Government Contracting Database
Since 1968, when the Changes clause was amended to include the phrase “whether or not changed by any order” (32 Fed.Reg. 16268 (1968), boards have experienced an increasing number of claims of cost “impact” on unchanged work, which allegedly were not priced and settled as a cost of performing the changed work. In cases involving a multitude of changes, these alleged added costs have been commonly referred to as “cumulative impact” costs. Because contractors are required to include known and generally foreseeable impacts on unchanged work in pricing the cost of a change, the term “cumulative impact” has come to mean, in a generic sense, the impact on unchanged work which is not attributable to any one change but flows from the synergy of the number and scope of changes issued on a project. The underlying theory is that numerous changes cause a cascading ripple-type of impact on performance time and efficiency which is too uncertain or diffuse to be readily discernable at the time of pricing each individual change. Mcmillin Bros. Constructors, Inc., EBCA No. 328-10-84, 91-1 B.C.A. (CCH) ¶ 23351 (Aug. 31, 1990) (citing Fruehauf Corp., 74-1 BCA p 10,596 (PSBCA); and Bechtel National, Inc., 90-1 BCA p 22,549 (NASA 1989)).
Cumulative impact arises from changes which had such an effect on performance that there is a separately compensable impact claim that does not include the direct costs of the changes. Appeal of Bechtel Nat., Inc., NASA BCA No. 1186-7, 90-3 B.C.A. (CCH) ¶ 23105 (July 9, 1990); see Jackson Const. Co. v. United States, 62 Fed. Cl. 84, 104 (2004) (citing McMillin Bros. Constructors, Inc., EBCA No. 328-10-84, 91-1 B.C.A. (CCH) ¶ 23351 (Aug. 31, 1990). Cumulative impact need not be traced to specific causes of increased performance costs, but can arise from changes which, when viewed retrospectively, were so many and had such effect on performance that there is a separately compensable impact claim. Bechtel, supra.
However, impact is not demonstrated solely by showing the number of changes or clarifications to the contract, nor by comparing the cost of the changes to the original contract price. McMillin Bros. Constructors, Inc., EBCA No. 328-10-84, 91-1 B.C.A. (CCH) ¶ 23351 (Aug. 31, 1990) (citing Montgomery–Ross–Fisher, Inc., 84–2 BCA ¶ 17,492 (PSBCA)). There is no fixed rule setting forth the number of changes or percentage of price of changes to establish a cumulative impact due to many changes. A 10% increase was not adequate to establish a cardinal change or breach in Appeal of Coley Properties Corp., PSBCA No. 291, 75-2 B.C.A. (CCH) ¶ 11514, p. 54,940 (Sept. 24, 1975). Moreover, although the Board in Coley found impact liability it did so based upon a showing that disruption and inefficiency resulted from the changes and not upon their cost or numbers.
It is important to produce contemporaneous documentation that substantiates the extent of the cumulative impact claimed. The contractor’s assertions must be more than general, conclusory, self-serving allegations, and there should be project records which support the contractor’s claim analysis. Cf. H.W. Detwiler Company, Inc., ASBCA No. 35327, 89-2 BCA p 21,612; Argo Technology, Inc., ASBCA No. 30522, 88-1 BCA p 20,381, at 103,060. The inability to ascertain the extent of cumulative impact and to obtain a reasonable estimate for a claim until contract completion is different than an inability to know, anticipate, or be aware of the facts of disruption and loss of productivity as they occur. A contractor may be able to establish that it was impossible to observe loss of productivity, but such assertion does not excuse or satisfactorily explain the absence of contemporaneous recording of the extensive disruption claimed. A contractor may also need an as-built schedule analysis to show the effect of the cumulative impact on the progress of the project.
Updated: June 14, 2018