Extra Work Priced at Contract Unit Price, Not at Cost
The contract price increase for additional work performed under a contract subsequently terminated for convenience was not limited to the contractor's cost and profit, according to the Armed Services Board of Contract Appeals, because contract specifications provided fixed unit prices for the work performed. The parties disputed how to calculate the price adjustment for additional piling and foundation work that was performed before the contract to construct and install an electrical line was terminated for the government's convenience. The contractor argued the adjustment should be based on unit prices provided in contract specifications. The government contended the Termination for Convenience clause (FAR 52.249-2) limited the adjustment to the contractor's actual costs and a reasonable profit.
No Merger
The contractor's right to compensation for the work did not merge into the Termination for Convenience clause as the government asserted. The "merger doctrine" set forth in Worsham Construction Co. (85-2 BCA ¶18,016) did not apply, because the contractor sought a contract price increase, and the price increase was not based on costs incurred, as in an adjustment under the Changes clause. Instead, the specification provisions entitled the contractor to a contract price increase "at the prescribed fixed unit price multiplied by the additional quantities of piling work performed." However, the specifications did not limit or supersede calculations required by FAR 52.249-2 to determine the final amount due the contractor. This amount had not yet been determined, and therefore, Contract Disputes Act interest was not payable on the claimed price increase. (Symbion Ozdil Joint Venture, ASBCA, ¶92,801)