, 8, 9). On
5 April 2010, as called for under the contract, the government completed excavation and
fill as-built surveys which determined that final quantities excavated and placed by RLB
were 234,501 CYs and 140,410 CYs, respectively (R4, tabs 26, 27). However, the
survey showed RLB had only placed 116,820 CYs that were eligible pay quantities, and,
due to the overpayment, the government advised RLB that it would reduce payment
accordingly in the amount of$183,420.00 (R4, tab 25). 9 Mr. Boyd testified, at great
length and detail, concerning numerous substantial errors in the survey that served as the
basis for the government's conclusions (tr. 1129-137). Mr. Boyd also testified no one
knows with certainty how much dirt was placed. We are persuaded by Mr. Boyd's
testimony and find that the government's as-built survey is so inaccurate that it is not a
useful representation of how many total CYs were placed or where they were placed by
RLB.

Request for Equitable Adjustment (REA)

       25. RLB filed an REA with the government on 29 September 2009 in the amount
of$2,864,447 for additional costs it claimed it incurred due to the realignment of the
drainage ditch (R4, tab 5). The request included a detailed report issued by RLB 's
consultant, Richard J. Roy, dated 28 August 2009 (R4, tab 4). RLB subsequently
submitted a certification of its request on 17 November 2009 (R4, tab 6). The REA
asserted that the realignment of the centerline of the ditch seriously impacted the
contractor's work, resulting in increased costs and time of performance in three ways.

       26. First, that the realignment forced it to excavate soil that was much wetter than
originally planned, resulting in increased time and costs for processing and placement,
explaining:

                In its original location the material to be excavated was to
                come from both banks of the ditch as well as a minor amount

9
    There is no evidence in the record the government ever took actions to recoup the
         asserted overpayment of$183,420.00.

                                              12
             from the submerged portions of the ditch. The composition
             of this fill would have contained a large proportion of the
             drier embankment soil. After the ditch was realigned by the
             COE, much less embankment soil was available from the
             east bank of the ditch. The only fill to be excavated came
             from a smaller than original amount of the west bank fill but
             predominately from fill material submerged deeper in the
             center of the ditch. This material was much wetter than the
             material originally designed to be used in the levee
             construction .



             . . . Due to the ditch realignment, the material never did meet
             the specified requirement [in the contract].

(R4, tab 4 at 5, 6)

       27. Second, RLB asserts that the wetter soil required to be excavated after the
ditch realignment yielded significantly fewer placed CYs of embankment as compared to
the yield that would have been realized had it been allowed to excavate the drier material
as originally planned. In other words, the pit-to fill ratio was increased. Thus, RLB
claims it had to perform much more work than originally anticipated, excavation and
drying, to achieve each placed CY of embankment. (R4, tab 4 at 5, 6)

       28. Third, RLB also asserted that its work was further impacted by the fact that
the ditch realignment reduced available area between the levee and ditch that it had
intended to use to dry the soil prior to placement in the levee. RLB asserts that the
realignment of the centerline of the ditch effectively removed required area between the
ditch and the levee that it had intended to use to dry the material excavated from the
ditch. The wet soil therefore had to be trucked to a remote location and dried, then
trucked back to the original location. (R4, tab 4 at 5, 6)

Claim Methodology

       29. Mr. Roy's original approach to the claim was to isolate the cost of completing
the work and then to apply a "measured mile" approach, comparing the as-bid plan to the
specific areas impacted by the change. However, he was unable to identify a period
when the work was not impacted so he found it impossible to apply the measured mile
approach. (R4, tab 4 at 6) Instead he tried to isolate the actual costs of performing the
excavation and compacted fill work, stating, "The proper measure of damages is the
'reasonable value' of the work." (!d. at 6) His analysis broke those costs into six
categories: (1) equipment; (2) labor; (3) subcontract cost; (4) travel cost-hotel only; (5)


                                            13
engineering and testing; and, (6) per diem cost for labor. From these costs he deducted
equipment and labor hours he referred to as "other than embankment and compacted fill"
work. Those cost categories included: truck wash; clearing and grubbing; gas line, 60"
culverts; surfacing; and CIN-006 Levee Construction, and were compensated by
reimbursement under separate CLINs or by modification and are not in dispute. He
arrived at a total cost of excavation of $3,094,193 .16. Applying his estimation of home
office overhead, profit and bond cost, he calculated a total "value" of the excavation work
of$4,236,259.86. Subtracting the amounts already paid, the total claim amounted to
$2,864,447.01. (App. Claim, vol. 3, tab 19)

Defense Contract Audit Agency (DCAA) Audit of REA

        30. The government requested DCAA conduct an audit ofRLB's REA,
examining its claimed direct labor rates, home office overhead and other portions of
direct costs (field office overhead) portions of the REA on 19 January 2010.
The government's request did not include audit of the claimed profit and bond rates.
DCAA's findings were provided to the government on 10 June 2010 in DCAA Audit
No. 3521-2010R17200001 (Audit). (App. supp. R4, tab 3) DCAA found that RLB's
REA provided adequate cost and pricing data in support of its proposed labor rates and
other direct costs (ODCs). 10 However, the claimed overhead and ODCs were found not
to be prepared in accordance with appropriate provisions ofF AR 31 and DF ARS but
such noncompliance was considered to have a limited impact on the proposal as a whole.
Because of the limited impact, DCAA found that the proposal served as an acceptable
basis for negotiation of a fair and reasonable price. (/d. at 2) The audit's recommended
amount was $4,078,184 as the total incurred cost ofthe excavation work (id. at 9). 11 We
find that RLB incurred the direct labor and ODCs claimed for all excavation work and
they are allocable to this contract.

      31. The Audit did question $318,999 of the total $421,060 claimed as indirect
expenses based upon unallowable costs included within the total. 12 Their findings were

10
   The Audit did not question that RLB had incurred the claimed direct labor costs (app.
       supp. R4, tab 3 at 2). Their finding was based upon an examination of a sample of
        83% of the total payroll found in RLB's company Quick Books payroll records
        between 2 October 2007 and 30 July 2009 (id. at 4, 5). Likewise, the Audit did
       not question any of the claimed incurred ODCs consisting of employee hotel bills,
       engineering and testing costs and per diem paid to employees based upon an
       examination of invoices and per diem paid to travelling employees (id. at 9, 10).
11
   This total includes the claimed amount of 8% profit and 2.50% bond rates which were
       not examined by the Audit.
12
   Unallowable expenses included: meals and entertainment per FAR 31.205-14;
       donations, interest expenses, and finance charges per FAR 31.205-8; and
       contributions or donations perF AR 31.205-20 (app. supp. R4, tab 3 at 5).

