Old Veteran Constr., Inc. v. United States

• Decision Date: 19 May 2015
• Docket Number: No. 14-807C,14-807C
• Parties: OLD VETERAN CONSTRUCTION, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Claims Court

OLD VETERAN CONSTRUCTION, INC., Plaintiff, v. UNITED STATES, Defendant.

No. 14-807C

United States Court of Federal Claims

May 19, 2015

Summary Judgment; Type I Differing Site Conditions.

Richard P. Reichstein, Reichstein Law, Chicago, IL, for plaintiff.

Lauren Springer Moore, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With her were Robert E. Kirschman, Jr., Director, Commercial Litigation Branch and Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division.

OPINION

Plaintiff, Old Veteran Construction, Inc. (OVC), filed a short complaint in this court on September 3, 2014, alleging it is entitled to damages in the amount of $321,561.00 because, contrary to its expectations, it was required "to dig out and haul off the existing lean clay and replace it with gravel from an outside source" in order to construct the Army Reserve Center that it had been contracted to build. Plaintiff claims the solicitation made clear that the contractor should be able "to use the on-site lean clay as load bearing support for the building," but in fact, it was not able to do so. Plaintiff argues that it was entitled to rely on the "positive statements in the specifications" and the drawings provided to guide bidders, "regardless of contractual provisions requiring the contractor to make investigations." Plaintiff contends, therefore, that it is entitled to recover the costs it incurred when the on-site lean clay proved unsuitable to use as load bearing support for the building. Plaintiff submitted a certified claim to the contracting officer, which was denied in full, and the contracting officer declined to pay plaintiff any increase in the contract price. Thereafter, plaintiff filed suit in this court, to which defendant has responded by filing a motion for summary judgment.

FINDINGS OF FACT

The United States Army Corps of Engineers - Louisville (Army Corps) issued Solicitation No. W912QR-11-R-0029 on April 7, 2011, seeking the construction of an Army Reserve Center in Quincy, Illinois. The solicitation included section 00 31 32, which contained a "Report of Geotechnical Investigation," dated December 20, 2010, which contained information regarding "Engineer Fill." Initially, contractors' proposals were due on or before May 10, 2011 and the Government was to have 120 days following the due date to accept a bidder's offer.¹ The Army Corps issued Amendment 002 to the solicitation, which changed the due date for proposals to May 19, 2011. OVC submitted a proposal on the due date and subsequently during discussions, submitted two revised proposals in response to letters OVC received from the contracting officer. On June 27, 2011, the contracting officer sent OVC a letter requesting a "final proposal revision in accordance with Federal Acquisition Regulation (FAR) 15.307" by July 1, 2011. OVC submitted its final proposal on June 30, 2011.

On September 20, 2011, the agency awarded the contract to OVC for $13,899,681.00, and on October 7, 2011, the Army Corps sent OVC a notice to proceed. OVC submitted a preliminary schedule for the project to the contracting officer on or about December 30, 2011, and then a revised schedule on or about January 13, 2012. OVC's project schedule estimated that excavation work would occur from December 24, 2011 through January 22, 2012. OVC actually began the excavation and fill work on January 13, 2012.

On January 23, 2012, OVC submitted a Request for Information to the contracting officer, which stated:

In accordance with the above specification section, OVC preformed [sic] a proof roll test on the building pad of the Training Center last Wednesday 1-18-12. Due [to] the time of year we found the clay to be saturated with water and the ground to be frozen. Given the current moisture content of the soil it is not suitable for placement under the building, resulting in a failed proof roll. As a result of the [sic] this failure our Geotechnical consultant has recommended that the entire building pad be built up with 3" (RR1B or RR2B) stone in lieu of the onsite clay. Given the time from bid to award of this project OVC could not have anticipated the required installation of the 3" stone given that the Geotechnical specification provided by G2 Consulting group only recommends the use of engineered structural fill if construction was to be completed during the winter months. Attached is a recommendation from Geotechnics Testing supporting the installation of the 3" stone for your review and approval.² If this alternate method is acceptable please advise if these additional costs will be considered a change order to the base contract.

