Wilner v. U.S., 92-5161

• Decision Date: 26 May 1994
• Docket Number: No. 92-5161,92-5161
• Citation: 24 F.3d 1397
• Parties: , 39 Cont.Cas.Fed. (CCH) P 76,665 Melvin WILNER, d/b/a Wilner Construction Company, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1397

24 F.3d 1397

62 USLW 2799, 39 Cont.Cas.Fed. (CCH) P 76,665

Melvin WILNER, d/b/a Wilner Construction Company, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 92-5161.

United States Court of Appeals Federal Circuit.

May 26, 1994.

Melvin Wilner, pro se.

Brad Fagg, Attorney, Commercial Litigation Branch, Dept. of Justice, Washington, DC, argued, for defendant-appellant. With him on the Rehearing Petition and Suggestion for Rehearing In Banc were Stuart E. Schiffer, Asst. Atty. Gen., David M. Cohen, Director and Mary Mitchelson, Deputy Director. Frank W. Hunger, Asst. Atty. Gen., Commercial Litigation Branch, Dept. of Justice, Washington, DC, was on the corrected Before ARCHER, Chief Judge, ^* RICH, Circuit Judge, BENNETT, Senior Circuit Judge, NIES, NEWMAN, MAYER, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER, and SCHALL, Circuit Judges.

In Banc brief. Of counsel was Sharon Y. Eubanks, Asst. Director.

SCHALL, Circuit Judge.

The United States appeals from the June 26, 1992 judgment of the United States Claims Court. ¹ Following a trial, the Claims Court (i) awarded Melvin Wilner, d/b/a Wilner Construction Company (Wilner), an additional $26,271.49 plus interest on his claim for delay compensation under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. Secs. 601-613 (1988 & Supp. IV 1992); and (ii) denied the government's claim for the return of certain sums previously paid to Wilner. ² On May 24, 1993, a divided panel of this court affirmed the judgment of the Claims Court. ³ The government filed a petition for rehearing and suggestion for rehearing in banc. On August 2, 1993, we accepted the suggestion for rehearing in banc, vacated the judgment of the panel, and withdrew the panel opinion. We now vacate the judgment of the Court of Federal Claims and remand the case with instructions.

BACKGROUND

Wilner was awarded a contract by the United States Department of the Navy to construct an Operational Trainer Facility at Camp Pendleton, California. Wilner, 26 Cl.Ct. at 262. Although the contract called for a completion date of October 1, 1986, the project experienced delays which postponed its completion by 447 calendar days. Id. Wilner submitted a claim to the Navy's contracting officer, alleging compensable government-caused delay to the completion of the project. Id. at 272. On August 1, 1989, Contracting Officer William N. Lindstrom issued a final decision on Wilner's delay claim. Id. Finding that Wilner was entitled to 260 calendar days of compensable delay, the contracting officer credited Wilner with delay-based compensation of $133,094.79. After deducting previous unilateral increases to the contract price to avoid double compensation, he made a net award to Wilner of $17,259.46 plus interest for the delay. Id. at 273-74.

Dissatisfied with the contracting officer's award, Wilner brought an action on the claim in the Claims Court under the CDA, contending that government conduct was the legal cause of all of the delay to the project, from the original contract completion date through the date the Navy accepted the project as completed. Wilner's claim was directed mainly to alleged delay costs arising from duct revision work, open web joist (OWJ) revision work, and smoke detector work. Id. at 263. ⁴ On its part, the government asserted that it was entitled to return of the $133,094.79 that the contracting officer had credited to Wilner, since Wilner could not establish that he was entitled to any delay compensation.

At trial, Wilner presented evidence relating to the duct revision work, the OWJ revision work, and the smoke detector work. Id. at 264-72. Although the Claims Court found that the government was responsible for delay to each of these activities, it determined that the evidence presented by Wilner was Eventually, following a careful and thorough review of the evidence presented at trial, the Claims Court found that the only critical path delay attributable to the government resulted from the duct revision work and that that delay extended the project from February 27, 1987, to May 29, 1987, a total of 91 calendar days. Id. at 275. Having so concluded, the court stated: "The problem that the court perceives is that its determinations thus far reflect the government-caused delays as proved by plaintiff at trial, rather than what the court perceives, but plaintiff failed to prove, to be the actual government-caused delays." Id. at 277 (emphasis added). The court also stated that, "[d]ue to the absence of a critical path analysis," and without considering the contracting officer's final decision, it was "unable to determine whether delays caused by the Navy were properly compensable as critical path delays." Id. at 279. Thus, the court made it clear that Wilner had failed to prove his case.