                                            14
based upon an examination of actual cost found in RLB' s "Schedule of Operating
Expense for the Eleven Months Ended [sic] November 30, 2008." (App. supp. R4, tab 3
at 5, 6) In addition, the claimed home office overhead rate was questioned based upon
finding unallowable costs within the indirect cost pool. The REA included a 26.41%
overhead rate based upon actual costs incurred between 1 January 2008 and
30 November 2008. The auditors adjusted the indirect cost pool for the identified
unallowable costs and calculated a new rate of 21.30%. (!d. at 6, 7)

Government's Response to Claim

        32. On 17 June 2010 the government informed RLB that its request for an
equitable adjustment did have some merit but that the government disagreed with the
contractor's total cost approach to pricing the change. The CO requested a meeting for
further discussions. (R4, tab 28) A meeting between RLB and the government took
place on 13 July 2010 with the parties discussing their positions. The meeting ended with
the parties in disagreement over the appropriateness of using the total cost method to
price the change and with the government advising it would consider the matters
discussed and would get back with the contractor. (R4, tab 29)

        33. Subsequently, based upon the government's estimate, the governm:ent
determined that the realignment of the ditch impacted the contractor in the total amount
of$447,354.40 (exclusive ofCDA interest). This consisted of entitlement to
$290,367.00 for an increase in the "Pit-to-Fill" ratio; a credit of$462.60 for deleted
work; and entitlement to $157,350.00 for the government direction to remove overbuild
on the side slopes of the upper end of the levee and haul and place it toward the lower
end. (R4, tab 30) The amount for the increased pit-to-fill ratio was based upon estimates
of amounts excavated as shown on the cross-sections of the final as-built survey and the
original bid estimate pit-to-fill ratio. 13 A 7.5% settlement factor was subtracted from this
total to arrive at 150,940 placed (id. at 6). Relying upon the government's determination
of entitlement, on 8 December 20 10 the government issued a unilateral modification
No. P00002 in the amount of$447,254.40, plus $5,134.23 in interest, to compensate the
contractor for the cost impacts associated with the realignment of the ditch ordered in
December of2007 (R4, tab 31). RLB was informed ofthis determination and, in
response, requested a CO's final decision (COFD) on 12 August 2010 (R4, tab 3).

       34. The COFD was issued on 15 March 2011 (R4, tab 2). The COFD conceded
entitlement acknowledging that the Corps' actions in realigning the drainage ditch did
impact the contractor's cost of performance but disagreed on the nature and extent of
those impacts. In addition, the government disagreed with RLB' s use of a total cost

13
     The final as-built survey indicated RLB excavated 234,501 CYs. Using the pit-to-fill
         ratio used in the government estimates for the bid process ( 1.28 to 1), the
         government calculated RLB would have placed 183,203 CYs.

                                              15
methodology to price the equitable adjustment due (id. at 9). The COFD found RLB's
claim for $2,864,447.01 to have partial merit in the amount of$447,254.40, the amount
previously placed on the contract by Modification No. P00002 (id. at 17).

        35. RLB appealed the COFD to the Board on 2 June 2011 and the appeal was
docketed as ASBCA No. 57638. The government conceded entitlement just prior to the
scheduled hearing and the parties stipulated that the hearing would only address quantum
(tr. 116).

Appellant's Expert Witness Analysis: The Mayeux Report

        36. Mr. Michael Mayeux was retained by RLB to conduct an expert analysis of
the claim. He was qualified and testified at trial as an expert witness in levee
construction cost estimation. He prepared two independent estimates: (1) the costs as
bid, and (2) the costs as changed. In addition, he reviewed the accuracy of the
government's estimate. (App. 2nd supp. R4, tab 23 at 4)

         (1) As-Bid Estimate vs. Realignment

       37. Mr. Mayeux found that the original specifications and plans were not unusual
for those used in levee construction contracts, with the specification being the standard
employed since 2005 (app. 2nd supp. R4, tab 23 at 5). However, he found that the work
sequence was more complicated than that usually found in similar contracts due to
weather and special requirements that made scheduling more difficult. 14 His analysis
took a detailed approach to planning the work but he noted his method was not identical
to those used by the Corps to build the government estimate or by RLB to prepare its bid.
He explained this based upon the fact it is not unusual for different contractors, when
bidding on a complicated contract such as this one, to take different approaches to
performing the work due to their differing equipment, labor, skill levels, etc. His as-bid
estimate for the embankment work was $1,561,887 or $8.06/CY and, as changed by the
realignment, $2,924,221. His report noted that bids vary due to market conditions so he
did not find RLB's bid rate of$9.00 unreasonable. (App. 2nd supp. R4, tab 23 at 6-8)

         (2) Review of the Independent Government Estimate


14
     The specific impacts on scheduling followed from requirements that no more than 2,500
         LF of borrow could be dewatered at one time, only 4,000 LF of borrow could be
         under construction at one time and this was reduced to 2,000 LF during hurricane
         season, material with a moisture content above 10% optimum could not be placed
         on a final levee, and the entire borrow area between Sta. 501+00 and Sta. 738+00
         be depleted and material used in levee construction but the contractor was only paid
         for material placed on the embankment (app. 2nd supp. R4, tab 23 at 5, 6).

                                               16
       38. Mr. Mayeux's report identified what he considered flaws in the government's
estimate. For example, he found the government made several faulty assumptions. His
summary stated:

                In short, it appears to me that the estimator put very little
                thought into how much material was in different reaches of
                the borrow area and what was actually required to place the
                material from each reach. Instead they estimated the project
                as if they [sic] whole project was the worst case scenario,
                then slowed down the haul trucks to assure the estimate was
                high enough to justify awarding a fairly high bid. The
                government estimate does not include profit and an additional
                25% is allowed for profit. This would allow for an award of
                $23.375 perCY for the uncompacted fill.

