Big Chief Drilling Co. v. United States

15 Cl. Ct. 295, 1988 U.S. Claims LEXIS 107, 1988 WL 58486
CourtUnited States Court of Claims
DecidedJune 9, 1988
DocketNo. 118-86 C
StatusPublished
Cited by29 cases

This text of 15 Cl. Ct. 295 (Big Chief Drilling Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Big Chief Drilling Co. v. United States, 15 Cl. Ct. 295, 1988 U.S. Claims LEXIS 107, 1988 WL 58486 (cc 1988).

Opinion

OPINION

HORN, Judge.

This case is before the court on defendant’s motion for summary judgment.1 Plaintiff, Big Chief Drilling Company (Big Chief), brought this action under the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (1982). The jurisdiction of this court is uncontested under 41 U.S.C. § 609.

The complaint in this action was filed with the court on February 25, 1986. Plaintiff claims money damages resulting from the government’s omissions and actions during contract performance. Defendant filed an answer in which it requested dismissal of the complaint and filed the instant motion for summary judgment. Oral argument was heard, after submission of briefs by both parties.

After consideration of the papers submitted by both parties and the arguments presented orally to the court, for the reasons stated below, defendant’s motion for summary judgment is denied.

Background

The facts of this case appear to be as follows. In December, 1982, the Department of Energy (DOE) issued an invitation for bids (No. DE-FB-96-83-P010872) for a fixed-price, construction contract. The project consisted of drilling ten wells at the DOE Strategic Petroleum Reserve’s Big Hill, Oil Storage Facility in Jefferson County, Texas.

The Strategic Petroleum Reserve Project Management Office (SPRO) held a pre-bid conference on February 3, 1983, which representatives of Big Chief attended. The parties agree, and affidavits submitted by both parties confirm, that the bidders were informed at the pre-bid conference that the differing site conditions clause would be deleted from the proposed contract. The parties disagree, however, as to what else occurred regarding the deletion of the differing site conditions clause. Defendant claims that it informed the bidders at the conference, and confirmed in a subsequent letter to all bidders, that the deletion meant that the contractor would be responsible for all problems arising from unforeseen subsurface conditions, including lost circu[297]*297lation. Defendant concedes, however, that no copy of this letter can be located.

Conversely, plaintiff contends that the DOE did not inform bidders that the deletion of the differing site conditions clause would make the contractor responsible for costs associated with lost circulation. Moreover, plaintiff states that none of its officers recall receiving a letter from defendant as to its responsibilities in the absence of the clause.

The contract was awarded to Big Chief on March 22, 1983. Nine out of the ten wells were completed without incident. This action concerns well number 108A. Work began on well number 108A on June 17, 1983.

The parties agree that the depth to the top of the caprock, which was located on June 19, 1983, was approximately 352 feet from the surface. They disagree, however, as to who determined the location of the caprock, who had the duty to make that determination under the contract and whether the determination was proper. The parties also disagree as to who was to establish the appropriate placement for the 30-inch casing shoe. Thus, substantial disagreements appear to remain as to what occurred and as to who had the duty to make key determinations during contract formation and during performance.

Defendant states that on June 20, 1983, Big Chief reached a drilling depth of 382 feet. Defendant further states that sand fell into the well hole on June 21 and 22, 1983, while Big Chief was trying to install the 30-inch casing. Plaintiff does not disagree with these facts. However, the parties disagree as to the depth at which the 30-inch casing became stuck. Defendant says it stuck at a depth of 358 feet; plaintiff says it became stuck at a depth of 356 feet. The parties agree that the 30-inch casing was set and cemented successfully on June 23, 1983, at a depth of 365 feet.

Big Chief encountered lost circulation on June 28,1983. The parties also disagree as to the depth at which lost circulation occurred. Defendant says it occurred between 688 and 815 feet; plaintiff says it occurred at a depth of 798 feet in a 12V4 inch hole. The parties also disagree about lost circulation in the 30-inch casing seat. Defendant contends that lost circulation in the vicinity of the casing seat first occurred on July 24, 1983. Plaintiff contends that it has never been established that lost circulation occurred at the 30-inch casing seat at all.

The parties agree that Big Chief performed a number of so-called “cement squeeze jobs,” a procedure which plaintiff defines as one in which cement is forced down the well hole and behind the casing shoe to restore the shoe. They disagree, however, as to the reason for performing such cement squeeze jobs and they disagree as to when the jobs were performed. Defendant contends that plaintiff performed these measures in an effort to combat lost circulation, and that these measures were performed prior to July 24, 1983 and without consultation with DOE officials. Plaintiff contends that it performed the squeeze jobs to remedy the failure of the casing shoe and that the procedure began after the casing shoe was lost on July 21, 1983. According to plaintiff, the casing shoe was restored on August 13, 1983. Also according to plaintiff, it engaged in redrilling until August 27, 1987 when the depth previously obtained before the loss of the casing shoe was achieved. As a result, plaintiff states, it incurred substantial expenses and loss of rig time from July 2, 1983 to August 27, 1983.

The parties also disagree about the occurrence of a pressure test. Defendant contends that on August 20, 1983, Big Chief conducted a pressure test of the 30-inch casing and that the test indicated a significant loss of pressure. Plaintiff denies that any such pressure test was conducted. Both parties agree that drilling of the well was completed on October 23, 1983.

On December 4, 1983, Big Chief filed a claim with the DOE requesting reimbursement in the amount of $906,525.93. This claim, which related only to well number 108A, requested reimbursement for expenses incurred as a result of the loss of [298]*298the casing shoe and for expenses arising from lost circulation. Defendant contends that the December 4, 1983 claim constituted its first notice that plaintiff considered the government responsible for problems with well number 108A. Plaintiff, however, maintains that the government officials on the site were fully apprised of all the drilling activities, as well as other problems encountered at the site.

Based upon a meeting between the parties, on May 8, 1984, Big Chief submitted a revised claim on June 14, 1984. The resubmitted claim requested reimbursement in the amount of $646,801.77. This revised claim related only to the loss of the casing shoe and omitted the claim for lost circulation. Defendant contends that until June 14, 1984, it had no knowledge of any problems plaintiff had encountered with the casing shoe, and that the claim for reimbursement constituted a new theory for compensation. Plaintiff argues that defendant knew precisely what was occurring at the site, and, therefore, the casing shoe claim formed a proper basis to support its claim.

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Cite This Page — Counsel Stack

Bluebook (online)
15 Cl. Ct. 295, 1988 U.S. Claims LEXIS 107, 1988 WL 58486, Counsel Stack Legal Research, https://law.counselstack.com/opinion/big-chief-drilling-co-v-united-states-cc-1988.