              ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                   )
                                              )
Speegle Construction, Inc.                    )      ASBCA No. 60089
                                              )
Under Contract No. W91278-07-D-0038           )

APPEARANCE FOR THE APPELLANT:                        Jesse W. Rigby, Esq.
                                                      Clark, Partington, Hart, Larry,
                                                       Bond & Stackhouse
                                                      Pensacola, FL

APPEARANCES FOR THE GOVERNMENT:                      Thomas H. Gourlay, Jr., Esq.
                                                      Engineer Chief Trial Attorney
                                                     David C. Brasfield, Jr., Esq.
                                                     Andrea M. Dowdy, Esq.
                                                      Engineer Trial Attorneys
                                                      U.S. Army Engineer District, Mobile

           OPINION BY ADMINISTRATIVE JUDGE THRASHER
      ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT

       The United States Army Corps of Engineers (Corps or government) moves for
summary judgment, arguing that Speegle Construction Inc. (Speegle or appellant)
executed a bilateral modification that constituted both a release and an accord and
satisfaction barring appellant's claim as a matter of law. 1 Appellant opposes the motion. 2
We deny the motion for the reasons set forth below.

       STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       1. In 2006, Speegle was awarded an indefinite-delivery/indefinite-quantity
(ID/IQ) contract (Contract No. W91278-07-D-0038) (Contract), for military construction
support to the Corps' South Atlantic Division (R4, tab 4 at 1, 11). On 1 July 2010,
Speegle was awarded Task Order (TO) No. 0004 for Design-Build Repair Hurricane
Damage Phase I, Mississippi Army Ammunition Plant (MSAAP), Stennis Space Center,

1
  The government's motion included an attached exhibit (ex. G-1), a Price
       Negotiation Memorandum (PNM), dated 26 November 2012.
2
  Appellant's response to the government's motion for summary judgment included
       an attached affidavit of Jeffrey S. Page, President of Speegle Construction,
       Inc., dated 24 November 2015 (ex. A-1).
Mississippi (R4, tab 5 at 2). The stated purpose of the TO was to repair damage to the
existing facilities resulting from Hurricane Katrina in September 2006 and to harden
MSAAP infrastructure against future hurricanes. Phase I of the work included
installation of underground communication system duct banks and the construction of a
new alternate communications Point of Presence (POP) facility. (R4, tab 5 at 100)

        2. On 16 November 2012, the parties executed bilateral Modification
No. 000404/SC003 (Mod. 000404/SC003) modifying TO 0004 to incorporate
changes to the scope of the work on the POP facility (R4, tab 6 at 13). Shortly thereafter
it was discovered changes were required to the fire suppression system added by
Mod. 000404/SC003 due to inadequate design data and update to new equipment
parameters (ex. G-1). On 26 November 2012, the parties entered into negotiations to
implement the changes to the POP facility fire suppression system. The parties reached
agreement on all terms except the 122% field overhead rate Speegle proposed on behalf of
one of its subcontractors, L. Pugh & Associates, Inc. (L. Pugh). (Id.) The parties were
unable to reach agreement on this issue and, on 7 December 2012, the Corps issued
unilateral Modification No. 00041H (Mod. 00041H) applying a 10% field overhead rate
for L. Pugh. The modification did not provide a time extension and specifically reserved
each party's rights to pursue claims under the Disputes clause. (R4, tab 6 at 15-16)

      3. By Serial Letter H-0064, dated 19 August 2013, Speegle requested that the
Corps obtain a DCAA audit ofL. Pugh's overhead rate (R4, tab 7). That same day,
Speegle sent Serial Letter H-0066 requesting a 21-day time extension, stating:

             On December 7, 2012 the Government issued unilateral
             modification SC01 l/00041H (attached) for Fire
             Suppression Changes for the subject contract. This
             unilateral was issued in the amount of $292,320.37 for
             added scope to the life safety systems for the subject
             contract. Please note this modification was not mutually
             agreed/accepted by SCI. The amount of the modification
             remains in dispute with regard to the subcontractor's
             overhead rate. SCI has submitted via a separate
             transmittal (reference serial letter H-0064) a request on
             behalf of L. Pugh and Associates for a DCAA audit. In
             addition, SCI was not granted additional contract
             performance time for this specific modification.
             Reference paragraph (D) of the subject modification
             wherein it states: The contract completion date shall
             remain unchanged by this modification. SCI does
             acknowledge additional contract time was added to
             modification 000404/SC003 - Misc. Scope changes to



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              POP Facility; however that modification was
              dated/executed on November 11, 2012, (21) days prior to
              issuing the unilateral modification for the Fire
              Suppression System.

