695 F.3d 1276
Fed. Cir.2012Background
- Postal Service awarded Tip Top a July 26, 2007 contract under a indefinite quantity with work orders and a changes process.
- May 26, 2009 work order issued to replace the Main Post Office AC system in Christiansted, Virgin Islands for $229,736.92.
- Submittals initially planned for R-22 refrigerant; subsequent direction to use R-410a caused schedule and cost implications.
- October 15, 2009 Postal Service approved a Scope-directed equipment change; October 19, 2009 Tip Top submitted a $28,838.43 cost proposal for the change.
- January 12, 2010 contracting officer directed Tip Top to proceed with the R-410a change; negotiations continued through June 2010.
- June 18, 2010 Tip Top submitted a CDA claim for $34,553.77; June 23, 2010 final CO decision granted $22,133.77 and denied $12,400.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are consultant/attorney costs for price negotiations recoverable? | Tip Top: costs are contract administration costs under the changes clause. | Government: costs are claim-preparation; not recoverable; B.309 prohibits certain prep costs. | Costs constituting genuine contract administration are recoverable. |
| Were post-October 15, 2009 consultant and attorney costs supported by substantial evidence? | Diaz and Hollins declarations and timesheets fully support costs. | Evidence insufficient; invoices lack detail; after-the-fact declarations unreliable. | Post-October 15, 2009 costs adequately supported and reasonable. |
| Did the Board properly classify costs between contract administration and claim preparation? | Costs were incurred to further negotiation and contract administration. | Costs were directed at maximizing recovery and not related to performance. | Costs were genuine contract administration costs, not merely claim preparation. |
Key Cases Cited
- Bill Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541 (Fed. Cir. 1995) (distinguishes contract administration costs from CDA-claim costs; negotiator costs may be recoverable)
- Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (addressed when a claim arises for purposes of the CDA and cost classification)