(App. 2nd supp. R4, tab 23 at 9)

Government's Expert Exceptions to RLB Damages: The Strickler Report

       39. Mr. George Strickler was retained by the government as an expert to analyze
and prepare an expert report on RLB's appeal (supp. R4, tab 66). 15 Mr. Strickler's report
(Strickler's Report) primarily addresses the effects the ditch realignment had on Rl.B's
work and an analysis of RLB' s damage claim, with his opinion on the amount of
damages that RLB may have suffered as a result of the realignment of the borrow ditch.

         (1) Analysis ofRLB's Claim Issues

       40. Strickler's Report addressed the issues alleged in RLB's claim. First,
Mr. Strickler addressed the effect of realignment on the available work area for
stockpiling and processing borrow material and concluded that the shifting of the ditch
"did cause a general reduction in the area available along the easterly bank of the ditch."
However, he concluded that, based on his review, this shift, by itself, would not have
impacted RLB's plan of operations to the extent asserted by RLB. (Supp. R4, tab 66 at
13-14) Second, he addressed the effect of realignment on the availability and wetness of
borrow material. He concluded that the realignment of the ditch did result in a net
reduction of borrow material but his calculations revealed there was not a significant

15
     His conclusions were based upon his review of the documents included within the Rule
         4 file, his discussions with Corps personnel and depositions transcripts for
         Mr. Boyd, Ms. Boyd, Mr. Sandhop and Mr. Sanders (supp. R4, tab 66 at 3-4).
         Mr. Strickler was qualified as an expert witness and direct testimony was
         presented through his expert report and RLB chose not to cross-examine him at
         the hearing (tr. 3/122).

                                             17
reduction in volume. (Supp. R4, tab 66 at 15) Additionally, Mr. Strickler examined
RLB' s assertions that the realignment of the borrow ditch caused RLB to have to
excavate wetter material, which in tum reduced the "in place" embankment yield of
material from each CY of material excavated from the ditch. His conclusion was that
because of the realignment, RLB encountered an increased moisture content of the
borrow material to be excavated, i.e., a higher "pit to fill" ratio than expected. However,
he noted there is no way to know how much embankment RLB placed, but cannot be
paid for, because the contractor failed to install settlement plates, which are the only
allowable method of measuring settlement. (Supp. R4, tab 66 at 16) Despite this
conclusion, he went on to conclude the CO's final decision included 32,263 cubic yards
of material due to an increase in the pit-to-fill ratio, "which would more than account for
this increase" (id. at 17-18). Third, Mr. Strickler addressed soil placed by RLB that was
not measured. He concluded that RLB had placed some embankment quantities that had
not been measured because they were not placed directly within the levee boundaries, and
thus not paid for, but noted such quantities were also included in the CO's final decision
as part of the additional32,263 cubic yards of embankment placed. 16 (Supp. R4, tab 66
at 18) Finally, Mr. Strickler addressed the Corps' directive to RLB in April2009 to use
the "overbuild" material on the side slopes of the northerly reach of the levee, haul it to
the southerly reach of the levee, and place it to bring up the levee to a +8 ft. elevation.
Mr. Strickler noted that this issue was addressed in the CO's final decision and that the
amounts included therein "more than adequately" compensated RLB for its additional
costs in carrying out that directive. (Supp. R4, tab 66 at 19)

         (2) RLB 's Incurred Costs for Embankment Work

        41. RLB's initial claim, on 12 August 2010, asserted a total cost ofthe
embankment work of$3,094,193.16, consisting ofthe following cost elements: (1) direct
equipment; (2) direct labor; (3) direct subcontractor cost; (4) direct travel cost-hotel only;
(5) direct engineering and testing; and (6) direct per diem cost for labor (R4, tab 3). With
the addition of home office overhead, profit and bond cost, the total cost of excavation
work came to $4,236,259.86. Subtracting the amount already paid for the work, the total
amount claimed was $2,864,447.01. (App. Claim, tab 22) Mr. Strickler's analysis of
RLB's damages can be separated into three findings. First, he performed a detailed
analysis ofRLB's claim noting any discrepancies in Mr. Roy's methodology. Second, he
identified items that should have been deducted from the claimed amount. Finally,
Mr. Strickler analyzed RLB's bid noting costs that should have been included within
RLB 's bid but were not and, therefore, should not be compensated now as part of its
claim. After analyzing RLB's claim, and identifying its deficiencies, Mr. Strickler

 16
      Mr. Strickler calculated that RLB had placed approximately 5,000-5,400 cubic
         yards of material at the levee ramps and repair sections which had not been
         measured.



                                              18
prepared his own detailed damage analysis, Reconciliation of Damages, which is found at
exhibit 3 of his report (supp. R4, tab 66, ex. 3). Adjusting the individual claimed cost
elements for the defects in RLB' s claim, he estimated a total incurred cost, including
markups, of$2,657,315.95 for the embankment work (id. at 2, line item 23). Applying
the estimated total incurred cost, Mr. Strickler then calculated a unit rate perCY
representing the difference in rate due to "realignment and other issues" of$3.28. He
then multiplied the adjusted rate ($3 .28) by the CYs placed in accordance with the COFD
(149,083 CY) to arrive at the total additional cost for CYs placed, $489,389.27. When
added to his calculations for other direct placement payments, he arrived at a total
possible compensation of$753,686.27. (!d., ex. 3 at 1)

Analysis of the Parties' Positions on Estimated Individual Cost Elements

       42. During his testimony, Mr. Roy revealed that he had revised RLB's total claim
downward to $2,407,775.74 based upon his review ofthe Strickler Report (tr. 2/60-75).
Further adjustments were also made in RLB' s claim in its post-hearing reply brief (app.
reply br. at 24-26).

       (1) Direct Equipment Costs

       43. The following summarizes Mr. Strickler's estimate of equipment cost by
individual cost element, as stated in his report, and RLB' s adjustments to its claim in
response:




                                             19
                                                  Strickler Report    RLB Revised Claim

Total hours of equipment                          $886,737.77           $1,244,840.21

Deduct for non-bid items                          ($49,501.39)               0
 (GPS, Water Trucks, Pumps, Grader)

Deduct for distributed equipment                  ($25,914.46)              (7,126.48)
 (60°/o Levee/40o/o Other)

Add additional grader hours and operator 17        $27,827.48             $27,827.48

Add rental equipment                              $230,908.45            $230,908.45
                                   18
Add for weather included in bid                    $78,891.82             $78,891.82

Net Equipment Cost                               $1,148,949.67         $1,575,321.48


(Supp. R4, tab 66, ex. 3; app. reply br. at 24) The parties only dispute three equipment
cost elements, the total cost of equipment hours, the deduction for non-bid items and the
deduction for non-embankment equipment cost. We will address each in tum.

