GRANTED IN PART: February 9, 1993 GSBCA 11182, 11297, 11673, 11698 MANAGEMENT & TRAINING CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Mary E. Shallman of Petit & Martin, San Francisco, CA, and Donald G. Featherstun of Petit & Martin, San Jose CA, appearing for Appellant. Telo Braswell and Steven Stomski, Office of General Counsel, General Services Administration, Washington, DC, appearing for Respondent. Before Board Judges LaBELLA, PARKER, and HENDLEY. LaBELLA, Board Judge. This decision concerns four appeals by Management & Training Corporation (MTC), appellant, from contracting officers' final decisions issued for the General Services Administration (GSA), respondent. Two appeals, GSBCA 11182 and 11698, relate to contract no. GS-09P-87-KSC-0187, awarded May 13, 1987, for commercial facilities management (CFM) services at federal buildings in Hawthorne and Van Nuys, California. GSBCA 11297 and 11673 relate to contract no. GS-09P-89-KSC-0103, awarded March 16, 1989, for CFM services at federal buildings in Santa Ana and San Pedro, California. All the appeals claim entitlement to increased costs incurred by MTC in providing utilities at the four facilities. The duplicate appeals of these contracts were necessary to allow supplemental claims, and to assure compliance with certification requirements after the Federal Circuit decision in United States v. Grumman Aerospace Corp., 927 F.2d 575 (Fed. Cir. 1991). Pursuant to Board Rule 9, the parties requested a hearing, which was held in March 1992. Appellant claims entitlement to a total of $2,104,717. For the reasons stated below, these appeals are granted in part, and appellant is awarded $937,083, with interest in accordance with 41 U.S.C. 611 (1988). Summary of Decision The issues in these appeals concern only the contract line items for utilities. MTC's contract bid prices for utilities at the four facilities has left it significantly in the red over the course of the contracts. Both contracts contained provisions allowing for escalation of the utility line items for rate increases imposed by utility companies. Also, MTC inserted language in its proposals providing for equitable adjustments due to significant increases in consumption, and this language became part of the contracts. Both parties agree that MTC is entitled to an adjustment as a result of increased utility rates, but dispute the method for calculating the amount of that adjustment, and the dates from which those adjustments should be made. The parties disagree as to whether appellant is due any adjustment for consumption increases. MTC originally submitted cost overrun data to the contracting officer as proof of damages, but neither party contends that this method was appropriate under the contract. Instead, both appellant and respondent have submitted analyses of the impact of rate increases on the cost of providing utilities to the buildings, and appellant has presented evidence of increased consumption at certain facilities. The claims under each contract vary in that the Santa Ana/San Pedro contract contains claims for increases in both utility rates and usage during the delay between issuance of the request for proposal (RFP) and award of the contract, while the claim under the Hawthorne/Van Nuys contract requests compensation only for increases occurring after award. The Santa Ana/San Pedro contract was solicited over a year before it was awarded. After issuance of the RFP, but prior to award, both utility consumption and utility rates increased dramatically at those facilities. These increases were not disclosed to the bidders, and neither the Government estimate nor the bidders library, from which proposal prices were to be computed, was updated during the delay. In fact, the bidders library was never intended to include utility bills for any month after the issuance of the RFP, but only the thirty-six months prior to the issuance of the RFP. Nevertheless, the Government argues that only post award increases in rates and no consumption increases are contemplated by the contract. It contends appellant should be held to its best and final offer (BAFO) as of the date of award and appellant should bear the burden of all pre-award increases. Appellant asserts that the Government had a duty to disclose any data documenting increases prior to BAFO submission if adjustments were to be allowed only for the time period after award. We agree. Appellant was reasonable in presuming that the provisions in the contract allowing for rate and consumption increases would operate concomitantly with the bidders library, allowing all increases not represented by those disclosed records to be the subject of subsequent change orders. The Government's negotiating stance during the course of this procurement sought a decrease in appellant's price for utilities rather than an adjustment for the rate increases the Government was paying during the same period. Not only did all bidders have the same information from which to formulate a price, but the Government's estimate was also grounded in the information contained in the library. Any other interpretation would unreasonably allow the Government to withhold relevant information, obtain erroneously low bids, and then force the contractor to absorb the undisclosed costs. Other utilities were underbid by appellant due to deficiencies in the Government's bidders library. For example, chilled water and steam, which are purchased off site for use in the Santa Ana building, were seriously underbid by appellant. The Government compilation of bills for these utilities in the bidders library was grossly deficient. Furthermore, MTC's total utility line item, which included its bid for chilled water, was higher than the Government estimate, which did not include the costs of chilled water. The contracting officer was unaware that the Government estimate did not include an amount for chilled water, so she indicated to MTC that its utility line item was high, resulting in MTC lowering that line item in its BAFO. Had the Government estimate included the cost of chilled water, MTC's bid would have appeared low, indicating to the contracting officer that a mistake had been made. Instead she believed the line item to be high, not recognizing the incomplete nature of the estimate. Neither MTC nor the contracting officer was aware of the actual cost being incurred by the Government for chilled water and steam, and both were mistaken as to the significance of those costs to the utility line item. Since we find the parties were mutually mistaken and would have agreed to a higher price had the information on true chilled water costs been known, we have revised the contract to effectuate what we hold is the intent of the parties: that MTC be compensated for the actual cost and fee for providing those utilities for the use of the Government tenants. In the dispute over the proper method for calculating rate increases and the effect of increases on MTC's costs, we have examined the two solutions proffered by the parties and we have concluded that only MTC's approach accurately reflects the additional costs incurred due to increases and changes to the rate structure of the utility companies serving the buildings in issue. The parties agree that rate increases are a proper element of an award to MTC, and we hold the contract language to be in accord with that agreement. Our decision does not address the wisdom of fixed price utility contracts, or of the parties' willingness to enter into such arrangements. The contracts have been interpreted by the parties to require a rate structure analysis and proof of increased consumption to establish eligibility for equitable adjustments. The parties have presented evidence in this fashion, building appellant's damages from the ground up, and the Board is constrained by this fact. We do not have the figures which show exactly how much appellant was paid, both in overtime and contract utilities, nor do we know the true cost of providing the utilities to the Government, exclusive of overhead and profit. If these figures are buried in the record, they are not readily identifiable. Given the information we possess, we have compensated appellant for all rate increases, and all consumption increases which are shown to be compensable under the contract, as interpreted by the parties and the Board. While it may have been more logical to allow a complete pass through module for utility rates and consumption increases, the parties did not explicitly contract for that arrangement, nor have they convinced us, or even argued to us, that these contract provisions should be interpreted in such a manner. Findings of Fact The Contracts 1. Contract no. GS-09P-87-KSC-0187 was awarded May 13, 1987, for CFM services at the federal buildings in Hawthorne and Van Nuys, California. Hawthorne Appeal File, Exhibit 16.