Free Response to Motion - District Court of Federal Claims - federal

Case 1:98-cv-00168-FMA

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APPENDIX

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STEWART SOKOL & GRAY

Januar3~ 12, 1996

By Fax (202) 514-7965 Oriqinal by Mail Donald E. Kinner, Attorney U.S. Department of Justice civil Division Commercial Litigation Branch A~tn: Classification Unit 2nd Floor, Todd Building 550 llth Street, N.W. Washington, D.C. 20530 North Star Alaska Housing Corp. v. The United States - U.S. Court of Federal Claims No. 93-88C Our File No. 4222-9161 Dear Don: While the Federal Government has been "paralyzed," Dick Fischer and I have resolved the refuse collection issue raised by your client. Mr. Fischer has advised the Government that North Star Alaska Housing Corporation will handle the refuse collection consistent with the demands (unreasonable we believe) of the Government. I am disappointed however that, notwithstanding Mr. Fischer's efforts ~o be a "good partner," the Government has decided ~o penalize North Star with respect to the amount of incentive award fee to which North Star is entitled for the calendar year 1995. Don, I was very pleased that you and I were able ~o work through a long series of long outstanding claims and settle those claims in 1995. We were both disappointed that the refuse collection matter was somewhat more challenging to resolve than anticipated. That challenge has been effectively dealt with_ It would seem to me that in the interest of equity and fairness the Government should reconsider the issue of incentive awards, given the extraordinary efforts of Mr. Fischer over the past many years with respect to this project.

Case 1:98-cv-00168-FMA

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Donald E. Kinner, Fage 2 January 12, 1996

Atnorney

I would

appreciate

your

personal

inuervention yours,

~o that

end.

Very truly STEW~/~T

SOKOL

& G~AY, L.L.C.

2HN SPEN~2.1SIE~...~T
John JSS:kag bc: Mr. Spencer Stewart Richard W. Fischer (By Fax and Mail)

STEWARTSOKOL & (;RAY

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Case 1:98-cv-00168-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORPORATION Plaintiff, No. 98-168C (Judge Allegra) THE UNITED STATES Defendant

DECLARATION OF RODNEY G. EVERETT 1. I, Rodney Everett, mnthe Contracting Officer's Representative for the Corpsof G. Engineers-managed housing for Ft. WainwrightAlaska and makethis Affidavit in 801 support of Defendant's opposition to the Plaintiff's Motionfor Summary Judgment.I

have served in this position from February 1999 through the present. I amone of the custodians of the records for the Depamnent the Army records relating to of for Birchwood Estates, the property that is the subject of the above-styledlitigation, located on Ft. Wainwright,Alaska.

2. I bave reviewed the 2ml Amended Complaintin the above-styled action. In CountIII, Turnaround Timefor Units as a Result of Chan~e Occupancy, Plaintiff asserts that of the the parties engagedin years of conductof using a consecutive calculation for determining allowable downtime units turned over to the Plaintiff for changeof occupancy for maintenance.

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Declarationof Rodney Everett G. No. 98-168C

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3. In my over five years of experience dealing with the Plaintiff

and as a custodian of

records, I have never encountered a single instmace of the Governmentcalculating allowable downtimefor a group of units turned over simultaneously by running the time consecutively and allowing all units to be returned at the end of the consecutive period. Wehave always calculated the start time in accordance with the contract, that is, by beginning the time whenthe unit is made available to the Plaintiff Government,in writing, accepts the same unit. and ending when the

I declare under penalty of perjury that the foregoing is true and correct. Executed this ~@_~f_ day of May 2004.

RODNEY G. EVERETT Contracting Officer's Representative U.S. Army, Corps of Engineers Alaska District

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THE UNITED STATES COI~T OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORPORATION Plaintiff, No. 98-168C (Judge Allegra) THE UNITED STATES Defendant

DECLARATION OF WILLIE MAE HARRELL 1. I, Willie MaeHarrell, amthe Division HousingChief for Ft. Wainwright Alaska. I haveserved in that position from1999to the present. Prior to serving as the Division HousingChiefI served as the Chief of Housing. I have workedfor the housing departmentsince 1977and have participated in the administration of the Birchwood Property since the property wasfirst occupiedin 1987. I makethis Affidavit in support of Defendant's Opposition to the Plaintiff's Motion for Summary Judgment. I amone

of the custodians of the records for the Department the Army records relating to of for Birchwood Estates, the property that is the subject of the above-styledlitigation, located on Ft. Wainwright,Alaska.

