JMR Contruction Corp. v. United States
| Decision Date | 14 July 2014 |
| Docket Number | No. 11-187 C,11-187 C |
| Parties | JMR CONTRUCTION CORP., Plaintiff, v. UNITED STATES OF AMERICA, Defendant. |
| Court | U.S. Claims Court |
Eichleay damages; Field overhead
damages; Home office overhead
damages; Contract Disputes Act;
Summary judgment.
OPINIONWilliam Harrell Nellis, born March 8, 1916, was a distinguished fighter pilot during World War II.1 As a member of the United States Air Force's 513th Fighter Squadron, Lieutenant Nellis participated in 70 aerial combat missions, most of which were in support of General George Patton's 3rd Army. He was shot down three times in service to his country. Regrettably, during Lt. Nellis' final flight on December 27, 1944, ground fire struck his plane while he was strafing a German convoy as part of a sortie during the Battle of the Bulge.
Already a decorated soldier, Lt. Nellis was posthumously awarded the Purple Heart for his final act of bravery. To further honor Lt. Nellis' sacrifice, the United States Air Force renamed the Las Vegas Air Force Base "Nellis Air Force Base" on April 30, 1950. In the case at bar, the base is the site of a very different type of conflict, a breach of contract claim. Its genesis is plaintiff's (JMR Construction Corp. or "JMR") contract with the United States Army Corps of Engineers ("COE") to build an aircraft maintenance facility on Nellis Air Force Base. Compl. ¶ 5.
JMR's complaint, filed on March 25, 2011, states a claim for money damages under the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613, arising from an alleged breach of their contract with the COE. Compl. ¶ 1. JMR avers that the COE breached JMR's contract by causing delays to essential, or "critical path," elements of the construction plan. Compl. ¶¶ 12-15. JMR contends that the project's delays were caused by the COE's refusal to adhere to the agreement's provisions for contract modification. Id. In its complaint, plaintiff alleges these project delays caused $428,261.44 in damages for field office overhead, home office overhead, bonding and fee damages, painting expenses, scheduling costs, and consulting costs. Compl. ¶ 4.
This case is now before the court on defendant's motion for partial summary judgment, pursuant to Rule 56 of the Rules of the United States Court of Federal Claims ("RCFC"). Defendant contends that, as a matter of law, plaintiff is not entitled to field overhead damages from the period of February 4 to September 4, 2009, home office overhead damages in toto, the portion of bonding/insurance and fee damages derived from these amounts, and damages for painting expenses, scheduling costs, and consulting costs. Def's S.J. Mot. at 9-10.
Plaintiff does not oppose summary judgment on its alleged damages for painting expenses, scheduling costs, consulting costs. Pl.'s Resp. at 12-13. Plaintiff also concedes that it is not entitled to its alleged home office overhead damages for the period of December 11, 2009 through January 15, 2009. Id. Nonetheless, plaintiff continues to seek damages2 for home office overhead, field overhead costs, and bonding/insurance and fee damages for the period of January 16, 2008 to September 4, 2009.
Defendant argues that field overhead damages are inappropriate because JMR "did not occupy the field." Def.'s S.J. Mot. at 11. Defendant contends that home office overhead damages are not available because plaintiff does not satisfy the legal test the United States Court of Appeals for the Federal Circuit (the "Circuit") has adopted for this type of damages, as originally set out in Eichleay Corp., ASBCA No. 5183, 60-2 B.C.A. (CCH) 2688, 1960 WL 538 (1960). See e.g., E.R. Mitchell Constr. Co. v. Danzig, 175 F.3d 1369 (Fed. Cir. 1999). Defendant also avers that, to the extent that plaintiff's other claimed damages for bond/insurance and fees are derived from plaintiff's field and home overhead amounts, those damages are unavailable.
As explained below, the court will grant defendant's motion in part and deny it in part. With respect to field overhead damages, home office overhead damages from January 16 to February 3, and bonding/insurance and fee damages the court will deny defendant's motion for partial summary judgment. But, the court will grant defendant's motion with regard to home office overhead damages from February 4 to September 4, 2009.
On June 26, 2007, JMR contracted with the COE for the construction of an aircraft maintenance facility on Nellis Air Force Base. Compl. ¶ 5; Def.'s S.J. Mot. at 3. The contract projected a 420 day performance period, anticipating construction would be completed by October 6, 2008. Compl. ¶ 7; Def.'s S.J. Mot. at 3. But, as explained below, this completion date would not be met. Final project work was not finalized until almost a year later, on September 4, 2009. Compl. ¶ 7; Def.'s S.J. Mot. at 2.