              The subject modification (SC01 l/00041H) significantly
              increased the scope of the Fire Suppression System .... This
              additional work added hundreds of man-hours as a result of
              this additional scope. SCI respectfully requests that a
              minimum of 21 calendar days be added to the contract
              performance. Though it could be argued that additional
              days can be substantiated, SCI is only seeking (at this time),
              uncompensated days that represent the 21 day difference in
              issue/execution dates for modification SCOO 1/0004 lH and
              modification 000404/SC003. This delay and inaction on
              the part of the Government delayed our ability to process a
              change order to the subcontractor, which subsequently
              delayed shop drawings, fabrication of materials and
              installation of the subject FE-25 system. As of this date,
              SCI still is waiting on the remaining required materials to
              be delivered for the FE-25 System. In summary, SCI is
              seeking 21 additional days to this contract.

(R4, tab 9 at 2)

       4. The contracting officer's representative responded to Serial Letter H-0066 by
email on 4 September 2013, stating that the Corps was considering the time extension if
Speegle would confirm that there was no other cost involved with the time extension
(R4, tab 10). Speegle responded that same day stating there were costs involved, but that
it was waiving its rights "for extended overhead or other costs for this associated time
request" (R4, tab 11 ).

         5. The parties' entered into negotiations on 4 September 2013, in response to
Speegle's 19 August 2013 proposal (R4, tab 12). The Corps' PNM associated with the
negotiation, under ''DESCRIPTION OF CHANGE" states, "Request for adjustment for
mod 00041H" and, "The purpose of this modification is to provide a complete equitable
adjustment for any and all impacts, delays and costs associated with modification
00041H issued unilaterally on 7 December 2012" (id. ii 1). Under "NECESSITY FOR
CHANGE" the PNM merely repeated the statement regarding purpose in paragraph 1
(id. ii 2). Paragraph 6, "TIME DISCUSSION," stated:




                                           3
                  The Contractor sought an adjustment as a result of
                  modification 00041H for the Fire Suppression System in
                  serial letter H-0066, dated 19 August 2013, requesting
                  21 days additional contract time.

                  The Contractor's request for time adjustment in serial
                  letter H-0066 and request for audit in serial letter H-0064
                  were not provided within the time limit prescribed in the
                  Changes Clause; therefore, no time extension is
                  warranted. However, there is mutual benefit in providing
                  a 21-day time extension at no additional cost in order to
                  reach a complete equitable adjustment for any and all
                  impacts, delays, and costs associated with modification
                  00041H issued unilaterally on 7 December 2012. This
                  time extension does not represent any additional cost but
                  has the potential to reduce the extended field overhead
                  costs associated with outstanding change order requests
                  SCO 17 for Feeders and SC020 for Additional Duct Bank.

(Id.   ~   6) In conclusion the PNM summed up the negotiation by stating:

                  At the conclusion of negotiations, the contractor and
                  government were in agreement on the time extension.
                  The contractor stated that Speegle Construction, Inc.
                  elected to waive its rights for extended overhead or other
                  costs associated with this additional time.

                  The Government and the Contractor agreed that the final
                  negotiated settlement as shown below was fair and
                  reasonable, and that an equitable adjustment to the
                  contract for all work associated with this change will be
                  forthcoming, including all applicable costs for overhead
                  and impact.