2. I have reviewed the affidavit of Richard Fischer dated March16, 2003. Paragraph 11 of Mr. Fischer's affidavit states, "The Government awardeda $56,943.50incentive fee to North Star for its performance in 1995. This amountis $10,675.15 below the maximum award[potential] for that year. Attached as Exhibit 12 is a memo from Colonel Kraus to

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Case 1:98-cv-00168-FMA Declaration WillieMae of Harrell No. 98-168C

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North Star dated January 10, 1996stating that the 1995incentive fee award wasreduced due to the refuse collection and downtime issues." (emphasisadded).

3. I havereviewedthis January 10, 1996letter. Theletter cites NorthStar's unilateral notification to the residents that it would changing refuse collection policy to be the require residents to deliver their refuse to a central collection point. I amfamiliar with the unilateral notification cited in the January10, 1996letter. I founda copyof this notification attached to Mr.Fischer's affidavit as Exhibit 8. I recall that NorthStar did not coordinate with the Government before notifying the resident of its plan to changeto a centrally located refuse collection scheme. We wouldhave objected to this schemehad North Star consulted with us in advancebecause the plan contradicted the lease. We first learned of the plan from complainingresidents. North Star's action, proposing a centrally located refuse collection point, upset our residents and damaged relationship our with our residents. Our otNce was in regular contact with Mr. Thomas Petersen. I was awarethat Mr. Petersen sat on the Incentive Awards Boardand that North Star received its incentive awardsbased on its performance.It is myposition that NorthStar should not have received the maximum award for the 1995year because of this unilateral notification. 4. In paragraph12, Mr. Fischer stated, "For the first nine years that the lease wasin effect, change of occupancymaintenanceon housing units was performed and evaluated based on the exampleset forth in Section D.5.(a) of the Lease Agreement's maintenance Annex.When multiple units were released simultaneously, turnaround time was calculated by totaling the number released units and multiplying that total by three of

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Case 1:98-cv-00168-FMA Declaration WillieMac of Harrell No. 98-168C

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workingdays in order to arrive at the total workingdays to performthe work." Mr. Fischer seemsto be arguing that whenmultiple units are turned over at the sametime, the turnarounddate for the groupof apartmentsis calculated as a single date for the entire group of apartments by adding the allowable time for each consecutively. For example, under Mr. Fischer's formulaif five units were turned over on the first of the month,North Star wouldhaveuntil the t5 ~ to return all five units. This has never beenthe practice of the parties. In myexperience with the administration of the lease and reviewof the records I knowof no instance in which North Star was permitted to run allowable downtime days consecutively. Additionally, this interpretation wouldviolate Section [pg. 39 of the lease, section D] Completionof Work,which states "(1) All change of occupancy workmust be completedwithin three workingdays after the unit becomesavailable whichshall be determinedfrom the date the unit is turned over to the Developerby the Government for change of occupancy work. (2) The downtimeperiod will be determined as follows: If the unit becomes available prior to 12:00 noon, the period will begin at 1:00 p.m. that day. If the unit becomes available at 12:00 noonor later, the maintenance period will begin at the start of the followingworkday."Thereis no separate provision providinga different start date for a unit that is turned over simultaneously with other units. We followedthe lease definition for the start date in calculating allowable down time throughout the administration &thecontract. 7. As noted above, we frequently chose to forbear enforcementof this provision and allow North Star additional time on a case-by case basis but never because weadopted Mr. Fischer's interpretation of the contract.

Case 1:98-cv-00168-FMA Declaration WillieMac of Harrell No. 98-168C

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8. In Paragraph13 of Mr. Fischer's affidavit, he states, "Onor aroundlate 1996or early 1997, I was informed by Army personnel that the Army using a newinterpretation of was changeof occupancy time that wascontrary to the interpretation that I had always understoodto be correct." I do not agree that the Army's calculation of allowable downtime constituted a "newinterpretation." TheArmy's calculation is in strict accordancewith the lease. I do not agree that the Army ftrst disputed North Star's interpretation of the allowable downtime under the contract in "late 1996or early 1997." 9. I have found in myfiles a memorandum the record recounting a meeting with Ms. for Suzanne Harrison, the then chief of housing division, Mr. Edward Miller, the 801 project managerfor Ft. Wainwright,Ms. Billie Menefee,and Mr. Dennis Wertz, North Star's representative. (Attachment 1). Accordingto the memorandum, meeting was held a July 28 and August7 1995. Thepurpose of the meeting was to "discuss and identify the procedure North Star uses to computeprojections, the actual dates quarters were being returned to the government from maintenance,and to identify the impact these dates have on the newquarters offering process that Family Housingimplemented with the new HousingPolicy." North Star apparently advocated the consecutive computationat the meeting because the memorandum states "Housing and North Star did not agree with a common interpretation of the contract methodfor computingthe numberof days North Star is allowedfor returning or projecting the quarters from maintenance.North Star feels that IAW contract they are allowed three days, in a consecutive manner,for each the set of quarters requiring maintenance." (emphasis in original). The memorandum clearly records the government disputing North Star's interpretation.

