[o]

nce built
upon these soils can experience significant volumetric changes when their in situ
moisture environment is altered.” PX 5 at 8; PX 6 at 9. Specifically, both soils reports
state that “the expansive soils have a heave potential” of more than nine inches. PX 5 at
8; PX 6 at 8.
In light of the expansive soil, the soils reports direct that “the presence of a highly
active subgrade must be accounted for in the design of the Dormitory foundation and
floor slab systems to prevent both functional and aesthetic problems within the completed
facility.” PX 5 at 9; PX 6 at 9. To account for the highly active subgrade, the soils
reports specifically recommend a foundation system consisting of a drilled and
underreamed pier foundation with a 12-inch void space under the floor slab. PX 5 at 9-
10; PX 6 at 9-10. The drilled and underreamed pier foundation prevents the building
from moving, regardless of soil heave. See Tr. 574 (Focht). As the Government’s
expert, John Focht III,
4
explained:
All of the structural loads come down to a series of drilled
concrete piers that are embedded at about 35 feet, and so the load
carries down through the portion of the soil that’s shrinking and
swelling, and it is resting down in some materials that don’t
move. As a result the structure is not moving, so as the soil goes
up and down the building is largely staying in place.
Id. The 12-inch void space under the floor slab prevents the soil from coming into
contact with, and pushing up on, the building floor whenever the soil expands. See Tr. 81
(Black).
The soils reports do not provide explicit guidance for the design of the underfloor
piping system. Tr. 94 (Black); see generally PX 5; PX 6. The soils reports do, however,
contain a section entitled “Mechanical Connections,” which states that “[a]ll exterior
mechanical connections should be of the flexible type. Flexible connections should be
capable of resisting a minimum of 25 millimeters [approximately 1 inch] of both vertical
and horizontal movement. All condensate lines should drain away from foundation
edges.” Stip. ¶ 19; PX 5 at 17; PX 6 at 19.
The soils reports also indicate that “proper drainage is an important design
consideration to ensure satisfactory long-term foundation performance.” Stip. ¶ 18; PX 5
at 16; PX 6 at 18. Specifically, the soils reports recommend that exterior grading
adjacent to the dorms should be sloped away from the structures a minimum of five

4 Mr. Focht is a chief geotechnical engineer for the consulting firm Raba-Kistner Consultants, Inc. Tr.
481 (Focht).
5
percent for the first three meters, runoff should be adequately discharged away from the
foundation edges, and in no case should water be allowed to pond adjacent to or beneath
the buildings, both during and after construction. Stip. ¶ 18; PX 5 at 16; PX 6 at 18.
B. The AEIM
The Contract required BPLW to incorporate into its design the technical
considerations set forth in the “US Army Corps of Engineers, Southwestern Division,
Architectural and Engineering Instructions Manual (CESWD-AEIM), October 1998”
(“the AEIM”). DX 12 at 8. Mr. Black called the AEIM “the Bible for . . . an in-house or
an A-E designer,” as it provides the guidance designers must follow and the minimum
requirements for a design submittal. Tr. 87.
During the trial of this case, the Government offered, and the Court admitted into
evidence, the 2000 edition of the AEIM. See Tr. 88-89; DX 3 at 1. Chapter 1 of this
edition provides that its purpose is to “provide general design guidance to ArchitectEngineers (A-E’s) working as design agents providing services, designs, construction
drawings and specifications pursuant to a contract with Corps of Engineers District
offices located in the Southwestern Division.” DX 3 at 4. Chapter 5 directs that “[i]n
areas where expansive soil conditions exist, comply with expansive soil criteria.” Id. at
208. Section 2.1.5 states, “Piping designs for underfloor piping in expansive soils will be
in accordance with SWDED-G letter [d]ated 29 Sep 1983, ER 1110-345-722” (“the 1983
letter”). Id. at 180.
In addition, Section 2.2.3 of this edition provides that for “[t]urfed [a]reas”
adjacent to a building, “

[o]

utside finished grade will slope away from the building at a
5% grade for the first 3 meters.” Id. at 21. “[I]n areas with highly expansive soil,” the
AEIM recommends that the “5% grade should be extended to 6 to 9 meters.” Id.
C. The 1983 Letter
As noted above, the 2000 edition of the AEIM directs piping designers to comply
with the September 29, 1983 letter, which sets forth proper design methods for areas with
expansive soils. Stip. ¶ 20; see generally PX 1. The 1983 letter provides that:
Experience has shown that a potential problem exists with
leakage of water and waste lines . . . when the lines are buried in
expansive soil. Access of free water to expansive foundation
soils from broken and/or ruptured water and waste lines has
resulted in foundation problems and on occasions excessive
distress to structures. Special precautions to isolate these utility
lines from expansive soils have reduced considerably the number
of foundation problems.
6
PX 1 at 1.
The 1983 letter further notes that “[t]reatment of water and waste lines will vary
with the type [of] foundation system selected for the building.” Id. The letter then
presents what it calls “the four basic foundation types” (a through d), along with the
“utility line treatment” corresponding to the foundation type. Foundation type (b),
“[s]pot footings . . . and grade beam with structural slab over a 6-inch void,” is
“identical” to the foundation type recommended in the soils reports, except that the soils
reports recommend a 12-inch void under the grade beams, rather than the 6-inch void
recommended in the 1983 letter. Tr. 153 (Black); see also PX 5 at 14. In conjunction
with this foundation type, the 1983 letter recommends the following piping system:

[w]

ater and waste pipes should be supported from the floor
system in a localized crawl space area under the interior of the
building and from the grade beam where the pipes exit the
building. A void area of 6-inch minimum should be provided
beneath the supported pipes. These pipes should have flexible
connections on the exterior side of the grade beam. The
connections should be accessible for maintenance. This will
allow some differential movement to occur between the building
foundation and the swelling soils outside the limits of the
building without damaging the pipes.
PX 1 at 2.
II. BPLW’s Piping Design
In compliance with the recommendation in the soils reports, BPLW’s structural
design provided for a drilled pier foundation on a structural slab over a 12-inch void, i.e.,
a structural slab over a 12-inch void space. Tr. 84 (Black); Compl. ¶ 18. Based upon the
structural design, BPLW’s MEP engineers then designed the underfloor piping system.
See Compl. ¶ 18. BPLW’s mechanical design for the underfloor piping system called for
burying the plumbing lines directly in the expansive soil within a trench bedded and
backfilled with select fill. Pl.’s Br. 1, 16.
A. Modifications to BPLW’s Piping Design – August 2003
BPLW’s original piping design called for the use of cast iron pipe but was later
changed to use PVC pipe. See Tr. 2344-46 (Bray). In August 2003, however, BPLW
“discovered” that the soil under the dorms had a high swell potential and informed the
Corps that it would need to modify its design. PX 22. In an email dated August 11, 2003
from Richard Bray, BPLW’s project manager, to Bobbi Farrell, a construction
7
coordinator for the Corps, Mr. Bray stated that it “[s]eems our structural and civil
engineers have dealt with the highly expansive soil on the site, but it slipped past our
mechanical (plumbing) engineers . . . they don’t normally have to deal with that issue.”
Id. In the email, Mr. Bray indicated that expansion fittings should be added to the PVC
pipe to address the soils’ swell potential. Id. He noted that while “I doubt even cast iron
will handle 8 [inches of heave] . . . [t]he rigid glued PVC pipe will not handle any
movement at all.” Id. Ultimately, BPLW did not incorporate expansion fittings but
instead modified its design to: (1) use cast iron with hub and spigot joints instead of PVC
for the pipes; and (2) reroute the main sewer line to the exterior of the building. See Tr.
2066-67 (Esmond); Tr. 2346-47, 2351-53 (Bray); PX 23; PX 27; Tr. 415-17 (Branson);
Tr. 1619 (Sanford).
Even after the implementation of BPLW’s design modifications, there were still
horizontal runs under the dorms. Tr. 418-19 (Branson). Moreover, after the
modifications, it is undisputed that BPLW’s design could not accommodate nine inches
of heave, as anticipated in the soils reports. BPLW’s expert, MEP engineer Jack
Esmond, testified that BPLW’s design, incorporating the cast iron pipe with hub and
spigots, could withstand one to one and a half inches of movement where the pipe runs
vertical and turns horizontal and up to four or five inches where the pipe runs horizontal
away from the vertical turn. Tr. 2068-69 (Esmond). Similarly, an expert for the
Government, consulting engineer James Branson, opined that BPLW’s design was
“typical of a design that would accommodate an inch or less of movement.” Tr. 440.
B. Costs of the Modifications to BPLW’s Piping Design
To implement BPLW’s design changes, the Corps issued two modifications to CF
Jordan’s contract. First, on August 26, 2003, the Corps issued CF Jordan a notice to
proceed and modification P00003 in the amount of $75,000. See DX 28; PX 70
(modification P00003). This change provided CF Jordan with immediate funds to begin
implementing the modification. See Tr. 1620 (Sanford). After the Corps determined the
total cost of the modification, it issued a second modification (P00008) on February 18,
2004, increasing CF Jordan’s contract by an additional $122,596.47 for a total
modification increase of $197,596.47. PX 70 (modification P00008); Tr. 1620 (Sanford).
III. BPLW’s Site Grading Design
BPLW also provided a civil site grading design for the areas surrounding the
dorms. The parties agree that BPLW was contractually obligated to strictly follow the
soils reports in preparing its design. Stip. ¶ 11. BPLW’s civil site grading design called
for “positive slope” around the perimeter of the dorms. Def.’s Br. ¶ 107.
8
IV. Construction of the Dorms – August 2003 to November 2006
The general contractor CF Jordan was responsible for the construction of the
dorms, Stip. ¶ 22, and the Corps was responsible for site observation, Compl. ¶ 23. CF
Jordan completed construction of the FY03 dorm in August 2005 and construction of the
FY04 dorm in November 2006. PX 4 at 3; PX 70. During construction of the dorms, CF
Jordan failed to grade the site with positive grading and drainage to carry water away
from the building. Stip. ¶ 24. CF Jordan also allowed post-rain ponding and pooling of
water around the foundation perimeter. Id. ¶ 23. BPLW played no role in supervising or
overseeing CF Jordan’s construction work. The Corps supervised CF Jordan’s
construction work.
V. Problems with the Dorms
A. Problems with the Piping Beneath the FY03 Dorm – September 2005
The Air Force began having problems with the utility lines underneath the dorms
on September 15, 2005 when the FY03 dorm’s sanitary sewer lines backed up, flooding
four living units in the east wing of the building via the shower, toilet, and sink. Stip. ¶
21; DX 45 at 3. The Air Force tasked CF Jordan with identifying and fixing the cause of
the problems. DX 45 at 3. CF Jordan made an excavation under the problem areas to
expose the sanitary sewer pipe network. Id. CF Jordan then hired Rimkus Consulting
Group, Inc. (“Rimkus”) as a mechanical engineer, which inspected the site in late
December 2005 and summarized its findings in a report dated January 12, 2006.
5
Id.
Rimkus Findings – December 2005
Rimkus determined that during installation, CF Jordan had bent and broken a pipe
component, which was then installed under four living units (E102-05) in the east wing
of the FY03 dorm, id. at 3, 6; see also Tr. 605 (McCleskey), and Rimkus attributed
additional pipe damage to soil heave, DX 45 at 3. In addition, Rimkus determined that
during its investigation of the clogged plumbing lines, CF Jordan had permitted grout
mortar cuttings from the bathroom tile installation to be washed down the bath drains,
thereby clogging the traps. Id. CF Jordan then used high pressure water jets to clean out
the grout material from the piping. Id. at 3.

