Free Response to Proposed Findings of Uncontroverted Fact - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS TETRA TECH EC, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 06-146C (Judge Wheeler)

DEFENDANT'S RESPONSE TO PLAINTIFF'S PROPOSED FINDINGS OF UNCONTROVERTED FACT Defendant, the United States, pursuant to Rule 56(h)(2) of the Rules of the United States Court of Federal Claims ("RCFC"), respectfully submits this response to plaintiff's proposed findings of uncontroverted fact ("PPFUF"). PPFUF No. 1: On September 27, 2001, the United States Army Engineering & Support Center, Huntsville, Alabama (the "Government") awarded Foster Wheeler Environmental Corporation ("FwEC"), predecessor in interest to Tetra Tech, Task Order 0006 under Contract No. DACA87-00-D-0039, for Non-Time Critical Ordnance and Explosives Removal Action at Fort George G. Meade, Maryland ("the Task Order"). (Amended Complaint and Answer, ¶ 1). The work included the removal of UXOs and UXO-like items from approximately 300 acres of land at Fort Meade, Maryland. (Ex. 1; Depo. Ex. 29 hereto). The Task Order included unit prices for different elements of work that originally totaled $2,777,814.20. Id. The amount of the Task Order was increased to a total of $3,051,138.10 by Modification 03 dated January 30, 2003. (Ex. 2; Depo. Ex. 30; Complaint and Answer, ¶ 1). RESPONSE: Agrees to the extent supported by the texts of the documents cited, which are the best

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evidence of their contents; otherwise disagrees. PPFUF No. 2: On September 7, 2005, Tetra Tech served upon the Contracting Officer a properly certified claim under the CDA, 41 U.S.C. §§ 601, et seq. ("CDA"), in the amount of $1,188,422.62, plus interest, for additional costs and profit that Tetra Tech incurred in performing the excavation and removal of UXOs and UXO-like anomalies under the Task Order (the "Claim"). (Complaint and Answer, ¶ 4). RESPONSE: Agrees to the extent supported by the text of the certified claim cited, which is the best evidence of its contents; otherwise disagrees. PPFUF No. 3: By letter dated November 30, 2005, the Contracting Officer issued a final decision (the "Final Decision") on Tetra Tech's Claim, finding that Tetra Tech is entitled to recover a total of $341,482.23 for the following: (a) $309,045.23 for the clearance of greater than 21 UXO-like anomalies per acre; (b) $19,333.00 for the increased level of effort by Tetra Tech in clearing 37 millimeter UXOs in Range 1; and (c) $13,104.00 for lost days associated with extreme weather. (Ex. 1; Depo. Ex. 29, at p. 9; Complaint and Answer, ¶ 5). RESPONSE: Agrees to the extent supported by the text of the final decision cited, which is the best evidence of its contents; otherwise disagrees. PPFUF No. 4: In her Final Decision, the Contracting Officer stated that her determination of the amount to which Tetra Tech is entitled was based upon the results of an analysis of 24,674 anomalies by a "government team." (Ex. 1; Depo. Ex. 29, at p. 7). The Government team found that 1,422 of the anomalies excavated by Tetra Tech met the discrimination criteria that the 2

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Government believed should be applied. Id. This analysis was the end result of an exchange of data and information with Tetra Tech for a year. Id., p. 9. In the words of the Contracting Officer, "The Government found that overall TtEC was entitled to an equitable adjustment of $341,482.23." Id. This finding was adopted by the Contracting Officer ("This is the final decision of the Contracting Officer ..."). Id. One of the Government's 30(b)(6) witnesses confirmed that the amount set forth in the Final Decision matched the estimate of the Government team. (Slater, Tr. 15-16; Addendum, Section I). RESPONSE: Agrees with the first, second, third, fourth, and fifth sentences to the extend supported by the final decision cited, which is the best evidence of its contents; otherwise disagrees. Agrees with the sixth sentence. PPFUF No. 6: The Contracting Officer reached her conclusion as to the amount of Tetra Tech's entitlement to an equitable adjustment despite the Contracting Officer's detailed findings that Tetra Tech's performance had been unsatisfactory in some respects. For example: a. "TtEC assumed the risk of increased cost by not complying with the contract terms." (Ex. 1; Depo. Ex. 29, at p. 6). b. Tetra Tech performed an "inordinate number of anomaly picks" because of its application of incomplete discrimination criteria. Id. c. "The decision TtEC made to dig over 24,000 anomalies (102 anomalies per acre), without incorporating the required feed back process, was a corporate decision." Id. d. "It also appears that this [cost overrun] was a result of TtEC's 3