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Case 1:98-cv-00168-FMA Declaration WillieMae of FIarrell No. 98-168C

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9. Prior to 1995, I do not recall North Star havingever advocateda consecutive computation of the downtime. 10. In paragraph 13 of his Affidavit, Mr. Fischer cites the April 16, 1997Colonel Brown Letter to NorthStar "attributing the reduced amount the incentive award] to between [of occupancyvacancy rates." I can confirm based on mypersonal knowledge that in 1996 the betweenoccupancyvacancyrates represented a very serious issue for the Government. recall having significant problemswith North Star getting units back to I the governmentin a timely manner, especially during the summer 1996. The of Government offset its paymentsto the Plaintiff by avoiding paying occupants temporary lodging allowanceand/or the BAH is paid in lieu of offering quarters. Additionally, that the Army policy is to maintain its family housing at a 98% occupancyrate. Our office was in regular contact with Mr. Thomas Petersen regarding the between occupancy downtimeand we madehim aware of the problems we were having with North Star on this issue in 1996. It is myposition that NorthStar should not have qualified for the maximum incentive awardfor the 1996 period in light of their problemswith the between occupancydowntime.I understandthat the Plaintiff disputes the Defendant'scalculation of allowable between occupancydowntime for assessment of liquidated damages, however, the Government still has an interest in encouraging reduced occupancydown time regardless of whetherit maycollect liquidated damages excessive down for time. 11. Mr.Fischer states in paragraph13 that he has attached a letter he wrote to Dennis Klein, Chief of the Real Estate division, dated May 1997, "that for many 6, years there was no dispute about calculating down time, and that the Army's interpretation is contrary to its prior interpretation." Although Fischer asserts in this letter that the Mr.

Case 1:98-cv-00168-FMA
Declaration Willie Mae of Harrell No, 98-168C

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Army adopteda "newinterpretation," as notedabove, Mr.Fischer mistaken his is in belie£ Tomyknowledge, there is not a single instance in whichthe parties agreedto a consecutivecomputation.To myknowledge, every instance in whichthis became a contestedissue, the government calculatedthe down time on a per-unit basis beginning onthe datethe unit wasturnedoverto the Plaintiff. 12. Paragraph of Mr. Fischer's affidavit cites a January29, 1998memorandum 16 explaining an incentive award$38,699.35belowthe maximum "due to as replacement/depreciation issues." Theletter actually states, "Aswepass the mid-point in our lease, the executionof management replacement and plans will continueto take on a greater significanceto the government, particularly when management indicators presentedby yourstaff show significant deviationfromyouroriginal proposed a replacement cycle. Theachievement excellencein this area of yourperformance of will continueto take on a more significant role than in the past." Although Fischer Mr. characterizes this remark an extension the depreciation as of dispute, in actuality, the two are separate issues. NorthStar's commitment its proposalregardingreplacement in cycles includedmajorappliances suchas refrigerators andovens, exterior painting, countertops,windows, carpet. The"depreciationissue" relates only to whether and the Government discount its reimbursement NorthStar for carpet that wasdestroyed may to by an occupant a ten-year depreciationschedule.Regardless the outcome that on of of issue, NorthStar retains its replacement-cycle duties undertaken its proposal.It is my in position that the Government an importantinterest in encouraging had NorthStar to adhere,evenexceed,its proposed replacement cycle schedules.At the time this letter

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waswritten, the units had aged to ten years and the replacementcycle concerns had becomevery important to the Army.

13. In paragraph19 of Mr.Fischer's affidavit, he cites Exhibit 22, a letter fromthe Army,dated May12, 1999, granting an incentive fee award for 1998 of"only $3,730, due to supposedexcessive downtime." letter actually cites several reasons for the The $3,720 award. I havereviewedthis letter. This letter is consistent with myobservations and concerns. It is myposition that North Star should not have received the maximum awardfor the 1998 period because &theconcerns cited in the letter. 14. I amaware that Mr. Fischer believes that the Incentive AwardsBoard gave lower awardsto punishNorth Star for filing claims and/or raising disputes about the lease. Havingbeen in a position whereI have personal knowledge the facts on whichthe of Incentive Award Boardrelied, I believe Mr. Fischer is mistaken in his belief. The Board's reasons were always consistent with myobservations and concerns. I declare under penalty of perjury that the foregoingis true and correct. Executed this day ofMay2004.