5 The Court did not admit this report into evidence, see Tr. 432-33, 757-59, 960, because the Government
failed to disclose its author, Steven A. Frase, as a potential witness in a timely manner, and Frase was
therefore precluded from testifying at trial as to the report’s contents, Dkt. No. 80 (Order dated February
9, 2012). However, the Court allowed other witnesses to testify as to their interpretation of the
photographs attached to the Rimkus report. See Tr. 432-33, 757-59, 960. The Court applied the same
treatment to a report authored by Dean Alderson. See Dkt. No. 80. The findings from the Rimkus report
included below are drawn from a later report written by Mr. McCleskey, as well as from Mr.
McCleskey’s testimony at trial. See DX 45.
9
B. Problems with the Piping Beneath the FY04 Dorm – April 2006
In April 2006, similar back-ups of the sanitary sewer lines began to occur in the
adjacent cluster of four living units (E106-09). Id. at 4. During the plumbing
investigation, high levels of grout were observed in the pipes. Id. CF Jordan again
excavated under the problem units and hired Rimkus to inspect the plumbing in that area.
DX 45 at 4. Rimkus observed distortions and several fractures in the underfloor
plumbing, including one section of vertical pipe that had become sheared and vertically
offset by two to three inches. Id. In addition, Rimkus observed that the carton forms
under the building floor slab had been crushed, reducing the original 12-inch void space
by at least four to six inches. Id. Rimkus attributed the pipe damage and the reduced
void space to heaving soil conditions. Id.
Mr. McCleskey’s Report – July/August 2006
In a letter dated July 27, 2006, CF Jordan formally notified the Corps of the
problems with the dorms, attributing them to the expansive soils underneath the dorms.
Id. at 4-5. On July 31, 2006, the Corps’ Project Quality Assurance Inspector at the
Lackland Resident Office, Bill Reese, requested that a representative of the Corps’
Geotechnical Section conduct a site visit to inspect the plumbing allegedly displaced by
heaving soils. Id. at 1, 5. In response, Mr. McCleskey conducted a site visit on August 2,
2006 and memorialized his observations in a report dated August 17, 2006. See DX 45.
Upon his arrival, Mr. McCleskey spoke with Messrs. Reese, Mitchell, and Painter,
all of whom accompanied him to the site. Id. at 5. Mr. Reese reported to Mr. McCleskey
that CF Jordan had allowed water from high-pressure jets to flow into the underfloor
excavation and had left the excavation open, allowing water to accumulate, for
approximately six months beginning in September 2005. Id. at 3; Tr. 606 (McCleskey).
When he visited the excavations adjacent to living units E106-09, Mr. McCleskey
observed approximately six to eight inches of standing water at the base of the
excavations. DX 45 at 5. Mr. Reese told Mr. McCleskey that CF Jordan had allowed the
water to accumulate in the underfloor excavations for over two months. Id. Mr.
McCleskey observed other potential sources of moisture, including “profusely dripping
condensate outlets” and “poorly graded areas next to the building.” Id.; Tr. 599
(McCleskey). Due to the standing water, Mr. McCleskey was unable to access the
underfloor area to inspect the condition of the piping and the magnitude of heave during
his site visit. DX 45 at 5.
Mr. McCleskey also inspected a damaged pipe in living unit N117 of the FY04
dorm. Id.; Tr. 599 (McCleskey). Based upon his observations, he testified that it had
been “cracked and broken through heat-related and vertical displacement . . . of
10
approximately one-half inch.” DX 45 at 5; Tr. 599 (McCleskey). He also observed
standing water north of living unit N117 and was told by Mr. Reese that CF Jordan had
permitted the water to accumulate in the area for approximately 18 months. DX 45 at 5-
6.
Based upon his review of the Rimkus report, as well as his site visit and
discussions with Corps personnel, Mr. McCleskey concluded that the pipe broken during
installation by CF Jordan “apparently developed a clog that resulted in the sanitary sewer
plumbing backups noted in September 2005.” Id. at 6; Tr. 605-06 (McCleskey). He
surmised that water from the broken pipe, as well as water from the high-pressure jets
used to clean out the pipe, would have contributed to the moisture in the underlying soil.
DX 45 at 6.6
Furthermore, he surmised that this water could have migrated, inducing soil
heave under living units E106-09, which are downhill from units E102-05. Id. at 7.
At the FY04 dorm, Mr. McCleskey surmised that it was “highly possible that the
water the Contractor permitted to accumulate within the drainage ditch, over time, raised”
the moisture content of the soils, which would have resulted “in the vertical displacement
of the water pipe [in] living unit N117.” Id. at 9.
C. Problems with the Grading Surrounding the Dorms
During his site visit in August 2006, Mr. McCleskey observed standing water and
poor drainage away from the buildings, which he surmised could have been another
contributor to the elevated moisture content of the soils in the area. Id. at 6-7; Tr. 599
(McCleskey).
Poor drainage was observed during at least two other site visits. In 2007, the
Government hired a consulting engineering firm, K.M. Ng & Associates, Inc. (“Ng”), to
assess the existing field conditions associated with the design and construction of the
dorms. See PX 4 at 2; Tr. 122 (Black). Based upon field observations, a geotechnical
investigation, topographic survey, and review of the construction documents and design
criteria in the 2000 version of the AEIM, Ng provided the Government with a report in
September 2007. See PX 4. Ng’s report concluded: “What can be physically
documented is the poor drainage construction around these buildings and surrounding
walks, swales, landscape area, and trench drains. A combination of both sites’
construction, together with nonconformance to the AEIM and/or [soils reports] has
magnified these problems.” Id. at 23.

6
Mr. McCleskey testified that CF Jordan “conveyed” to him: damaged pipe during installation;
permitted grout to be washed down the drains; used high pressure jets to clean out the pipes; allowed that
water to flow into the excavations; and left parts of the excavations open for months at a time. See Tr.
605-09. Mr. McCleskey did not have first-hand knowledge of any of these issues but instead, obtained
the information from Mr. Reese. Tr. 606, 614-15 (McCleskey).
11
Ng also noted that:
[t]he most notable nonconformance between the Contract
Drawings and existing conditions appears to be with the site
grading and surface drainage. The spot elevations indicate that
for the most part the finished floor elevations for the [dorms] . . .
have been constructed very close to allowable standards. The
major discrepancies are with the surrounding site grading which
does not conform to the elevations indicated on the Contract
Grading Plans.
Id. at 12. The report then shows a picture allegedly depicting the “finished grade
adjacent to the foundation [of the FY03 dorm] approximately 5 inches above the
elevations indicated on the drawings (a typical condition).” Id. at 12. As construction of
the dorms was finished in August 2005 and November 2006, see DX 45 at 3; PX 70, the
Ng survey did not provide information regarding the as-built conditions, Tr. 825 (Long).
In addition, in November 2007, Mr. Black asked Wayne Long, a resident engineer
in the Corps’ Jacksonville District, to investigate drainage issues, primarily around the
FY04 dorm, and to prepare a corrective action design. Tr. 818-19, 821-22 (Long).
During his site visit, Mr. Long observed pooling around the building and surmised that
there was a grading problem. Tr. 821. Consequently, he concluded that he needed a
topographical survey of the area, which he received in December 2007. Tr. 821, 825,
844 (Long); DX 50; PX 8.
Mr. Long also conducted an analysis comparing BPLW’s civil site grading design
with the grading requirements in the 2000 version of the AEIM. Tr. 825 (Long). In a
memorandum dated November 24, 2008, Mr. Long concluded that in many areas,
BPLW’s design grades failed to adhere to the AEIM requirements. See DX 67; Tr. 837,
856 (Long). Specifically, he testified that “BPLW did not provide the .3 meter drop
outside of . . . the building

[or]

. . . the 5 percent grade six to nine meters beyond the
building.” Tr. 837 (Long); see also DX 65; DX 67. Mr. Long ultimately produced
drawings, which were used to correct the drainage issues. Tr. 838-40 (Long); DX 53.
VI. Costs to Repair the FY03 and FY04 Dorms
As a result of the piping and grading problems discussed above, the Corps entered
into contracts to fix certain broken pipes, replace the piping system underneath the
dorms, and remedy the grading surrounding the dorms. CF Jordan and Tepa EC, LLC
(“Tepa”) performed most of the repairs.
12
A. Costs Paid to CF Jordan and Mustang General Contracting
In May 2007, CF Jordan filed a claim in the amount of $21,103.44 for costs it
incurred to repair a break in the chilled water line at Cooling Tower 2 and associated
dorm room repairs. See PX 63; PX 70. After the Government concluded that BPLW was
at fault for the break in the chilled water line, see PX 70 (0399), William Sanford, a civil
engineering technician in the Corps’ Fort Worth District, negotiated a settlement of CF
Jordan’s claim, see PX 63; Tr. 1419 (Sanford). On August 13, 2007, the Corps issued
modification P00056 to CF Jordan’s contract in the amount of $21,404.00, which
includes the settlement amount plus CDA interest. See PX 70 (0411).
On July 11, 2007, CF Jordan submitted a claim to the Corps seeking
reimbursement for the costs it incurred in repairing a sewer line under the FY03 dorm.
See DX 47 at 1, 33. The Government “determined that BPLW’s failure to account for
heaving soil in their design caused the sewer pipes to break,” PX 70, and thus, that
settlement of CF Jordan’s claim was appropriate, Tr. 1415 (Sanford). Mr. Sanford
subsequently negotiated a settlement with CF Jordan for a total of $114,046.00. Tr. 1415
(Sanford).
On July 20, 2007, the Corps issued to Mustang General Contracting an “Order for
Supplies and Services” in the amount of $57,406.65 for the immediate repair of a second
broken lateral sewer line. Def.’s Br. ¶ 128; DX 48; Tr. 1615, 1617-18 (Sanford).
B. Costs Paid to Tepa
In September 2008, the Corps issued two sole-source contracts to Tepa to replace
the piping system under the dorms and to remedy the site grading. See DX 54; DX 57.
The Tepa repair contracts were based upon “Independent Government Estimates”
(“IGEs”) prepared by the Corps’ Cost Engineering and Specification Section (“the Cost
Section”). Tr. 1269 (Schmidt). The Cost Section generates IGEs to determine the cost at
which a prudent contractor would undertake a project. Tr. 1273 (Schmidt). The Corps
certifies an IGE only upon a determination that the price therein is “fair and reasonable.”
Tr. 1274 (Schmidt).
On September 11, 2008, the Corps issued an IGE for the repairs to the FY03 dorm
in the amount of $1,815,820, DX61 at 12, and an IGE for the repairs to the FY04 dorm in
the amount of $1,847,797.00, DX 61 at 3; Tr. 1294 (Schmidt). Jack Shelton7
prepared,
and Milton Schmidt8
certified, the IGEs for the repairs to both dorms. See Tr. 1294,
1298, 1307 (Schmidt). The original IGEs were subsequently revised based upon a
change in the scope and type of work required to repair the dorms. See Tr. 1327-28

7 Mr. Shelton is a cost estimator within the Corps’ Cost Section.
8 Mr. Schmidt is the Chief of the Corps’ Cost Section.
13
(Schmidt). Based upon discussions with Tepa, the major revisions to the IGEs were as
follows:
 The method of excavation changed. See Tr. 1331-33 (Schmidt). Mr. Shelton
and Mr. Schmidt determined that a vacuum truck, rather than a Bobcat loader,
should be used to excavate the tunnels and remove the soils. Id.
 The duration of the project increased from 270 to 330 days. Tr. 1335
(Schmidt).
 The original IGEs did not account for a site engineer and his equipment or for
a safety engineer, both of which were determined to be necessary. Tr. 1359
(Schmidt).
 The waste disposal method changed. Tr. 1335-36, 1357-58 (Schmidt). The
original IGEs assumed on-site disposal but were revised to include costs for
transportation and disposal off-site. Id.
 The revised IGEs added option costs for site grading and drainage. Tr. 1336
(Schmidt).
 The revised IGEs added costs for a storm water waste pollution plan. Id.
 The revised IGEs added costs associated with lighting and ventilation under
the dorms. Id.
The Corps issued a revised IGE for the FY03 dorm repairs in the amount of
$3,915,211, DX 56, and for the FY04 dorm repairs in the amount of $3,608,581, DX
56A. Based upon the revised IGEs, on September 30, 2008, the Corps issued contract no.
W9126G-08-C-0064 to Tepa for the repairs to the FY03 dorm and contract no. W912G08-C-0071 to Tepa for the repairs to the FY04 dorm. The design-build contracts for the
FY03 and FY04 dorms included a base bid and two options for total amounts of
$4,400,446 and $3,219,569, respectively. See DX 54; DX 57. Due to subsequent
modifications on January 4, 2010, the total amounts were reduced to $4,245,270.75 and
$3,069,067.34, respectively. See DX 90; DX 91.
Each contract included a base bid amount for all services necessary to replace the
underfloor piping systems, as well as an option to replace the shower pans and an option
to correct the site grading. See DX 54; DX 57. The detailed scope of work for the base
bid on both contracts required the excavation of tunnels for each wing of the dorms that
“ran from one side across, under the building to the other side.” Tr. 1004 (Leathers).
Another tunnel provided access to the plumbing under the common area where the three
wings came together. Tr. 1005 (Leathers). The tunnels allowed Tepa to remove the
damaged cast iron piping, replace it with new PVC piping suspended from the floor slab,
and provide a void space under the piping so that any future soil heave would not affect
the piping. Tr. 1006 (Leathers). The Government’s expert, Francis D. Leathers9
testified

