TPL, Inc. v. United States
| Decision Date | 16 September 2014 |
| Docket Number | No. 11-482C,11-482C |
| Court | U.S. Claims Court |
| Parties | TPL, INC., Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. |
Jurisdiction; Contract Disputes Act; 41 U.S.C. §§ 7101-7109; Summary Judgment; RCFC 56; Breach of Contract; Impossibility; Impractic ability; Mutual Mistake; Unconscionability; Mitigation of Damages; Failure to Raise Defense with Contracting Officer.
Robert Stewart Gardner, Law Office of Robert S. Gardner, Colorado Springs, CO, for plaintiff.
Daniel B. Volk, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him were Donald E. Kinner, Assistant Director, Bryant G. Snee, Acting Director, and Stuart F. Delery, Assistant Attorney General.
This case is before the Court on the government's motion for summary judgment. Plaintiff, TPL, Incorporated (hereinafter "TPL"), seeks relief from the decision of a U.S. Army contracting officer finding that it owes the United States $11,958,046 as compensation for TPL's breach of contractual obligations to demilitarize and dispose of certain Army ammunitions. The government, in turn, has filed a counterclaim seeking damages in the amount of $11,887,509.72 for TPL's alleged breach of contract. For the reasons set forth below, the government's motion for summary judgment is GRANTED.
In 1994 and 1996, the U.S. Army Material Command awarded TPL two contracts involving the demilitarization and disposal of ammunitions. The first contract, No. DAAA09-94-C-0386 ("the 1994 demilitarization contract"), was awarded on June 30, 1994, and the second, No. DAAA09-96-C-0065 ("the 1996 demilitarization contract"), was awarded on September 17, 1996. Def.'s Mot. Summ. J., ECF No. 34, A1, A126 (hereinafter "Def.'s Mot."). The third contract at issue in this case, No. DAAA09-94-E-0014 (),was awarded on September 30, 1994, Def.'s Mot. A17, and permitted TPL to use portions of an Army installation located at Fort Wingate, New Mexico on a rent-free basis to conduct demilitarization operations under the demilitarization contracts. Id. at A105.
The statement of work for the 1994 demilitarization contract called for "disassembly for reuse and resource recovery of various pyrotechnic ammunition items." Id. at A6. The statement of work for the 1996 demilitarization contract contemplated "the incineration and/or reuse/resource recovery of Armor Piercing and Anti-Personnel loaded ammunition." Id. at A130, ¶ 1.1. Both demilitarization contracts provided that the "[t]he contractor shall take title to all material/components arising out of the disassembly and demilitarization of the Government Furnished Ammunition." Id. at A15, ¶ 5.1; A140, ¶ 5.1. The contracts further provided: Id. at A16, ¶ 5.3; A140, ¶ 5.2.3.
The demilitarization contracts stated that "the contractor shall use best efforts to recover the maximum materials/components possible" and that "[t]he Government does not guarantee the quantum of recoverable materials/components." Id. at A6, ¶ 1.3; A130 ¶ 1.3. They further stated that "[t]he negotiated firm-fixed price reflects full consideration to the contractor for its performance under the contract" and that "[t]he proposed price will reflect any estimated or anticipated proceeds from recovered materials/components." Id.
Under the facilities use contract, the parties agreed that at the conclusion of TPL's use of the facilities, all government-furnished property "shall, at the contractor's sole expense and without direct charge to this contract, be returned to the Government in the same condition . . . as when originally provided less normal wear and tear." Id. at A18, ¶ 3(c). The facilities use contract initially had a term of four years, id. at A18, ¶ 2, but it was extended several times at TPL's request. Id. at A69 (extension to September 30, 2000), A86 (extension to September 30, 2002), A92 (extension to December 31, 2006 "or until transfer of the Government property to the Department of the Interior, whichever first occurs"), A180 (requesting 90-day extension beyond December 31, 2006), A102, A183 (granting extension to March 31, 2007), A186 (requesting extension to April 27, 2007), A191-93 (granting extension to April 27, 2007). TPL ultimately vacated Fort Wingate on April 27, 2007. Id. at A194-96, A197-98, A199-200.1
The Army permitted TPL to use a variety of facilities at Fort Wingate, including storage igloos, for its demilitarization work. On January 30, 1998, the Army requested that TPL remove any residual material from previous contracts within sixty days. Id. at A158 (January 30, 1998 letter reminding TPL of a previous agreement to remove all energetics within 60 days after title transfer via form DD250). In a letter dated February 9, 1998, TPL responded that, although it could not accomplish removal of these materials within sixty days, it "plan[ned] to sell the pyrotechnic materials over the next three years, emptying the last of the storage magazines during 2000." Id. at A159; see also id. at A162.