[foot #] 1 The initial period of performance was from July 1, 1987, until June 30, 1988. There are also four options, all of which have been exercised, with the last option year expiring in June 1992. Transcript, Vol. 1 at 50. 2. Contract no. GS-09P-89-KSC-0103 was awarded March 16, 1989, for CFM services at the federal buildings in Santa Anna and San Pedro, California. Appeal File, Exhibit 15. The RFP on this contract was issued in July 1987, and the initial proposals were submitted in September 1987. However, BAFOs were not submitted until February 1989. The performance period commenced May 1, 1989, and ran through April 30, 1990. This contract also has four options, two of which have been exercised, and at the time of hearing GSA had communicated to MTC its intent to exercise the third option. Transcript, Vol. 1 at 46-48. 3. One of MTC's duties under these facilities maintenance contracts was the payment of the utility bills at all four of the buildings covered by the two contracts, subject to rate and consumption escalation provisions. Gas, water, sewer, and ----------- FOOTNOTE BEGINS --------- [foot #] 1 There are two appeal files in the record of this case. One concerns the disputes at the Hawthorne and Van Nuys buildings, docketed as GSBCA 11182 and 11698; we refer to this appeal file as the Hawthorne Appeal File. The other appeal file concerns the disputes at the Santa Ana and San Pedro locations, docketed as GSBCA 11297 and 11673, which we refer to as simply the Appeal File. ----------- FOOTNOTE ENDS ----------- electricity were consumed at each building; steam and chilled water were added components of the bills for the Santa Ana building. Transcript, Vol. 1 at 49, 52. 4. The utility rate increase clauses of both contracts state: When utility rate changes take effect, the contractor shall submit a proposal detailing the effect the change(s) will have on his utility cost identifying direct and reimbursable costs of operation of the building. The Contracting Officer will review this proposal, and, if warranted, will amend the contract to reflect changed utility costs to the Contractor. The Government shall reserve the right to negotiate an amendment with the Contractor should utility rates change. Appeal File, Exhibit 15 at III-J-192; Hawthorne Appeal File, Exhibit 16 at III-J-150. 5. Both contracts contain provisions regarding consumption increases, stating: "MTC assumes that significant increases in utility usage created by installation of additional equipment by tenants, or by other valid reasons will be grounds for consideration of an increase in the utilities budget." Appeal File, Exhibit 6 at 40; Appellant's Supplement to Hawthorne Appeal File, Exhibit 3. Chilled Water/Steam--Santa Ana Building 6. The purchase of chilled water and steam from a utility company was a unique element of the Santa Ana/San Pedro contract with which neither the contracting officer nor MTC had any prior experience. Transcript, Vol. 1 at 221-2, 259. 7. Prior to bidding on the Santa Ana/San Pedro contract, GSA held a pre-proposal conference at which all the interested potential offerors were given access to a bidders library. This was to contain utility bills for the two facilities spanning the three years prior to July 1987, the date of the issuance of the RFP. Appellant's Exhibit 7; Appeal File, Exhibit 15 at III-J- 192. 8. Rex Barber, formerly a vice president of MTC, attended this conference for MTC and reviewed the bidders library. He used the information contained in the library in preparing MTC's bid for the Santa Ana/San Pedro contract. Transcript, Vol. 1 at 212-14. Mr. Barber found the library did not contain a complete set of utility bills and did not contain any information for the period after 1986. Id. at 214. He believes he brought that fact to the attention of either Ms. Marie Preston or Mr. Paul Preston, contracting officers of GSA who worked on this contract. Id., Vol. 1 at 213, 242. 9. While Ms. Perez, the contracting officer at the time of award of the Santa Ana/San Pedro contract, did not specifically remember any complaint voiced by MTC, she did remember that she received several complaints about the adequacy of the information contained in the bidders library prior to the award of the contract and she determined that the information contained in the library was incomplete. Transcript, Vol. 1 at 271. 10. Another firm, which was considering bidding on this contract, sent a letter to GSA in August 1987 stating that the utility records in the bidders library were incomplete. Specifi- cally, it pointed out that only eleven of the thirty-six billing periods which were supposed to be included in the library for chilled water and steam were actually present. Respondent answered this letter by reasserting that all records were contained in the bidders library. Appellant's Exhibits 4, 5. Neither this letter nor the GSA response was included in amendment one to the solicitation, which contained questions and answers of other bidders. Nor was the letter shown to MTC prior to contract award. Transcript, Vol. 1 at 272. 11. While the Government witness responsible for the compilation of the bidders library did testify that the library was in fact complete, Transcript, Vol. 2 at 270-72, the overwhelming evidence, see Findings 8-10, supports the conclusion that the library was not complete, and we so find. 12. The Government estimate for the utilities to be provided under the Santa Ana/San Pedro contract was $334,793 before the deduction for overtime utilities. See Finding 23. Although the contracting officer believed this estimate was for the total cost of utilities, it did not include the cost of providing chilled water at Santa Ana. Transcript, Vol. 2 at 266- 67. 13. Actual chilled water costs amounted to $103,977 for 1989 alone. Transcript, Vol. 1 at 176, 179. However, based on the inadequate information provided in the bidders library, MTC bid only $17,000 per year for chilled water. Id. at 177. 14. Because the Government estimate did not include the price of providing chilled water, MTC's total price for the utility line item was higher than the Government estimate that was provided to the contracting officer. Since the contracting officer did not realize the Government estimate was incomplete, she concluded that MTC's utility bid was too high. While the contracting officer never directed MTC to lower its utility line item bid, she did indicate to MTC that she believed the line item was too high. Transcript, Vol. 1 at 279. As a direct result of the contracting officer's statement that the utility line item was high, MTC lowered its price for that line item in its BAFO. Id. at 219. 15. The contracting officer stated she would have notified her program people of potential defects in the Government estimate regarding the absence of chilled water costs if she had known it to be flawed. She would have notified MTC of a potential mistake in its bid if she had been aware of the tremendous disparity between MTC's bid for chilled water and the actual cost the Government was incurring for chilled water at the time she was examining proposals (a difference of approximately $85,000 per year). Transcript, Vol. 1 at 270-71. Pre-Award Consumption Increase--Santa Ana and San Pedro Buildings 16. The Government estimate and MTC's bid for the Santa Ana/San Pedro contract were based on historical experience, utility bills, and the bidders library, respectively, which did not extend past 1986. Appellant's Exhibit 8; Transcript, Vol. 1 at 214. Neither the Government estimate, the bidders library, nor MTC's bid was revised to account for rate or consumption increases imposed after the RFP was issued. 