9 Mr. Leathers is a geotechnical engineering consultant with GEI Consultants.
14
that this method was the “only practical way to do it, given the nature of the structure.”
Tr. 1007 (Leathers).
VII. Claim Against BPLW
A Corps board including the chief of construction and chief of engineering
ultimately determined that the Government should pursue a claim against BPLW for the
costs incurred to repair the dorms. Tr. 1675 (Sanford). Mr. Sanford was tasked with
determining which costs within Tepa’s contracts were associated with repair of the piping
and site grading problems and thus attributable to BPLW. Tr. 1676 (Sanford).
On October 8, 2008, the Government issued a letter to BPLW, claiming that
BPLW’s failure to account for the expansive soils necessitated the repairs and demanding
payment of over $7.6 million. Compl. ¶¶ 32-33. The Corps subsequently brought a
formal A-E claim against BPLW for defective dormitory designs. Compl. ¶ 34. The
Corps’ contracting officer issued a final decision on November 25, 2008, finding that
BPLW was negligent in providing a defective MEP design for the sanitary sewer lines
and holding BPLW liable for damages in the amount of $7,604,834.11. Id. On October
7, 2009, BPLW filed a petition in this Court, seeking review of the contracting officer’s
final decision, and requesting the Court to declare the November 25, 2008 decision null
and void.
Discussion
The Government’s principal contention is that BPLW is responsible for the failure
of the underfloor piping system beneath the FY03 and FY04 dorms at Lackland AFB.
The Government contends that BPLW breached its Contract with the Corps by providing
a negligent underfloor piping design, as well as a negligent civil site grading design.
Specifically, the Government contends that BPLW was required, but failed, to provide an
underfloor piping design that could accommodate the maximum potential soil heave
predicted in the soils reports. Likewise, the Government asserts that BPLW was
required, but failed to provide a civil site grading design that complied with the slope
requirements set forth in the soils reports and the AEIM. On account of these failures,
the Government maintains that it incurred substantial expense to repair and replace the
underfloor piping systems and to re-grade the site. The Government seeks a total of
$6,755,826.72 in damages from BPLW for the costs it incurred as a result of BPLW’s
negligent designs.
I. Whether The Government Has Shown That BPLW Breached Its Contract With
The Corps
To recover for breach of contract, a party must establish: (1) a valid contract
between the parties; (2) a duty arising out of the contract; (3) a breach of that duty; and
15
(4) damages caused by the breach. San Carlos Irrigation & Drainage Dist. v. United
States, 877 F.2d 957, 959 (Fed. Cir. 1989). It is undisputed that BPLW entered into a
valid contract (subsequently modified) with the Corps to design the FY03 and FY04
dorms at Lackland AFB. See Stip. ¶¶ 3-5. Moreover, under the Contract, BPLW had a
duty to provide design services without negligence. See DX 12 at 105 (incorporating
FAR 52.236-23); see also C. H. Guernsey & Co. v. United States, 65 Fed. Cl. 582, 602-
03 (2005) (interpreting same provision as imposing duty to provide design services
without negligence). The standard of care for evaluating a negligence claim against an
A-E is “such care, skill, and diligence as others who are engaged in the profession would
ordinarily exercise under similar circumstances.” Id. at 595 (internal citation omitted).
An act will be deemed negligent if it “‘involve[s] a risk which could or should have been
foreseen by the actor.’” Id. (quoting Elmore Moving and Storage, Inc. v. United States,
845 F.2d 1001, 1004 (Fed. Cir. 1988)).
The parties dispute whether BPLW provided (a) a negligent underfloor piping
design or (b) a negligent civil site grading design. The Court will address each design in
turn to determine whether it complied with the applicable standard of care.
A. Whether BPLW’s Underfloor Piping Design Complied with the Applicable AE Standard of Care
1. As Informed by the Soils Reports
The Government claims that BPLW provided negligent design services insofar as
its underfloor piping design failed to comply with the applicable A-E standard of care.
Def.’s Br. 56. The parties agree that the applicable A-E standard of care requires an MEP
engineer to comply with the soils reports when designing a piping system, Stip. ¶ 12; see
also Pl.’s Br. 51; Def.’s Br. 58, and that BPLW was contractually obligated to follow the
soils reports in preparing the structural and MEP designs for the dorms, Stip. ¶ 11. The
parties disagree, however, on what sections of the soils reports apply to the underfloor
piping and consequently, what BPLW needed to do to conform to the standard of care.
Based upon the soils reports’ prediction that the soil underneath the dorms had the
potential to heave over nine inches, the Government contends that BPLW was required to
design a plumbing system capable of withstanding over nine inches of heave. Def.’s Br.
58. By contrast, BPLW relies on language in the “Mechanical Connections” subsection
of the soils reports (“the MC subsection”) to assert that it was required to design a
plumbing system that could accommodate only one inch of movement. Pl.’s Br. 52. As
set forth below, the Court concurs with the Government’s view that the A-E standard of
care required BPLW to provide a piping design to accommodate the maximum potential
soil heave predicted in the soils reports.
16
The stated purpose of the soils reports is “to provide subsurface information, and
foundation and pavement design recommendations” for the dorms. PX 5 at 1; PX 6 at 1.
In line with that purpose, the soils reports provide detailed discussions of the subsurface
and laboratory tests conducted by the Corps, as well as foundation and pavement design
considerations and recommendations. See generally, PX 5-6. The soils reports contain
no explicit guidance concerning piping designs, only what magnitude of movement the
designers should expect when placing the pipes. Id.; see also Tr. 94 (Black). What is
abundantly clear from the soils reports is that the Corps determined that the soils in the
area of the dorms “have a very high shrink-swell potential.” PX 5 at 8; PX 6 at 8. The
reports explain that “

[o]

nce built upon, these soils can experience significant volumetric
changes when their in situ moisture environment is altered.” PX 5 at 8; PX 6 at 9.
Specifically, the reports estimate that the “expansive soils have a heave potential of
approximately” 235-240 millimeters, or more than nine inches. PX 5 at 8; PX 6 at 8.
Four witnesses called by the Government testified that the A-E standard of care
requires a mechanical engineer to provide a piping design capable of withstanding the
maximum potential soil heave forecast by the soils report. Tr. 85 (Black) (“I would
expect [the mechanical engineer] to design or account for the nine and a quarter inches of
vertical movement.”); Tr. 222-23, 226 (Branson) (“The full amount of the heave has to be
accommodated by . . . the design in some fashion.”); Tr. 514 (Focht) (“[T]he mechanical
engineer should have taken into account the geotechnical engineering reports’ indication
that [at least nine] inches of heave . . . should be anticipated and should have included
provisions to deal with that in his design.”); Tr. 966-67 (Leathers) (“[T]he amount of
potential soil heave . . . should be accommodated in the design of the structure.”).
They explained that one reason the piping design must accommodate the
maximum potential soil heave is because there is no way to control when it will occur.
See Tr. 86 (Black); Tr. 514-15 (Focht); 967-68 (Leathers) (“[B]ecause you can’t reliably
control it you need to accommodate it.”). Mr. Focht opined that it would be impossible
to prevent water from infiltrating the expansive soil beneath the dorms. Tr. 514. He
explained that at the site, there are at least four moisture pathways through which water
could infiltrate the soil beneath the dorms and that the depth of the active zone10 is twenty
feet. Tr. 514-15. Under such conditions, to prevent water from migrating in and out of
the space beneath the dorms, the system would have to be perfect all the way down to the
water table. Id. Such a system, with “no defects[,] . . . [is] very unlikely to occur.” Id.
Even incorporating grades with a five percent slope around the perimeter of the dorms
could not prevent the migration of water through the pathways into the space beneath the
dorms. Tr. 520 (Focht).

10 Mr. Focht explained that the “active zone” is a “zone over which the soil moisture varies with time
between a wet condition and a dry condition. When you get below that zone, then you’re in a part of the
soil profile where the moisture content does not appreciably change over time.” Tr. 515.
17
While it is impossible to control when the maximum potential soil heave will
occur, the testimony at trial established that its occurrence is reasonably likely over the
life of the buildings. See Tr. 86-87 (Black) (testifying that based upon the soil tests,
approximately nine inches of soil heave is a realistic estimate); Tr. 227 (Branson); 518
(Focht). Mr. Focht stated that it is “quite likely in the 50- to 100-year life of the
building[s] . . . that you would see that range of movement [over nine inches].” Tr. 518,
555-56. He explained that such movement is likely because San Antonio has significant
dry and then wet periods, causing a contraction and then swelling of the soil. See Tr.
519. Similarly, Mr. Branson testified that “the limits that are mentioned in the soils
report[s] are to be anticipated as a real possibility of an occurrence, not simply due to
something like an earthquake or an act of God, but due to a natural migration of water as
it moves through the stratum.” Tr. 227, 444.
Another reason the piping design must accommodate the maximum potential soil
heave is because the piping design must “work in harmony” with the structural, or
foundation, design. Tr. 907 (Leathers). As Mr. Focht explained, because both the
foundation and piping systems have direct interaction with the ground, it is “important”
to avoid a “situation where the building is behaving in one manner and the plumbing is
behaving in a very different manner causing a differential movement between the two.”
Tr. 496. “[I]f the building is not moving and the plumbing is moving with the soil, then
[there is] a potential for formation breaks in the plumbing system.” Tr. 496-97 (Focht).
Here, the soils reports dictated that “the presence of a highly active subgrade must
be accounted for in the design of the [d]ormitory foundation and floor slab systems to
prevent both functional and aesthetic problems within the completed facility.” PX 5 at 9;
PX 6 at 9. To account for the active subgrade, the soils reports recommended that the
dorms be founded on a drilled and underreamed pier foundation with a 12-inch void
space below the slab. PX 5 at 9-10; PX 6 at 9-10. Mr. Focht explained that the
recommended foundation system prevents the buildings from moving:
All of the structural loads come down to a series of drilled
concrete piers that are embedded at about 35 feet, and so the load
carries down through the portion of the soil that’s shrinking and
swelling, and it is resting down in some materials that don’t
move. As a result the structure is not moving, so as the soil goes
up and down the building is largely staying in place.
Tr. 574. In addition, the 12-inch void space between the bottom of the structure and the
soil provides a buffer that prevents the soil from pushing up on the building when it
expands. See Tr. 81 (Black). BPLW’s structural design followed the soils reports and
accounted for the highly active subgrade by calling for a drilled pier foundation on a
structural slab over a 12-inch void space. Tr. 82 (Black); Compl. ¶ 18. Given that
18
BPLW’s structural design accommodated the highly expansive soils, BPLW’s piping
design needed to do so as well to avoid differential movement between the systems.
BPLW designed the piping system, however, such that the piping passed directly into the
soil with no void space or other allowance for soil movement.11
Tr. 496-97 (Focht).
BPLW does little to refute the persuasive testimony that the soils are likely to
experience the maximum amount of heave or that the structural and mechanical systems
need to work together.12
Instead, BPLW relies on language in the “Mechanical
Connections” subsection of the soils reports to maintain that it was required to design a
piping system that could accommodate only one inch of horizontal and/or vertical soil
movement. Pl.’s Br. 52. The MC subsection provides: “All exterior mechanical
connections should be of the flexible type. Flexible connections should be capable of
resisting a minimum of 25 millimeters [nearly one inch] of both vertical and horizontal
movement. All condensate lines should drain away from foundation edges.” PX 5 at 17;
PX 6 at 19. Relying on testimony from Mr. Esmond,13 BPLW contends that “Mechanical
Connections” refers to underfloor piping and thus, pursuant to the MC subsection, BPLW
was required to provide a piping design to accommodate only one inch of soil movement.
See Pl.’s Br. 52; Tr. 2064-66 (Esmond).
A plain reading of the MC subsection does not support BPLW’s interpretation that
it applies to the underfloor piping. The MC subsection refers to “exterior” connections,
PX 5 at 17; PX 6 at 19, and is a subsection of the “Foundation Design
Recommendations,” PX 5 at 13; PX 6 at 13. A natural reading of the MC subsection is
that it is referring to connections “exterior” to the foundation, or the building, and not the
piping underneath the building. Three witnesses for the Government confirmed this
interpretation. Mr. Black testified that the MC subsection does not refer to the underfloor
piping but instead “pertains to [the] exterior of the building.” Tr. 90. David Clarke,
Chief of the Mechanical Design Section in the Corps’ Fort Worth District, testified that
the MC subsection “addresses piping connections that are exterior to the building” and
“provides no guidance to the underfloor piping design.” Tr. 186-87. Finally, Mr.