Complications began to delay construction in March and April of 2008 and would continue to plague the project through January of 2009. Def.'s S.J. Mot. at 3-5; Pl.'s Resp. at 37. These initial problems included facility issues, problems with the building's design, as well as base-wide schedule conflicts. Id. In total, these setbacks added 59 days to the project's completion date and necessitated four separate contract modifications.3 Id.
Faulty steel also delayed the project. Def.'s S.J. Mot. at 3-4; Pl.'s Resp. at 4. On July 10, 2008, JMR discovered the first load of structural steel did not conform to thickness standards. Id. To mitigate potential delay, JMR accelerated its pace, working a "two-shift" operation from August 6, 2008 through November 7, 2008 in an effort to get construction back on schedule. Id. Nevertheless, steel-related problems delayed construction through at least December 10, 2008.4 Id.
Although these delays took place before the period at issue, they affected the project through early January of 2009. Id. From January 1 to January 16, JMR continued to perform substantial work on-site, with its workforce averaging 37 hours of work per day. A309-32.5 On January 14, the facility was complete enough for the COE to take possession, or "beneficial occupancy," of the facility. Def.'s S.J. Mot. at 5; Pl.'s Resp. at 3-4. From that point onward, JMR's work slowed to roughly 10 hours per day. A309-32. During this period JMR installed temporary lighting in a room referred to by the parties as "Room 109." Def.'s S.J. Mot. at 5; Pl.'s Resp. at 5-6. Notably, the parties dispute the nature of the work performed in January. Defendant argues the work was significant. Def.'s Reply at 7. Plaintiff argues the work was "minor." Pl.'s Proposed Finding of Disputed Facts ¶ A.3.
By January 29, completed work was significant enough that JMR's Quality Control Manager Marcia Kawa noted in an email that "[the] project is complete at this time."6 A410. On February 2, JMR installed a temporary power converter. A11-12. One day later, on February 3, JMR removed its construction office trailer from the work site. A37. As JMR's Quality Assurance Reports demonstrate, JMR performed six days of field work after this date. A13, A39, A41-2, A130-36, A384-85. Despite Ms. Kawa's statement, however, two substantial tasks remained before the project could be finished: installation of a permanent power converter and permanent ceiling lights in Room 109. Def.'s S.J. Mot. at 7; Pl.'s Resp. at 10.
The manufacture and installation of the permanent power converter was the "longest critical path delay" on the project. Pl.'s Resp. at 6; Def.'s S.J. Mot. at 5-6. The power converter was a custom-built unit, requiring 6 months to fabricate. Id. Whether this schedule was known to JMR is a matter of considerable dispute between the parties. Def.'s Reply at 13; Pl.'s Resp. at 10. It was not until May 26, 2009 that Choice Construction, Inc. ("Choice"), JMR's electrical subcontractor, could accept delivery of the permanent converter and install it. A13. But, Choice did not connect the converter immediately because no manufacturer's representative was present, as the contract required. Id. On July 14, 2009, the converter was finally connected and tested. A39. Installation was not completed, however, because Choice would not connect the converter without receiving a variation for the Underwriters Laboratories' approval.7 Id. On August 6,2009, the converter was connected to the facility and energized. A41. In total, the converter was installed in 3 days, stretched over a 73 day period. Def.'s S.J. Mot. at 5; Pl.'s Resp. at 6.
Installation of permanent lighting in Room 109 was delayed by complications with the ceiling's design. Def.'s S.J. Mot. at 7; Pl.'s Resp. at 5-6. On November 1, 2008, JMR submitted a Request for Information ("RFI") to the COE in order to clarify problems JMR had identified with the design of the ceiling. Id. As JMR explains, complications arising from evaporative coolers8 in a separate building required new ductwork, as well as reconfigured sprinkler and mechanical systems. Id.
In response to JMR's RFI, the COE issued a solicitation, designated AV006, for the needed revisions to Room 109's ceiling. Def.'s S.J. Mot. at 7. On March 24, JMR and the COE reached an agreement covering the direct labor portion of the work included in solicitation AV006, as well as seven other changes. Id. These issues delayed the installation of permanent lighting, which was not completed until 142 days later, on August 13, 2009. Id; Pl.'s Resp. at 5.
In addition to the four days of on-site work needed to address the power converter and lighting, JMR conducted off-site work between January 16 and September 4. Def's S.J. Mot. at 4. Defendant contends that JMR conducted only two days of off-site work, receiving and transmitting contract submittals. Id. On August 28, JMR submitted documentation relating the power converter. A358, A362; Compl. ¶¶ 8, 14. On September 4, 2009, JMR received the COE's acknowledgment of JMR's transmittals. Id. JMR argues it performed significant additional work, averring that it was in almost...
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