17. The Government estimate for the Santa Ana/San Pedro contract was prepared in 1987. The RFP for this contract was issued in July 1987, but due to an unexplained Government delay, the contract was not awarded until March 1989. During the delay between issuance of the RFP and award of the contract, the Government experienced utility cost increases on the order of $200,000 over the Government estimate. Historical data for 1989 shows that the Government expended $534,481 for utilities (including overtime utilities) in that year, but the estimate to be used in evaluating offers remained at $334,733. Transcript, Vol. 1 at 173, 177; Appellant's Exhibits 8, 16. 18. At the time of contract award both the Government contracting officer and MTC believed the utility line item of the Santa Ana/San Pedro contract would be adjusted for rate increases occurring after the issuance of the RFP. In addition, MTC's proposal, which became part of the contract, contained language which made consumption increases a possible basis for equitable adjustments. Transcript, Vol. 1 at 285-87; Appeal File, Exhibits 6 at 40, 15 at III-J-192. 19. We find as fact that the contract provisions concerning the basis for rate and consumption increases are effective from the issuance of the RFP rather than the date of award of the Santa Ana/San Pedro contract or submission of BAFOs because no revision of the estimate or updating of the bidders library was done prior to submission of BAFO's. The bidders library was to contain bills for the three years prior to July 1987, the date the RFP was issued. It would have been impossible for offerors to revise their price proposals to include either rate or consumption increases after that time without having been provided updated information from the Government. Additionally, revision of offers would have rendered the Government estimate on utility costs useless for comparison purposes because it was based on the same time frame covered by the bidders library. Since all parties used the same information, adequate price competition was achieved. This fact is illustrated by the narrow range in bids for the utilities line item ($5,000 separating the low and next low offeror). Appellant's Exhibit 20. Rate Increase Effect--Hawthorne, Santa Ana, and San Pedro Buildings 20. Electricity is supplied to the Santa Ana building and the Hawthorne building by Southern California Edison (SCE) under its TOU-8 rate schedule. The San Pedro building is served by the Los Angeles Department of Power and Water under its A-3-A rate schedule. Both these rates are general service time of use rate structures. Transcript, Vol. 2 at 158-59, 188. 21. These rate structures are extremely complex. They can contain customer charges, time and non-time related demand charges, energy charges, power factor adjustments, electric revenue adjustments, energy taxes, and other components. Different rates are applied to peak demand periods than to mid- or off-peak periods, and a separate charge is made for peak demand. As a result, rate changes are not simply a matter of percentage increases to existing rates but may take the form of added or changed demand charges, reclassifying hours as peak, mid-peak, or off-peak, increasing the demand or rate charge in one time classification while reducing or eliminating it in another, or myriad other changes to the rate structure which may raise the cost to the consumer, depending on the usage pattern. See, Appeal File, Exhibit 58; Transcript, Vol. 2, at 160-70; Appellant's Exhibit 26. 22. The contract language requiring appellant to detail rate change effects does not take into account these complexities, nor does it specify an acceptable method by which the contractor can meet its obligation to document the effect of rate increases. The parties have attempted to meet this obligation by providing detailed rate analyses to the Board. 23. Prior to MTC's retention of an expert in electrical rate increase effect, MTC's claim under the Santa Ana/San Pedro contract was based primarily on the difference between its bid and the actual cost incurred at the facilities. Its claim in the Hawthorne/Van Nuys contract used total cost data to compute percentage increases, without reference to actual rate increases or deductions for overtime utilities. Overtime utilities must be removed because they are not appellant's responsibility, and were to be reimbursed separately by the agency which necessitated the expenditure. Appellant's Exhibit 11; Appellant's Supplement to Hawthorne Appeal File, Exhibit 7. 24. Not until MTC's post trial brief did it submit an estimate of the utility rate increase effect which factored out the reimbursable cost of overtime utilities for which appellant was to be compensated separately. This was the first time the Government was given an estimate of the direct cost of the rate increase effect on the operation of the building which complied with the contract clause governing utility rate increases. Under that clause MTC was required to properly document its rate increase request before the Government was required to pay the claim. 25. The contracting officer denied MTC's claims based on MTC's failure to document adequately the actual rate increase effect, delineated by direct and reimbursable expenses pursuant to the contract's rate increase clause. Appellant's Exhibit 10; Appellant's Supplement to Hawthorne Appeal File, Exhibits 11, 14. Expert Testimony 26. The effect of electrical rate increases was testified to by MTC's expert, Mr. Kaiser, and by Mr. LeBlanc of GSA. Mr. Kaiser was offered as an expert on utility rate impact, and accepted as such by the Board. Transcript, Vol. 2 at 96-115. Mr. LeBlanc was neither qualified as an expert by counsel nor accepted as one by the Board; in fact, his testimony was vigorously objected to by appellant, but was allowed by the Board. Id., Vol. 3 at 108-10. Mr. Kaiser's Testimony 27. Mr. Kaiser's final report is dated February 14, 1992, little more than one month prior to the date of the hearing in this case. Appellant's Exhibit 26. Mr. Kaiser calculated the rate increase effect on the Santa Ana/San Pedro contract by utilizing 1986, the last year GSA was responsible for performing the services covered by the CFM contract at the buildings, as the base year for consumption purposes. He transposed the consumption data for each month of the base year into each corresponding month of the contract period. For example, January 1986 consumption data was transposed into the January bills for each contract year, February 1986 data was transposed into all February contract period bills, continuing on with each succeeding month through December. This method kept consumption constant across the contract period and accounted for seasonal fluctuations in annual consumption while determining the effect of rate increases over the period in question. Appellant's Exhibit 26 at 3, 8. 28. Mr. Kaiser used this same method, except for the use of 1988 consumption data, to calculate the rate increase effect under the Hawthorne contract. He used 1988 consumption data because the data for the last year GSA operated the building was not available to him. Appellant's Exhibit 26 at 3; Transcript, Vol. 1 at 223-24. 29. Mr. Kaiser designed algorithms for calculating utility bills which contemplated all of the rate factors the power companies use, e.g., demand charges, off-peak, mid-peak, and peak consumption, etc. Transcript, Vol. 2 at 196-97. By use of these algorithms, Mr. Kaiser was able to reproduce actual utility bills supplied to him when historical usage was entered into the appropriate equations. For example, the algorithm designed for July 1989 would reproduce the cost charged by the utility for that month when July 1989 consumption data was introduced. He used this method of entering historical consumption data and comparing the results to the corresponding bills to check the accuracy of his formulas. After establishing that the formulas would accurately reproduce historically verifiable results, he replaced the historical consumption data with the corresponding consumption data from his base year. In this example, July base year historical data would be introduced to the algorithm for July 1989, resulting in a bill that reflected what the utility company would have charged appellant during July 1989 if consumption had been identical to the consumption for July of the base year. In this way, Mr. Kaiser was able to determine the actual rate increase effect, without any consumption related error. Appellant's Exhibit 26 at 9; Transcript, Vol. 2 at 196- 201. 