11 In Mr. McCleskey’s trip report following his site visit in August 2006, he confirmed that “no freedom
of movement of the underfloor plumbing was observed during a review of the Contractor’s photos,”
despite the fact that the soils reports “clearly and emphatically stated” that the soils “are very highly
expansive . . . at this project site.” DX 45 at 9.
12 BPLW’s expert, Mr. Esmond, conceded at trial that the structural design has a large impact on the
foundation design. Tr. 2060-61.
13 Mr. Esmond is an MEP engineer, who provided an expert report and rebuttal reports based upon his
review of BPLW’s plumbing designs, correspondence, other designs, and site visits. See Tr. 2044-45
(Esmond).
19
Branson confirmed that the MC subsection does not address underfloor piping
connections but instead addresses connections exterior to the building. Tr. 228-30.
In contrast to the aforementioned testimony, the rationale provided by BPLW’s
expert in support of its interpretation is unavailing. Mr. Esmond testified that
“Mechanical Connections” refer to “joints, fittings, and pipe.” Tr. 2065. When asked
why he believes that the MC subsection applies to the underfloor plumbing in particular,
Mr. Esmond responded that it is because it was written by “the geotech[nical engineer]
who deals with the underfloor areas of the building” and because the subsection “deals
with the horizontal and vertical movement of the earth or the ground material. That’s not
found in the building.” Tr. 2064-65. Mr. Esmond’s purported explanation of why the
MC subsection pertains to the underfloor piping in particular could be said about every
section of the soils reports. The soils reports in their entirety deal with issues in areas
under, and not found in, the buildings, i.e., foundation and pavement issues affected by
the soils. Other than Mr. Esmond’s testimony that “Mechanical Connections” can refer
to pipe, BPLW provides no support for its view that the MC subsection pertains to the
underfloor piping.
Contrary to BPLW’s view, the Court is persuaded that the standard of care
required BPLW to design a piping system capable of withstanding the maximum
potential soil heave forecast in the soils reports. BPLW concedes that it was
contractually obligated to “strictly” follow the soils reports in preparing both the
structural and MEP designs for the dorms. Stip. ¶ 11. Given that the soils reports’
seminal finding was that the soils beneath the dorms were highly expansive with the
potential to heave over nine inches, it would be odd indeed if the soils reports required
BPLW’s piping design to account for only one inch of movement. In light of the soils
reports’ explicit finding that the soils had the potential to heave over nine inches, the risk
that the soils would do so is one that BPLW should have foreseen. In providing a piping
design that failed to accommodate more than nine inches of heave,14 BPLW provided
negligent design services in breach of its Contract with the Corps. See C. H. Guernsey,
65 Fed. Cl. at 596.
2. As Informed By the 1983 Letter
The Government asserts that the applicable A-E standard of care also required
BPLW to consult the 1983 letter and to utilize the piping design guidance therein. Def.’s
Br. 62. Specifically, the Government contends that the 1983 letter required BPLW to

14 BPLW concedes that its “plumbing design . . . was not intended to address the maximum possible soil
movement.” Pl.’s Br. 82. Instead, it maintains that its design allowed for “an inch to an inch and a half of
movement where the pipe runs vertical and turns horizontal and four to five inches of movement as the
horizontal pipe moves away from the vertical turn.” Id. at 52-53.
20
provide a design that would isolate the pipes from the expansive soil. Id. at 64. For its
part, BPLW avers that the Government has not shown that the 1983 letter is part of the
Contract. See Pl.’s Br. 20-21. Moreover, BPLW maintains that “[e]ven if the 1983
Letter did apply, the Government did not follow the 1983 Letter.” Id. at 21.
a. Whether the 1983 letter is incorporated into the Contract
At the outset, the Court must address the issue—hotly contested by the parties—of
whether the 1983 letter is part of the Contract. The Contract’s Statement of Work
provides that “[t]he project design shall incorporate the . . . technical considerations”
found in the “US Army Corps of Engineers, Southwestern Division, Architectural and
Engineering Instructions Manual (CESWD-AEIM), October 1998.” DX 12 at 8
(emphasis added). In addition, the 2000 version of the AEIM provides that “[p]iping
designs for underfloor piping in expansive soils will be in accordance with SWDED-G
letter [d]ated 29 Sep 1983, ER 1110-345-722,” i.e., the 1983 letter. DX 3 at 180. Based
upon the Contract’s reference to the AEIM and the AEIM’s reference to the 1983 letter,
the Government submits that the 1983 letter is incorporated into the Contract. Def.’s Br.
62; see also Tr. 162-63 (Black) (testifying that by referencing the AEIM, which in turn
references the 1983 letter, his soils report (FY03) incorporated the 1983 letter).
BPLW emphasizes that the Contract specifically incorporated the 1998 AEIM but
does not refer to or incorporate the 2000 edition of that document. Pl.’s Br. 20, 32.
Moreover, only the 2000 version—not the 1998 version—was offered by the
Government, and admitted by the Court, into evidence at trial. Id. at 32; Tr. 88-89; DX 3
at 1. BPLW asserts that “the Government did not present any evidence that proved the
contents, attachments, terms or conditions of the 1998 AEIM, including whether or not
the 1983 Letter is incorporated into or referenced by the 1998 AEIM that is mentioned in
BPLW’s contract.” Pl.’s Br. 20. As such, BPLW maintains that “the Government has
not established that the 1983 letter is a part of BPLW’s contractual duties in this case.”
Id. at 37.
In response, the Government contends that the Contract’s reference to a 1998
AEIM was simply a “scrivener’s error,” as a 1998 version of the AEIM does not exist.
Def.’s Rep. 10, 10 n.3. Moreover, the Government maintains that both parties
understood that the applicable AEIM was the 2000 AEIM because it was the most up-todate version when the parties entered into the Contract. Id. at 10-11. In support of its
position, the Government emphasizes that during the design phase of the project, a
BPLW employee requested the most recent version of the AEIM from the Corps. Id. at
12 (citing PX 26 at 1).
When contract language is unambiguous, the plain language of the contract is
controlling. Bristol-Myers Squibb Co. v. United States, 48 Fed. Cl. 350, 355 (Fed. Cl.
2000) (internal citation omitted). If, however, a party makes an arguable claim that a
21
contract provision contains a latent ambiguity, courts may resort to extrinsic evidence to
determine whether a latent ambiguity actually exists. Rogers v. United States, 93 Fed.
Cl. 607, 625 (2010) (internal citations omitted). A latent ambiguity is one “that does not
readily appear in the language of a document, but instead arises from a collateral matter
when the document’s terms are applied or executed.” Black’s Law Dictionary (9th ed.
2009).
BPLW claims that the Contract is “free of any ambiguity,” as it expressly refers to
the 1998 AEIM. Pl.’s Resp. 3. Accordingly, BPLW argues that the Government cannot
use outside evidence “to attempt to contradict the unambiguous terms of the contract.”
Id. The Government made an arguable claim at trial, however, that the reference to the
1998 AEIM creates a latent ambiguity. Mr. Clarke testified that “[t]here actually wasn’t
any [19]98 version available.” Tr. 2616, 2618. Mr. Clarke explained that his testimony
was based upon the fact that “[t]he 2000 version was current at the time of the contract,”
and the AEIM typically is “updated about every four years.” Tr. 2618-19, 2622. Absent
a 1998 version of the AEIM, there arises a latent ambiguity as to what version the parties
intended to incorporate into the Contract.
While ambiguities are generally construed against the drafting party under the rule
of contra proferentem, a court will adopt a contractor’s interpretation of a latent
ambiguity only if its interpretation is reasonable. Travelers Cas. & Sur. Co. of Am. v.
United States, 75 Fed. Cl. 696, 711 (2007). Moreover, before applying the rule of contra
proferentem, a court must determine whether extrinsic evidence resolves the ambiguity.
Jayne v. United States, 75 Fed. Cl. 218, 234 (2007) (internal citations omitted). In
evaluating the extrinsic evidence, courts must endeavor to effectuate the intent of the
parties when they entered into the contract. Praecomm, Inc. v. United States, 78 Fed. Cl.
5, 13 (2007) (internal citation omitted).
Given Mr. Clarke’s testimony that no 1998 version of the AEIM exists, BPLW’s
insistence that the parties incorporated a 1998 version is unreasonable. Rather than
insisting on the incorporation of a 1998 version, the evidence demonstrates that the
parties intended to incorporate the most recent version of the AEIM.
As a preliminary matter, BPLW was fully aware that its design needed to comply
with the AEIM. Both Mr. Black and Mr. Clarke testified that the AEIM is an integral
document for an A-E designer. Mr. Black went so far as to call the AEIM “the Bible for .
. . an in-house or an A-E designer,” as it provides the minimum requirements for a design
submittal. Tr. 87. Mr. Clarke confirmed its importance, stating that “the AEIM has been
the primary design criteria” for the Fort Worth District for “at least 25 years.” Tr. 2616.
He testified that he refers to the AEIM every time the Corps designs a project. Id.
Demonstrating that BPLW was aware of the applicability and importance of the AEIM,
BPLW’s recorded minutes from a meeting during the design phase of the project show
that a BPLW employee requested a copy of the AEIM. See PX 26 at 1.
22
Not only was BPLW aware of the applicability of the AEIM, but the evidence also
demonstrates that BPLW knew that the most recent version, i.e., the 2000 version, of the
AEIM applied to the Contract. The meeting minutes referenced above state that the
BPLW employee requested specifically “the most recent version of the AEIM.” Id.
(emphasis added). Moreover, within the “Foundation Design Recommendations,” the
FY03 soils report provides that “[a] minimum 305-millimeter void should be maintained
beneath all grade beams, and the void area shall be protected with concrete retainer
blocks as shown in the latest edition of the SWD-AEIM.” PX 5 at 14 (emphasis added).
In line with this view, Mr. Clarke testified that the Corps always consults the most recent
version of the AEIM and provides it to the A-Es when they enter into a contract with the
Corps. Tr. 2622-23. He submitted further that the current version of the AEIM is
maintained on the Corps’ website and that the A-E firms are directed to the website
whenever they enter into a contract with the Corps. Tr. 2623. BPLW’s request for the
“most recent version of the AEIM” during the design phase of the project corroborates
Mr. Clarke’s testimony. See PX 26 at 1.
The parties’ conduct at trial reinforces the view that they understood the 2000
version of the AEIM to have been incorporated into the Contract. During the first seven
days of trial, counsel for both parties repeatedly referred to the 2000 version of the AEIM
(DX 3) without raising the question of whether it was the applicable version. When
counsel for the Government moved to admit the 2000 version into evidence, counsel for
BPLW objected on the ground that the witness testifying as to its contents was not a
records custodian, not on the ground that the 2000 version was inapplicable. The fact
that the Contract referenced a purported 1998 version, rather than the 2000 version, of the
AEIM did not appear to come to BPLW’s attention until the final day of trial; until then,
both parties appeared to assume that the Contract incorporated the 2000 version. See Tr.
2615-24. Based upon the foregoing, the Court concludes that the parties intended the
most recent version of the AEIM to apply to the Contract.
Once the 2000 version of the AEIM is incorporated into the Contract, the
September 1983 letter is incorporated by reference. See Gee & Jenson Eng’rs,
Architects, & Planners v. United States, 2008 U.S. Claims LEXIS 504 (filed November
7, 2008); see also Tr. 102-03 (Black) (testifying that the guidance in the AEIM and the
1983 letter is included in the soils reports by reference); Tr. 180 (Clarke) (confirming that
the Contract required BPLW to comply with the AEIM and the 1983 letter).
b. Whether BPLW was bound by the 1983 letter to isolate the pipes
from the expansive soil
Based upon the 1983 letter’s recommendation that the “

