MW Builders, Inc. v. United States, 13-1023 C
| Decision Date | 18 October 2017 |
| Docket Number | No. 13-1023 C,13-1023 C |
| Parties | MW BUILDERS, INC. f/n/a MW BUILDERS OF TEXAS, INC., Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Anti-Deficiency Act, 31 U.S.C. § 1350;
Breach of Contract;
Contract Disputes Act, 41 U.S.C. §§ 7101-7109;
Counterclaims, 28 U.S.C. § 2508;
False Claims Act, 31 U.S.C. §§ 3729-3733;
Federal Acquisition Regulation, 48 C.F.R. §§ 52.211-12 (Liquidated Damages), 52.242-14 (Suspension of Work), 52.249-10 (Contract Default);
Good Faith and Fair Dealing;
Special Plea In Fraud, 28 U.S.C. § 2514;
Tucker Act Jurisdiction, 28 U.S.C. § 1491;
Unreasonable Delay;
Waiver.
Paul Harvey Sanderford, Sanderford and Carroll, P.C., Temple, Texas, Counsel for Plaintiff.
Alexander Orlando Canizares, United States Department of Justice, Washington, D.C., Counsel for the Government.
This case concerns the United States Army Corps of Engineers ("Army Corps") attempt to shift its contractual responsibility to make arrangements for permanent electrical utility services that MW Builders, Inc. ("MW Builders") needed to build an Army Reserve Center in Sloan, Nevada. This imposed unnecessary construction delay and costs on MW Builders that the Contracting Officer ("CO") refused to pay. When MW Builders filed a Complaint in the United States Court of Federal Claims, the Government alleged that the contractor's claim was fraudulent.
As discussed herein, the court has determined that the Army Corps breached a September 10, 2010 Contract with MW Builders and violated the duty of good faith and fair dealing for which $418,961.90 is awarded, as compensable delay damages, together with statutoryinterest. The Government's counterclaims for fraud are dismissed, but the Government's affirmative defense of waiver concerning one of MW Builders' subcontractors' alleged pass-through claim is granted.
To facilitate review of this Post-Trial Memorandum Opinion And Final Order, the court has provided the following outline.
I. RELEVANT FACTUAL BACKGROUND.
F. In March 2012, MW Builders, Inc. And The United States Army Corps Of Engineers Had A Dispute Over The Execution Of A Line Extension Agreement With NV Energy.
G. On April 6, 2012, MW Builders, Inc. Notified The United States Army Corps Of Engineers That The Construction Schedule Would Be Delayed, Because The Line Extension Agreement With NV Energy Was Not Executed.
H. On April 19, 2012, The United States Army Corps Of Engineers Began To Negotiate A Line Extension Agreement With NV Energy.
J. On December 27, 2012, MW Builders, Inc. Submitted A Certified Claim To The Contracting Officer For Costs Incurred As A Result Of The United States Army Corps Of Engineers' Failure To Timely Execute A Line Extension Agreement With NV Energy.
K. On June 10, 2013, The Contracting Officer Issued A Final Decision Denying MW Builders, Inc.'s Monetary Claim, But Granting A Non-Compensable Time Extension Of 146 Days For MW Builders, Inc. To Complete Construction Of The Army Reserve Center In Sloan, Nevada.
L. On December 13, 2013, The Completed Army Reserve Center in Sloan, Nevada Was Accepted By The United States Army Corps Of Engineers.
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I. RELEVANT FACTUAL BACKGROUND.2
In 2008, the United States Army Corps of Engineers (the "Army Corps") began designing an Army Reserve Center in Sloan, Nevada (the "Project") for use by the Army Reserve 63rdRegional Support Command ("63rd RSC"). TR at 16-17 (Probst); TR at 971 (Miller). During the "Design Phase," the Army Corps retained Mason & Hanger, an architecture and engineering firm, to design and prepare construction specifications. Jt. Stip. ¶ 8. Mr. Jonathan Miller also served as Mason & Hanger's Project Manager. TR at 970-71 (Miller). Several Army Corps employees also were involved:
The Sloan, Nevada site selected by the Army Corps did not have any existing electric utilities. Jt. Stip. ¶ 5. Therefore, the local electrical utility, Nevada Power Company, doing business as NV Energy ("NV Energy"), was required to design a new utility line that would connect the Project with existing power lines. PX 4 at 2; see also JX 2 (4/28/09 Meeting Minutes reporting that "[u]tility coordination is critical").
Mason & Hanger was responsible for contacting NV Energy about utility design and, on May 6, 2009, NV Energy provided Mason & Hanger with a draft "Design Initiation Agreement," together with a memorandum that listed all the steps necessary for NV Energy to provide electrical power to the Project. DX 6 at 4. NV Energy's May 6, 2009 draft Design Initiation Agreement provided that, "[p]rior to going to construction, [the applicant must] sign one or more of the following agreements: Line Extension Agreement (LEA); Large Profit Service Agreement (LPS Agreement); Contribution In Aid of Construction Agreement (CIAC Agreement); Non-Refundable Construction Agreement (NRCA)." DX 6 at 5.
On May 14, 2009, a Mason & Hanger employee forwarded the Design Initiation Agreement and attached memorandum to Mark Cutler, an employee of the 63rd RSC. DX 6 at 2. On May 15, 2009, Mr. Cutler forwarded the agreement to Ms. O'Leary, the Army Corps Design Project Engineer for the Project, and stated that the Design Initiation Agreement should "be signed by the [Army] Corps," because it "has a look on it that whoever signs it should really have a warrant or be a contracting officer." DX 6 at 1. But, Ms. O'Leary declined to authorize a representative of the Army Corps to sign the Design Initiation Agreement. DX 6 at 1. Consequently, neither the 63rd RSC, Mason & Hanger, nor the Army Corps signed the Design Initiation Agreement that NV Energy required before it would commence utility work on the Project. JX 4. Instead, Ms. O'Leary suggested that the Army Corps "place that requirement on the construction contractor." DX 6 at 1.
On July 15, 2009, the 63rd RSC, the Army Corps, and Mason & Hanger decided that the solicitation should include a requirement that the winning bidder must sign the Design Initiation Agreement with NV Energy. DX 8 at 1; see also TR at 978 (Miller). The Army Corps and Mason & Hanger, however, did not include any express...
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