30. After this process was completed for all the contract years, total yearly costs could be compared to determine the percentage increase or decrease due solely to rate changes. These percentage changes were then applied to MTC's utility line item bids to determine the amount due appellant because of rate increases. Appellant's Exhibit 26 at 11, 18, 23. These utility line item prices contain amounts for both general and administrative costs (G&A) and overhead. Since percentage increases were applied to these amounts, the resultant increased amount also includes a proportional increase for G&A and overhead. While MTC asks for an additional amount to be awarded for these costs, the Board determines that no amount for overhead should be awarded because MTC has not proven that it incurred any additional overhead due to the increased utility costs, and will factor out the overhead at 7.5%, the amount MTC has requested for this factor. Other than the failure to remove overhead and overtime utilities from the calculations, the Board concludes Mr. Kaiser's approach was a reasonable methodology for determining the rate increase effect. 31. While we find as fact that Mr. Kaiser's calculations of rate change effects are reliable approximations of the costs incurred by MTC as a result of increased electrical rates, they fail to factor out overtime utility costs which are specifically a cost reimbursement item, already paid by the tenant agencies, and thus result in double recovery for overtime costs. Transcript, Vol. 2 at 230. Mr. LeBlanc's Testimony 32. Mr. LeBlanc made his rate increase calculations for the San Pedro building by taking the consumption from one month, February 16 to March 16, 1989, a period of only 28 days, as his consumption base. Transcript, Vol. 3 at 115. For the Santa Ana building, Mr. Leblanc used the period of March 13 to April 11, 1991, for his base winter consumption, and June 8 to July 11, 1990, for his summer base consumption. Id. at 137, 139. Mr. Leblanc did not explain why he picked these particular months, nor why he thought the use of individual months rather than full years an appropriate method for establishing base line consumption. 33. For the Hawthorne building Mr. Leblanc stated, "Now this was utilizing the same utility bill--and even though it was for Santa Ana, I used the same consumption because it was the same identical rate schedule; I just used a consumption model and then carried that all the way through so it would have been just as applicable for Hawthorne." Transcript, Vol. 3 at 146. Since no other testimony establishes what base line consumption was used for the Government's calculations concerning the Hawthorne building, the Board presumes the same consumption base was used for both Santa Ana and Hawthorne, the two buildings covered by SCE's TOU-8 rate schedule. 34. Mr. Leblanc relied on a letter from SCE establishing its overall percentage rate increases for 1989 and its projected rate increases for 1990 in preparing his calculations on the Hawthorne and Santa Ana buildings. Transcript, Vol. 3 at 190; Respondent's Exhibit 3 at 4. The rate increases referred to in this letter are systemic averages and do not correlate directly to the specific rates being charged MTC under the TOU-8 rate schedule. Transcript, Vol. 2 at 184. 35. Mr. Leblanc's calculations do not include any recovery for rate increases during the period of delay between the issuance of the RFP and the award of the Santa Ana/San Pedro contract, but begin with contract performance. Transcript, Vol. 3 at 164. The Claim 36. MTC incurred costs over its bid (i.e., overruns) at the Santa Ana building in the amount of $161,486 for electricity, $263,486 for chilled water, and $19,375 for steam. Appellant's Exhibit 12. MTC experienced an overrun of $231,675 for electricity at the Hawthorne building. Appellant's Exhibit 17. MTC experienced overruns of $242,280 for electricity and $7,076 for sewer at the San Pedro building. Appellant's Exhibit 12; Transcript, Vol. 1 at 142; Appeal File, Exhibit 38. 37. Consumption of electricity at Santa Ana increased by 30% between the issuance of the RFP and award of the contract, and 7% between award and April 1991. Appellant's Exhibit 14. Consumption of electricity at San Pedro increased 20% between the issuance of the RFP and award of the contract, and 10% between award and April 1991. Appellant's Exhibit 15. Electricity consumption at the Hawthorne building neither increased nor decreased dramatically over the contract period. Appellant's Exhibit 26 at 24, 28. 38. MTC documented added equipment at Santa Ana, San Pedro, and Hawthorne by submitting lists of electrical appliances, computers, printers, etc., which have been added to those buildings. Appellant's Exhibits 2-a, 2-b, 3; Transcript, Vol. 2 at 18-21. 39. MTC's claims,[foot #] 2 as of its Post- Hearing Brief, are as follows: San Pedro Santa Ana Hawthorne Rate Increases: Electricity $187,000 $154,000 $282,000 Sewer $7,076[foot #] 3 Chilled H2O $35,453[foot #] 4 Steam $9,643[foot #] 5 Other $1,048 Electric Con- sumption Increase/ Added Equipment $45,000 $8,000 $245,557 Undisclosed Electric Consump- tion Increase $275,000[foot #] 6 San Pedro Santa Ana Hawthorne Undisclosed Chilled H2O Consumption Increases $235,000[foot #] 7 Cost Attributable ----------- FOOTNOTE BEGINS --------- [foot #] 2 All of these claims run through December 31, 1991, except the rate increase for non-electrical utilities at the Hawthorne building (labeled "other" above) which only covers through April 1990. Appellant's Post-Hearing Brief, at 62-70. [foot #] 3 $1,846 of this amount is contingent on the exercise of option 4 of the contract. [foot #] 4 $6,385 of this amount is contingent on the exercise of option 4 of the contract. [foot #] 5 $1,779 of this amount is contingent upon the exercise of option 4 of the contract. [foot #] 6 $55,000 of this amount is contingent on the exercise of option 4 of the contract. [foot #] 7 $35,000 of this amount is contingent on the exercise of option 4 of the contract. ----------- FOOTNOTE ENDS ----------- to Steam/Chilled H2O Use Mis- representation $227,795 Overtime Utilities $3,068 ----------- FOOTNOTE BEGINS --------- Total $514,076 $666,891 $531,116 40. MTC also claims $99,508 in rate increases for the Van Nuys building. MTC seeks an additional $135,964 for overhead, and 155,905 in profit on the entire award. This amounts to a total claim of $2,104,017. This number is $700 less than the sum MTC puts forward in its post-hearing brief. The difference appears to lie in the rate increase request, which MTC tallies as $773,428, including the Van Nuys building. Our addition of the figures produces $772,728 as the correct tally. Van Nuys Building 41. The dispute over the effect of rate increases at Van Nuys, through December 1990, has been effectively settled by the Government's proposal of Modification AS-31, proposing $99,508 in settlement of this claim. MTC has indicated its willingness to accept this amount. Modification AS-31, reproduced as Appellant's Exhibit 13, attachment 9; Appellant's Post-Hearing Brief at 70-71. Discussion The overriding fact in these appeals is that the parties backed into an economically inane contractual scheme. The contract reflects the respondent's quest for the unattainable, i.e., a fixed price for its utility costs for several buildings over a five year period. It is doubtful that such a goal can be realized. The respondent, recognizing that the contract price would have to be increased for utility rate increases, included a clause in the solicitation providing for rate increases. The clause, however, appears as almost