[w]

ater and waste pipes
should be supported from the floor system in a localized crawl space . . . [and] [a] void
area of 6-inch minimum should be provided beneath the supported pipes,” PX 1 at 2, the
23
Government contends that BPLW had a duty to isolate the piping from the expansive
soil, either by incorporating a crawlspace or a void space, Def.’s Br. 63. BPLW
maintains, however, that it is not bound by the guidance in the 1983 letter because the
Corps violated the provisions of the letter. See Pl.’s Br. 21. BPLW emphasizes that the
1983 letter directs that “[t]he [soils report] should give recommendations for underfloor
water and waste pipe treatment and expansive characteristics of the foundation soils.”
Id.; PX 1 at 1. Because the soils reports did not provide specific recommendations for
what to do with the plumbing lines, BPLW contends that the Government did not follow
the 1983 letter. Pl.’s Br. 21. The implication is that, in turn, BPLW should not be
required to follow it. See id.
Contrary to BPLW’s position, the evidence suggests that the Corps was not
required to provide specific recommendations for the piping system within the four
corners of the soils reports. Both Mr. Black and Mr. Focht testified that it is often the
case that guidance for the piping system is contained in multiple documents, rather than
only in the soils report. Mr. Black explained that he typically writes addenda to his soils
reports, as parties follow up with additional parameters. See Tr. 109. Likewise, Mr.
Focht testified that while a recommendation regarding what to do with the plumbing lines
“should be made, . . . it doesn’t necessar[il]y have to go in a single document.” Tr. 543.
He went on to state, “I’ve been involved in a lot of projects where there was actually not
a single geotechnical report but rather a series of memoranda and letters and technical
guidance provided to various engineering and architectural disciplines as it relates to the
design and construction of a project.” Id. In fact, when asked whether soils reports give
recommendations for the plumbing systems, Mr. Focht replied that “[they] rarely provide
that kind of direction.” Tr. 183. He explained that this is because the geotechnical
engineers that provide the soils analysis typically do not have the knowledge to give
recommendations regarding the type or layout of the piping system. Tr. 184.
The position that piping recommendations may be contained in multiple
documents is logical in light of the language of the Contract and the AEIM. The Contract
states that the project “shall incorporate” the technical considerations in the AEIM. DX
12 at 8. In turn, the AEIM provides that the “[p]iping designs for underfloor piping in
expansive soils will be in accordance with [the 1983 letter].” DX 3 at 180. The words
“shall” and “will” indicate requirements, and the words “incorporate” and “in accordance
with” indicate incorporation. In other words, because the Contract required BPLW to
comply with the applicable provisions of the AEIM and the 1983 letter, there was no
need for their provisions to be restated in the soils reports.
Finally, the Court questions BPLW’s insistence that the Corps was required to
spell out within the soils reports specific guidance regarding the underfloor piping
system. If the Corps was required to provide such detailed guidance, why did it need to
hire BPLW? The Court finds it sufficient that the Corps provided the guidance that it did
in the AEIM and the 1983 letter along with the predicted soil heave in the soils reports.
24
Based upon this guidance, BPLW had a duty to isolate the piping from the expansive soil
in a way that would accommodate the maximum potential soil heave predicted in the
soils reports. The 1983 letter specifically warned that “a potential problem exists with
leakage of water and waste lines . . . when the lines are buried in expansive soil.” PX 1 at
1. The 1983 letter noted that the situation had been ameliorated where special
precautions had been taken to isolate the utility lines from the expansive soils and
specifically recommended the incorporation of a void space beneath the pipes to avoid
differential movement. Id. at 1-2. Rather than the Corps failing to provide sufficient
guidance, it appears that the Corps’ guidance “slipped past” BPLW’s mechanical
engineers. PX 22. Whether willful or not, BPLW failed to head the warning and
guidance set forth in the 1983 letter, as well as the soils reports’ prediction that the soil
could heave over nine inches, and provided a negligent design in violation of the
Contract.
B. Whether the Government Issued a Design Directive that Prevented BPLW
from Complying with the Standard of Care
Even if the standard of care, as informed by the soils reports and the 1983 letter,
required BPLW to isolate the underfloor piping in order to withstand at least nine inches
of soil heave, BPLW claims that the Government prevented it from designing such a
piping system. See Pl.’s Br. 54. BPLW’s position is based upon its assertion that the
Corps issued a “design directive” “prohibit[ing] the use of crawl space foundation
systems when the [d]orms were designed.” Id. at 68, 76. Without the option of a
crawlspace, BPLW maintains that the “only reasonable alternative . . . [wa]s to bury the
pipes in the soil.” Id. at 54. BPLW concedes that “[u]nder those circumstances, the
buried pipes would not be expected to withstand more than nine inches of soil
movement.” Id. at 66. By eliminating the use of crawlspaces, however, BPLW posits
that the Government assumed the risk “if these design specifications ultimately turn[ed]
out to be ill-advised.” Id. at 68.
As the breaching party, BPLW has the burden to establish that the Corps
prohibited BPLW from utilizing crawlspaces in its piping design. See Westfed Holdings,
Inc. v. United States, 407 F.3d 1352, 1360 (Fed. Cir. 2005). The Court finds, however,
that BPLW’s entire argument is premised upon the Corps’ issuance of a design directive
that has not been shown to exist.15
See Pl.’s Br. 11, 68; Pl.’s Resp. 1 (stating that “[t]he
Government . . . issued a design directive that ultimately required BPLW to bury
underground pipes in expansive soil”).

15 BPLW emphasizes that its implied waiver argument “is not based on the Government’s review,
approval or payment related to BPLW’s design, but upon the Government’s design directive that
precluded BPLW from using the very design [a crawl space] the Government now says it should have
used.” Pl.’s Br. 76.
25
In support of its position that the Corps issued a design directive prohibiting the
use of crawlspaces, BPLW relies heavily on an affidavit signed by Refugio (“Chico”)
Fernandez and choice excerpts from Mr. Fernandez’s testimony at trial. Mr. Fernandez
served as program manager for the Corps’ Air Education and Training Center (“AETC”)
for the design and construction of the FY03 and FY04 dorms. See Tr. 1720-22. Counsel
for BPLW met with Mr. Fernandez in November 2011, at which time Mr. Fernandez
reviewed and signed an affidavit representing that due to budgetary constraints, the Air
Force issued a design directive prohibiting the use of any type of crawlspace for the
FY03 and FY04 dorms. Tr. 1734, 1757 (Fernandez); PX 158. At trial, however, Mr.
Fernandez so completely contradicted the statements in his affidavit as to render the
affidavit and his testimony entirely unreliable.
If anything, Mr. Fernandez’s testimony at trial served to undermine BPLW’s
position that the Air Force prohibited BPLW from using a crawlspace for the FY03 and
FY04 dorms. Mr. Fernandez explicitly denied the proposition that the Air Force
eliminated the use of a crawlspace at least three times:
Q. Mr. Fernandez, did you agree that one method of reducing
costs in the construction of dormitories at Lackland Air Force
Base, including FY03 and FY04 dormitories, was to eliminate
crawlspaces under the building and bury the plumbing lines in
the subgrade?
A. No, that’s not an option.
Tr. 1729 (Fernandez).
Q. . . . . The Air Force imposed a design directive to BPLW for
the FY03 and FY04 dormitories that prohibited the use of a
crawlspace, any type of crawlspace, on either of the dormitories,
correct?
A. I don’t think that’s correct.
Tr. 1741 (Fernandez).
Q. . . . . Are you aware of any design directive from the AETC
that prohibited BPLW from utilizing a localized crawlspace to
hang utility pipes?
A. No, no.
Tr. 1755 (Fernandez).
26
In addition, Mr. Fernandez testified that he did not have any discussions with
BPLW or the Corps regarding the design of the underfloor piping systems for the FY03
and FY04 dorms and that there was “definitely” room in the budget for the creation of
localized crawlspaces
16 for the FY03 and FY04 dorms. Tr. 1748, 1759. While Mr.
Fernandez’s affidavit may contradict these statements, Mr. Fernandez’s testimony at trial
severely discredited the validity of his earlier affidavit.
BPLW provides emails showing that the Corps sought to save money by using 6-
inch void spaces, rather than crawlspaces, but only for the FY01 and FY02 dorms. See
PX 24; PX 32; PX 33. BPLW can point to no similar design directive for the FY03 and
FY04 dorms, however. The record includes comments from Mr. McCleskey and Ms.
Farrell to the effect that the Air Force communicated that it did not want to use
crawlspaces, but neither Mr. McCleskey nor Ms. Farrell had any personal knowledge
regarding such communications, see DX 45 at 2 (noting that the geotechnical section was
“unaware of this design directive”); Tr. 596-67 (where Mr. McCleskey testifies that he
had no personal knowledge of conversations regarding crawlspaces); PX 96 (indicating
that Ms. Farrell could not identify who eliminated crawlspaces), and in the case of Ms.
Farrell, it is not clear whether she was referring to the elimination of crawlspaces for the
FY03 and FY04 dorms or for the FY01 and FY02 dorms, see PX 136 at 1 (referring to an
email from Mr. Black that “mentioned the Lackland BCE request[ed] years ago to
eliminate . . . crawlspaces”). Such tenuous and vague evidence is insufficient to establish
BPLW’s defense that it is not liable for its negligent design because it was prohibited
from using crawlspaces for the FY03 and FY04 dorms.
C. Whether BPLW’s Civil Site Grading Design Complied with the Applicable
Standard of Care
In addition to its claim that BPLW provided a negligent underfloor piping design,
the Government claims that BPLW provided a negligent civil site grading design.
Specifically, the Government maintains that BPLW breached its Contract with the Corps
by providing a “site grading design [that] failed to meet the contractual requirements set
forth in the soils reports and in the AEIM.” Def.’s Rep. 31.
The parties agree that BPLW was contractually obligated to strictly follow the
soils reports in preparing its designs. Stip. ¶ 11. The soils reports indicate that “proper
drainage is an important design consideration to ensure satisfactory long-term foundation
performance.” Stip. ¶ 18; PX 5 at 16; PX 6 at 18. Accordingly, the soils reports

16 Mr. Black explained that a localized crawlspace is just under the pipe itself, rather than a full
crawlspace that runs under the entire building. Tr. 154. He further explained that a crawlspace is
normally approximately three to six feet tall. Tr. 160-62.
27
recommend that “[e]xterior grading adjacent to the [dorms] should be sloped away from
the structure[s] a minimum of 5 percent for the first 3 meters [approximately ten feet],”
“

[r]

unoff . . . should be adequately discharged away from foundation edges,” and “[i]n no
case should water to be allowed to pond adjacent to or beneath the building, both during
and after construction.” Stip. ¶ 18; PX 5 at 16; PX 6 at 18; Tr. 95 (Black). Similarly, the
2000 version of the AEIM provides that for “[t]urfed [a]reas” adjacent to a building,
“

[o]

utside finished grade will slope away from the building at a 5% grade for the first 3
meters.” DX 3 at 21. “[I]n areas with highly expansive soil,” the AEIM recommends
that the “5% grade should be extended to 6 to 9 meters.” Id.
The purpose of the positive slope is to move water away from the dorms as
quickly as possible. Tr. 96 (Black). In regard to the five percent slope in particular, Mr.
Long testified that “water is just going to pond, if [the slope is] flatter than 5 percent.”
Tr. 816. The concern is that if water is allowed to pond next to the buildings, it could
drain or seep underneath them and affect the foundation and underfloor piping. Tr. 96
(Black).
Two witnesses for the Government provided persuasive testimony that BPLW’s
site grading design did not call for a five percent slope around the perimeter of the dorms.
Mr. Long did a comparison to determine whether BPLW’s design conformed with the
five percent requirement set forth in the AEIM. Id. at 836. In a memorandum addressed
to Mr. Sanford and dated November 24, 2008, Mr. Long reported his results, concluding
that “in many areas the . . . grade was not designed in accordance with the AEIM.” Tr.
837 (Long); DX 67. Regarding the FY03 dorm, Mr. Long wrote that “[t]he designed
grade at point 4, which is 6 meters (19.7 feet) from the face of the building, is 0.176
meters (6.9 inches) higher than the AEIM required grade.” DX 67 at 7. In regards to the
FY04 dorm, Mr. Long wrote that “[t]he designed grade at points 2, 4, and 6, which are 6
meters (19.7 feet) from the face of the building, are 0.277 meters (10.9 inches), 0.293
meters (11.5 inches), and 0.298 meters (11.7 inches) higher than the AEIM required
grade, respectively.” Id. At trial, Mr. Long reiterated that BPLW’s site grading design
did not comply with the AEIM because it “did not provide the .3 meter drop outside of . .
. the building

