DENIED: April 28, 1994 GSBCA 12580 VISTACON INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Basilio A. Silva, Jr., President of Vistacon Inc., El Paso, TX, appearing for Appellant. Kevin M. Myles, Office of Regional Counsel, General Services Administration, Fort Worth, TX, counsel for Respondent. Before Board Judges DANIELS (Chairman), HYATT, and GOODMAN. DANIELS, Board Judge. In the course of performing a contract for alterations, repair, and expansion of the Bridge of the Americas Border Station in El Paso, Texas, Vistacon Inc. installed a heating system in the station's Building B. The General Services Administration (GSA) later determined that in doing this work, Vistacon had situated heating coils improperly by placing them upstream of variable air volume (VAV) boxes. The agency's contracting officer directed Vistacon to reposition the coils. This appeal requires the Board to determine whether the contractor or the Government is liable for the cost of moving the coils. We agree with the Government that the contractor must absorb the cost of complying with the agency's directive. The appeal is denied. Findings of Fact 1. The contract required Vistacon to install in Building B "Rooftop air handling unit with DX cooling and economizer cycle; VAV dump box terminal units with hot water reheat; pneumatic controls." Appeal File, Exhibit 1 at 15985-4. The contractor was ultimately responsible for providing an operable heating system in the building. Id. at 15985-5. 2. The contract contains inspection, warranty, and guarantee clauses under which Vistacon agreed to perform work in conformance with contract requirements, and to correct at its own expense work that did not meet those requirements. Appeal File, Exhibit 1 at pages 11-13 of GSA Form 3506. This promise bound the contractor for a period of one year from the date of final acceptance of the work or the date the Government took possession of the work or placed it in use, whichever came first. Id. Inspections, which the Government was entitled to make, were not to affect the right of the Government to have the contractor make necessary corrections. Id. at page 11 of GSA Form 3506. 3. During the summer of 1991, Vistacon "completed all phases of work on Bldg 'B' of the contract and was working on punch list items." Appellant's Brief at 1; see also Respondent's Reply Brief at 3. As part of that work, a Vistacon subcontractor, Thermodyn Contractors, Inc., installed heating coils upstream from each of the many VAV boxes in the building's heating system. Complaint 1; Answer 1. Booth Keirsey Mijares Architects (BKM), a firm which was under contract to GSA to manage and inspect the performance of Vistacon and its subcontractors, observed this work, but did not notify Vistacon that it was improper. Appeal File, Exhibit 12 at 4 (report of GSA review team). 4. "[I]n the winter of '91 - '92 the heating problems arose. At that time, many speculations were made about the system, but no consensus was established." Appellant's Brief at 1; see also Respondent's Reply Brief at 3. It is apparent from statements made by the parties that the "speculations" involved notification by GSA to Vistacon that the Government was dissatisfied with the performance of the system. 5. "During the winter of '92 - '93 the problem with the heating system arose anew." Appellant's Brief at 1-2; see also Respondent's Reply Brief at 3. 6. On December 29, 1992, an engineer employed by the consulting engineering firm of Coupland-Moran Engineers, Inc., wrote to BKM, noting that the heating coils had been installed upstream of the VAV boxes and asserting that as a result, proper heating of occupied zones of the building was not occurring. He maintained that the installation was incorrect and recommended that the contractor be instructed to move the coils so they would be downstream of the boxes. Appeal File, Exhibit 4 at 2d-3d unnumbered pages. By cover letter dated January 5, 1993, BKM sent the Coupland-Moran letter to GSA and Vistacon. BKM told the contractor that it expected the correction to be made as soon as possible. Id. at 1st unnumbered page. 7. In response, Vistacon and Thermodyn maintained that neither the contract nor the coil manufacturer specified placement of the coils relative to the VAV boxes. Therefore, Vistacon and Thermodyn said, their choice of location was permissible, and if the Government wanted the coils moved, it would have to pay for the extra work as an equitable adjustment to the contract. Vistacon and Thermodyn blamed the heating system's failures on a boiler which they considered "too small in capacity for efficient operation." Appeal File, Exhibits 6, 7, 10. The contractor has not developed a factual record in support of its contention as to the boiler. 