             (a) Total Hours ofEquipment Used for Excavation and Fill Work Only

       44. Although the labor costs were based on actual rates paid to the employees,
Mr. Roy calculated equipment costs based on Corps published rates found in the
Construction Equipment Ownership and Operating Expense Schedule, U.S. Army Corps
ofEngineers, Pub. No. EP 1110-1-8, Region III (Corps Manual) (supp. R4, tab 66, ex. 8).
The equipment costs associated with the embankment work were derived by reviewing
the daily reports identifying the pieces of equipment used for that purpose (app. Claim,

17
   Although Mr. Strickler reduced the equipment hours due to the fact he could not find
       specific dollars within the bid for a grader: 50% of the grader cost, $27,827.48,
       was added back to the total in recognition of its use on the haul road effort at
       (778.5/2)*(56.82+14.67) (supp. R4, tab 66, ex. 3 at 2, line item 4). RLB agrees with
       this amount and also adds this amount to its claimed equipment costs (app. reply
       br. at 24, line item 4).
18
   Mr. Strickler included a credit for normal weather included in the bid based upon a
       straight proration of days of normal weather (44%) to unusually severe weather
       (56%) (supp. R4, tab 66 at ex. 3, note 6). RLB does not dispute this amount and
       adds the same amount in its revised claim (app. reply br. at 24).



                                            20
tab 4). He also used the daily reports to establish the hours that these pieces of equipment
actually worked on the embankment work and then determined which pieces of identified
equipment were owned or leased by RLB (id. ). An average hourly rate was then
established for each piece of owned equipment based upon the rates established in the
Corps Manual. Using this rate, he determined that the direct equipment cost was
$1,709,104.52. (App. Claim, tab 11)

        45. Mr. Strickler noted that the rates, as calculated by the Corps Manual, include
both ownership cost elements and operating cost elements. The ownership portion of the
rate includes an allowance for the facilities capital cost of money (FCCM) and
depreciation (DEPR). The operating cost elements include: fuel; filters; oil; grease
(FOG) to include servicing; repairs to include maintenance and major overhauls; tire
wear (replacement); and tire repair (supp. R4, tab 66, ex. 8). Mr. Strickler found any
costs associated with these elements, either directly claimed or claimed as a function of
overhead, were duplicative. Finally, he also noted any efforts on the part of the
equipment operators to provide basic maintenance on their vehicles should also be
deducted as duplicative based on the Corps equipment rates. (Supp. R4, tab 66)
Mr. Strickler calculated the new cost of equipment for the embankment work, as adjusted
by his findings as $886,737.77 (supp. R4, tab 66, ex. 3).

        46. Mr. Roy stated during his testimony that upon reviewing the Strickler Report
he realized that RLB 's initially claimed direct equipment costs were included in
depreciation costs, which was duplicative due to the fact that RLB accounted for
equipment depreciation in its home office overhead (tr. 11291-93). Mr. Roy was unaware
of that fact when the initial claim was presented and, therefore, revised the claim to
correct that calculation error (tr. 1156-57, 60-62). The backup data created by Mr. Roy to
support his calculation is located at Exhibit A-1, which was introduced and admitted at
the hearing. Mr. Roy's final claim adjustment also includes equipment standby costs
using rates from the Corps Manual. As explained by Mr. Roy at the hearing, "these are
the revisions that were based on what I learned from Mr. Strickler's report" (tr. 2/62).
After these adjustments Mr. Roy's final value for the direct equipment cost is
$1,296,846.22. 19

        4 7. The government, in its post-hearing brief, noted that the standby equipment
cost in Exhibit A-1 was still inaccurate because it did not account for depreciation costs,
which is duplicative as in the case of equipment operating cost (gov't br. at 69).
Recognizing this error, RLB chose to concede the claimed standby cost of $52,026.01 in
its entirety rather than attempt to calculate the exact amount of duplicative costs. This
reduced the total direct equipment cost from $1,296,846.22 to $1,244,820.21. (App.

19
     The total is a $412,258.30 reduction from the original claimed amount of
         $1,709,104.52 but does not include rental equipment cost which is broken out as a
         separate line item (ex. A-4).

                                             21
reply hr. at 24 n.l) We find RLB's incurred total cost for equipment hours for
embankment work was $1,244,820.21.

              (b) Deduction for Non-Bid Items (GPS, Water Trucks, Pumps, Grader)

       48. After calculating the total cost for the equipment hours, Mr. Strickler deducted
some items from that total and added others. He deducted $49,501.39 for items that he
was unable to find within RLB's bid, such as GPS, water trucks, pumps, and a grader.
These were items Mr. Strickler believed were necessary to complete this job but he could
not find evidence they were included in RLB' s bid and, therefore, RLB should not be
reimbursed for these items. (Supp. R4, tab 66, ex. 3 at 1, note 2)

        49. RLB does not deduct for these items because Mr. Boyd testified they were
factored into the bid even though not separately broken out (app. br. at 24). Specifically
addressing the pumps, Mr. Boyd testified he did not breakout a separate line item amount
for pumps because there was a pump station on-site to dewater the ditch (tr. 1164).
Concerning the water truck, Mr. Boyd testified he also factored this into his bid but did
not separately break the cost out explaining, that given the purpose of a water truck, he
did not foresee extensive use of one on this project, i.e., the major challenge on this
project was to reduce the soil moisture not increase it (tr. 1/64-66). Likewise he also
testified the cost of a grader was also included in the bid but not separately itemized and
that there was a separate itemization of the cost of bulldozers that could be used as
graders if necessary (tr. 11198-99). We find Mr. Boyd's testimony persuasive and find
that the items identified by Mr. Strickler, and subsequently deducted from his
calculations, were included within RLB's bid and should not be deducted from total
equipment costs.

