Bell v. United States

• Decision Date: 25 March 2014
• Docket Number: No. 2013–5002.,2013–5002.
• Citation: 739 F.3d 1324
• Parties: BELL/HEERY, A Joint Venture, Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

739 F.3d 1324

BELL/HEERY, A Joint Venture, Plaintiff–Appellant,

v.UNITED STATES, Defendant–Appellee.

No. 2013–5002.

United States Court of Appeals,Federal Circuit.

Jan. 7, 2014.

Rehearing and Rehearing En Banc Denied March 25, 2014.

Robert D. Windus, Moore & Lee, LLP, of McLean, VA, argued for plaintiff-appellant. With him on the brief was Richard O'Shea Wolf.

Ellen M. Lynch, Trial Attorney, Commercial Litigation Branch, Civil Division, of Washington, DC, argued for defendant-appellee. On the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Harold D. Lester, Jr., Assistant Director, and Devin A. Wolak, Trial Attorney.

Before PROST, MAYER, and REYNA, Circuit Judges.

Opinion for the court filed by Circuit Judge REYNA.

Dissenting opinion filed by Circuit Judge MAYER.

REYNA, Circuit Judge.

Bell/Heery, a Joint Venture (“BH”), appeals from the decision of the United States Court of Federal Claims dismissing its complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Rules of United States Court of Federal Claims (“RCFC”). See Bell/Heery v. United States, 106 Fed.Cl. 300 (2012) (“CFC Decision”). Because BH has failed to set forth facts sufficient to state a viable claim for the requested relief under the theories presented in its complaint, we affirm.

Background

This appeal involves a contract dispute between BH and the Federal Bureau of Prisons (the “FBOP” or “Government”). In April 2006, the FBOP issued a Request for Proposal (“RFP”) soliciting bids for the “design-build” construction of a federal correctional institution in New Hampshire. The RFP detailed the specifications for the project and the duties of prospective contractors. In particular, the construction project involved a “cut-to-fill” site, meaning that the ground for the project had to be made level by excavating (or “cutting”) materials from one area of the work site and using those materials to fill the lower areas. The contract mandated that the cut-to-fill operations be performed in compliance with the rules and regulations of the New Hampshire Department of Environmental Sciences (“NHDES”). These requirements included obtaining and complying with an Alteration of Terrain (“AOT”) permit for the cut-to-fill operations.

The RFP included a section entitled “Certification, Codes, Regulations, and Permits,” which included several subsections regarding substantive and procedural obligations assumed by prospective bidders in addressing state-related permit requirements in their construction plans. RFP § C.4. First, the provision advised that the contractor would be responsible for “prepar[ing] the necessary documentation and forms required for the permits, and shall apply for, pay for and obtain all such permits and submit the application(s) for the FBOP.” RFP § C.4(d)(1). Second, it advised that “[i]n preparing construction documents, the Contractor is to consult with appropriate officials of the State or a political subdivision of a State, or both, in which the project will be located, who would have jurisdiction if it were not constructed by a federal agency.” RFP § C.4(e). Third, it indicated that “[i]n no case are the comments or recommendations of these officials to be implemented into the developmental documents without the approval of the FBOP.” RFP § C.4(e)(3).

In addition to the foregoing explicitly recited obligations, the RFP further advised that “[t]he FBOP Technical Design Guidelines shall be referenced by the Contractor for additional requirements.” RFP § C.4(d)(3). These requirements included a Technical Design Guideline (“TDG”) entitled “Codes, Regulations, Laws, Permits and Variances.” TDG 01415. The stated purpose of these guidelines was to “provide[ ] guidance to ensure that the Contractor obtains, reads, and complies with the terms and conditions of applicable permits....” TDG 01415(A)(1). The “Regulations” section of these guidelines further states that a prospective “contractor should ... become familiar with of [sic] all Federal Acquisition Regulation (FAR) clauses incorporated into this project.” TDG 01415(C)(1). The Regulations section of the TDG expressly advises contractors that the FAR's “Permits and Responsibilities clause,” set forth in 48 C.F.R. § 52.236–7, was incorporated into the contract and that it allocates all costs associated with obtaining permits to the Contractor “without additional expense to the Government”:

The requirements for permits on projects are regulated by FAR clause 52.236–7: “The Contractor shall, without additional expense to the Government, be responsible for obtaining any necessary licenses and permits, and for complying with any Federal, State, and municipal laws, codes, and regulations applicable to the performance of the work....”

