Rma Eng'g S.A.R.L. v. United States

• Decision Date: 29 August 2018
• Docket Number: No. 14-1202,14-1202
• Parties: RMA ENGINEERING S.A.R.L., d/b/a/ RMV ARCHITECTS, Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

RMA ENGINEERING S.A.R.L., d/b/a/ RMV ARCHITECTS, Plaintiff, v. THE UNITED STATES, Defendant.

No. 14-1202

United States Court of Federal Claims

August 29, 2018

Breach of Contract;

Constructive Change;

Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (2006);

Duty of Good Faith and Fair Dealing;

Federal Acquisition Regulation, 48 C.F.R. §§ 6.101 (Competition Requirements), 16.202-1 (Firm, Fixed-Price Contract), 49.103 (Methods of Settlement), 52.221-13 (Change Order Extensions), 52.233-1 (Disputes), 52.236-2 (Differing Site Conditions), 52.236-3 (Site Investigations and Conditions Affecting Work), 52.236-13 (Safety Equipment), 52.242-14 (Excusable Delays), 52.243-7 (Change Order), 52.246-12 (Inspection of Construction), 52.249-2 (Termination For Convenience), 52.249-10 (Termination For Default), 53.301-1436 (Settlement Proposal (Total Cost Basis));

Ratification;

Rules of the United States Court of Federal Claims 9(k) (Pleading Requirements for Contract Claims), 11(b)(3) (Representations to the Court), 12(b)(1) (Subject Matter Jurisdiction), 12(b)(6) (Failure to State a Claim), 15 (Amending Pleadings);

Safety and Health Regulations for Construction, 29 C.F.R. §§ 1926.1-1926.1442;

Tucker Act Jurisdiction, 28 U.S.C. § 1491.

John M. Manfredonia, Manfredonia Law Offices, LLC, Creskill, New Jersey, Counsel for Plaintiff.

Sean Siekkinen, United States Department of Justice, Civil Division, Washington, D.C., Counsel for the Government.

MEMORANDUM OPINION AND ORDER

BRADEN, Senior Judge.

On November 9, 2017, the Government filed a Motion To Dismiss a Second Amended Complaint filed by RMA Engineering S.A.R.L d/b/a RMV Architects ("RMA") that alleged twenty-three counts arising from the United States Army's ("Army") August 4, 2010 decision to terminate an August 1, 2009 contract awarded to RMA for default. In response, RMA filed a March 22, 2018 Cross-Motion, requesting that the court grant RMA leave to file a Third Amended Complaint. For the reasons discussed herein, the Government's Motion To Dismiss is granted as to Counts 1 through 9 and 11 through 23, but denied as to Count 10. RMA's Cross-Motion For Leave To Amend is denied.

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

I. FACTUAL BACKGROUND.

A. On August 1, 2009, The United States Army Awarded Contract No. W90BRJ-09-C-0036 To RMA Engineering S.A.R.L.

B. On August 1, 2009, RMA Engineering S.A.R.L. Received A Notice To Proceed.

C. On August 4, 2010, The United States Army Terminated The August 1, 2009 Contract For Default.

II. PROCEDURAL HISTORY.

III. DISCUSSION.

A. Jurisdiction.

B. Standing.

C. The Government's November 9, 2017 Motion To Dismiss, Pursuant to RCFC 12(b)(1).

1. The Government's Argument.

2. RMA Engineering S.A.R.L.'s Response.

3. The Government's Reply.

4. The Court's Resolution.

a. Standard Of Review For A Motion To Dismiss, Pursuant To RCFC 12(b)(1).

b. RMA Engineering S.A.R.L.'s Claim For Wrongful Termination (Count 1).

c. RMA Engineering S.A.R.L.'s Claims For Delay, Post-Termination Costs, Breach of Contract, And Breach Of The Duty Of Good Faith And Fair Dealing (Counts 2, 21, 22, and 23).

D. The Government's November 9, 2017 Motion To Dismiss, Pursuant To RCFC 12(b)(6).

1. The Government's Argument.

2. RMA Engineering S.A.R.L.'s Response.

3. The Government's Reply.

4. The Court's Resolution

a. Standard Of Review For A Motion To Dismiss, Pursuant To RCFC 12(b)(6).

b. Differing Site Conditions (Counts 3 and 10).

c. Constructive Changes (Counts 4-9, 11-14, and 17-20).

d. Misrepresentation Or Unjust Enrichment (Counts 15 and 16).

e. Post-Termination Costs (Count 21).

E. RMA Engineering S.A.R.L.'s March 22, 2018 Cross-Motion For Leave To File A Third Amended Complaint.

1. RMA Engineering S.A.R.L.'s Argument.

2. The Government's Response.

3. RMA Engineering S.A.R.L.'s Reply.

4. The Court's Resolution.

a. Governing Precedent.

b. Whether The Third Amended Complaint Is Unduly Delayed Or Prejudicial To The Government.

c. Whether The Third Amended Complaint Is Futile.

i. Differing Site Conditions (Counts 3 and 10).

ii. Constructive Change (Counts 4-9, 11-14, and 17-20).

iii. Uncompensated Pre-Award Design Work (Counts 15-16).