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failure to follow its own quality control plan regarding discrimination of geophysical data." Id. RESPONSE: Agrees to the extent supported by the text of the final decision cited, which is the best evidence of its contents; otherwise disagrees. PPFUF No. 7: The Contracting Officer confirmed in her deposition that she had a clear understanding of the basis for her Final Decision, that she was "comfortable" with the information provided to her by the Government team, and that she was "very satisfied" with the way that the Government team had differentiated UXOs and UXOlike items in its analysis. (Tadesse Tr. 57-59). She explained that the team was comprised of the agency's geophysicist, technical manager, legal advisor, cost engineer, contract specialist, herself and possibly others. Id., at 42. She further testified that her Final Decision was based upon "sound business judgment," id., at 40-41, and that "I do agree with what you see here [in the Final Decision]," id., at 41. RESPONSE: Agrees. PPFUF No. 8: Modification 03 to the Task Order provided additional funding for an increase in the number of anomalies to be excavated. (Ex. 2; Depo. Ex. 30). The scope of Modification 03 was explicitly set forth in Tetra Tech's proposal for Modification 03: "With the revised dig depth, we have now assumed 25 anomalies per acre (versus 20 anomalies per acre in our original Technical Approach) and 3 UXO items per acre (opposed to the original 2 UXO items per acre)." (Ex. 3; Depo. Ex. 33, at second page; Slater Tr. 72­74). 4

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RESPONSE: Agrees with to the extent supported by the text of Modification 03, which is the best evidence of its contents; otherwise disagrees. Disagrees that the scope of Modification 03 is set forth in Tetra Tech's proposal for Modification 03. PPFUF No. 9: The total acreage covered by Modification was 82 acres, as set forth in Tetra Tech's proposal for Modification 03, which specifically stated that it covered "the 82 acres requiring the revised increased dig depth." (Ex. 3; Depo. Ex. 33). RESPONSE: We assume that by "Modification" Tetra Tech is referring to Modification 03. Objects to this proposed finding upon the grounds that "total acreage covered" is vague and ambiguous. Disagrees that the total acreage covered by Modification 03 was 82 acres. Agrees with the description of Tetra Tech's proposal dated December 2, 2002, to the extent supported by the proposal, which is the best evidence of its contents; otherwise disagrees. PPFUF No. 10: The scope of Modification 03 was explicitly recognized by the Government in its "Prenegotiation Objectives and Cost/Price Analysis," as follows: "The Contractor's Proposal includes an increase in the estimated number of anomalies per acre from 20 to 25. . . . This change applies to approximately 82 of the 306 project acres." (Ex. 4; Depo. Ex. 34, at pp. 2-3, ¶¶ e. and h.; Slater Tr. 75-79; emphasis added). Further, the scope of Modification 03 was acknowledged by the Government's 30(b)(6) representative. (Slater Tr. 27-29, referring to Ex. 5; Dep. Ex 26, Att. 1); (Slater Tr. 75-80, referring to Exs. 4 and 6; Depo. Exs. 34 and 35). He testified: Q: Okay. So based on review of these documents, does it appear that Mod 3 only applied to 82 acres? 5

