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In May of 2010, the United States, acting through the Department of Defense (the Government) awarded a contract to James Talcott Construction, Inc. (Talcott) to replace existing housing for military families at the Malmstrom Air Force Base in Great Falls, Montana. Talcott was required to construct thirteen buildings, each comprising seventy housing units. Each building was to be constructed with concrete foundations and wood framing, and the project’ design called for wooden floor joists and subfloor decking to be enclosed in crawlspaces. The contract stated that the “structural drawings and specification represent the finished structure… [but] do not indicate the method of construction. The contractor will provide all measures necessary to protect the structure during construction.” The plans and specifications were silent as to ventilation of the crawlspaces.
Talcott enclosed the crawlspaces with “Exposure 1” Opposed Strand Board sheathing, which requires that moisture levels be maintained below 19 percent and did not install ground vapor barriers to prevent groundwater intrusion. Several months after the work commenced, Talcott discovered significant mold growth in the crawlspaces of one of the buildings. Talcott’s subsequent investigation revealed that humidity within the crawlspaces measured more than 80 percent. After performing initial mold cleanup, Talcott retained an industrial hygienist to formulate a comprehensive remediation plan. Ultimately, after performing the necessary remediation, Talcott completed the project 145 days after the contract’s deadline. It submitted a request for equitable adjustment claiming, among other things, that it was entitled to additional costs associated with mold remediation because the existence of mold was the result of flaws in the Government’s design. The contracting officer denied the claim.