. . . the 5 percent grade six to nine meters beyond the building.” Tr.
837.
Like Mr. Long, Mr. Leathers concluded that BPLW’s site grading design did not
conform to the AEIM’s five percent slope requirement. Using elevation data from
BPLW’s site grading design, Mr. Leathers computed the designed slope at multiple
points around the dorms. Tr. 975-76 (Leathers). Mr. Leathers conceded that at least twothirds of the points around the FY03 dorm called for at least a five percent slope. Tr.
1245. Nevertheless, Mr. Leathers testified that there were six locations around the FY03
dorm where the site grading design did not meet the AEIM’s five percent slope
requirement. Tr. 985-86. Likewise, with only one exception, all of the locations he
assessed around the FY04 dorm called for a grade of less than five percent. Tr. 978
28
(Leathers). In addition, Mr. Leathers concurred in Mr. Long’s assessment that, per
BPLW’s design, “the ground surface around the edges of the building was six inches
below the floor slab instead of the 12 inches required by the AEIM.” Tr. 987.
Confronted with this persuasive testimony, BPLW does not appear to dispute that
its site grading design did not call for a five percent slope around the entirety of the
dorms. See Pl.’s Resp. 22. BPLW contends, however, that the five percent slope
requirement applies only to turfed, but not paved, areas adjacent to the buildings. Id. In
support of its view, BPLW highlights the testimony of its expert in civil engineering,
Raymond G. Helmer, Jr., who testified that it would be dangerous to design a sidewalk
with a transverse slope of five percent because it would get wet and freeze, causing
people to slip and fall. Tr. 2419, 2421-22. Mr. Helmer testified that instead, a two to
four percent slope would be desirable. Tr. 2422. Thus, BPLW appears to concede that
its design did not call for a five percent slope around the entirety of the dorms. BPLW
contends, however, that in calling for positive drainage around the perimeter of the
dorms, its design met the applicable standard of care. Pl.’s Resp. 22.
Notwithstanding Mr. Helmer’s testimony and the fact that the AEIM’s five percent
slope requirement refers specifically to “[t]urfed [a]reas,” the weight of the evidence
suggests that BPLW was contractually obligated to provide a site grading design with a
five percent slope around the perimeter of the dorms. While the AEIM refers to “[t]urfed
[a]reas,” the soils reports do not; they simply require that the “[e]xterior grading adjacent
to the [dorms] should be sloped away from the structure[s] a minimum of 5 percent for
the first 3 meters.” PX 5 at 16; PX 6 at 18. Insofar as BPLW’s civil site grading design
did not call for a five percent slope at all points around the perimeter of the dorms,
BPLW provided a negligent design in breach of the Contract.
II. Whether The Government Has Established That Its Alleged Damages Were
Caused By BPLW’s Negligent Designs
As a result of BPLW’s negligent underfloor piping design and negligent civil site
grading design, the Government claims that BPLW is liable to it for a total of
$6,755,826.72 in repair costs. Def.’s Br. 56. The Government claims that it contracted
for, and was entitled to receive, a piping system that would accommodate nine inches of
soil heave and a civil site grading design that met the requirements of the soils reports
and the AEIM. Id. at 68. Accordingly, the Government’s damages claim is based upon
the costs it incurred: (1) to repair broken pipes; (2) to replace the piping system with one
capable of withstanding nine inches of soil heave; and (3) to remedy the inadequate site
grading. Id. at 38; Def.’s Rep. 33.
To recover for breach of contract, the Government must establish not only that
BPLW provided negligent designs in breach of the Contract, but also the damages caused
by the breach. See San Carlos Irrigation, 877 F.2d at 959. To be recoverable, damages
29
for breach of contract must be: (1) reasonably foreseeable by the breaching party at the
time of contracting; (2) substantially caused by the breach; and (3) shown with
reasonable certainty. Ind. Mich. Power Co. v. United States, 422 F.3d 1369, 1373 (Fed.
Cir. 2005) (citing Energy Capital Corp. v. United States, 302 F.3d 1314, 1320 (Fed. Cir.
2002)). “To meet the substantial causal factor test, [the Government] must definitively
establish a causal connection and show that the mitigation costs flowed ‘inevitably and
naturally’ from the breach.” Carolina Power & Light Co. v. United States, 82 Fed. Cl. 23,
42 (Fed. Cl. 2008) (quoting, inter alia, Franconia Assocs. v. United States, 61 Fed. Cl.
718, 747 (Fed. Cl. 2004)), vacated in part on other grounds by Carolina Power & Light
Co. v. United States, 573 F.3d 1271 (Fed. Cir. 2009). With these requirements in mind,
the Court will address each of the cost items claimed by the Government.
A. Costs to Repair the Broken Pipes
The Government seeks reimbursement for the amounts it paid to CF Jordan and
Mustang General Contracting to repair specific broken pipes under the dorms.
Specifically:
 The Government seeks $20,988 from BPLW for costs incurred to repair the
chilled water line, Def.’s Br. ¶ 122;
 $90,966.73 it paid CF Jordan to repair the broken sewer line under the FY03
dorm, id. ¶ 125; and
 $57,406.65 it paid Mustang General Contracting to repair a second lateral sewer
line, id. ¶ 127 (citing DX 48).
The Government maintains that BPLW is liable for the costs paid to repair the chilled
water line because the design criteria required a flexible connector, but BPLW’s design
did not provide for one. Tr. 1421 (Sanford). In addition, the Government maintains that
BPLW is liable for the costs to repair the two broken sewer lines because they broke due
to the expanding soil, and BPLW’s design failed to accommodate the anticipated soil
heave. Def.’s Br. ¶¶ 125, 127.
The Government provided persuasive evidence at trial to show that the underfloor
piping failures were due to the expanding soils displacing the pipes. Upon reviewing
photographs attached to the Rimkus report, Mr. Leathers concluded that the soils had
heaved five inches, as demonstrated by the carton forms separating the building floor
from the soils having been crushed by that amount. Tr. 961-62; DX 40 at 10. Likewise,
looking at photographs attached to the Alderson report, Mr. Branson determined that the
soils had heaved six inches based upon the carton forms being crushed by that amount.
Tr. 431, 436-38; DX 44 at 3-4. In light of the above, the Court concurs with the
Government that “[i]f BPLW had designed a piping system that could accommodate the
maximum potential soil heave, as it was required to do, the amount of soil movement that
30
occurred would not have caused the pipe system’s failure.” Def.’s Rep. 29. In that way,
BPLW’s negligent underfloor piping design was a “but-for” cause of the pipe failures.
The question remains, however, whether BPLW’s negligent underfloor piping
design was the predominant or primary factor that led to the alleged damages. BPLW
does not appear to contest that the underfloor piping system failed due to soil heave;
however, BPLW avers that the soil heave was the result of CF Jordan’s construction
errors, which led the soils to become saturated. See, e.g., Pl.’s Br. 82.
In his report, Mr. McCleskey cited the Rimkus report stating that CF Jordan had
installed a bent and broken pipe under living units E102-05 in the east wing of the FY03
dorm, an area that experienced piping problems thereafter. DX 45 at 3, 6; Tr. 605
(McCleskey). Moreover, Mr. McCleskey surmised that the moisture coming from that
broken pipe could have migrated to living units E106-09, where additional piping failures
surfaced. DX 45 at 7. While Mr. McCleskey’s report and testimony are based upon a
report that was not admitted into evidence—and is thus attenuated at best—the
Government should not be permitted to benefit from the fact that the Rimkus report could
not be admitted because its author could not testify at trial. After all, it was because the
Government belatedly disclosed Mr. Frase as a witness that he could not testify and the
Rimkus report could not be admitted. See supra n.5; Order, Dkt. No. 80.
Moreover, in its Post-Trial Brief, the Government concedes that Rimkus
determined that a pipe component had been damaged, apparently bent and broken, during
installation by CF Jordan. Def.’s Br. ¶ 90. The Government provides no contrary
evidence to show that the piping installation was done properly. The Government
presented persuasive testimony that the soil would have heaved over nine inches at some
point over the life of the dorms. See Tr. 86-87 (Black); 227 (Branson); 518 (Focht).
Nevertheless, CF Jordan’s apparent construction errors virtually ensured that the piping
system would fail in the short term, by releasing moisture into the soils beneath the
piping. The Government has the burden to show that BPLW’s negligent underfloor
piping design was the primary factor that led to the alleged damages. In light of the
evidence that CF Jordan installed a broken pipe, contributing to the soils’ moisture
content and the eventual displacement of the pipes, the Court concludes that the
Government has not carried its burden. As such, the Government cannot recover for the
costs it incurred to repair the broken pipes.
31
B. Costs to Replace the Piping System with One Capable of Withstanding Nine
Inches of Soil Heave
The Government seeks $5,872,980.8717 from BPLW for costs associated with
replacing the dorms’ underfloor piping systems. See Def.’s Br. ¶¶ 170, 186. The
Government emphasizes that as the breaching party, BPLW has the burden to prove that
the Government’s remedial measures were not reasonable. Def.’s Br. 72-73. Moreover,
the Government asserts that it has shown both the reasonableness and necessity of its
repair costs, Def.’s Rep. at 35, as well as demonstrated with reasonable certainty the costs
it incurred to remedy BPLW’s negligent underfloor piping design, Def.’s Br. 68.
In order to recover damages, the claimant must make a prima facie showing that
the repair costs it claims are reasonable.18
The burden shifts to the breaching party only
after the claimant has proven its damages with reasonable certainty and provided the
Court with a basis for making a reasonably correct approximation of the damages. See
Wunderlich Contracting Co. v. United States, 173 Ct. Cl. 180, 199 (1965); Ind. Mich.
Power Co., 422 F.3d at 1376 (emphasizing that the claimant must prove foreseeability,
causation, and reasonableness). The amount of damages “may be approximated,” but
only “if a reasonable basis of computation is afforded.” Locke v. United States, 151 Ct.
Cl. 262, 267 (1960) (internal citations omitted); see also Wunderlich, 173 Ct. Cl. at 199.
In other words, “

ertainty is sufficient if the evidence adduced enables a court to make a
fair and reasonable approximation of the damages.” Locke, 151 Ct. Cl. at 267 (citing
Stern v. Dunlap Co., 228 F.2d 939, 943 (1955)). Here, the Government failed to adduce
sufficient evidence to show that its claimed repair costs are reasonable or to allow the
Court to make a fair approximation of the damages.
The only witnesses who testified at trial regarding the amount of the
Government’s damages were Milton Schmidt and William Sanford. Mr. Schmidt is the
Chief of the Cost Section in the Corps’ Southwestern Division, and Mr. Sanford is a civil
engineering technician in the construction branch of the Corps’ Southwestern Division.
Neither witness was designated or accepted as an expert and thus, both offered lay
opinion testimony.