Larry Wernle, the contracting officer's representative, replied to plaintiff's Request for Information that either of the substitutions OVC proposed were acceptable, "but only if performed at no additional cost to the Government."

On February 14, 2012, OVC submitted a Request for Equitable Adjustment, based on the "fact OVC bid the project anticipating favorable weather conditions, given that the award date was never identified." Plaintiff referenced the initial bid date, May 19, 2011, and suggested that since the bids were submitted in May 2011, OVC was hopeful "that an award would be sent out within the month to come and the earthwork would take place during the recommended summer months as stated in the Geotechnical report." The contract, however, was awarded on September 20, 2011, and, according to plaintiff, OVC was "taxed with the most unfavorable time to begin excavation," hindering its ability to use "the onsite lean clay as structural fill." OVC also noted that OVC "had no option but to begin the work during the winter months. Although, it is clearly stated by G2 Consulting Group³ in their report that the earthwork could not be completed during the winter months without substantial costs impacts." OVC reasoned, "[s]ince, only a recommendation was given to import granular structural fill OVC strongly believes that if we had had [sic] acknowledged this recommendation to import granular fill in our original bid submission, we would not have been competitive with other bidding General Contractors."

In a letter, dated March 30, 2012, Donald Peterson, identified as a government resident engineer and an administrative contracting officer, responded to OVC's February 14, 2012 request, explaining that OVC's Request for Equitable Adjustment has "no merit." (emphasis in original). Mr. Peterson stated that the placement of the stone was "within the scope of work required by the As-Awarded Contract." The administrative contracting officer also noted that while plaintiff referenced the May 2011 bid date, it failed to acknowledge that the final proposal revision occurred on July 1, 2011, and at that time, the government was entitled to a specified number of additional days to consider andaccept the proposal, and that the contract was awarded within the "Bid Acceptance Period."⁴

On August 30, 2013, OVC submitted a certified claim titled "Proposal for Equitable Adjustment of Contract No. W912QR-11-C-0049," and included certification language, seeking payment of $321,561.00. On March 26, 2014, the contracting officer, Gloria Ritter, issued a final decision denying OVC's claim in its entirety.⁵ In her final decision, the contracting officer stated:

You made an error in your calculation as to when you would be able to start working on the Quincy Army Reserve Center. You unreasonably assumed that if awarded the Contract you would start work on ARC during the summer months of 2011. In reality, you started work on the project in January of 2012. Because you started in the winter, you claim you are entitled to additional costs due to alleged government delay. However, no such delay occurred. You were on notice by the solicitation, which you signed, that a winter start date was very likely. You should have calculated your proposal to include the likelihood of a winter start date instead of assuming a definite summer start date.

The contracting officer also indicated that OVC was "clearly on notice" that excavation work likely would begin during the winter months and that "your [OVC] assumption that you would be able to start in the summer months was entirely unreasonable." In addition, despite the changes in proposal submission times and the 90 day acceptance period, the contracting officer stated, "you had several chances to revise your proposal but failed to do so," and "submitted the same price you [OVC] had submitted previously." The contracting officer also noted that under the terms of the solicitation, OVC had the right to withdraw its proposal at "any time before it was accepted," and that it was clear to all that additional time before work could begin would be required for bond approval. The contracting officer continued, "[s]ince you calculated your proposal based on yourunreasonable assumption, you must bear the costs associated with that assumption. When a contractor places a proposal on a government project, it assumes the basic obligation to accurately propose according to its ability."

In evaluating whether OVC had proven it was entitled to relief under a differing site conditions claim, the contracting officer stated, "[a] reasonably prudent contractor would not have interpreted the contract documents as promising a summer start date." The contracting officer determined that "the site conditions you encountered were exactly the same as the geological [geotechnical] report claimed they would be. The geological report clearly informed you about the soil conditions of the site during both winter and summer months." The contracting officer further stated:

The report gave you sufficient information concerning the soil conditions in the winter and the summer. In addition, there is nothing in this report that would lead a reasonably prudent contractor to conclude that summer

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