U.S. Customs and Border Protection Training Center Construction
PJ Dick, Inc. v. The United States of America
U.S. Customs and Border Protection entered into a $20 million contract with PJ Dick to design and build the Advanced Training Center in Harpers Ferry, West Virginia. PJ Dick issued a claim for 572 project delays and additional costs. PJ Dick’s claim included general conditions, extended home-office overhead (using the Eichleay method), price escalations, labor inefficiencies, and losses on subcontracts from project delays. The claim included damages due to deleted work and the division of project scope. It also included additional costs for “scope creep”, “negative perception”, and design work claimed using the total cost claim methodology. Finally, PJ Dick claimed damages for inefficiencies with change orders and Government Interferences.
Cotton & Company was engaged by the U.S. Customs and Border Protection to evaluate the $6 million claim. Of note, Cotton & Company:
- Identified duplicate overhead recovery through change orders and daily rates, unallowable costs in accordance with Federal Acquisition Regulation cost principles, and claimed basic contract costs not associated with damages.
- Identified unallowable overhead pool costs and excess costs from incorrect use of the Eichleay formula, as well as excessive design and subcontractor costs calculated using a flawed total cost claim methodology.
- Commented on the inappropriate use of the Leonard inefficiency study.
Cotton & Company prepared an expert report and participated in arbitration, which resulted in a favorable settlement.