an afterthought because it fails to provide for any methodology for increasing the price. For example, there is no base line for the increases, no formula, and no evidence required to be provided by the contractor to demonstrate the amount of the increase. Finding 4. The contractor, surely recognizing that it could not guarantee, and hence bear the cost of increases in the level of consumption of the utilities, inserted an equally inadequate clause which obviously contemplates contract price increases to compensate for significant increases in consumption of the utilities. Finding 5. What results from such a contractual scheme is a contract under which the contractor is to pay for all utilities, obviously ----------- FOOTNOTE ENDS ----------- out of the proceeds of the contract price which is to be increased by the amount of the increases in the cost of the utilities resulting from increases in the rates and/or consumption. While we have recognized that what we have before us is a contract which evinces a contractual intent that increased utility costs will be compensated by an increase in the contract price, the case, unfortunately, was not presented with any such direct approach. Chilled Water/Steam--Santa Ana Building The purchase of chilled water and steam off site was a unique element of the Santa Ana/San Pedro contract, one that neither the contracting officer nor the appellant had encountered before. Chilled water, used in the air cooling system, and steam, used to heat the building, are usually produced by chillers and boilers located within a building complex. A contractor who had not purchased these commodities in previous contracts would have no reference from which to evaluate the accuracy of the bills provided in the bidders library, or know the importance of obtaining a complete set of bills because of dramatic seasonal fluctuations. The Government's failure to provide a complete set of chilled water bills in the bidders library compounded the difficulties MTC faced as an inexperienced bidder attempting to determine the proper amount to bid for those utilities, and the failure of the GSA in-house estimate of utility costs to include the costs of chilled water prevented the contracting officer from recognizing the mistake which MTC made. Using the erroneous estimate, Ms. Perez, the contracting officer, determined that MTC's total bid for utilities was high, when in fact it was lower than the Government's historical experience for the buildings in question. Ms. Perez communicated her mistaken belief that the utilities line item in MTC's proposal was high to Mr. Barber of MTC, with the direct result that MTC lowered that line item in its BAFO, and reasonably, but mistakenly, believed that MTC had bid adequately to cover the cost of providing utilities to the tenants of the buildings. Both parties were mistaken about the actual historical utility costs being incurred by the Government at the time BAFOs were submitted. Ms. Perez was unaware that the Government's estimate for utilities did not include chilled water and that $104,000 had been expended in the previous year for chilled water alone. She testified that had she been aware of those facts, she would have advised her program people and appellant of a possible mistake. MTC has both itemized claims it believes properly relate to the chilled water and steam component of this contract, and asked, in the alternative, that we revise the contract to effectuate the intent of the parties which was thwarted by this mutual mistake. It contends that had the parties known all the facts now known about the chilled water and steam components of the chilled water bill they would have contracted for an amount sufficient to cover the actual cost of providing those utilities to the Government tenants of the buildings. A party seeking to revise a contract under a mutual mistake theory must demonstrate: (1) the parties to the contract were mistaken in their belief regarding a fact; (2) that mistaken belief constituted a basic assumption underlying the contract; (3) the mistake had a material effect on the bargain; and (4) the contract did not put the risk of the mistake on the party seeking reformation. Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir. 1990). It must also show that the party against whom reformation is sought would have agreed to the proposed reformation had the facts been known at the outset. See Roseburg Lumber Co. v. Madigan, No. 92-1062, slip op. at 19 (Fed. Cir. Oct. 19, 1992). Given that neither party to this contract negotiation was aware of the true cost of chilled water and steam to the Government at the time of contract inception, and the fact that the cost of chilled water was omitted from the Government estimate, we find that a mutual mistake was made. This mistake constituted an erroneous basic assumption as to the cost of a material component of the contract. The risk of this mistake is not put on the contractor because the Government had a duty to accurately prepare its estimate and present the best information available to the bidders. Womack v. United States, 182 Ct. Cl. 399, 389 F.2d 793 (1968). Respondent further compounded the mistake by negotiating with appellant for price reductions on its utilities line item, causing appellant to believe the amount was high, not low. Based on the presumption that the Government will act in good faith, we find that the respondent would have agreed to a higher price for this line item had it known the true cost of providing the utilities at the time of contract formation. We therefore grant reformation of the contract in the amount of $263,486 for chilled water, and $19,375 for steam. These are the amounts by which MTC has established its cost for chilled water and steam exceeded the amount it bid for these utilities. Finding 36. There is insufficient evidence in the record to determine with certainty whether this figure includes overtime utilities which have already been paid to MTC. The Board presumes, since respondent has not objected to these figures, and it would be fraudulent for appellant to make a claim for monies already paid to it, that no overtime utility payments have been made for chilled water or steam. We reject as singularly unpersuasive and non-credible the Government's argument that the cost of chilled water was excluded from its estimate because chilled water bills were to be in the bidders library. All bills were to be in the bidders library. It is no more logical to exclude chilled water costs from the Government estimate than electricity, gas, water, sewer, or all utilities, and it in no way legitimizes such an oversight. As the estimate is written it appears to be for the cost of all utilities under the contract in dispute, and was treated as such by the contracting officer, but it does not contain a component for chilled water. There is nothing contained in the estimate to alert the contracting officer to its incomplete character. This docu- ment, which was prepared for her use in negotiating the contract, led her to believe, erroneously, that MTC's bid for utilities was high, and the Government, as the beneficiary of the mistake, not the contractor, should shoulder the burden of the mistake. Having granted MTC's request that we modify the contract in regard to chilled water and steam, we need not address the itemized claims for undisclosed consumption increases, rate increases, and misrepresentation of historical data on those utilities; the relief granted forecloses recovery under these alternative theories. Electrical Rate Increases--Santa Ana, San Pedro, and Hawthorne Buildings The Santa Ana/San Pedro solicitation was issued on July 1, 1987, but no contract was awarded until March 16, 1989. While we have revised the contract to allow payment to MTC to cover the cost of providing chilled water and steam under that contract, another major component of the disparity between MTC's proposed price and the actual utility costs under this contract and the Hawthorne/Van Nuys contract are rate and consumption increases. Language contained in both RFPs and both of MTC's proposals, which the Government accepted and incorporated into the contracts for the Santa Ana/San Pedro locations and the Hawthorne/Van Nuys locations, contemplates adjustments to the utility line item for rate increases and significant consumption increases. There can be no doubt that MTC is entitled to adjustments to its utilities line items for any rate or consumption increases which it can adequately substantiate. MTC's expert testified at the hearing that electrical rate increases accounted for $154,000 of the $161,486 overrun at Santa Ana, and $133,773 of the $242,000 overrun at San Pedro.