inadequate to establish the critical path of the project, so as to enable Wilner to prove that government-caused delay had delayed the overall completion of the project. ⁵ Nevertheless, the court examined the evidence presented at trial to determine whether there was a basis, despite the absence of a critical path analysis, for determining that any of these activities was on the critical path of the project. The court sua sponte admitted into evidence the written decision of the contracting officer and also heard the testimony of the contracting officer, who was called as a witness by the government.

The Claims Court, however, did not enter judgment based upon its finding of 91 calendar days of government-caused delay. Rather, relying upon J.D. Hedin Construction Co. v. United States, 347 F.2d 235, 171 Ct.Cl. 70 (1965), for the proposition that "the findings of a contracting officer are entitled to a strong presumption of validity, subject to rebuttal," Wilner, 26 Cl.Ct. at 277, the court described the contracting officer's decision as "evidence before the court that must be considered and weighed." Id. at 279. After summarizing Mr. Lindstrom's testimony explaining how he had reached his decision, the Claims Court stated: "Plaintiff's failure to present a critical path analysis at trial is an insufficient basis to reject the contracting officer's determinations of critical path delay days based on the technical analysis [presented to the contracting officer]." Id.

After considering Mr. Lindstrom's final decision, the Claims Court modified his calculations to increase the delay compensation awarded to Wilner by $26,271.49 plus interest, based upon 259 calendar days of government-caused critical path delay (instead of the 260 days of critical path delay found by the contracting officer). Id. at 280-81. The court also rejected the government's claim for repayment of $133,094.79 in delay compensation already paid to Wilner for lack of jurisdiction. Id. at 279. ⁶

DISCUSSION

I

The government contends that the Claims Court erred as a matter of law by failing to conduct a proper de novo review pursuant to the CDA. Specifically, the government argues that, in ruling for Wilner, the Claims Court "deferred completely to the contracting officer's decision" and therefore made improper use of the decision under the CDA. The government does not challenge the finding of the Claims Court that the evidence at trial established that the Navy was responsible for 91 calendar days of critical path delay. Neither does the government challenge the Claims Court's dismissal of its claim for repayment of the $133,094.79 credit. The government does, however, seek repayment of the $17,259.46 net award to Wilner. Wilner, on the other hand, contends that the Claims Court conducted a proper de novo review and that its decision was based upon evidence admitted at trial, which included both the contracting officer's testimony and his final decision.

In view of the contentions of the parties, resolution of this appeal requires a two-step process. First, we must determine the method by which the Claims Court decided the case. Then, we must determine whether, as a matter of law, that method of decision was proper under the CDA. It is to the former question that we turn first.

II

We disagree with Wilner's contention that the contracting officer's testimony at trial provides support for the Claims Court's decision and that the Claims Court relied upon both the contracting officer's testimony and final decision. We have carefully reviewed both the contracting officer's testimony and the decision of the Claims Court. As far as the contracting officer's testimony is concerned, the contracting officer did not provide testimony which independently established 259 calendar days of government-caused delay. Mr. Lindstrom testified that, in making his decision, he attempted to weigh equally the interests of the Navy and the contractor, and he noted that it was the practice of his office to ascertain that a compensable delay had occurred before granting delay compensation. Mr. Lindstrom stated that his final decision was based upon the results of a technical review performed by the Navy's Engineering Construction Division and upon the opinions of a Navy technical analyst, a consultant, and counsel, who conducted a legal review of the technical analysis. However, Mr. Lindstrom did not conduct an independent analysis of Wilner's delay claim. In addition, he had no first-hand knowledge of the events that transpired during performance of the contract and no specific recollection of the documents he reviewed in making his final decision. Significantly, at no point in his testimony did Mr. Lindstrom state why he believed that the delays which Wilner experienced fell on the critical path of the project so that they delayed the overall completion of the project. Moreover, counsel for Wilner asked no questions designed to elicit such information. Thus, this is not a case in which the contracting officer testified to any facts underlying the claim. Mr. Lindstrom merely explained the process he followed in making the award. In...