IV. CONCLUSION.

I. FACTUAL BACKGROUND.¹

A. On August 1, 2009, The United States Army Awarded Contract No. W90BRJ-09-C-0036 To RMA Engineering S.A.R.L.

On August 1, 2009, the Army awarded Contract No. W90BRJ-09-C-0036 (the "Contract") to RMA to build training facilities at the Saudi Arabian National Guard (the "SANG") base in Khashm Al An, Riyadh, Saudi Arabia (the "Project"). Gov't App'x at 1-2. The Contract was a Foreign Military Sales procurement, whereby RMA agreed to design and build a two-story administrative building, one warehouse, and three sunshades for outdoor training for the 43rd Mechanized Infantry Battalion. 2d Am. Compl. ¶¶ 1, 2, 12. The Contract provided that the administrative building and warehouse would be original designs, but the covered training shelter would be a "modified and site adapted design." Gov't App'x at 9-10.

A Joint Engineering Team ("JET") was designated with "cognizance over all technical aspects of the [C]ontract and . . . [responsibility] for monitoring [c]ontractor performance." Gov't App'x at 27. The JET included personnel from the SANG and the Army, including the Contracting Officer's Representative ("COR"). 2d Am. Compl. ¶ 2. The JET was responsible for reviewing three phases of proposed designs, i.e., the S-1, S-2, and S-3. Gov't App'x at 11.

The Contract required RMA to submit the S-1 design to the JET and, "[u]pon receipt of JET S-1 comments, [RMA was to] incorporate all comments in the drawings and documents, concurrently with the preparation of S-2[ design]." Gov't App'x at 11. Thereafter, RMA was required to submit the S-2 design to the JET for additional comments and approval. Gov't App'x at 11. Then, RMA was required to incorporate any JET comments on the S-2 design into the S-3 design, i.e., the final design. Gov't App'x at 11. RMA was required to build each of the structures according to the S-3 design and, on completion, the buildings were to be "complete and usable in all respects[.]" Gov't App'x at 12.

The Contract provided that RMA agreed to supply "all materials, equipment, labor, supervision, and resources required to design and construct" for a firm, fixed-price² of 4,370,771 Saudi Riyals, of which 352,500 Saudi Riyals would be paid for the S-1, S-2, and S-3 designs. Gov't App'x at 7-9.

On August 1, 2009, the Army issued a Notice To Proceed that required RMA to complete all work within 180 days, i.e., by February 6, 2010. 2d Am. Compl. ¶ 14; Gov't App'x at 21. Mobilization was to begin after the S-1 design was approved by the JET; full payment would be made "in accordance with Contract Paragraph G.7" and under the relevant CLINs. Gov't App'x at 12.

RMA was required to construct all required buildings, in "accordance with the technical specifications, contract drawings, approved site adapt drawings, and contract requirements." Gov't App'x at 15. "[C]hanges in or deviation from the scope of work" could be made, but could be authorized only by the Contracting Officer ("CO"), by a contract modification. Gov't App'x at 27.³ Because the Contract was a Foreign Military Sales procurement, the following clause was included:

All communication by the [c]ontractor with all officials, representatives, and/or offices of the Saudi Arabian Government in all matters pertaining to the design or construction of this contract, shall be through and in full liaison with the [CO]. This does not relinquish [c]ontractor responsibility for obtaining routine items to conduct day-to-day business, such as visas, permits, and custom clearances.

Gov't App'x at 37.

Importantly, RMA was required to

perform [a] Geotechnical Investigation in order to establish soil bearing capacity and other soil characteristics at the site. . . . The [c]ontractor shall prepare a Geotechnical [R]eport, prepare a site topographic plan, prepare a site plan for facilities (existing and new), prepare a site adapt analysis, and prepare site adapt drawings for construction of the facilities included in this total [P]roject.

Gov't App'x at 12-13.

The Geotechnical Investigation and Report were to be used by RMA to "design [the] building foundation and other design works . . . consistent with [the] site specific geotechnical condition." Gov't App'x at 128. Failure "to take the action described and acknowledged in this paragraph [would] not relieve [RMA] from responsibility for estimating properly the difficulty and cost of successfully performing the work." Gov't App'x at 128.

The Contract also incorporated FAR 52.236-3⁴ concerning Site Investigation and Conditions Affecting the Work. Gov't App'x at 84.

In addition, the Contract incorporated a number of other standard Federal Acquisition Regulation ("FAR") provisions, including FAR 52.221-13,⁵ FAR 52.233-1,⁶ FAR 52.236-2,⁷ FAR

52.236-13,⁸ FAR 52.242-14,⁹ FAR 52.243-7,¹⁰ FAR 52-246-12,¹¹ FAR 52.249-2,¹² and FAR 52.249-10.¹³

RMA also was required to verify the "[l]ocations of nearest acceptable utility tie-ins . . . during site visits and preliminary surveys prior to offer" and was "responsible for [the] rerouting of any utilities impacted by the new construction work." Gov't App'x at 33. The Contract defined "utility systems" as "all exterior utilities, such as water, sewer, drainage, electricity, telephone, and other similar systems." Gov't App'x at 13. Likewise, the Contract required RMA to "indicate indesign drawing submittals the method of connecting all facilities to electrical power" and that electrical power must "connect to the nearest SEC¹⁴ facility in a manner proposed by the contractor and approved by . . . [the] JET." Gov't App'x at 15. Other provisions provided that RMA was "responsible for tie-in of all required utilities and paying of all connection and testing fees" that may be required by SEC or the Army. Gov't App'x at 33, 37.

Although the Contract required RMA to...