              (c) Deduction for Distributed Equipment (60% Levee/40% Other)

       50. Mr. Strickler deducted $25,914.46 as the non-levee use of the equipment
applying a 60% levee work to 40% non-levee work allocation he derived from the bid
documents (supp. R4, tab 66, ex. 3 at 1, note 3). In contrast, Mr. Roy testified that he
determined the embankment equipment cost was 79% of the total equipment cost for the
project (tr. 11277-78). We find Mr. Roy's calculations more persuasive and find the
proper allocation of equipment costs is 79/21% ratio for a total deduction of $7, 126.48.

      51. We find that the total incurred net equipment cost for embankment work was
$1,575,321.48.

       (2) Direct Labor Costs

       52. Below is a comparison ofMr. Strickler's and RLB's revised direct labor
calculations:


                                            22
                                                  Strickler Report      RLB Revised Claim

Labor Costs for embankment work                       $501,803.22          $548,933.07

Deduct for Mechanic                                   ($53,010.14)         ($53,0 10.14) 20

Deduct for distributed labor                          ($77 ,529 .28)       ($52,332.26)

Add for 6560 - Payroll Expenses Other                  $35,543.58           $35,543.58

Deduct for daily servicing of equipment                 ($5,838.66)         ($5,838.66)

Deduct for labor to run pumps                           ($1' 181.90)        ($1,181.90)

Net Labor Cost                                        $399,786.82          $472,113.69


(Supp. R4, tab 66, ex. 3; app. reply br. at 24) We find that the parties only dispute two
direct labor cost elements, labor cost for excavation fill work and deduction for
non-embankment labor cost work and address each in tum.

                (a) Labor Cost for Embankment Work

       53. RLB's claim relied upon the daily reports to determine the number of labor
hours each piece of equipment was operated on the job site and RLB's certified payroll
records to determine the total cost direct labor for the entire project (app. Claim, tab 13).
Then the costs for hours associated with other work were subtracted from the total cost to
arrive at the labor cost to perform the embankment work of$641,087.53 (id., tab 14).
Other work hours included truck wash, clearing and grubbing, gas line, 60" culverts,
surfacing and the CIN-006 change order costs (id., tab 12). Based upon his review,
Mr. Strickler determined there were discrepancies between the QCRs and the payroll
summary in RLB's claim for manpower. He noted there was not enough information
included in the daily reports to determine the hourly effort for laborers on the job site,
there were unspecified hours where it was impossible to determine whether the employee
was a laborer or operator, and there was a significant mixing of hours within the operator
and laborer line items on the QCRs. In addition, he noted discrepancies between the
operator hours and equipment hours on the QCRs and between RLB 's job cost report and
the payroll. (Supp. R4, tab 66 at 20-21) There was also not enough information for
Mr. Strickler to identify or quantify any mobilization and demobilization costs that

20
     Mr. Roy included a deduction for a mechanic in his labor cost calculations in this
         amount. Therefore, this deduction appears to be a duplication already accounted
         for in the total (see ex. A-3).

                                             23
should be deducted (supp. R4, tab 66, ex. 3 at 2, note 8). Despite the uncertainties in the
data, Mr. Strickler estimated $501,803.22 in labor costs for excavation and fill work.
Based upon its review of the Strickler Report, RLB reduced its claimed labor cost from
$641,087.53 to $548,933.07 (ex. A-4). This revised number includes deductions for the
mechanic cost of$53,010.14, identified by Mr. Strickler, and an adjustment for the
salaried labor of$19,347.16 (ex. A-3). We find RLB's calculations more persuasive and
find the Labor Cost for the embankment work to be $548,933.07.

                 (b) Deduct for Distributed Labor (60% Levee/40% Other)

       54. The ratio applied for this deduction, non-embankment work, is the same as
what Mr. Strickler applied above for the equipment costs for a deduction of$77,529.28
(supp. R4, tab 66 at 2, note 10). In contrast, RLB applied a ratio of73% Levee to 27%
based upon the total number of bid embankment labor hours with the total number of
labor hours for the project (tr. 11278). We find Mr. Roy's calculations more persuasive
and find the proper allocation of labor costs is 73/27% ratio and the total amount of
deduction to be $52,332.26.

      55. We find the total net incurred direct labor cost for embankment work to be
$472,113.69.

         (3) Subcontractor, Prorated Hotel Costs for Traveling Laborers and Prorated Per
               Diem for Traveling Laborers

        56. The parties do not dispute these three cost elements: $300,413.40
representing the cost to RLB for its subcontractor, Weeks Marine, who performed most
of the excavation work; 21 prorated hotel costs of96,763.06; 22 and, prorated per diem of
$67,842.54. 23


21
     (Supp. R4, tab 66, ex. 3 at 2 note 15; app. reply br. at 24, item 15)
22
     (Supp. R4, tab 66, ex. 3 at 3 note 16; app. reply br. at 24, item 16)
23
     Mr. Strickler's review of the job cost report disclosed that RLB claimed all per diem
         costs on the job through 6 July 2009 in the amount of $130,466.43 despite the
         fact RLB's bid included per diem as a function of the hourly wage rate of
         employees and was therefore distributed among all items of work within the
         contract. Therefore, he found that some portion of the per diem costs should be
         distributed among the other than levee tasks as was done in the RLB bid
         calculation. As a result, he calculated a prorated portion of these costs that would
         be associated with levee work with a percentage of 52% levee work to 48%
         non-levee work for a total amount of$67,842.54. RLB's revised claim retained
         the original amount of $130,466.43 but its post-hearing brief reduced the amount
         to $67,842.54. Line item 18 ofRLB's calculations indicates a proration

                                               24
       (4) Testing and Engineering

        57. RLB claimed $127,038.48 for the test and engineering costs associated with
excavation and fill work invoiced by consultants G&W Engineers, Inc., (app. Claim,
tab 17). This amount was reviewed by the DCAA audit and not questioned (app. supp.
R4, tab 3 at 4). Subsequently, Mr. Roy reviewed the additional cost records and
concluded that the claim for these items should be increased to $162,322.80 because the
original claim was completed before the entire project was completed and therefore did
not include a complete accounting of engineering and testing costs. (tr. 2/70). However,
there is no documentation within the record to substantiate the additional amounts
claimed above the original $127,038.48.