As the facilities use contract neared its September 30, 1998 expiration, and with the Army anticipating a transfer of the land on which Fort Wingate was situated to the Department of the Interior, the Army expressed reluctance to agree to another extension of the facilities use contract. Id. at A142; see also id. at A161. Ultimately, after inquiries from members of Congress, the Army agreed to a two-year extension of the contract. Id. at A69; see also id. at A121, A155.
Id. TPL further reported: "Slurry Explosives Corporation ("SEC") our main customer for propellant (approximately 30,000# daily) has had their Explosives Manufacturing License revoked by ATF and may be out of production for several months." Id.; see also id. at A149-54 (contract with Slurry Explosives Corporation), A178.
On November 27, 2006, approximately one month before the facilities use contract, as amended, was to expire, TPL requested a ninety-day extension of the contract. Id. at A180. TPL explained that "[t]he reason for this request is to allow TPL sufficient time to remove the stored energetic materials and complete other required departure activities." Id. The Army granted the request, extending the contract to March 31, 2007. Id. at A102, A183.
On March 21, 2007, TPL requested an extension of the facilities use contract through April 27, 2007, stating, "[w]e hope to complete shipping prior to that date." Id. at A186. The Army agreed to grant the requested extension, on certain terms, id. at A191-93, and forwarded a modification to TPL for signature. Id. at A194-96. TPL declined to sign the modification, andvacated Fort Wingate on April 27, 2007, leaving behind approximately 400,000 pounds of energetic material it had recovered from the demilitarization contracts. Id. at A197-202.
After TPL vacated Fort Wingate, the Army disposed of the energetic materials TPL left behind. Id. at A356. To dispose of this material, the Army incurred $11,887,509.72 in total costs. Id. at A357. The largest components of these costs consist of amounts the Army paid to other ammunition disposal contractors. See id. at A356. To dispose of the hundreds of thousands of pyrotechnic items left at Fort Wingate by TPL, the Army modified a pre-existing contract it had with General Dynamics Ordnance and Tactical Systems, Inc. (GDOTS), at a cost of $7,896,626. Id. at A242-46, A269, A356, A361.
In addition to the pyrotechnic items, TPL also left sixteen boxes of miscellaneous energetic material at Fort Wingate. Id. at A356. To dispose of this material, the Army issued a delivery order for a contract it had in place with PIKA International, Inc. (PIKA). Id. at A222-23. The Army incurred costs of $1,441,424.15 under the delivery order issued to PIKA. Id. at A324, A343, A356, A361.
The Army also incurred costs contracting for security at Fort Wingate, to replace the security that TPL was required to provide under its facility use contract. See id. at A35. The Government obtained the necessary security under a contract with Vista Sciences Corporation (Vista). Id. at A187-90. Vista began providing security in April 2007 under Contract No. W52P1J-07-D-3004. Id. at A189-90. The first two months of security under delivery order 0001 for this contract cost the Army $250,829.30. Id. at A189. The security contract was extended thereafter by several delivery orders at a monthly rate of $71,887.08. Id. at A204 (delivery order 0002), A212 (delivery order 0003), A289 (delivery order 0004), A299 (delivery order 0005), A325 (delivery order 0006), A329, A339 (cancellation of delivery order 0006). For security at Fort Wingate between April 2007 and the beginning of March 2008, the Army incurred...
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