(Id.~      8)

       6. On 18 September 2013, the parties executed bilateral Modification No. 00041N
(Mod. 00041N) (R4, tab 6 at 29). The modification (block 14) explicitly stated its
purpose was to provide a time extension for adverse weather for December 2012 through
July 2013, and for "Request for adjustment for mod 00041H" stating, "The purpose of
this modification is to provide a complete equitable adjustment for any and all impacts,
delays and costs associated with modification 0004 lH issued unilaterally on 7 December



                                               4
2012." The modification extended the contract completion date by 32 days, but did not
provide any further price adjustment. (Id. at 30) The modification also included the
following release clause:

                 In consideration of a modification agreed to herein as
                 complete equitable adjustment for the Contractor's
                 August 19, 2013 proposal(s) for adjustment, the
                 Contractor hereby releases the Government from any and
                 all liability under this contract for further equitable
                 adjustments attributable to such facts or circumstances
                 giving rise to the proposal for adjustment.

(Id. at 30-31)

        7. By email dated 23 September 2013, after Mod. 00041N was signed, Speegle
requested the status of its request for a DCAA audit on behalf of L. Pugh (R4, tab 13 at
2). The Corps responded with Serial Letter C-0025, dated 11December2013, stating in
part that "Serial letter H-0066 requested a 21-day time extension as a result of damages
incurred from modification lH .... [M]odification IN was issued bilaterally providing a
complete equitable adjustment for any and all impacts, delays and costs associated with
modification [0004]1H." (R4, tab 14)

       8. Speegle responded on 6 February 2014, stating that a DCAA audit ofL. Pugh's
overhead rate was warranted and that it never agreed to waiving its rights to any
additional overhead due L. Pugh and that it would not have agreed to Mod. 00041 N if
specific verbiage regarding L. Pugh's extended office overhead had been included (R4,
tab 15).

       9. By Serial Letter H-0069, dated 19 May 2014, Speegle submitted a Request for
Equitable Adjustment (REA), seeking $132,248.76 based upon a revised overhead rate
for L. Pugh of 74.19% that included both field and office overhead (R4, tab 16). The
Corps denied the REA on 21January2015 (R4, tab 17).

        10. Speegle submitted a certified claim by letter dated 18 February 2015,
asserting that the negotiation between the parties for Mod. 00041 N did not address
L. Pugh's overhead rate, and that the parties had engaged in numerous discussions
regarding that overhead rate after the modification was issued thus indicating the issue
was unresolved (R4, tab 3).

      11. A contracting officer's final decision (COFD) was issued on 20 April 2015
denying Speegle's claim on the basis that Mod. 00041N was bilateral and contained a




                                            5
full release of claims (R4, tab 2). Speegle timely appealed the COFD to the Board on
20 July 2015 (R4, tab 1).

                                     DECISION

       We will grant summary judgment only if there is no genuine issue as to any
material fact, and the moving party is entitled to judgment as a matter of law. Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material fact is one that may affect the
outcome of the decision. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).
All significant doubt over factual issues must be resolved in favor of the party opposing
the summary judgment. Mingus Constructors, Inc. v. United States, 812 F.2d 1387,
1390-91 (Fed. Cir. 1987).

       The government argues appellant's execution of Mod. 00041 N constituted both a
release and an accord and satisfaction barring appellant's claim as a matter of law (gov't
mot. at 5-8). Although separate affirmative defenses, a single agreement "may constitute
both a release and an accord and satisfaction, either of which may bar future claims.
Holland v. United States, 621F.3d1366, 1377 (Fed. Cir. 2010). We address each
argument in tum.

Release

       The government argues Mod. 00041N included an unqualified general release and
there are no facts establishing one of the limited exceptions to the general rule that a
general release, which is not qualified on its face, bars any claims based upon events
occurring before execution of the release (gov't mot. at 5-8). Regarding the scope of the
release, the government asserts:

                     The language contained in Modification
             No. 00041 N clearly encompassed the disputed overhead
             at issue in this appeal. The "Scope of Work" section of
             the modification specifically stated that its purpose was to
             "provide a complete equitable adjustment for any and all
             impacts, delays and costs associated with modification
             00041H issued unilaterally on 7 December 2012." The
             release referenced Appellant's request for equitable
             adjustment and stated that Appellant was releasing
             Respondent "from any and all liability under this contract
             for further equitable adjustments attributable to such facts
             or circumstances giving rise to the proposal for
             adjustment." (SUF No. 8). No reservation of rights or
             exclusions were included in the release language.