[foot #] 8 However, these figures did not factor out overtime utilities and were adjusted downward to $130,125 at Santa Ana and $112,490 at San Pedro in appellant's post-hearing brief, apparently in response to concerns the Board voiced at the hearing about overtime utilities being included in the figures ----------- FOOTNOTE BEGINS --------- [foot #] 8 Mr. Kaiser presented two sets of numbers for the San Pedro building. The Board has chosen to use the one using 1986 consumption data rather than the set using 1988 consumption data ($187,000, which was reduced to $175,499 once overtime utilities were factored out) because MTC is also receiving an award for undisclosed consumption increases between 1986 and 1988. ----------- FOOTNOTE ENDS ----------- presented. MTC also claims electricity rate increases at the Hawthorne building of $282,000 based on Mr. Kaiser's calculations. Once overtime utilities were factored out in its post hearing brief, that amount was reduced to $222,595. In addition, appellant is seeking $275,000[foot #] 9 in pre-award consumption increases allegedly incurred at the Santa Ana and San Pedro facilities. Mr. Kaiser carefully and thoroughly demonstrated the effect of rate increases on the cost of the electricity supplied to the Government. His analysis was based on the actual rate schedules employed by the utilities servicing the three facilities. He used the bills from an entire year at each building for his base periods in order to hold consumption constant. In contrast, the Government used only one month, February 16 to March 16, resulting in a 336 day "year" for its base line consumption at Santa Ana, and two months, one winter and one summer, to derive base consumption for San Pedro and Hawthorne. Not only did the Government's use of selected months result in short years, it failed to account for seasonal fluctuations in utility consumption, thereby further skewing the results of its calculations. No adequate justification was provided to prove that the base months chosen by the Government resulted in a representative model; the two months chosen for the San Pedro and Hawthorne calculations are not even from the same year. Neither did respondent explain how a 336 day "year" can be fairly compared to a 365 day year. Based on the forgoing, we conclude the Government's base line data was unreliable, and acted to skew the rest of its calculations. Government calculations for San Pedro and Hawthorne also failed to utilize the rate increases applicable to appellant's contracts. Instead of the actual rates employed by the utility at the facilities under review, respondent used a system-wide average of all rate increases provided to it by SCE. The average provided by SCE may be representative of the increased revenue the utility can expect on average, but is wholly irrelevant to this appeal and useless in calculating the increased costs to an individual consumer due to rate increases. SCE has many different rate structures. To believe that the average increase can be used in determining the increased cost to appellant is irrational. We must focus on the rates actually applied at the facilities in question, as done by MTC's expert, Mr. Kaiser. Owing to these numerous defects we find that the Government's calculations are a totally unreliable indicator of the costs incurred by MTC due to electrical rate increases. We do, however, find persuasive respondent's argument that overtime utilities must be factored out of appellant's rate calculations. Overtime utilities were otherwise directly reimbursable to the contractor. The rate increases on these charges should have been ----------- FOOTNOTE BEGINS --------- [foot #] 9 $55,000 of this figure is contingent upon the Government choosing to exercise option 4 of this contract. ----------- FOOTNOTE ENDS ----------- passed on to the Government agencies using the overtime utilities because the agency should be billed according to the cost of providing the utilities, not the contract price. MTC argued at hearing, and in its post-hearing brief, that leaving overtime utilities in the total calculation would bring down total rate increases because overtime utilities are generally incurred at off-peak rates, which have fluctuated less dramatically than the peak rates. MTC, however, failed to carry the burden of proving this theory to the Board but has provided us with calculations factoring out overtime utilities as an alternative argument. Appellant's Post-Hearing Brief at 77. Despite appellant's contentions that leaving in overtime utilities would bring the total award down, these new numbers are lower than those which fail to factor out overtime utilities. Neither the Government nor appellant has pointed out that overhead was to be factored into MTC's bid for utilities in these contracts. As Mr. Kaiser has applied percentage increases to the bid amounts, the resultant increases include a proportional increase for overhead. MTC, however, has not demonstrated entitlement to overhead on its claim as it has not shown that its overhead was increased by the higher than expected utility bills, nor has it shown that the contract or case law requires any additional overhead under the facts in question. Accordingly the Board has factored out overhead from MTC's requested rate increase award at the 7.5% rate appellant has submitted as its claim for overhead. Once this adjustment is made, Mr. Kaiser's figures are the most reliable figures which have been presented to us, and we are convinced of their accuracy and reasonableness. We award these adjusted amounts for electrical rate increases. We reject the Government's contention that rate increases should be measured only from the date of award of the Santa Ana/San Pedro contract. While MTC could theoretically have revised its BAFO to account for rate changes during the Government caused delay in awarding that contract, it did not possess the information necessary to do so, and did not adjust its BAFO to account for these factors. The bidders library, on which price proposals for the utilities line items were based, was never updated beyond the date of the RFP, if it was complete even to that date. Since the utilities would not have released utility bills to third parties, there was no way for any bidder to make an accurate estimate of increases absent the Government's release of new bills into the bidders library. The Government's failure to update the library, and its use of an estimate compiled using data from the three years prior to issuance of the RFP for comparison purposes, indicates a good faith intention to award the contract competitively using outdated historical data as the benchmark and adjust the contract upward as needed to compensate for undisclosed intervening increases. The contract itself is silent on this point, but the facts and circumstances surrounding the procurement made it reasonable for MTC to have interpreted the contract to require rate increases from the issuance of the RFP. We conclude that this interpretation is controlling. Santa Ana/San Pedro The Board finds that Mr. Kaiser's estimate of rate increase impact is reliable but that overtime utilities and overhead must be factored out in order for the calculations accurately to reflect the amount due MTC. We find that appellant is entitled to an equitable adjustment for electrical rate increases at the San Pedro building in the amount of $104,053, and $120,366 at the Santa Ana building. Hawthorne Finding, as we did above, that appellant's calculation of the rate increase effect is credible and the Government's is not, but again agreeing with the Government that overtime utilities must be factored out, and