        58. Mr. Strickler found there was no explanation within RLB's claim to account
for the claimed cost of$127,038.48 in the testing and engineering for excavation and fill.
In its report, RLB did include invoices for Southern Earth Sciences for soils testing and
G&W Engineers for engineering. Mr. Strickler's report noted that RLB failed to account
for soils testing in its bid. The only costs he allowed were those for G& W Engineers
which may have been incurred for additional engineering due to the realignment. He also
noted, the cost of testing should not have changed due to the realignment and, therefore,
should not be included within the damages calculation. (Supp. R4, tab 66 at 43-44) As a
result, Mr. Strickler excluded any cost for testing & engineering because it was not
included within RLB's bid as a separate line item but did include the cost of the line item
for G&W Engineers in the amount of$24,939 (supp. R4, tab 66, ex. 3 at 3, note 17).
Mr. Boyd testified he "believes" he included testing costs in his bid but under the wrong
line item, line item 24 -"drag line mats" (tr. 11199). That line item bid is only $30,000
(supp. R4, tab 38 at 4). Additionally, RLB's claimed amount for testing does not account
for non-embankment testing under the contract (R4, vol. II at §§02316-6 ~3.4,
02731-4~1.5.1 (6), (7), 02632-4~2.1.3). We find RLB's embankment additional related
testing cost is $24,939.

       (5) Indirect Costs: Home Office Overhead, Profit & Bond Cost

        59. The REA included a 26.41% overhead rate based upon actual costs incurred
between 1 January 2008 and 30 November 2008 (app. Claim, tab 21). The DCAA
adjusted the indirect cost pool for the identified unallowable costs and calculated a new
rate of 21.30% (see finding 31 ). The government and RLB now agree on this percentage
(supp. R4, tab 66, ex. 3 at 3 note 20; app. reply hr. at 24, item 20). Likewise, RLB now
adopts the profit rate (8%) and bond cost (1.044%) stated in the Strickler Report (app.
reply hr. at 24, items 21, 22). Therefore, we find the appropriate overhead rate to be
21.30%, the profit rate to be 8%, and the bond rate to be 1.044%.

      percentage of 68% of $130,466.43 with no explanation in the associated notes.
      (App. reply hr. at 24, item 18)

                                            25
        60. We find RLB's total incurred cost for all embankment work to be calculated
as follows:

              Net Equipment Cost                              $1,575,321.48

              Net Labor Cost                                    $472,113.69

              Subcontract Cost (Weeks Marine)                   $300,413.40

              Laborer Travel Costs (Hotels)                      $96,763.06

              Testing and Engineering                            $24,939

              Per diem for traveling laborers                    $67,842.~4


              Total direct cost of embankment work             $2,537,393.17

              21.30%, Home Office Overhead                       $540,464.75

              8°/o Profit                                        $202,991.45

              Bond@ 1.044°/o                                      $26,490.38

              Total Cost for Embankment Work                   $3,307,339.75


Unquantifiable, Non-Reimbursable Costs

       (I) Settlement & Placement Outside Section

       61. Mr. Strickler identified additional items that he did not deduct from his
estimate but, in his opinion, should not be recovered by RLB because they are not
recoverable under the contract and were not deducted from RLB' s claim. These items
include such things as reimbursement for settlement of dirt placed upon the levee, dirt
placed outside the contractual bounds of the contract, dirt not placed within the
requirements of the contract, etc. (Supp. R4, tab 66 at 16, 18) The contract is clear that
RLB was allowed, but not required, to install settlement plates but if it chose not to do so,
it would not be paid for any settlement that occurred in the levee (R4, tab 1 at 02332-2,
~ 1.3.2, "Settlement"; at 02332-4, ~ 1.4.3, "Forfeiture of Payment for Settlement of
Foundation"). RLB elected not to install settlement plates because Mr. Boyd did not
think settlement was an issue on this job (tr. 1168-69, 21198). It is undisputed there was
settlement of the dirt placed on the levee. However, as Mr. Strickler also points out, there


                                             26
is no way to know how much settlement occurred since the settlement plates were not
used (supp. R4, tab 66 at 16). RLB's total cost claim includes all costs that were incurred
placing dirt on the levee, including costs for dirt that later settled that are not
reimbursable under the contract. The same issue exists for placing dirt outside of section.
(Supp. R4, tab 66 at 17-18) The final as-built survey found RLB had placed dirt outside
the contractual boundaries, which was not reimbursable under the contract (R4, tab 25).
Mr. Boyd effectively established the inaccuracy of this survey but in doing so did not
question the fact that some dirt was placed outside the contractual limits (see finding 24 ).
The problem is we have no way of knowing the quantity or its associated cost included in
RLB 's claim and neither party has attempted to quantify it. As a result, we find these
costs are included within RLB's claim, are not readily quantifiable but should not be
reimbursed in RLB' s claim.

       (2) Cost Claimed but Paid Under Other Line Items

        62. Mr. Strickler also found RLB should not be reimbursed for items that were
bid, and are compensated, in other line items of the contract but are currently included
within RLB's total cost claim. One such item is the fact that Mr. Boyd shifted
approximately 10% ofthe bid embankment cost ($1.04 ofthe $10.04 estimated bid cost)
into another bid line item (supp. R4, tab 66 at 36). Although the exact costs are
unknown, these costs would be reimbursed under RLB 's claim methodology despite the
fact they have presumably already been paid under another line item. In a similar
manner, the contract required RLB to make several repairs ("hurricane cuts") to breaches
that had previously been made in the levee (see supp. R4, tab 43, Drawing No.9,
"Typical Repair Levee Section"). Mr. Boyd testified that, in RLB's bid, he put the costs
to repair the seven levee breaches in CLIN 0005, "Gas Lines," for the pipeline repair
work (tr. 1/73-74, 201-02). Mr. Roy testified that his calculation of total embankment
costs did not include any deduction for costs for levee repair work that RLB included
under CLIN 0005, "Gas Lines." When asked why not, he stated "No, that's embankment
work." (Tr. 2/28) Thus, Mr. Strickler asserts that under RLB's claim methodology it is
seeking to be paid twice for costs associated with the levee repair work. Similarly,
RLB's bid includes mobilization and demobilization costs (CLIN 0001) for various items
ofwork associated with the embankment work. RLB's claim methodology makes no
attempt to remove these costs from its embankment-only claim, even though RLB has
already been compensated for these costs under CLIN 0001. Similarly, in its "other
work" calculations, Mr. Roy has not assigned any mobilization and demobilization costs
to any non-embankment work. (Supp. R4, tab 66 at 37-38) We find these costs are not
readily quantifiable but should not be reimbursed as part ofRLB's claim.