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A. Yes. (Slater Tr. 80, referring to Exs. 2, 4 and 6; Depo. Exs. 30, 34 and 35). Another 30(b)(6) Government witness provided the same testimony. (Adams Tr. 33-38, referring to Ex. 7 (Table); Depo. Ex. 54). Thus, Modification 03 was applicable to only a fraction of the 306 acres covered by the Task Order. RESPONSE: Objects to the this proposed finding upon the ground that the phrase "scope of Modification 03" is vague and ambiguous, and proposes a conclusion of law rather than a finding of fact. Agrees with the first sentence of the proposed finding to the extent supported by the "Prenegotiation Objectives And Cost/Price Analysis" cited, which is the best evidence of its contents; otherwise disagrees. Disagrees with the assertion in the second sentence of the proposed finding that Brendan Slater testified as a Rule 30(b)(6) representative upon the subject of the "scope of Modification 03," which was not one of the topics designated in the Rule 30(b)(6) deposition notice. Agrees with the second sentence of the proposed finding to the extent supported by the deposition testimony cited, which is the best evidence of its contents; otherwise, disagrees. Disagrees with the assertion in the third sentence of the proposed finding that Jason Adams testified as a Rule 30(b)(6) representative upon the subject of the "scope of Modification 03," which was not one of the topics designated in the Rule 30(b)(6) deposition notice. Agrees with the third sentence of the proposed finding to the extent supported by the cited deposition testimony of Adams, which is the best evidence of its contents; otherwise, disagrees. Disagrees with the fourth sentence of the proposed finding. Modification 03 modified and is applicable to the contract as a whole. 6

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PPFUF No. 11: In a supplemental document production by the Government, Tetra Tech obtained two spreadsheets that show the calculations the Government team performed in reaching its determination of the number of anomalies to which the correct discrimination criteria were applied and the resulting amount to which Tetra Tech was entitled as an equitable adjustment. (Ex. 5 hereto; Slater Depo. Ex. 26, Att. 1, Slater Tr. 6-7, 27-34). These spreadsheets thus show exactly how the Government team and the Contracting Officer derived the equitable adjustment to which Tetra Tech was found to be entitled. RESPONSE: Agrees with the proposed finding to the extent that the referenced spreadsheets show some of the calculations performed by the Corps in the course of rendering the contracting officer's final decision; otherwise disagrees. Disagrees with the assertion in the second sentence of the proposed finding that the spreadsheets show "exactly how the Government team and the Contracting Officer derived the equitable adjustment to which Tetra Tech was found to be entitled." The contracting officer's decision was not based solely upon the referenced spreadsheets, but rather was based upon all of the information and factors identified in her final decision. PPFUF No. 12: The spreadsheets demonstrate that the equitable adjustment amount of $341,378.23 was the weighted average of the UXO and UXO-like items that were anticipated in Area G and in non-G Areas. A legend to the spreadsheet explains that the Government's calculation was based upon: "Non-G Areas: Mod 3: funds 25 anomalies/AC and 3 UXO/UXO-like investigations/AC." (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 22-34). Thus, as the spreadsheet shows and the Government's 30(b)(6) representative testified, the calculation of the 7

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impact in the non-G Areas was based upon the anomalies and UXO items as provided for in Modification 03. Id. For Area G, the Government's analysis was based upon "20 UXO/UXO-like items/AC." Id. RESPONSE: Agrees to the extent supported by the spreadsheets and testimony cited, which are the best evidence of their contents; otherwise disagrees. PPFUF No. 13: The Government's analysis alleged that Tetra Tech had actually completed UXO removal in 278.57 acres, as compared with the 306.45 acres covered by the Task Order. (Exhibit 5; Depo. Ex. 26, Att. 1; Slater Tr. 50-51, 70-74). According to the Government, of the total acreage completed, 270.1 acres were in non-G Areas and 8.47 acres were in Area G. From this, the Government calculated that it was entitled to a credit for "Decrease due to Acreage" of 9.1%, or a total credit of $247,775.82. (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 50-52, 61-62). RESPONSE: Agrees to the extent supported by the documents and testimony cited, which are the best evidence of their contents; otherwise disagrees. PPFUF No. 14: On the plus side, the Government's analysis showed that Tetra Tech was entitled to an "Increase due to Items" calculated as follows. Based upon its analysis purporting to show that Tetra Tech excavated 1,422 UXO and UXO-like items and the actual acreage completed by Tetra Tech, the Government calculated that in the non-G Areas Tetra Tech had excavated 3.6 UXO and UXO-like items per acre (270.1 ÷ 974 = 3.6). (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 41-45, 8

