Winter v. Cath-dr/Balti Joint Venture

Donald Winter, the Secretary of the Navy (Navy) (plaintiff), entered into a fixed-price contract with Cath-dr/Balti Joint Venture (Cath) (defendant) to renovate a historical dental research facility at Great Lakes Naval Training Center. The contract explicitly stated that only the Contracting Officer had the authority to modify the contract terms, including terms regarding price, quality, quantity, or delivery times. The contract further stated that, if necessary, equitable adjustments would be made to the contract’s timing and compensation terms to account for the Contracting Officer’s modifications. Shortly after Cath started work on the project, the Navy assigned Tim Meland as the project manager and the resident officer in charge of contracts (ROICC). The Navy told Cath that Meland was responsible for administering the contract and that any modifications to the project required Meland’s authorization. During the course of the contract, Meland authorized several modifications at Cath’s request. After Cath completed the renovation work, it submitted a cumulative request to the Contracting Officer for equitable adjustments related to those modifications. The Contracting Officer issued a written decision accepting Cath’s claims; however, the Navy overruled the Contracting Officer’s decision and denied Cath’s claims. Cath appealed to the Armed Services Board of Contract Appeals (Board). The Board ruled that Cath was entitled to an equitable adjustment in compensation, holding that Meland, as the project manager and RIOCC, was authorized to modify the contract terms to address issues that arose during construction. The Navy appealed, arguing that only the Contracting Officer, not Meland, was authorized to modify the contract terms. Cath challenged, arguing that even if Meland did not have authority to modify the contract terms, the Contracting Officer ratified Meland’s modifications by accepting Cath’s equitable adjustment claims.