Rda Constr. Corp. v. United States, 11-555 C

• Decision Date: 27 July 2017
• Docket Number: No. 11-555 C,11-555 C
• Parties: RDA CONSTRUCTION CORP., Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

RDA CONSTRUCTION CORP., Plaintiff,
v.
THE UNITED STATES, Defendant.

No. 11-555 C

United States Court of Federal Claims

July 27, 2017

Accord and Satisfaction;
Breach of Contract;
Cardinal Change;
Contract Disputes Act ("CDA"), 41 U.S.C. §§ 7101-7109;
False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733;
Federal Acquisition Regulations ("FAR") 52.233-1 (Disputes), 52.236-2 (Differing Cite Conditions), 52.236-3 (Site Investigation and Conditions Affecting Work), 52.236-13(Accident Prevention), 252.236-7001(Contract Drawings and Specifications), 52.249-10 (Default on Fixed-Price Construction Contract);
Rule of the United States Court of Federal Claims ("RCFC") 12(b)(1);
Special Plea in Fraud, 28 U.S.C. § 2514;
Tucker Act Jurisdiction over Contract Disputes, 28 U.S.C. § 1491(a)(2);
United States Court of Federal Claims' Jurisdiction to Adjudicate Government Set-Offs, 28 U.S.C. §§ 1503, 2508.

Cornelius J. O'Brien, Eckert Seamans Cherin & Mellott, LLC, Pittsburgh, Pennsylvania, Counsel for Plaintiff.

Daniel B. Volk, United States Department of Justice, Washington, D.C., Counsel for the Government.

POST TRIAL MEMORANDUM OPINION AND FINAL ORDER

This post trial liability decision adjudicates a protracted dispute between RDA Construction Corp. ("RDA") and the United States Department of the Navy, Naval Facilities Engineering Command ("the NAVFAC"), arising from an October 13, 2009 Contract, requiring RDA to demolish, remove, and construct a wharf at the Naval Station in Newport, Rhode Island ("Newport Naval Station").

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To facilitate review of this Post Trial Liability Memorandum Opinion And Order, the court has provided the following outline:

I. RELEVANT FACTUAL BACKGROUND.

A. The Deteriorating And Dangerous Conditions At The Newport Naval Station Wharf.

B. On May 18, 2009, The Naval Facilities Command Issued Solicitation No. N40085-09-B-7002.

C. On June 4, 2009 and June 11, 2009, The Naval Facilities Command Conducted Two Site Visits Of The Newport Naval Station Wharf.

D. On June 30, 2009, RDA Construction Corp. Submitted A Bid.

E. On October 13, 2009, RDA Construction Corp. Signed Contract No. N40085-09-B-7002.

F. On November 18, 2009, The Appledore Report Was Disclosed To RDA Construction Corp.

G. On April 21, 2010, RDA Construction Corp. Filed A Certified Claim.

H. On May 17, 2010, The Naval Facilities Command Approved RDA Construction Corp.'s Baseline Schedule.

I. On August 31, 2010, RDA Construction Corp.'s April 21, 2010 Certified Claim Was Denied.

J. On September 20, 2010, RDA Construction Corp. Informed The Naval Facilities Command That Underground Obstructions Were Encountered, So Work Stopped.

K. On March 10, 2011, The Naval Facilities Command Instructed RDA To Submit A Cost Proposal To Remove The Obstructions And Continue Work.

L. In Late March 2011, RDA Construction Corp.'s Quality Control Manager And Site Safety Health Officer Quit.

M. On June 7, 2011 And August 19, 2011, The Naval Facilities Command Issued Contract Modifications 4 and 5 To The October 13, 2009 Contract.

N. On August 31, 2011, RDA Construction Corp. Filed A Complaint In The United States Court Of Federal Claims.

O. On September 14, 2011, RDA Construction Corp. Experienced A Third Accident At The Project Site.

P. From March 20, 2012 To November 8, 2012, The Naval Facilities Command Issued Contract Modifications 6-12.

Q. On February 21, 2013, The Naval Facility Command Terminated The October 13, 2009 Contract.

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R. On July 3, 2013, RDA Construction Corp. Filed A Second Certified Claim.

S. On April 15, 2015, The Naval Facility Command's Contracting Officer Determined That RDA Construction Corp. Was Liable For Liquidated Damages.

II. PROCEDURAL HISTORY.

III. DISCUSSION.

A. Jurisdiction.

1. Whether The Claims Alleged In The May 7, 2015 Second Amended Complaint Arise Under The Contract Disputes Act.

2. Whether The Claims Alleged In The May 7, 2015 Second Amended Complaint Were Submitted To The Contracting Officer For A Final Decision.

a. Regarding Counts I-IV.

b. Regarding Counts V-IX.

c. Regarding Damages.

B. Standing.

C. The Claims Alleged In RDA Construction Corp.'s May 7, 2015 Second Amended Complaint.

1. Count I: Whether The Naval Facilities Command Had A Duty To Disclose The Appledore Report And The Fay, Spofford & Thorndike Report.

a. Plaintiff's Argument.

b. The Government's Response.

c. Plaintiff's Reply.

d. The Court's Resolution.

2. Count II: Whether RDA Construction Corp. Is Entitled To An Equitable Adjustment Under The October 13, 2009 Contract's Differing Site Conditions Clause.

a. Plaintiff's Argument.

b. The Government's Response.

c. The Court's Resolution.

3. Counts III And IV: Whether The Naval Facilities Command Misrepresented The Condition Of The Wharf And The Purpose Of The October 13, 2009 Contract.

a. Plaintiff's Argument.

b. The Government's Response.

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c. The Court's Resolution.