17 The Court arrived at this number by adding together the total costs the Government claimed for repairs
to the FY03 and FY04 dorms, as listed in paragraphs 170 and 186 of the Government’s Opening PostTrial Brief and then subtracting the costs the Government claimed for repairs to the site grading, as listed
in paragraphs 185 and 198. The Court addresses the costs associated with re-grading the site separately in
Section C below.
18 The Government concedes that it “bears the burden of proving that its costs of repair are reasonable.”
Def.’s Resp. to BPLW’s Mot. for Sum. J., Dkt. No. 97 at 14.
32
Testimony of a lay witness is admissible only upon a showing that the witness has
personal knowledge of the subject matter of the testimony. DataMill, Inc. v. United
States, 91 Fed. Cl. 722, 734 (Fed. Cl. 2010) (internal citation omitted). Federal Rule of
Evidence (“FRE”) 701, which allows a lay witness to testify in opinion form, requires the
testimony to be “rationally based on the witness’s perception.” FRE 701(a). This
requirement “effectively incorporates the personal knowledge requirement as a
prerequisite to acceptance of opinions by lay persons.” DataMill, 91 Fed. Cl. at 734-35.
The party offering the testimony must show that the witness “‘had an adequate
opportunity to observe and presently recalls the observation,’ and a ‘person who has no
knowledge of a fact except what another has told him does not satisfy the requirement of
knowledge from observation.’” Id. at 735 (quoting 1 McCormick on Evidence § 10
(Kenneth S. Broun et al. eds., 2006)). “[A] witness may testify to an event or occurrence
that he has seen himself, but not one that he knows only from the description of others.”
Id. (internal citation omitted).
1. Mr. Schmidt
The Government called Mr. Schmidt to testify regarding the Corps’ calculation of
the IGEs for the work done by Tepa LLC to repair the FY03 and FY04 dorms. The
Corps prepares an IGE to show the costs that a prudent contractor would incur during a
project, thereby ensuring that the Government does not under- or over-pay for a contract.
Tr. 1273-74 (Schmidt).
On September 11, 2008, the Corps issued an IGE for the repairs to the FY03 dorm
in the amount of $1,815,820, DX61 at 12, and an IGE for the repairs to the FY04 dorm in
the amount of $1,847,797, DX 61 at 3; Tr. 1294 (Schmidt). The Corps ultimately issued
a revised IGE for the FY03 dorm in the amount of $3,915,211, DX 56, and for the FY04
dorm in the amount of $3,608,581, DX 56A, to reflect a change in the scope of work on
the dorms, Tr. 1327-28 (Schmidt). The revised IGEs were the product of negotiations on
September 26, 2008 between Ed Morgan of the Corps and Tepa representatives, who
jointly determined that a revised scope of work was necessary. Tr. 1345, 1385-86
(Schmidt); DX 56. Based upon the revised IGEs, the Corps issued two sole-source
contracts to Tepa on September 30, 2008 for the repairs to the dorms. See DX 54; DX
57. After a subsequent modification on January 4, 2010, the total contract amounts for
the FY03 and FY04 dorms were $4,245,270.75 and $3,069,067.34, respectively. See DX
90; DX 91.
The Government relies on Mr. Schmidt’s testimony to assert the reasonableness of
its repair costs. Mr. Schmidt’s testimony, however, reveals that he lacked personal
knowledge of any of the assumptions and calculations underlying the original IGEs; the
negotiations leading to the revision of the IGEs; and the assumptions and calculations
underlying the revised IGEs. Mr. Schmidt could not provide any of the most basic
information about the assumed number of hours for the work, the number of workers
33
required, the labor rates to be paid, or the tasks to be performed. Instead, Mr. Schmidt’s
testimony consists primarily of hearsay in the form of conversations he had with Jack
Shelton and Ed Morgan, Corps employees who did not testify at trial.
a. The original IGEs
An IGE is based, in part, upon the detailed scope of work, which describes the
parameters of a given project. See Tr. 1368, 1370-71 (Schmidt). The cost estimator
takes the detailed scope of work and begins the process of pricing to arrive at the IGE.
Tr. 1371 (Schmidt). To obtain pricing information, the cost estimator relies primarily on
a computer-aided cost-estimating system called “MCACES.” Tr. 1278 (Schmidt). In
addition to MCACES, the cost estimator refers to “historical data,” a separate “H2” unit
database, and “local pricing sources.” Tr. 1290 (Schmidt). To generate an IGE, the cost
estimator makes a series of assumptions and inputs them into MCACES. See Tr. 1379
(Schmidt). The cost estimator cannot simply retrieve a number from MCACES and
insert it into the IGE. Id. Instead, it is necessary to have an experienced cost estimator,
who can compare the MCACES pricing data with local pricing data and relate that to the
construction work at hand to arrive at a sound estimate. Tr. 1289-90 (Schmidt).
Here, the detailed scope of work was prepared by someone (unknown to Mr.
Schmidt) in the Lackland Resident Office, along with the Corps’ contracting officer,
Joyce John. Tr. 1366-67 (Schmidt). Mr. Schmidt could not testify whether Ms. John or
the unknown individual determined that the work included in the detailed scope of work
was reasonable and necessary. Tr. 1369 (Schmidt).
Then, Mr. Shelton – not Mr. Schmidt – prepared the IGEs based, in part, upon the
detailed scope of work, as well as other information and documents supplied by third
parties. For example, Mr. Schmidt testified that Mr. Shelton relied on information he
gleaned from Bobbi Farrell and Ed Morgan through memos and telephone conversations.
Tr. 1372-73. As the principal preparer of the IGEs, Mr. Shelton used MCACES and the
other aforementioned resources to generate the IGEs. Mr. Schmidt conceded that he did
not know too much about the assumptions that Mr. Shelton made in generating the IGEs.
Tr. 1373-74, 1379. To the extent that Mr. Shelton could testify as to some of the
assumptions underlying the IGEs, his testimony consisted of hearsay in the form of
conversations he had with Mr. Shelton. Tr. 1379-80. The Government provided no other
evidence regarding the assumptions Mr. Shelton made in employing the databases; it did
not submit pertinent information contained in either MCACES or the H2 unit database.
See Tr. 1307-08 (Weger).
Mr. Schmidt reviewed the detailed scope of work and the IGEs prepared by Mr.
Shelton and determined that the overhead, home office, profit, and bond costs fell within
the expected ranges. Tr. 1311 (Schmidt). Based upon his past experience in costestimating, as well as a conversation with Mr. Shelton regarding the assumptions that
34
went into his estimates, Mr. Schmidt determined and certified that the costs within the
IGEs were “fair and reasonable.” Tr. 1306 (Schmidt).
Notwithstanding Mr. Schmidt’s certification, the Court finds that Mr. Schmidt
lacked the requisite personal knowledge to establish the reasonableness of the costs in the
original IGEs. It is not enough that the Government provide a witness to say that its costs
were reasonable; the Government must demonstrate that this is the case. Mr. Schmidt
could not testify regarding the rationale for including certain items in the original scope
of work, or even who created it. Likewise, he had limited knowledge as to the
assumptions and calculations Mr. Shelton made in preparing the IGEs. In fact, Mr.
Schmidt conceded that, in general, rather than his personal knowledge, he relies on others
to provide him with information, whether via emails, memos, conversations, or other
means, to determine whether an IGE is fair and reasonable. See Tr. 1365. While the
Court does not question Mr. Schmidt’s competency as Chief of the Cost Section, Mr.
Schmidt simply was not the proper witness to testify about the reasonableness of the costs
within the IGEs. The Court was not afforded “a reasonable basis of computation” when
it could not question Mr. Shelton concerning the assumptions and calculations he made
when preparing the IGEs. From the Court’s viewpoint, the cost figures provided by the
Government are simply “numbers on a page” without any substantiation or support.
b. The negotiations
The two contracts the Corps ultimately issued to Tepa were sole-source contracts,
meaning that the Corps negotiated them with Tepa and did not conduct any competitive
bidding process before awarding them to Tepa. Tr. 1382-83 (Schmidt). Ed Morgan
appears to have been the lead Corps representative during the negotiations with Tepa,
which occurred on September 26, 2008. See Tr. 1384-86. Neither Mr. Shelton nor Mr.
Schmidt was involved in the negotiations. Tr. 1344, 1391 (Schmidt). During the
negotiations, the parties decided to make certain changes to the scope of work. Tr. 1385
(Schmidt). In addition to the major changes listed above, see supra p. 12, Mr. Schmidt
testified that the scope of work changed, in part, because the parties decided to create a
tunnel beneath the dorms to do the repairs. Tr. 1328. However, as that decision was
made during the negotiations between Mr. Morgan and Tepa representatives, Mr.
Schmidt was not involved in it. Tr. 1328-30 (Schmidt).
c. The revised IGEs
As a result of the negotiations between Mr. Morgan and Tepa, and the changes in
the scope of work, the Corps issued revised IGEs for the dorms. See DX 56; DX 56A.
Again, Mr. Shelton – not Mr. Schmidt – prepared the revised IGEs. Tr. 1382, 1390-91
(Schmidt). Mr. Shelton prepared the revised IGEs based upon information regarding the
negotiations given to him by Mr. Morgan. Tr. 1391 (Schmidt). Specifically, Mr. Shelton
relied upon a price negotiation memorandum, which included information regarding the
35
increased duration of the project and the addition of the site grading option. See Tr.
1337-41 (Schmidt); DX 87; DX 92.
Because Mr. Shelton prepared the revised IGEs, Mr. Schmidt could not testify as
to the information that Mr. Shelton put into MCACES to generate the costs in the revised
IGEs. Tr. 1393 (Schmidt). Mr. Schmidt conceded that he did not calculate the numbers
written into the revised IGEs, those on the IGE summary page, or even the total contract
price. Tr. 1389. Mr. Schmidt did not participate in the analysis for arriving at the
$50,000 figure for removal costs. Tr. 1387 (Schmidt). He assumed the costs for the
structural and geotechnical engineers were added together to come up with the $15,000
figure in the revised IGEs, Tr. 1388-89 (Schmidt), and likewise, appeared to assume that
the geotechnical and structural testing costs were included in the $115,000 figure for
“AM” costs, Tr. 1353-54 (Schmidt). Mr. Schmidt testified that the unit costs in the IGEs
were Mr. Morgan’s figures from the unit price database, but he could not testify
otherwise regarding how the unit prices were determined. Tr. 1393-94 (Schmidt). He
also could not testify as to whether Tepa subtracted costs from its overhead for savings
due to the project being onsite. Tr. 1396 (Schmidt). Mr. Schmidt could not even break
down the details of the revised IGEs to explain what portions were his work product or
that of Messrs. Morgan or Shelton. Tr. 1392-93 (Schmidt).
Mr. Schmidt was able to identify and break down some of the costs within the
revised IGEs, such as the labor costs for the project superintendent, equipment costs for
pickup trucks, direct costs to rent an office trailer, and a Storm Water Pollution
Prevention Plan. See Tr. 1346-53 (Schmidt). As detailed above, however, there were
significant gaps in his knowledge of the calculations and assumptions underlying the
figures in the revised IGEs. Despite the gaps in Mr. Schmidt’s knowledge regarding the
assumptions underlying the revised IGEs, he approved them, Tr. 1392 (Schmidt),
certifying that the costs contained therein were “fair and reasonable,” Tr. 1362-63, 1374
(Schmidt). Mr. Schmidt approved the revised IGEs based upon his conversations with
Mr. Morgan, a copy of the original IGEs marked up by Mr. Morgan,
19 a price objective
memorandum and a price negotiation memorandum, and copies of the revised IGEs
provided to him by Mr. Shelton. Tr. 1343, 1346, 1360, 1383-85 (Schmidt); DX 87; DX
92.
On the whole, the weaknesses in Mr. Schmidt’s testimony render it woefully
insufficient to allow the Court to assess whether the costs reflected in the revised IGEs
are reasonable. As an initial matter, the Court questions whether the revised cost
estimates were truly “independent.” Mr. Schmidt conceded that as part of the

19 Mr. Schmidt’s testimony indicates that the numbers in the original IGEs were crossed out and revised
numbers were written in, see Tr. 1388-89 (Schmidt), seemingly by Mr. Morgan as a result of his
negotiations with Tepa, see Tr. 1390 (Schmidt).
36
determination of whether costs are fair and reasonable, the cost estimator does not
consider the method of contracting. Tr. 1290, 1383. This is particular noteworthy
because the Corps made significant upward adjustments to the IGEs after the price
negotiations with Tepa. After incorporating the revisions, the total amounts of the IGEs
for the FY03 and FY04 dorms increased from $1,815,820 and $1,847,797 to $3,915,211
and $3,608,581, respectively. Compare DX 61 at 12, with DX 56, and DX 61 at 3, with
DX 56A; see also Def.’s Br. ¶¶ 133-34, 141-42. Because the awards to Tepa were solesource contracts, without any competitive bidding, the Court cannot assume the
reasonableness of the contract prices.