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                      When read as a whole, there is no question that
              Modification No. 00041N was intended to fully resolve
              the fire protection change order. The scope language
              cited above clearly stated that it was intended to resolve
              any outstanding issues relating to Modification
              No. 00041H. The actual release language covered "any
              and all liability" for the facts and circumstances that gave
              rise to the proposal, which was the fire protection change.
              Appellant was fully capable of reading and
              comprehending the three-page modification form to
              ensure that it accurately described the parties['] intent.
              Had Appellant not intended to release Respondent it could
              have excluded the subcontractor overhead specifically,
              using language similar to the closing statement in
              Modification No. 00041H. The fact that full release
              language was included, and garnered no objection by
              Appellant, indicates the Appellant was in agreement with
              a full release.

(Id. at 6)

        In response, appellant argues that the intent of the parties, and thus the scope of
the release in Mod. 00014N, did not include the overhead issue as evidenced by the
language of the release and the parties' actions leading to execution of the modification
(app. resp. at 5). Additionally, appellant argues the facts establish three exceptions to the
release; mutual mistake, unilateral mistake, and continuing consideration of the claim
after release (id. at 6-8).

       A release is a contract whereby a party abandons a claim or relinquishes a right
that could be asserted against another and must be interpreted in the same manner as any
other contract term or provision. Bell BC! Co. v. United States, 570 F.3d 1337, 1341
(Fed. Cir. 2009). Consequently, our examination begins with the plain language of
Mod. 00041N. The stated purposes of the modification under the description (block 14)
was to grant a request for adjustment to Mod. 00041H and to provide an equitable
adjustment for "any and all impacts, delays and costs associated with modification
00041H." Additionally, under subparagraph F, Closing Statement, there is release
language stating:

              In consideration of a modification agreed to herein as
              complete equitable adjustment for the Contractor's
              August 19, 2013 proposal(s) for adjustment, the



                                            7
                Contractor hereby releases the Government from any and
                all liability under this contract for further equitable
                adjustments attributable to such facts or circumstances
                giving rise to the proposal for adjustment.

(SOF ii 5)

       A reading of Mod. 00041N, as a whole, reveals the release language to be
ambiguous as to the scope of the release. The scope of the release is specifically tied to
the "August 19, 2013 proposal(s)" and "further equitable adjustments ... giving rise to the
proposal." Consequently, the scope of the release cannot be determined without
examination of extrinsic evidence, i.e. the 19 August 2013 proposal. Additionally, the
stated purpose of the modification is tied to the "request for adjustment to mod 00041 H."
The referenced "request" is not specifically identified but, based upon a reading of the
document as a whole, presumably refers to the 19 August 2013 letter requesting a time
extension of21 days. Additionally, the scope of the release is further muddled by the use
of "proposal(s)" to indicate their might be aspects of the proposal other than those in the
19 August 2013 letter. 3

        As moving party, the government has the burden of proving that there are no
genuine issues of material fact and any doubt about factual issues is to be resolved in
appellant's favor. DTC Engineers & Constructors, LLC, ASBCA No. 57614, 12-1 BCA
ii 34,967 at 171,898. Our reading of the release language and other documents in the
record indicates there is doubt whether the scope of the release encompassed the
overhead issue. For instance, the first paragraph states, "Please note this modification
was not mutually agreed/accepted by SCI. The amount of the modification remains in
dispute with regard to the subcontractor's overhead rate." Additionally, the second
paragraph indicates the scope of the proposal was to seek an additional 21 days resulting
from the delay between execution of Mod. SC001/00041H and Mod. 000404/SC003.
(SOF ii 3) Consequently, the proposal could indicate the scope of the proposal was
limited to a request for a 21-day time extension for the government's delay between
issuing Mod. 000404/SC003 and Mod. 00041H (id.). If that is the case, the scope of the
release would not encompass the overhead issue.

        The Board's task is not to resolve factual issues, but to determine whether disputes
of material fact exist. Advanced Business Concepts, Inc., ASBCA No. 55002, 06-1 BCA
ii 33,271 at 164,893. Drawing all reasonable inferences and viewing the evidentiary
record in a light favorable to the non-moving party, appellant, the scope of the release in

3
    There is a least one other 19 August 2013 "proposal" in the record, appellant's proposal
         that the government conduct a DCAA audit of the subcontractor's overhead rate
         (R4, tab 7).