4. Count V: Whether The Naval Facilities Command's November 7, 2012 Directive Was A Cardinal Change To The October 13, 2009 Contract.

a. Plaintiff's Argument.

b. The Government's Response.

c. The Court's Resolution.

5. Counts VI, VII and VIII: Whether The NAVFAC Violated The Duty Of Good Faith And Fair Dealing.

a. Plaintiff's Argument.

b. The Government's Response.

c. The Court's Resolution.

i. Regarding Price And Schedule Changes To The October 13, 2009 Contact, Because Of The NAVFAC's Failure To Disclose The Appledore Report And FST Report.

ii. Regarding Rescinding Approval Of RDA Construction Corp.'s Baseline Schedule.

iii. Regarding Extraction Of The Broken H-Pile Sections.

iv. Regarding Obstruction Drilling.

v. Regarding Work Suspension After The September 14, 2011 Safety Mishap.

vi. Regarding Approval Of RDA Construction Corp.'s Quality Control Manager And Site Safety And Health Officer.

vii. Regarding The Re-Inspection Of The Manitowoc 4100 Crane.

6. Count IX: Whether RDA Construction Corp. Was Entitled To An Extension Of The Contract Completion Date For Excusable Delays.

IV. DISCUSSION OF THE COUNTERCLAIMS ALLEGED IN THE GOVERNMENT'S JUNE 12, 2015 ANSWER.

A. Jurisdiction.

B. Standing.

C. Counterclaim I: Whether The Naval Facilities Command Is Entitled To Recover Liquidated Damages For The Cost Of Completing The October 13, 2009 Contract.

1. The Government's Argument.

2. Plaintiff's Response.

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3. The Government's Reply.

4. The Court's Resolution.

a. Whether RDA Was Entitled To An Extension Of The Contract Completion Date.

b. Whether The Naval Facilities Command's February 21, 2013 Termination Of The October 13, 2009 Contract For Default Should Be Converted Into A Termination For Convenience.

i. Whether The February 21, 2013 Notice Of Termination Was "Fair And Impartial," Pursuant To 48 C.F.R. § 1.602-2.

ii. Whether The Naval Facilities Command Established That RDA Construction Was In Default As Of The Termination Date.

iii. Whether The Naval Facilities Command Breached The October 13, 2009 Contract Thereby Relieving RDA Construction Corp. Of Any Consequences Stemming From The February 21, 2013 Default Termination.

c. The Quantum Of Liquidated Damages That The Naval Facilities Command Is Entitled To Recover.

D. Counterclaim II: Whether RDA Construction Corp. Is Liable For Damages Under The Contract Dispute Act's Anti-Fraud Provision, 41 U.S.C. § 7103(c)(2).

1. The Government's Argument.

2. Plaintiff's Response.

3. The Court's Resolution.

a. Whether RDA Construction Corp.'s Crane Re-Inspection Claim Was "Baseless."

b. Whether RDA Construction Corp.'s Crane Re-Inspection Claim Was "Indefensibly Inflated."

c. Whether RDA Construction Corp.'s Crane Re-Inspection Claim Was "Premised On Affirmative Misrepresentations Of Fact."

E. Counterclaim III: Whether RDA Construction Corp. Forfeited All Claims Against The United States Under The Special Plea In Fraud Statute, 28 U.S.C. § 2514.

F. Counterclaim IV: Whether RDA Construction Corp. Violated The False Claims Act.

1. The Government's Argument.

2. Plaintiff's Response.

3. The Court's Resolution.

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a. Whether RDA Construction Corp. Falsely Certified That Its Deck Removal Work Complied With The October 13, 2009 Contract.

b. Whether RDA Construction Corp. Falsely Certified That Its Rock Fill Removal Work Complied With The October 13, 2009 Contract.

i. Regarding Rock Fill Removal.

ii. Regarding The Hydrographic Survey.

c. Whether RDA Construction Corp. Falsely Certified That It Made Timely Payments To Its Subcontractors.

d. Whether RDA Construction Corp.'s July 3, 2013 Certified Claim For Costs Incurred To Re-Inspect The Manitowoc 4100 Crane Was Baseless, Inflated And Premised On Factual Misrepresentations.

V. CONCLUSION.

* * *

I. RELEVANT FACTUAL BACKGROUND.¹

A. The Deteriorating And Dangerous Conditions At The Newport Naval Station Wharf.

In 1958, the NAVFAC built a steel-reinforced concrete structure, known as the "marginal wharf" ("wharf"), and a metal-sheet pile bulkhead² along 850 feet of Narragansett Bay shoreline, located between Piers 1 and 2 of the Newport Naval Station. PX 12 at 1-2.

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Image materials not available for display.

DX 7 at 7.

As depicted below, the bulkhead is a seawall comprised of metal sheet-piles that were secured by steel rods anchored into concrete structures beneath the sea floor.

Image materials not available for display.

PX 12 at 3.

The wharf is a concrete structure, supported by 248 steel H-piles.³ DX 1 at 82-91. As illustrated below, each pile was encased in a concrete "jacket" from the top to below the waterline.

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Image materials not available for display.

PX 12 at 4; DX 1 at 82-91.

In April 2005, Appledore Marine Engineering, Inc. issued a report that was commissioned by the NAVFAC, titled: "Underwater Facilities Inspection And Assessment of the Newport Naval Station" ("the Appledore Report"). PX 12. The Appledore Report found "approximately ten percent of the concrete piles [supporting the wharf were] missing their fiberglass shell forms with failed or partially failed concrete encasement exposing the reinforcing steel and encased steel H-pile." PX 12 at 15-16. The Appledore Report advised the NAVFAC...