Innoventor, Inc.
ASBCA No. 59903
| A.S.B.C.A. | Jul 11, 2017Background
- Contract FA8224-11-C-0043 (fixed-price) required Innoventor to design/build a Dynamic Brake Test Stand (DBTS) that would "combine the functionality" of the legacy DBTS and provide "uniform functionality and accuracy" with the legacy unit and to pass specified technical-order (TO) tests; FAR 52.243-1 and a provision reserving change authority to the Contracting Officer (CO) were incorporated.
- The government provided Units Under Test (UUTs) for Initial Operational Test & Evaluation (IOT&E). In Sept. 2013 Innoventor's DBTS failed badly (0 of 5 UUTs passed; one UUT destroyed); further testing in Dec. 2013 showed mixed results but evidence that Innoventor's stand broke UUTs at a higher rate than the legacy DBTS.
- Air Force engineers discussed inertia and spring-rate characteristics and proposed a contract modification to address spring rate; the CO nunca issued a modification, and the government ultimately accepted the DBTS "as-is" and planned to make in-house changes.
- Innoventor submitted a Request for Equitable Adjustment and later a certified claim alleging defective specifications, undisclosed information, constructive change, and technical impossibility; the CO denied the claim and Innoventor appealed to the ASBCA.
- The cross-motions for partial summary judgment presented here addressed only entitlement on the constructive-change theory: whether government personnel (with authority) compelled Innoventor to perform work beyond contract requirements.
Issues
| Issue | Plaintiff's Argument (Innoventor) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Whether a constructive change occurred | Government directed Innoventor to replicate legacy DBTS performance (including reverse-engineering/inertia and spring-rate characteristics), enlarging Innoventor's duties | Contract unambiguously required the DBTS to match legacy performance and pass tests; government personnel only offered suggestions; only the CO could order changes and did not do so | No constructive change: summary judgment for government — no competent evidence that an authorized gov't rep ordered work beyond contract |
| Whether contract was ambiguous about required performance/design | PS and tests left gray areas re: implicit parameters (inertia/spring rate); Innoventor relied on government input and sought adjustment | The PS was a performance spec requiring uniform functionality/accuracy; extrinsic agency debates cannot override plain terms; no design specs were imposed | Contract unambiguous as performance specification; Innoventor bound to achieve the end-result |
| Whether anyone with authority ordered additional work | Statements/emails by Air Force engineers (e.g., Mr. Hansen) show direction to alter design | Contract reserved change authority to the CO; kickoff briefed that technical staff had no authority; emails show suggestions only; proposed modification was never issued | No evidence CO or other authorized official ordered changes; authority remained with CO and no final order issued |
| Recoverability for costs incurred to modify DBTS post-failures | Costs incurred to fix DBTS after Sept. 2013 arose from government-ordered change or instability of expectations, so are recoverable | Costs were incurred to meet existing contract requirements (pass tests/replicate legacy performance); not compensable as a constructive change | Costs for making the DBTS meet the contract are not recoverable under constructive-change theory; judgment for government |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment — genuine issue standard)
- Dairyland Power Coop. v. United States, 16 F.3d 1197 (movant entitled to summary judgment when non-movant bears burden and fails to produce evidence)
- Mingus Constructors, Inc. v. United States, 812 F.2d 1387 (cross-motions: draw inferences against movant under consideration)
- Coast Fed. Bank, FSB v. United States, 323 F.3d 1035 (clear and unambiguous contract language controls; extrinsic evidence not used to interpret)
- E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334 (ambiguity exists only if contract reasonably susceptible to more than one interpretation)
- Stuyvesant Dredging Co. v. United States, 834 F.2d 1576 (distinguishing design vs. performance specifications)
- Winter v. Cath-dr/Balti JV, 497 F.3d 1339 (where contract reserves change authority to CO, other govt employees lack authority to bind contractor)
- Alloc, Inc. v. Int'l Trade Comm'n, 342 F.3d 1361 (usage of permissive language — "can" is permissive, not mandatory)