Moreover, the second- and third-hand character of Mr. Schmidt’s testimony makes
it largely unhelpful. Because Mr. Schmidt was not involved in the negotiations leading to
the revisions, he could provide only a second-hand description of the changes in the
scope of work, rather than details concerning the negotiations and how the decisions to
alter the scope of work were made. Likewise, Mr. Schmidt did not prepare the revised
IGEs, so he could not testify as to the calculations and assumptions underlying them. It is
evident that Mr. Schmidt’s testimony is not based upon his own personal knowledge. As
a result, it cannot serve as a predicate for a determination that the Government’s repair
costs were reasonable.20
See DataMill, 91 Fed. Cl. at 734 (noting that where a witness
testifies on matters “with which he has no familiarity,” it is “of no use to the trier of fact
and . . . waste[s] everybody’s time.”) (internal citations omitted).
2. Mr. Sanford
Mr. Sanford, who had been tasked by the Corps with determining which costs
associated with Tepa’s repair work were attributable to BPLW, Tr. 1607 (Sanford),
testified about his work at trial. However, as with Mr. Schmidt, testimony, the Court
finds Mr. Sanford’s testimony of marginal utility.
To make his determination, Mr. Sanford primarily relied on the Tepa contracts but
also considered the government estimates. Tr. 1607, 1623 (Sanford). He then created a
memorandum, identifying the costs he deemed attributable to BPLW. Tr. 1650-51
(Sanford); DX 71. The costs included those for: designing a crawl space; excavating
beneath the dorms to remove the broken piping and replace it with a new piping system;
metal to hang the pipe; replacement of the piping; electrical work; Tepa’s labor burden;
Tepa’s home office overhead; Tepa’s profit; Tepa’s builders’ risk insurance and general
liability insurance; Tepa’s bond costs; final as-built drawings; shower pans; site work;
curbing; and metals. See Tr. 1653-63 (Sanford); DX 71.

20 Insofar as the Government relies on Mr. Schmidt’s testimony to establish the reasonableness of its
costs to remedy the site grading, the Government has not only failed to show that BPLW’s design caused
the improper site grading, see infra Section C, but it also has failed to establish that the damages it claims
for the site grading are reasonable.
37
BPLW makes much of the fact that Mr. Sanford is not a plumbing engineer and
had no role in determining whether BPLW was liable for the repair costs, as that
determination was made by a separate board. See Pl.’s Br. 89-90; Tr. 1672-75 (Sanford).
On those bases, BPLW maintains that Mr. Sanford is unqualified to decide which costs
should be attributable to BPLW. See Pl.’s Br. 89-90. The Court merely views Mr.
Sanford’s testimony on that front as duplicative of its own responsibility to determine
which costs are attributable to BPLW due to its negligent designs. The Court finds Mr.
Sanford’s testimony deficient for another reason: as with Mr. Schmidt, Mr. Sanford’s
testimony does not aid the Court in determining whether the amounts paid to Tepa for the
repair work were reasonable.
Mr. Sanford essentially reviewed the Tepa contracts and allocated component
costs to BPLW based upon a board’s determination that BPLW was liable for certain
damages. Tr. 1677-79 (Sanford). Like Mr. Schmidt, however, Mr. Sanford was not
privy to the negotiations, which resulted in the revised IGEs and ultimately, the contract
awards to Tepa. Tr. 1682 (Sanford). Mr. Sanford did not assess whether the work within
the detailed scope of work was reasonable or necessary. Tr. 1683 (Sanford). Moreover,
Mr. Sanford did not observe any of the repair work being done by Tepa. Tr. 1680-81
(Sanford). Accordingly, he had no knowledge regarding whether the repair work by
Tepa conformed to the scope of work. Tr. 1683 (Sanford).
In sum, through the testimony of Mr. Schmidt and Mr. Sanford, the Government
provided insufficient evidence to show that its repair costs were reasonable. As such, the
Government has failed to show that it is entitled to the damages it claims for the repairs
associated with the replacement of the piping system and the remedial site grading.
C. Costs to Remedy the Inadequate Site Grading
The Government has shown that BPLW provided a negligent civil site grading
design insofar as the design failed to meet the slope requirements set forth in the soils
reports and the AEIM. As a result, the Government seeks reimbursement for $340,592 of
the costs it paid for remedial work to the site grading. See Def.’s Br. ¶¶ 185, 198. The
Government contends that BPLW is liable for its deficient site grading design regardless
of how the grades were ultimately constructed. See id. ¶ 108. The Government
maintains that “even if it were true that the construction contractor failed to grade the site
in accordance with BPLW’s design, it does not relieve BPLW of liability for failing to
produce a civil site grading design that complied with the Soils Reports and AEIM.” Id.
The Court disagrees.
As noted above, in addition to showing that BPLW breached the Contract, the
Government must show that BPLW’s breach caused the alleged damages. See San
Carlos Irrigation, 877 F.2d at 959. As this Court has stated, “design compliance is ‘an
38
essential element’ in evaluating a claim for ‘negligently preparing defective plans and
specifications.” C. H. Guernsey, 65 Fed. Cl. at 596 (internal citation omitted). If a
claimant cannot show that the contractor actually complied with the purportedly
negligent design, it cannot show that the design caused the damages alleged.
By its own admission, the Government cannot show that CF Jordan initially
constructed the grades in accordance with BPLW’s design and thus, that the negligent
design led to the improper grades and pooling of water. See Def.’s Br. ¶ 109. The
Government has no as-built data to show how CF Jordan initially constructed the grades,
see Tr. 2426-27 (Helmer), and no witnesses testified as to the as-built condition of the
site grading, see Pl.’s Resp. 18; Def.’s Rep. 30. As the Government notes, while CF
Jordan completed dorm construction in August 2005 and November 2006, the earliest
report concerning the site grading—Ng’s report—was based upon a topographical survey
conducted in late 2007. See Def.’s Rep. 30 n.7 (citing DX 45 at 3). Mr. Long did not
visit the site until November 2007, and Mr. Helmer did not visit the site until 2009. Id.
Given the lack of information regarding the as-built grades, the Government takes the
position that “the Ng data shed no light on whether the construction grades matched the
design grades because the grades may have changed after construction due to soil
movement.” Def.’s Br. ¶ 109 (citing Tr. 1233 (Leathers)). While the Court questions
whether the grades could have changed so drastically over a one- to two-year period, the
fact remains that the Government cannot carry its burden to show that CF Jordan
complied with BPLW’s design.
In contending that contractor compliance is irrelevant, the Government
emphasizes that “in many locations the actual grades by Ng were steeper than those
called for in BPLW’s design.” Id. At trial, Mr. Leathers provided support for this view.
Specifically, based upon data from the Ng’s report, he found that all six points measured
around the FY03 dorm revealed grades at steeper slopes than that stipulated in BPLW’s
designs. Tr. 991 (Leathers). Of the seven survey points around the FY04 dorm, Mr.
Leathers found that four were steeper than those called for in BPLW’s designs, while
three were the same or less. Tr. 992 (Leathers). Overall, after reviewing the Ng survey
data, Mr. Leathers concluded that the slope at the majority of locations (10 of 13) around
the dorms was steeper than those called for in BPLW’s site grading design. Tr. 992-93.
Nevertheless, as noted, the Ng data was obtained more than two years after CF
Jordan constructed the dorms. The Government itself undercuts the relevance of the Ng
data by maintaining that the grades could have shifted over that two-year period.
Moreover, Mr. Leathers’ testimony shows that there were at least some locations where
the slope was not as steep as that called for in BPLW’s design. If the Government seeks
to have the Court rely on the Ng data where it suggests that CF Jordan more than
complied with BPLW’s site grading design, the Court also must rely on the Ng data
where it suggests that CF Jordan failed to comply with BPLW’s site grading design.
39
Finally, although the Court does not have before it definitive data regarding the asbuilt condition of the site grading, the weight of the evidence suggests that CF Jordan
constructed the grades at a slope flatter than that provided for in BPLW’s civil site
grading design. It is undisputed that BPLW’s site grading design called for “positive
slope” around the perimeter of the dorms. See Def.’s Br. ¶ 107 (citing Tr. 1233
(Leathers)). Yet, multiple witnesses testified to the fact that they observed ponding and
pooling of water in the area surrounding the dorms.21
See Tr. 821 (Long) (testifying that
when he visited the site, in late 2007, he observed pooling around the FY04 dorm); Tr.
599 (McCleskey) (same). Mr. Leathers conceded that where there is pooling of water, “it
means that . . . there is not positive drainage.” Tr. 1233. Again, while there is no
definitive evidence of the as-built grades, the weight of the evidence indicates that CF
Jordan failed to comply with BPLW’s site grading plan. In fact, while the Government
appears to have backed away from its earlier stipulation, it initially stipulated that “CF
Jordan failed to grade the site with positive grading and drainage to carry water away
from the building.” Stip. ¶ 25.
Based upon the foregoing, the Government has not shown that CF Jordan
complied with BPLW’s site grading design and thus, that it was BPLW’s negligent
design, rather than CF Jordan’s improper site grading, that caused the ponding and
pooling of water that contributed to the soil heave. As such, the Government cannot
recover the costs it claims for remedying the inadequate site grading.
D. Costs to Implement the Modifications to BPLW’s Underfloor Piping Design
Lastly, the Government seeks reimbursement for the $197,596.47 it spent to
implement BPLW’s modified piping design. Def.’s Br. ¶ 117. As set forth above, after
BPLW’s mechanical engineers “discovered” that the soils beneath the dorms had a high
“shrink swell potential,” it informed the Corps that it would need to modify its design.
PX 22. Mr. Bray confirmed that BPLW recommended the modifications that the parties
ultimately adopted. See Tr. 2347-49, 2351-52. Thereafter, the Corps provided CF Jordan
with immediate funds and a notice to proceed in order to avoid additional costs associated
with construction delays. Def.’s Br. ¶ 116; DX 28; PX 27 at 2; PX 70 (P00003).
It is undisputed that it was BPLW’s responsibility to provide the underfloor piping
design for the project. See Stip. ¶ 7. It is also undisputed that BPLW was required to
provide a design complying with the soils reports, which found that the soils beneath the
dorms had “a very high shrink swell potential.” Stip. ¶¶ 11, 17. The evidence indicates
that BPLW initially failed to use any means to accommodate the expansive soils because
the fact that the soils were highly expansive “slipped past” BPLW’s mechanical

21 The Government also stipulated to the fact that “CF Jordan allowed post-rain ponding and pooling of
water around the foundation perimeter during construction.” Stip. ¶ 23.
40
engineers. PX 22; Tr. 2375 (Bray). Upon realizing its oversight, BPLW suggested
modifications to accommodate the expansive soils. See PX 22.
As a result, the Government incurred additional costs to pay for the more
expensive cast iron pipe and the new pipe layout. See PX 28 (estimating a price
difference of $173,201—not including CF Jordan’s overhead and profit—for the new
layout and use of cast iron pipe, which the contractor estimated to be three times the cost
of PVC pipe). While the Government may have received a higher grade piping system as
a result, BPLW still failed to provide a non-negligent design. The Government suffered
damage—in the form of increased costs—for a piping system that continued to be
negligently designed. Essentially, BPLW’s negligence caused the Government to
needlessly incur these costs because the changes had no material effect on improving the
design. These costs are recoverable.
Moreover, the Government’s damage claim for the increased costs is reasonable.
Based upon the communications between Mr. Bray and Ms. Farrell, it is apparent that
BPLW viewed the changes as necessary modifications of its design. See PX 22. In
addition, given that BPLW recommended the means by which to modify its design,
BPLW must have viewed the means as reasonable. See id.; Tr. 2347-49, 2351-52 (Bray).
Lastly, by providing CF Jordan with immediate funds and issuing the notice to proceed,
the Government made reasonable efforts to mitigate damages that could have increased
on account of delays. See DX 28; PX 27 at 2; PX 70 (P00003). Based upon the
foregoing, the Court concludes that the Government is entitled to the $197,596.47 in
costs it incurred to implement the modifications to BPLW’s design.
Conclusion
As set forth above, the Government has shown that it is entitled to recover the
costs it incurred to implement the modifications to BPLW’s piping design. The
Government is not entitled to recover the costs associated with the repairs of the broken
pipes; the replacement of the underfloor piping systems; or the re-grading of the site.
Pursuant to Rule 54(d), BPLW as the prevailing party is entitled to recover its reasonable
costs.
IT IS SO ORDERED.