that overhead must be factored out, we award MTC $205,900 for rate increases at the Hawthorne building. Van Nuys The parties have both accepted the figure of $99,508, proposed in Modification AS-31, as an acceptable compromise to the dispute over rate increases at the Van Nuys facility through December 1990. Finding 23. Accordingly, we find appellant is entitled to that amount for electricity rate increases at the Van Nuys building. Other Rate Increases--San Pedro, Santa Ana, and Hawthorne Buildings MTC has claimed $7,076 for sewer rate increases at San Pedro, and $9,643 for increases in rates for steam and $35,453 for increases in the rates for chilled water at Santa Ana. Finding 39. MTC has also claimed $1,048 for combined non- electric rate increases covering the period through April 1990 at the Hawthorne building. Id. at n.2. The claim for rate increases for steam and chilled water is rendered moot by our making MTC whole with respect to those utilities due to the mutual mistake of the parties. The claim for sewer rate increases at San Pedro includes $1,846 contingent on the exercise of option four of the contract. Id. at n.3. We do not here grant prospective damages, but we do find that the evidence supports award of $5,230 on this claim. The last claim, that for non-electrical utilities at Hawthorne, is supported by the record and is granted in the amount of $1,048. Pre-Award Consumption Increases--Santa Ana and San Pedro Buildings As to pre-award consumption increases at Santa Ana and San Pedro, the Board finds that the contract language inserted by MTC in its proposal requires price adjustment if consumption is significantly increased. This is a five year contract in which MTC bid the same amount for utilities in the primary year and each of the four options. There is no justifiable or demonstrable expectation on the part of the Government that it be allowed to dramatically increase consumption without bearing the cost of that increased consumption. MTC demonstrated that the consumption increase complained of here occurred prior to award, so there can be no question of MTC's mismanagement being responsible for the increase. Rather, it is evident the Government significantly increased the amount of electricity it was using during the course of the procurement, but failed to adjust its estimate or update its bidders library prior to award to reflect the increase. There is no way MTC could have known of the increase absent Government disclosure. The Government contends that MTC had a duty to inquire about increased costs due to consumption or rate increases. However, the Government has produced no evidence to support the position that MTC knew or should have known that utility consumption or rates had increased during the period between issuance of the RFP and submission of BAFOs, nor has respondent convinced us that MTC should have interpreted the rate and consumption increase clauses of the contract as operating from the date of award of the Santa Ana/San Pedro contract. The Government had a duty to supply reliable and current information in its bidders library, and MTC is entitled to the adjustment as a result of the Government's failure to disclose the increase in consumption. It was reasonable for MTC to presume that any undisclosed increases in the Government's cost experience would be the basis of an equitable adjustment. The Government failed to update its bidders library, which prevented the offerors from updating their proposals. Since all the offerors had the same information, an effective competition was achieved. Neither the Government nor MTC will be unduly harmed by a correction at this time. It is interesting to note that both MTC and Ogden Allied proposed utility line items which were only $5,000 apart, further evidencing that the information provided in the bidders library led to the conclusion that utilities were lower than the actual experience of the Government. Having determined that MTC is entitled to some amount for pre-award consumption increases, we must now determine the appropriate figure. MTC asks for $55,000 per year stating that the 1988 historical experience of GSA was $155,000, while the previous three years saw an average cost of $100,000. MTC argues that it would have raised its bid by $55,000 had it known of the increase. We are unpersuaded by this argument because some of the increased cost is attributable to rate increases which we have already awarded. Instead we conclude that the facts surrounding the electricity bid favor resolution within the rate and consumption adjustment clauses of the contract rather than relief under a mistake theory. This Board must interpret the contract language agreed to by both parties. That language allows us to adjust the contract for both consumption and rate increases, if warranted. The evidence presented by MTC on consumption increases indicates a pre-award/post RFP increase of 20% at San Pedro and 30% at Santa Ana. Finding 37. The percentage increases cited above, applied to MTC's price proposal for electricity at Santa Ana and San Pedro, will adequately approximate the amount due MTC for consumption increases. Before an adjustment for overtime utilities, MTC's price proposals were $115,000 per year at San Pedro and $225,000 at Santa Ana, and MTC's total bid for the utility line item on the contract was $377,400. We subtract $17,000, the proposed amount for chilled water, because that item is not included in the Government estimate, and arrive at $360,400. The chilled water price must be subtracted from MTC proposal to allow the Board to compare the Government estimate to MTC's proposal on an equal basis, and to deduct the proper component for overtime utilities. By comparing MTC's total utility price with its price for electricity under the contract, $340,000, we can determine that 95% of the total was for electricity. We then apply that 95% to $60,050, the amount indicated in the solicitation as the amount to include for overtime utilities, and determine that $57,047 of that amount was for electricity. We deduct this amount proportionately from the price proposals, 66% ($37,651) coming from the Santa Ana proposal because it represents two thirds of the total amount proposed, and 34% ($19,396) coming from the San Pedro bid because it represents the remaining one third of the total. We then factor out 7.5% of the electric bid as the amount included for G&A or overhead, because MTC has failed to prove entitlement to any additional overhead. See infra discussion of profit and overhead. Applying the consumption increase percentages shown above to the figures for the electricity bids at the facilities freed from overtime utility charges and overhead, we arrive at a consumption increase of ($170,474 x .30 =) $51,142 at Santa Ana, and ($86,979 x .20 =) $17,396 at San Pedro, which we award to appellant. In making these calculations we presume that the $500 per month decrease in MTC's BAFO utility line item occasioned by Ms. Perez's indication the line item was high did not come from the electricity component of the line item, leaving the electricity bid unchanged. Post Award Consumption Increases--Santa Ana and San Pedro Buildings MTC has asked for any shortfall between the amount we award as rate increases or pre-award consumption increases at Santa Ana and San Pedro and its overruns at those facilities to be awarded as post award consumption increases. MTC, however, has failed to carry its burden of proof on the quantum of the claim, and it is rejected in part. MTC did establish that consumption increased by 10% at San Pedro and 7% at Santa Ana, between contract award and April 1991. Finding 37. MTC further established that this consumption increase was due to added equipment at the two facilities. Accordingly, we award MTC an additional $10,437 for San Pedro (10% of $104,375, the original bid adjusted upward for pre-award consumption increases as calculated above), and $15,513 for Santa Ana (7% of $221,616, the original bid adjusted upward for pre-award consumption increases). MTC failed to establish that any further overruns in electricity costs were the direct result of consumption increases rather than it underbidding