8. BKM and Coupland-Moran, on the other hand, contended that the contract, industry practice, and maximum efficiency in the heating system all mandated placement of the coils downstream of the boxes. Appeal File, Exhibit 8. Coupland-Moran's engineer explained in a letter to BKM: The system designed and specified for this building utilized variable air volume bypass boxes with reheat coils for space heating. . . . The intent of any type of VAV terminal reheat system is to heat when the box has closed to it's [sic] minimum position. That is why all VAV terminals (bypass and standard) have the coils installed downstream of the box. With the coil upstream we are heating 100% of the air then bypassing it to the plenum instead of heating the minimum airflow supplying the space and bypassing a large percentage of cold air to the plenum. This is standard industry practice. The name requires the coil to be downstream; reheat. If the coils were upstream they would be terminal preheat coils. Id. at 2d unnumbered page. 9. On April 1, 1993, a GSA review team sided with BKM and Coupland-Moran. Appeal File, Exhibit 12. Thirteen days later, the contracting officer followed the team's recommendation by directing Vistacon to correct the placement of the heating coils. Id., Exhibit 13. The contractor agreed to perform the work, but reserved the right to bill GSA for its costs. Id., Exhibit 14 at 3d unnumbered page. 10. After Thermodyn moved the coils to downstream of the VAV boxes, Coupland-Moran performed a test and balance analysis of the heating system in Building B. The analysis showed marked improvement in operation of the system; the engineer concluded that "[t]he system is maintaining building temperatures at acceptable levels." Appeal File, Exhibits 303, 304. A GSA maintenance mechanic states in an affidavit that after the coils were reinstalled, complaints about the building being too cold stopped. Id., Exhibit 302. 11. On July 16, 1993, Vistacon sent GSA a claim for the costs incurred in moving the coils, $27,927. Appeal File, Exhibit 14. The contracting officer denied the claim on the ground that installing the coils downstream from the VAV boxes "is a basic contract requirement." Id., Exhibit 17. An appeal was timely taken from the contracting officer's decision. Id., Exhibit 18. Discussion When the Government asserts its right under a contract's warranty or guarantee clause, it bears the burden of proving, by a preponderance of the evidence, that (a) the contractor was responsible for furnishing the defective materials or workmanship; (b) the required notice was given during the relevant time period; and (c) the Government did not cause or contribute to the defects. ABM/Ansley Business Materials v. General Services Administration, GSBCA 9367, 93-1 BCA 25,246, at 125,748-49; Joseph Penner, GSBCA 4647, 80-2 BCA 14,604, at 72,019. GSA has demonstrated the existence of each of the three items as to which it has the burden of proof. The contract clearly required Vistacon to provide an operable heating system in the building at issue. The warranty period was one year from the date the Government accepted the work or took possession of it, and the parties agree that within the first year the Government used the system, GSA complained that operation was inadequate. The parties expressed different theories as to the reason for the deficiency; Vistacon maintained that the design of the system was at fault, in that the boiler was undersized, whereas GSA insisted that the placement of the heating coils, upstream of the VAV boxes, was the problem. The test and balance analysis which was performed after the coils were moved demonstrates that the Government was right; the modification caused the system to operate acceptably. Thus, the defect was exclusively within the control of the contractor. The parties devoted most of their attention in litigating this case to addressing whether the contract was explicit in requiring that the heating coils be positioned downstream of the VAV boxes. It makes no difference which side is right on this question. Even if the contract did not tell Vistacon where to put the coils, the contractor could not meet the specification of an operable system until the coils were placed downstream. Nor does it matter that the Government's inspectors did not conclude during installation that the coils were incorrectly placed; the contract expressly says that this does not affect the Government's warranty rights. What is of paramount importance is that the heating system did not work acceptably as Vistacon installed it; GSA gave notice of inadequate operation within the warranty period; and the improper placement of the coils turned out to be the cause of the problem. Decision The appeal is DENIED. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ CATHERINE B. HYATT ALLAN H. GOODMAN Board Judge Board Judge