       (3) RLB Internal Issues /Inefficiencies

       63. Based upon his review of the project documents, Mr. Strickler also found that,
"there were multiple RLB internal issues which caused increased costs for which RLB


                                             27
should not be compensated" including, poor surveying practices, poor construction
practices that increased the moisture content of the soil, deviation from contract
specifications requiring double-work; out of sequence work; and general poor
productivity issues. (Supp. R4, tab 66 at 29-35) His conclusions, for the most part, are
based upon a review of the QARs and videos taken on-site during the work (id.). The
government presented four videos at the hearing in an attempt to demonstrate RLB's
inefficient practices during performance (tr. 3/97-99; supp. R4, tab 14). Based upon
Mr. Boyd's testimony in rebuttal explaining each of the actions in the videos, we are not
persuaded these videos establish RLB used inefficient practices on the job (tr. 3/133-36).
We find Mr. Strickler's thorough review of the QARs more persuasive but it does not
factor in the possible impact of the government's actions, or inaction, in contributing to
any problems in performing the work. Although not readily quantifiable, we find some
costs were the direct result of inefficiencies attributable to appellant and should not be
reimbursed.

                                        DECISION

        Appellant, as the party claiming the benefit of the adjustment, bears the burden of
proving the amount of loss with sufficient certainty so that the determination of the
amount of damages will be more than mere speculation. Wilner v. United States, 24 F.3d
1397 (Fed. Cir. 1994); Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 767 (Fed.
Cir. 1987). In order to prevail, appellant must prove three elements: (1) liability- that the
government did something that changed the contractor's costs for which the government
is legally liable; (2) causation-that there exists a causal nexus between the basis for
liability and the claimed increase in costs; and (3) resultant injury. Servidone Constr.
Corp. v. United States, 931 F.2d 860,861 (Fed. Cir. 1991). The government concedes
the first two elements as they relate to the realignment (findings 33, 34). The crux of the
dispute before the Board is the third element, i.e., the magnitude of the cost impact on
appellant's performance flowing from the realignment of the ditch and how the financial
impact should be measured.

Impact of the Realignment

        Appellant argues the movement of the centerline of the excavation pit to the west
resulted in a loss of dry material which would have been placed directly onto the levee
with little or no processing, requiring RLB to utilize wetter material which required
additional processing beyond the requirements of its bid. Additionally, the movement of
the excavation pit not only increased the moisture content of the dirt requiring more
processing, it also reduced the area where wet dirt could be processed as a result of the
reduction of the width of the berm between the excavation pit and the levee. The
realignment also reduced the volume of dirt produced for construction of the levee,
reducing the elevation of the levee from+ 12.5 feet to +8 feet. (App. br. at 5-7) In
summary, appellant argues the realignment resulted in a cascading chain of changes in


                                             28
the manner of performance, which was exacerbated by the lack of contract administration
and guidance by the government, resulting in increased costs of performance.

        The government concedes the realignment did reduce the amount of borrow
material, did cause an increased moisture level (higher pit-to-fill ratio) and reduced the
available berm area for drying the dirt resulting in an increase in appellant's cost of
performance (findings 33, 34, 40). However, the government argues the impact of the
realignment was minimal because RLB did not bid the job with the intent of using a
"direct placement" approach, directly placing borrow material onto the adjacent levee
and, even if it had intended to do so, the realignment had no impact on appellant's
inability or decision, to not use that method because appellant's bid seriously erred in its
estimate of the optimal moisture content of the soil and the borrow material in the borrow
ditch (gov't hr. at 2-3). In addition, the government argues appellant's own inefficiencies
and lack of experience in performing this specific type of work contributed to the
increased cost of performance (id. at 81-93).

       Since the government concedes entitlement and, based upon our findings above,
we conclude that the realigned borrow pit, when combined with the government's lack of
timely contract administration, resulted in a significant impact upon appellant's
performance ofthe work (findings 10, 13, 16-20, 21-23). We now tum to the financial
measurement of that impact.

Method ofProof RLB 's Total Cost Claim

        The basic method of proving the quantum resulting from an equitable adjustment
is the difference between the reasonable cost to perform the work as originally required,
and the reasonable cost to perform the work as changed. See B.R. Servs., Inc., ASBCA
Nos. 47673, 48249, 99-2 BCA ~ 30,397; Buck Indus., Inc., ASBCA No. 45321, 94-3
BCA ~ 7,061. The realignment occurred before the work began. Appellant argues it was
impossible to breakout the specific costs resulting from the realignment and the resulting
changes that flowed from that action in its claim given the nature of the work and the fact
it was only after work began that the parties became aware of the impact the realignment
would have (finding 29; app. hr. at 33-35). The government does not challenge this
assertion. We agree that there is no way to specifically segregate the costs associated
with the realignment.

       Given it could not segregate the costs associated with the change, appellant chose
to employ what it refers to as a Total Cost Claim method asserting it is entitled to the
'"reasonable value' of the work" as measured by the total cost of excavation and compact
fill work minus the amount alreadypaid for the work (finding 29; app. br. at 7).
Appellant sometimes refers to its claim as a modified total cost claim because it sought to
remove all non-embankment work costs (app. hr. at 32-33; app. surreply hr. at 10).
However, it did not modifY its claim by recognizing any costs that resulted from its own


                                            29
fault and asserts there is no reasonable way to quantify such costs (finding 29; app. br. at
8).

       Although often stated, it bears repeating that the total cost method is not preferred
because it assumes that all additional costs of performance are solely the government's
fault. As a result, courts and boards have developed four factors, as safeguards, that the
claimant must prove in order to employ this method of proof: (1) the nature of the
particular cost is impossible or highly impracticable to determine with a reasonable
degree of certainty; (2) the contractor's bid or estimate was realistic; (3) the contractor's
actual incurred costs were reasonable; and (4) the contractor was not responsible for any
of the added costs. Raytheon Co. v. United States, 305 F.3d 1354, 1365-66 (Fed. Cir.
2002). Appellant argues that it has proven these four factors and, consequently, the total
cost method is not only an appropriate method to establish its damages but that it is the
only way to calculate its damages (app. br. at 31-49).