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70-71). This translated into an increase of 20.2% over the factor of three items per acre that the Government applied because of Modification 03 (3 ÷ 3.6). (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 44-50). This 20.2% was then applied to the entire non-G Areas, not just the 82 acres that were subject to Modification 03. (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 54-55, 70-71). RESPONSE: Agrees with the first, second, and third sentences to the extent supported by the documents and testimony cited, which are the best evidence of their contents; otherwise disagrees. Disagrees with the fourth sentence. Modification 03 modified the contract as a whole, and was not limited in application to specific acres. PPFUF No. 15: For Area G, the Government calculated an increase of 164.34% over the contract's 20 items per acre, as applied to the 8.47 acres in Area G. (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 46-50, 54-55). RESPONSE: Agrees. PPFUF No. 16: When these percentages are then applied to the non-G Areas (270.1 acres in the Government's calculation) and Area G (8.47 acres), the result is entitlement to a compensable contract price increase of $576,154.05 and a net equitable adjustment $341,482.23, after deducting the credit the Government exacted for the alleged decrease in acreage and adding the amount for adverse weather to which the parties had previously agreed. (Ex. 5; Depo. Ex. 26, Att. 1; Slater Tr. 63-66). RESPONSE: Objects to this proposed finding upon the ground that it proposes a conclusion of law 9

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rather than a finding of fact. Disagrees with the proposed finding. The exhibits and testimony cited do not support the assertion that Tetra Tech is entitled to an increase in compensation. PPFUF No. 17: The Government misinterpreted the scope of Modification 03 in the analysis that formed the basis for the Final Decision. The Government improperly applied the three UXO/UXO-like items per acre under Mod. 03 to all non-Area G acreage, when Mod. 03 actually applied to only 82 acres. The Government admitted this error through the testimony of its 30(b)(6) deponent, Project Manager Brendan Slater. (Slater Tr. 70-75, 80-83). He testified: Q: Would your calculation change if the three per acre of the non-Area G applied to 82 acres as opposed to the whole 270? . . . A: Of course, yes. (Slater Tr. 71-72). He further testified that the factor of three anomalies per acre should be applied only to the 82 acres covered by Modification 03 "and then there would be an additional calculation for increase for everything outside the 82 acres." Id., at 81-82. RESPONSE: Objects to the proposed finding upon the grounds that it proposes a conclusion of law, rather than a finding of fact. Disagrees with the proposed finding. Mr. Slater did not "admit" any "error" or "misinterpretation" concerning the "scope of Modification 03," and the cited testimony does not support those assertions. PPFUF No. 18: The Government's 30(b)(6) representative testified that a re-calculation could be performed by reworking the calculation to accurately account for Modification 03. This would entail breaking out Modification 03's 82 acres from the 270 acres in non-G Areas, 10

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applying three anomalies per acre to that acreage, and then applying two items per acre to the balance of the acreage. (Slater Tr. 86-87). RESPONSE: Agrees with the proposed finding to the extent supported by the testimony cited, which is the best evidence of its contents; otherwise disagrees. PPFUF No. 19: Another Government 30(b)(6) deponent, Mr. Jason Adams, further clarified that the 82 acres to which Mod. 03 applied should be broken down as 59.65 acres to be applied to non-Area G and 22.3 acres to be applied to Area G. (Ex. 7, Depo. Ex. 54; Adams Tr. 37-38). This means that the actual scope of Mod 3 was 59.65 non-G Area acres and 22.3 Area G acres, and results in a net 210.45 acres for non-G Areas (270.1 ­ 59.65 = 210.45). Id. Accordingly, the 20.2% weighted factor based on three UXO/UXO-like items per acre average under Mod. 03 should apply to only 59.65 acres for non-G Area acreage. Id. RESPONSE: Objects to this proposed finding upon the ground that it proposes a conclusion of law, rather than a finding of fact. Disagrees with the proposed finding. Mr. Adams did not "clarif[y] that the 82 acres to which Mod. 03 applied should be broken down as 59.65 acres to be applied to non-Area G and 22.3 acres to be applied to Area G," and the cited testimony does not support that characterization. PPFUF No. 20: As a further adjustment to the Government's formula, the UXO and UXO-like items per acre for the 8.47 Area G acres may be increased from 20 to 30 items per acre. The 20 to 30 items increase is consistent with going from two to three UXO/UXO-like 11