the utility line item on the contract, a risk the Government did not assume under this fixed price contract. The fact remains that MTC bid on this contract with incomplete information on which to base its utility estimate. It has aptly demonstrated entitlement to rate increases, pre-award consumption increases, and post award consumption increases to the extent supported by the consumption data, but the submission of a list of added equipment coupled with its professed belief that any shortfall in electricity not compensated for by the primary two categories should fall under increased consumption is insufficient proof on which to base an additional award. Consumption Increases at the Hawthorne Building MTC also claims a consumption increase in the amount of $245,557 for the Hawthorne building. When coupled with the claim for rate increases MTC's total claim at the Hawthorne building is in excess of $500,000 while MTC only documents an overrun of $231,675 at that facility. We have previously awarded MTC $205,900 for rate increases. In its post-hearing reply brief MTC argues that the amount requested should be awarded to protect MTC's "excellent bid" on electricity at Hawthorne, claiming MTC overbid this line item, and that the overbid should be preserved by any equitable adjustment. MTC's "overbid," which resulted in its losing over $200,000 on this line item alone, is based on comparing its bid of $305,000 per year with GSA's historical experience of $265,000 for the prior year. This left MTC with a $40,000 cushion according to appellant. We do not find that this contract obligates GSA to reimburse appellant for consumption increases based on its previous experience. Both consumption and rate increases are computed using the price proposal as a starting number. MTC has used this method on the other elements of its claim in which it underbid historical costs, and cannot now request the opposite tack on the one component in which it overbid historical costs. The Hawthorne contract's consumption increase adjustment clause provides: "MTC assumes that significant increases in utility usage created by installation of additional equipment by tenants, or by other valid reasons will be grounds for consideration of an increase in the utilities budget." Finding 5. While MTC has pro- vided the Board with evidence of added equipment, and estimates of the cost to run that equipment, it has not documented consumption increases at the Hawthorne building which would justify award of the amount claimed. In fact, Mr. Kaiser's analysis, provided to the Board as Appellant's Exhibit 26, indicates that energy usage at Hawthorne has not increased dramatically as one would expect from the size of the claim, but "has remained unchanged at 10,000 Kwh/day." Appellant's Exhibit 26 at 18-23. Under the contract provision providing for adjustments, MTC must prove a consumption increase caused by the added equipment, not just the fact of new or different equipment. The additional equipment could have replaced other less efficient equipment, or had some other purpose which would not increase consumption and not require an adjustment to the contract. Without the evidence of increased energy usage, appellant has not shown harm from the addition of equipment. For this reason, MTC's claims for the cost of running fans, space heaters, chillers, and all other electric consumption-based claims on the Hawthorne building are rejected. Overtime Utilities at the Hawthorne Building MTC claims an additional $3,068 for overtime utilities incurred due to a GSA contractor's operations at the Hawthorne building. This claim is separate and distinct from other claims advanced by appellant. Since we find no evidence in the record that this claim was ever submitted to a contracting officer for final decision, we lack jurisdiction over the claim. 41 U.S.C. 605(a), 607(d) (1988); see Malone v. United States, 849 F.2d 1441, 1443 (Fed. Cir. 1988). Profit/Overhead MTC has also asked that it be awarded overhead and profit on its claim. In support of the proposition that profit and overhead are to be included as elements of an equitable adjustment it cites United States v. Callahan Walker Construction Co., 317 U.S. 56, 61 (1942), and Derek & Dana Contracting v. United States, 7 Cl. Ct. 627, 639 (1985). These cases both represent situations in which the equitable adjustment, which included additional overhead and profit, was granted to compensate the contractor for work which was performed but which was beyond the duties imposed by the contract. In this case, while MTC has incurred additional out of pocket expense because the utilities bills were higher than anticipated, there is no evidence in the record that MTC expended more effort to pay a larger power bill than would have been required to pay a smaller one. MTC has presented no evidence or case law establishing that it is entitled to any fee or overhead above the original amount it contracted to receive in exchange for processing the utility bills by virtue of rate or consumption increases. Since we do not read the contract provisions allowing rate and consumption adjustments to require the addition of overhead or fee, and we believe MTC has made its bargain with respect to the price it would charge GSA to process utility bills, we deny the request. MTC contends the added work required to recover the additional expenditures through this appeal justifies a profit award. How- ever, profit is awarded to encourage performance, not to compensate an appellant for the time spent in settlement negotiations or the appeals process. Aerojet-General Corp., ASBCA 17171, 74-2 BCA 10,863. The Board has awarded MTC modifications and adjust- ments under the contract, and we are bound by the terms of the contract in making that award. No contract provision cited to the Board requires or expressly permits that profit and overhead be a component of an adjustment for added utilities cost, and we deny the requested award. This conclusion is supported by the fact that modification AS-31, which the parties have stipulated is a fair settlement of the Van Nuys building rate increase claim, does not contain an express component for profit or overhead. While we deny MTC's request for additional overhead or profit on its awards for rate increases or consumption increases, we have determined the parties were mutually mistaken as to the price for chilled water and steam, and a profit factor, at the prevailing contract rate, is an appropriate component of that award. MTC charged a fee of 8% on the utility line item of the contract. Since the amount we award for chilled water and steam would have been subject to this fee if the intent of the parties had been correctly exercised at contract inception, we award MTC $22,629 (8% of the $282,861 adjustment for mutual mistake) as the fee component of our modification of the contract. Overhead sufficient to cover that component of paying the utility bills, however, was to be included in MTC's bid, and MTC has not demonstrated that additional overhead costs were incurred by it merely because utility bills were higher than anticipated. We deny this request for overhead as well. Conclusion MTC is entitled to the following amounts under its various theories of recovery: Utility Rate Increases Hawthorne Electricity $205,900 Other $1,048 Santa Ana Electricity $120,366 San Pedro Electricity $104,053 Sewer $5,230 Van Nuys $99,508 ----------- FOOTNOTE BEGINS --------- Subtotal $537,105 Consumption Increases Santa Ana Pre-Award $51,142 Post Award $15,513 San Pedro Pre-Award $17,396 Post Award $10,437 ----------- FOOTNOTE BEGINS --------- Subtotal $94,488 Mutual Mistake Chilled Water $263,486 Steam $19,375 Fee $22,629 ----------- FOOTNOTE BEGINS --------- Subtotal $305,490 ----------- FOOTNOTE BEGINS --------- ----------- FOOTNOTE BEGINS --------- Total $937,083 Decision ----------- FOOTNOTE ENDS ----------- These appeals are GRANTED IN PART. MTC is awarded $937,083 with interest in accordance with 41 U.S.C. 611 (1988). ________________________ VINCENT A. LaBELLA Board Judge We Concur: ________________________ ROBERT W. PARKER Board Judge ________________________ JAMES W. HENDLEY Board Judge