C. Sanchez & Son, Inc. v. United States

37 Cont. Cas. Fed. 76,152, 24 Cl. Ct. 14, 1991 U.S. Claims LEXIS 354, 1991 WL 150169
CourtUnited States Court of Claims
DecidedAugust 8, 1991
DocketNo. 90-386 C
StatusPublished
Cited by3 cases

This text of 37 Cont. Cas. Fed. 76,152 (C. Sanchez & Son, Inc. 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
C. Sanchez & Son, Inc. v. United States, 37 Cont. Cas. Fed. 76,152, 24 Cl. Ct. 14, 1991 U.S. Claims LEXIS 354, 1991 WL 150169 (cc 1991).

Opinion

OPINION AND ORDER

TURNER, Judge.

Plaintiff was awarded a contract by the U.S. Army Corps of Engineers on September 30, 1986 for the construction of an artificial battlefield at Fort Hunter Liggett, California. Subsequently, plaintiff entered into a subcontract with I.C.G. Electric, Inc. (ICG) to perform substantially all electrical work under the prime contract. The contract between Sanchez and the Corps of Engineers required the installation of several electrical systems such as an interior electrical wiring system, an underground electrical distribution system, a telephone system, a protective lighting system and a lightning protection system. Plaintiff also agreed to perform all trenching and back-filling associated with the installation of these electrical systems.

After construction was complete, the contracting officer issued three final decisions denying equitable adjustments on three claims submitted by Sanchez on behalf of ICG. The claims asserted entitlement to equitable adjustments arising from the Army’s refusal to grant a waiver of the Buy American Act, the Army’s directive that a rollover protective structure (ROPS) be installed on ICG’s trencher, and the Army’s refusal to allow substitution of aluminum-sheathed data cable in place of the steel-sheathed cable required by the contract. Plaintiff appeals these final decisions.

Defendant has filed a motion for summary judgment alleging that there are no [16]*16material facts in dispute and that it is entitled to judgment as a matter of law on all three claims. Plaintiff contends that there are material facts in dispute and that this case should proceed to trial. The genuine issues identified in plaintiffs response to defendant’s motion for summary judgment and in plaintiff’s statement of genuine issues (both filed on May 7, 1991) are essentially legal questions based on historical facts which are undisputed. We conclude, therefore, that this case presents no genuine issue of material fact for trial. We further conclude that defendant’s motion for summary judgment should be granted.

I. BUY AMERICAN ACT CLAIM

A. Facts

The contract required plaintiff and its subcontractors to comply with the Buy American Act, 41 U.S.C. §§ 10a-10d (BAA), which provides that the government give preference to domestic construction material during the performance of government contracts. See 48 C.F.R. § 52.225-5; Contract Clause 33—Buy American Act—Construction Materials (APR 1984); DX D, p. 41. Accordingly, plaintiff agreed that only domestic construction material would be used by the contractor, subcontractors, materialmen and suppliers in the performance of this contract except for foreign construction materials listed in the contract. 48 C.F.R. § 52.225-5(b). ICG bid the subcontract for electrical work using price quotes for wire and cable manufactured in Canada by Canada Wire and Cable Limited. The Canadian wire was supplied to ICG through an American company, Houston Wire and Cable Co. At the time ICG submitted its bid to Sanchez, it believed in good faith that this wire and cable complied with the provisions of the BAA (PX 1). In preparing its bid to the Corps, Sanchez relied on the interpretations made by ICG regarding BAA requirements (PX 2).

Sanchez requested approval to use the material manufactured by Canada Wire from the Corps on February 12, 1987 (DX H). The submission included a letter from ICG to Sanchez explaining its belief that the wire complied with the BAA (DX I). The Corps disapproved the use of the wire on February 19,1987, staging that it did not conform with the BAA (DX I). In a letter to Houston Wire and Cable Co., the Corps explained that the BAA requires construction materials to be made in the United States and to contain at least 50% American-made components. Since the proposed wire was actually manufactured in Canada, the Corps refused to accept it for use in government contracts (DX J). Houston Wire and Cable Co. responded with a letter to the Corps explaining that over 50% of the components of the proposed material were American-made and the final stages of its fabrication would occur in Houston, Texas, thus bringing it within the definition of a “domestic construction material” for purposes of the BAA. See 48 C.F.R. § 52.-225-5(a).

Sanchez resubmitted its proposal to use the wire supplied by Canada Wire on April 9, 1987. The submittal contained an option to use equivalent wire and cable manufactured by an American company, the Okonite Co. Okonite’s product was more expensive than the material supplied by Canada Wire. The Corps approved the cable supplied by Okonite without exception and disapproved the cable supplied by Canada Wire because it did not comply with the BAA. Following the Corps’ rejection of the Canadian material, the contracting officer’s authorized representative, William Strid, met with ICG’s president, Michael Gilbreth. Gilbreth informed Strid that Canada Wire’s products were $100,000 less expensive than the equivalent domestic wire and cable. He also informed Strid that the domestic source, the Okonite Co., did not have sufficient current inventory to meet the contract schedule while Canada Wire’s products were available within the required time frame (PX 1, ¶18). Strid replied that there was nothing he could do and that ICG would have to use an American-made product.

Following the Corps’ rejection of the Canadian material, ICG purchased the more expensive wire and cable from the Okonite Co. and proceeded to install it. On June 16, [17]*171987, Sanchez forwarded to the Corps ICG’s notice of intent to file a claim for alleged increased costs because of the Corps’ disapproval of the use of wire and cable supplied by Canada Wire (DX 0). On behalf of ICG, Sanchez filed a claim with the contracting officer on July 11, 1988.1 Sanchez’s claim was based on the theory that the Canadian wire was a “domestic construction material” for purposes of the BAA or alternatively, that Sanchez was entitled to a post-award waiver of the BAA. It requested an equitable adjustment totaling $879,342. The Corps responded on October 21, 1988 with a letter to Sanchez denying the merit of its claim (PX 4). The contracting officer issued its final decision on February 16, 1990 denying plaintiff’s claim for an equitable adjustment to the contract price (DX BB).

B. Discussion

Clause 33 of plaintiff’s contract requires Sanchez and all its subcontractors to comply with the BAA. It states:

(a) The Buy American Act (41 U.S.C. 10) provides that the Government give preference to domestic construction material.
“Domestic construction material,” as used in this clause, means (1) an unmanufactured construction material mined or produced in the United States, or (2) a construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components.

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37 Cont. Cas. Fed. 76,152, 24 Cl. Ct. 14, 1991 U.S. Claims LEXIS 354, 1991 WL 150169, Counsel Stack Legal Research, https://law.counselstack.com/opinion/c-sanchez-son-inc-v-united-states-cc-1991.