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items per acre under Modification 03 for non-Area G acreage. This reduces the percentage used for the Area G weighted calculation from 164.37% to 76.33%, and results in a substantial benefit to the Government. RESPONSE: Objects to this proposed finding upon the ground that it does not propose a finding of fact or identify the evidence upon which it is based. Disagrees with the proposed finding. PPFUF No. 21: The Government has agreed through its 30(b)(6) representatives that its calculation should be corrected as follows: a. The 20.2% weighted percentage calculation, corresponding to the three UXO/UXO-like items per acre under Mod. 03, should apply to only the 82 acres covered by Modification 3. (Slater Tr. 85-87). b. An 80% weighted factor should be applied to the 210.45 non-Area G acres that are not subject to Modification 03. Id. c. The 82 acres to which Modification 03 applied should be allocated as 59.65 acres to non-Area G and 22.3 to Area G. (Adams Tr. 37-38). RESPONSE: Objects to this proposed finding upon the ground that it proposes a conclusion of law, rather than a finding of fact. Disagrees with the proposed finding. None of the cited testimony supports the proposed finding that "the Government has agreed through its 30(b)(6) representatives that its calculation should be corrected as follows . . . ." Nor does the testimony cited in subsections (a), (b), and (c) of the proposed finding support the assertions made therein. 12

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PPFUF No. 22: Thus, the weighted average would change as follows: Original Government Formula: 20.2(270.1/278.57) + 164.34(8.47/278.57) = 24.58% (Ex. 5; Dep. Ex. 26, Att. 1). Revised Formula: 80(210.45/278.57) + 20.2(59.65/278.57) + 76.33(8.47/278.57) = 67.08% (Ex. 8 ). When the corrected formula is then applied to the Tasks affected by the overrun (Tasks 4, 6, 7 and 9), the amount of the compensable increase is $1,572,184.64. Id. After deducting the Government acreage credit ($247,775.82) and adding the amount of the previously agreed weather impact ($13,104.00), the net amount owed to Tetra Tech as an equitable adjustment is $1,337,512.82, plus CDA interest. Id. RESPONSE: Objects to this proposed finding upon the ground that it proposes a conclusion of law, rather than a finding of fact. Disagrees with the proposed finding. The contracting officer stated in her final decision that, "in an effort to reach a resolution," she would allow "some compensation" for the certified claim. The contracting officer concluded in her final decision that Tetra Tech was entitled to compensation in the amount of $341,482.23. At her deposition, the contracting officer testified that "I do agree with what you see here [in the Final Decision]." Tadesse Tr. at 41, cited in PPFUF No. 7. No Government witness has testified that Tetra Tech that Tetra Tech is owed or is entitled to an amount in excess of $341,482.23.

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PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director s/ Steven J. Gillingham STEVEN J. GILLINGHAM Assistant Director s/ Roger A. Hipp ROGER A. HIPP Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 307-0277 Fax: (202) 307-0972 November 5, 2007 Attorneys for Defendant

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CERTIFICATE OF SERVICE I hereby certify that on this 5th day of November, 2007, a copy of the foregoing "DEFENDANT'S RESPONSE TO PLAINTIFF'S PROPOSED FINDINGS OF UNCONTROVERTED FACT" was filed electronically. I understand that notice of this filing will be sent to all parties of record by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/ Roger A. Hipp