       The government counters that application of the total cost or modified total cost
methodology is not appropriate because, based upon the record, appellant's claim does
not meet the requirements for application of those methods (gov't br. at 3). We have a
more fundamental problem with appellant's professed use of the total cost method
because, in fact, its claim does not apply the total cost method formula. The basic total
cost formula is the difference between the bid cost of the contract and the actual total cost
of performing the contract as changed. Raytheon Co. v. White, 305 F.3d 1354, 1365 (Fed.
Cir. 2002). Although both parties refer to appellant's claim as a total cost claim,
appellant's claim only seeks payment for the total value of its embankment work minus
the amount it has already been paid. Appellant might have intended the amount already
paid to represent its cost under the original bid but appellant does not characterize it as
such and there is no evidence to support its use as such. Therefore, we conclude
appellant's claim does not meet the requirements of a total cost claim.

        Even if appellant intended the amount paid to represent the bid amount we would
reject it as such given the structure of this contract. The bid cost, as used in the total cost
method, serves as a baseline for what the work should have cost absent the factors that
caused the overrun. That is the reason courts and boards have imposed a requirement that
the bid was realistic. Here, the bid was a dollar amount per CY applied against an
estimated number of CY s placed for purposes of the bid competition, with the final
payment to be determined by the final amount of CY s of dirt actually placed.
Consequently, there was no fixed total dollar bid; the bid price was the dollar amount per
CY. The only way to determine an accurate dollar cost estimate for what the work would
have cost absent the realignment is to multiply the bid price by the CYs of dirt actually
placed. Per our findings, there is no accurate estimate of the CYs actually placed (finding
24 ). Appellant's brief asserts the only undisputed measurement of CYs placed is the one
invoiced and applied in its claim (app. reply br. at 21 n.41). We disagree. The
government argues that its final survey contradicts appellant's assertion. Appellant's


                                              30
own witness, Mr. Boyd, after credibly challenging the accuracy of the government's final
survey, stated he does not believe anyone knows how much dirt was excavated or placed
(tr. 11120). We agree with Mr. Boyd. Unfortunately, this leaves us without an accurate
measure in the record of the CYs of dirt actually placed. Consequently, there is no way
to apply the total cost method because there is no way to calculate the bid cost for
purposes of measuring the cost of the work as unchanged.

        An alternative method of calculating the bid amount would be to calculate the
difference between the bid dollar amount per CY and the incurred dollar amount per CY.
In fact, the government's expert, Mr. Strickler, made an attempt to do just that in his
report comparing the original bid dollar amount per CY against an estimated dollar
amount per CY cost associated with the work as changed to arrive at a total damage
calculation based upon the CYs placed used by the CO in the COFD (finding 41).
Appellant, applying Mr. Strickler's methodology, presented its alternative calculations in
its brief (app. br. at 22). However, appellant went on to correctly point out in its brief
that Mr. Strickler's methodology is flawed because any calculation of the dollar amount
per CY costs incurred for the work as changed is dependent upon an accurate
determination of the amount of dirt actually placed and there is no support in the record
for the CYused in Mr. Strickler's calculations (app. hr. at 21). We agree.

        Appellant has proven its actual incurred costs for the work but has failed to
support its claim under the total cost method of proof. We have also found it was
impracticable for appellant to segregate its costs resulting from the change (finding 29).
The government concedes entitlement and confronted with the government's clear
liability we conclude the government's actions had significant cost impact upon
appellant. However, the record does not establish whether all of the incurred costs in
excess of the bid were solely the fault of the government. Accordingly, we consider
whether we may make an award on the basis of a jury verdict. There are three elements
required for a jury verdict. Grumman Aerospace Corp. v. Wynne, 497 F.3d 1350,
1358-59 (Fed. Cir. 2007). The first is clear proof of injury. Here the government
concedes entitlement. Appellant has, therefore, established injury. The second element
is that there is no more reliable method for computing damages. Given the change to
appellant's manner of performance, it was impracticable to prove actual damages. Our
findings establish appellant has also met this element of proof. The third element is that
evidence is sufficient for a court to make a fair and reasonable approximation of
damages; given the evidence in the record, we can do so. Our findings establish the total
incurred costs on the project for the embankment work. As a result, we conclude that the
evidence allows us to make a fair and reasonable approximation of the damages incurred.

       We believe the evidentiary record here fully supports application of a jury verdict
and we would be remiss if we were to deny appellant's recovery here where the evidence
indicates the government's actions adversely impacted appellant's manner of
performance of the contract. We found appellant proved actual burdened costs of


                                            31
$3,307,339.75 for the embankment work (finding 59). However, appellant has not met
its burden of proving that the entire amount is attributable to the government and the
realignment. Our findings establish there were costs included within appellant's claim
for such things as settlement, dirt placed outside contractual boundaries, costs reimbursed
under other line items, non embankment mobilization and demobilization costs and
inefficiencies during performance that are attributable to appellant but should not be
reimbursed. (Findings 61-63) Although these items are not readily quantifiable, we
conclude we must account for them within our jury verdict.

       In the nature of a jury verdict, we conclude that appellant is entitled to recover
65% of its total embankment costs, $2,149,770.84, as a result of the government's
actions. Subtracting amounts already paid, $1,234,800, appellant is entitled to
$914,970.84. This amount is inclusive of the amounts granted in the COFD but not yet
paid.

                                     CONCLUSION

       The appeal is sustained in the amount of $914,970.84 for the reasons stated above.
Interest pursuant to 41 U.S.C. § 7109 to run from 17 November 2009.

      Dated: 3 January 2014




I concur                                         I concur



~/4i
Administrative Judge
                                                 ~~
                                                 DIANA S/DICKINSON
                                                 Administrative Judge
Acting Chairman                                  Acting Vice Chairman
Armed Services Board                             Armed Services Board
of Contract Appeals                              of Contract Appeals




                                            32
      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 57638, Appeal ofRLB
Contracting, Inc., rendered in conformance with the Board's Charter.

      Dated:



                                                 JEFFREY D. GARDIN
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals




                                            33