                                             8
Mod. 00041N is unclear and there is a genuine issue of material fact regarding the scope
of the release. 4

Accord and Satisfaction

       The party asserting the affirmative defense of accord and satisfaction has the
burden of proving all four elements of the defense: (1) proper subject matter;
(2) competent parties; (3) a meeting of the minds; and (4) consideration. Holland, 621
F.3d at 1382; Troy Eagle Group, ASBCA No. 56447, 13 BCA ii 35,258 at 173,060. The
government argues the agreement (Mod. 00041 N) constitutes an accord and satisfaction
and thus bars appellant's claim because:

               Even if Appellant had not signed the modification with
               full release language, the agreement to provide additional
               time in lieu of any additional costs constitutes accord and
               satisfaction. The only outstanding issue after the
               finalization of Modification No. 00041H was L. Pugh's
               field overhead rate. As stated in the PNM for
               Modification No. 00041N, no additional time extension
               was warranted, but Respondent agreed to the request for
               additional time in order to full and finally resolve all
               aspects of the fire protection change, to include L. Pugh's
               field overhead. The time extension was valuable
               consideration given the substantial liquidated damage rate
               and the relief from those damages that this extension may
               have provided Appellant.

(Gov't mot. at 8-9)

      Appellant responds that clearly there was no meeting of the minds, and therefore,
no accord and satisfaction. Appellant supports this argument by stating;

                       The attached affidavit of Mr. Page establishes that
                no meeting of the minds occurred between the parties
                relating to the purported release of the overhead claim by
                the language in Modification No. 00041N. This fact is
                further supported by the 6 February 2014 letter from SCI
                to the Government unqualifiedly disputing the
                Government's assertion that the parties' discussions and

4   Given our conclusion, we need not address appellant's asserted exceptions to the
         release (app. resp. at 6-8).


                                             9
              negotiations included release of the overhead claim.
              [Citations omitted]

(App. resp. at 8)

        Contrary to appellant's argument, appellant's mere subjective intent not to waive
its claim is insufficient to raise a genuine issue of material fact to preclude summary
judgment in defense of accord and satisfaction. Ed. Zueblin, A.G. v. United States,
44 Fed. Cl. 228, 233 (1999); see also Mingus Constructors, 812 F.2d at 1394 (a claim
cannot be reserved and asserted on the basis of intent alone). Likewise, we are not
persuaded by appellant's letter after executing the agreement asserting it did not waive
its claim creates a genuine issue of material fact that would preclude summary judgment.

        We are also not persuaded by the government's argument (gov't mot. at 8). Our
reading of the 6 September 2013 PNM indicates the negotiation and execution of
Mod. 00041 N was the result of appellant's 19 August 2013 proposal/request (ex. G-1 ).
As discussed above, that proposal arguably reserved the overhead issue and limited the
scope of the proposal to the delay between execution of Mod. 000404/SC003 and
Mod. 00041H (SOF ~ 3). Drawing all reasonable inferences and viewing the evidentiary
record in a light favorable to the non-moving party, appellant, the PNM could be read to
reflect the parties' agreement to be limited to only addressing any time or cost impacts
resulting from the delay between executing Mod. 000404/SC003 and Mod. 0004 lH; not
the issue of overhead. Clearly, here there is dispute of a material fact on this issue of
whether there was a meeting of the minds between the parties. Consequently, the
government has failed in its burden of proof of establishing there is no genuine issue of
material fact that Mod. 00041N constituted an accord and satisfaction barring appellant's
claims as a matter oflaw.

                                   CONCLUSION

       The government's motion for summary judgment is denied.

       Dated: 10 May 2016




                                                  dminis rative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

(Signatures continued)



                                          10
 I concur                                       I concur




~~· ~HACKlEFORD
MARKN.'fEMPLER
Administrative Judge                            Administrative Judge
Acting Chairman                                 Vice Chairman
Armed Services Board                            Armed Services Board
of Contract Appeals                             of Contract Appeals




      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. 60089, Appeal of Speegle
Construction, Inc., rendered in conformance with the Board's Charter.

      Dated:



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




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