Chief of HousingDivision Ft. Wainwright, Alaska

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APVR-WPW-H (APVR-WPW-H/I6 August 1995) (210-50) 1st SUBJECT: Housing Lease No. DACA85-1-86-71 80I with North Star Alaska Housing Corporation Chief, Housing Division, Fort Wainwright, Alaska 99703 17 August 1995 " TtIRU Director, Public Works, Fort Wainwright, Alask~-@ "~q

FORHousing Department, Public Works, ATTN:APVR-RPW-H, U.S. ArmyAlaska, Fort Richardson, Alaska 99505 SUBJECT: Housing Lease No. DACA85-1-86-71 801 with North Star Alaska Housing Corporation

h Concurwith Mr. Miller's request for legal interpretation of the maintenance ordering process Exhibit C, Section D, paragraph5 (a). 2. This item, whichaddresses quarters returning from maintenance allowable days in and accordancewith the contract, wasto be discussed at the past incentive award/contractor performance meetingheld on 12 July 1995, but instead it wasdelayed to a later date whenall personnelcould attend. 3. The Fort WainwrightHousingDivision (Ms. SuzanneHarrison and Mr. EdwardMiller) met with North Star Alaska HousingCorporation's representatives (Ms. Billie Menefeeand Mr. Dennis Wertz) on 28 July and 7 August1995. Reasonfor this meeting was to discuss and identify the procedureNorth Star uses to compute projections, the actual dates quarters were being returned to the government from maintenance,and to identify the impactthese dates have on the newquarters offering process that FamilyHousingimplemented with the newHousing Policy. 4: As always; North Star was very cooperative in assisting Housingin gaining m~i~urn utilization of these 400 units. Althoughan agreementwasnot madeto the exact interpretation of the abovementionedparagraph, North Star agreed to an alternate methodof executing the number days they will take for maintenance an interim solution to our situation. of as 5. Thefollowingitems affect the executionof the contract and require official legal interpretation: a. Housingand North Star did not agree with a common interpretation of the contract method for computing number days North Star is allowedfor returning or projecting the quarters the of from maintenance.

ATTACHMENT I

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APVR-WPW-H (APVR-WPW-H/16 August t995) (210-50) Ist SUBJECT: Housing LeaseNo. DACA85-1-86-7Iwith North Star Ataska Housing 801 Corporation

(1) North Star feels that IAW contract they are allowed three days, in a consecutive the manner~ each set of quarters requiring maintenance.For example,if two sets of quarters for were terminated and turned over to North Star for maintenanceon the sameday, they wouldhave to return the first unit three dayslater, andthe secondsix dayslater. Monday DAY i QTRS 1 Terminates
QTRS 2 Terminates

Tuesday DAY 2

Wednesday DAY 3

Thursday DAY 4 DueBack date from North Star

Friday DAY 5

Monday DAY6

Tuesday DAY 7_

Due Back date from North Star

(2) Housingfeels that IAW contract, North Star is allowed three days, in a concurrent the manner~ each set of quarters requiring maintenance.For example,if two sets of quarters for were terminated and turned over to North Star for maintenanceon the sameday, they wouldhave to return the first and secondunit three dayslater. Monday DAY 1
QTRS 1 Terminates

Tuesday DAY 2

Wednesday DAY 3

Thursday DAY 4
Due Back date from Norfl~Star

QTRS 2 Terminates

DueBack date from North Star

b, North Star madea proposal to ;educe the numberofdays they will take to perform maintenance quarters, whichis different fromtheir interpretation of their contractual allowance on &three days. This agreementwasto allow two days for the first five in maintenanceand one day for the remainingquarters over five. (Anexample six sets of quarters terminating on the same for day, is enclosed.) In the absenceof an official agreement the interpretation &thecontract, to Housingaccepted their proposal with the understandingthat Housing'sposition on the interpretation &the abovementionedparagraph has not changed, and that Housingwill request an official legal interpretation. 6. POC additional information is Mr. EdwardMiller at 353-9454. for

Enclosure as

SUZ,@INE M. HARRISON , ChieffHousing Division, FWA 13

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NEW MAINTENANCE SCtIEDULE AGREEMENT BETWEEN FORT WAINWRIGHT HOUSING AND NORT[t STAR ALASKA HOUSING CORP.

(WORKING DAYS, MONDAYTI-IRU FRIDAY AND DOES NOT ~CLUDE WEEI~NDS OR HOLIDAYS)

DAY1

DAY2 DAY3 Due Back

DAY4 DAY5

DAY6 DAY7 DAYg DAY9

DAYI0 DAYII

DAYI2 DAY 13

QTRS l-T-QTRS 2-T QTRS 3-T QTRS QTRS 5-T

-Due Back
Due Back

Due Back Due Back ,Due Back

Qre, s

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