TDG 01415(C)(1)(a) (emphasis added).

The TDG also reiterates many of the obligations specifically set forth in the RFP solicitation documents. For instance, the TDG provision entitled “Permits,” places the duty of obtaining, paying for, and complying with permits on the contractor. TDG 01415(F). The TDG section concerning “State and Local Government Consultation, Review and Inspection” (the “Consultation, Review, and Inspection” provision) imposes obligations on the contractor to: consult with state officials when “preparing the design for the project”; “submit plans and specifications for the project in a timely manner for review” by state officials; “allow inspections by [state] officials during construction of the project”; and, in conjunction with the Government, “give due consideration to [state official's] recommendations and ensure that a written response is made to them.” TDG 01415(D)(1)(a), (d), (e), (f). The TDG's Consultation, Review, and Inspection provision also states that “[t]he Contractor shall perform the [obligations regarding state official consultation, review, and inspection] in conjunction with the FBOP Project Management Team.” TDG01415(D)(1); TDG01415(D)(1)(f).

Based on the criteria and obligations set forth in the solicitation documents, BH submitted its bid with a construction plan that assumed it would be granted a permit for cut-to-fill operations that would occur in a single step. Under BH's one-step-cut-to-fill plan, the cut materials would be directly transported to their final fill locations without interruption. According to BH, the one-step-cut-to-fill plan was adopted because it was the most efficient process for completing the required cut-to-fill operations. Based on information provided in the Government's solicitation documents and its prior experience, BH believed the NHDES would approve an AOT permit for the one-step-cut-to-fill construction plan. As such, BH's bid price for the construction contract was calculated based on the assumption that the cut-to-fill work would occur in one step.

In May 2007, the Government selected BH's bid for the construction contract for a base sum of $238,175,000. The contract included a scheduled completion date of June 10, 2010, and provided liquidated damages in the amount of $8,000 for each day completion was overdue. The contract also included a number of express provisions and incorporated several Federal Acquisition Regulation (“FAR”) provisions. In addition to the Permits and Responsibilities clause, the contract also incorporated the FAR's “Changes” clause, which describes the procedure by which the Contracting Officer can “make changes in the work within the general scope of the contract.” 48 C.F.R. § 52.243–4(a). The Changes clause further states that, for any such ordered change that “causes an increase or decrease in the Contractor's cost of, or the time required for, the performance of any part of the work under [the] contract,” the Contracting Officer “shall make an equitable adjustment and modify the contract in writing.” Id. § 52.243–4(d).

After BH was awarded the contract, it applied for state permits to begin cut-to-fill operations under the one-step-cut-to-fill plan. The NHDES rejected the application because it would not authorize BH to proceed under the proposed one-step-cut-to-fill plan. Instead, the NHDES informed BH that it would only authorize cut-to-fill operations that were limited to a forty-acre disturbance area, meaning that BH could only disturb a maximum of forty-acres of land at any given time. This restricted the cut-to-fill work to an area substantially less than BH anticipated under its one-step-cut-to-fill plan. To comply with the forty-acre restriction, BH revised its plans for the initial phases of the cut-to-fill operations and submitted those plans to the NHDES for approval. The NHDES authorized BH to proceed with the plans for the initial phases of operations, but further required BH to submit plans for the subsequent phases for review and approval before BH could proceed with those additional phases.

BH advised the FBOP of the restrictions placed on the cut-to-fill operations by the NHDES and the potential ramifications of those restrictions on BH's performance under the contract. In a letter from BH to the Contracting Officer, BH indicated that the NHDES's requirements would “restrict our contractor's ability to complete the work based on the means, methods and durations anticipated in their [sic] bid.” Additionally, BH advised that it had additional risk of being unable to meet the contract's performance deadlines since “the requirements for future phasing plan limitations are yet to be determined.” With these considerations in mind, BH advised the government of the “potential exposure for addition[al] cost and schedule impact based on the requirements of the NHDES through the [AOT permit] and we are reserving our rights for additional compensation resulting from the requirement of amendment A of the [AOT permit] as well as future requirements of the permit.” BH did not, however, refuse to proceed with construction under the...