CLASS EXERCISE #14 The following scenario is based upon a litigated case before the Board of Contract Appeals between the Government and Spectrum Leasing and focuses on two issues: (i) the COR's responsibility to monitor contractor progress and (ii) legal tests to to determine excusability. Review the case scenario and answer the two questions at the end.

BCA Case Decision Excusable Delay Claim On September 11, the Army (Aberdeen Proving Grounds) awarded a contract to Spectrum Leasing Corporation for the delivery and installation of an "IBM 4331 or equal Central Processing Unit (CPU)." The pre-award solicitation included preliminary floor plans. Actual floor plans to be used for installation would be provided as soon as they were available. This requirement was part of a major ongoing effort at Aberdeen to build and operate a facility for running a Missile Defense Program. Multiple contracts had been awarded by the Army for this facility. Besides the Spectrum contract, a contract had been awarded to IBM for designing floor plans for housing and interfacing equipment. Other contracts had been awarded for facility construction. Timely performance of the Spectrum contract was affected by and in turn affected these other contracts. The Spectrum contract amount was $296,893. It covered installation (not mere delivery) and leasing costs. Installation was, in part, based upon preliminary floor plans developed by IBM and included in the solicitation. Delivery was to be made on or before October 27. The contract included a liquidated damages clause that imposed a 1%/day price deduction for each day late. The contract identified Mr. Walker as the COR. The contract stated that the COR was responsible for representing the Government in scheduling a time frame for delivery and installation of the CPU as well as inspecting and accepting the CPU and related installation work. This was Mr. Walker's first experience on a contract. His normal job was as Chief of the Real Property Branch. This assignment was in addition to his basic duties. On September 11th (the award date), Mr. Walker called Spectrum's vice-president (Mr. Hummel) to determine the exact date of CPU delivery and installation. Spectrum stated that this would be accomplished by October 10th. However, a follow-up call two weeks later requesting written confirmation of that date produced the following response from Mr. Hummel: I thought we had a gentlemen's agreement that I would get the system installed as soon as possible and try to meet that date, however if you want me to commit myself in writing I won't agree to that date. Houseman & Associates Chapter 10, Contractor Progress and Delinquency, Page 178 When pressed for some specific delivery date, Mr. Hummel agreed to October 23rd. However, written confirmation (though requested by Mr. Walker) was never received. During this period, the initial IBM floor plan had undergone revisions. A final plan was agreed to on September 30th and mailed to Spectrum on October 6th. Among other things, this second plan called for more cable than the first plan. Spectrum received a copy of the second plan on October 10th and expressed displeasure that the change in floor plans might also require a change in cable and possibly the equipment configuration. Spectrum feared that if a CPU were delivered with cable lengths that were too short to install, then Spectrum could be required to find another CPU with the proper cable lengths. Accordingly, Spectrum in an October 10th telephone conversation requested a clarification of the matter from Mr. Walker. The company also requested an extension of the delivery date to November 11th based upon the floor plan problem. A written confirmation from Spectrum was received by the Contracting Officer and Mr. Walker on October 22nd. Until that date, the CO was unaware of any contractor request for a time extension. Mr. Walker told the CO that the Army could not afford an extension because of other contract performance dates which had been scheduled around the completion of the Spectrum contract. He further stated that Spectrum's fears regarding its proposed equipment were overblown since it could simply substitute different cable to meet the new floor plans not different equipment. He stated that if there was no installation by October 27th the Army would experience costly and unacceptable delays on other contracts. He concluded that the request for time extension be denied. QUESTIONS 1. What progress monitoring techniques should Mr. Walker have implemented?

What other actions could he have taken to avoid this problem?

2. What facts need to be established in order to determine if Spectrum would be entitled to a contract extension and relief from liquidated damages during the extension period?

Would Spectrum be entitled to extra costs, if the delay were deemed excusable?