Delhur Industries, Inc. v. United States

95 Fed. Cl. 446, 2010 U.S. Claims LEXIS 923, 2010 WL 4983593
CourtUnited States Court of Federal Claims
DecidedDecember 9, 2010
DocketNo. 08-541C
StatusPublished
Cited by5 cases

This text of 95 Fed. Cl. 446 (Delhur Industries, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delhur Industries, Inc. v. United States, 95 Fed. Cl. 446, 2010 U.S. Claims LEXIS 923, 2010 WL 4983593 (uscfc 2010).

Opinion

OPINION AND ORDER

WHEELER, Judge.

This case involves performance disputes stemming from a road construction contract between Plaintiff Delhur Industries, Inc. (“Delhur”) and the United States Department of Transportation, Federal Highway Administration (“FHWA”). Delhur is an experienced construction contractor based in [448]*448the state of Washington. The project at issue is located in the Lincoln National Forest near Alamogordo, New Mexico. Although the stretch of road to be constructed was only 12.359 km long (7.68 miles), the road was in mountainous terrain and required extensive rock excavation. The contract called for Delhur to build fill areas, construct stabilizing walls, install drainage systems, and place aggregate base and asphalt pavement for a two-lane highway. The contract price at award on December 2, 2003 was $10,158,250. Delhur performed the project during 2004 and 2005. Delhur had planned to complete the project in one construction season, approximately one year earlier than required, but it did not achieve this plan.

Delhur alleges that it incurred significant additional costs in performing the contract due to errors in the FHWA’s plans and specifications. Specifically, Delhur claims to have excavated and disposed of far more material than indicated in the contract bid documents. Delhur further asserts that it performed other extra work caused by the FHWA for excess surveying costs, hand-scaling slope embankments, topsoil hauling, and installing a temporary guardrail. Delhur has included amounts for field and home office overhead in its claim due to alleged government delay. Delhur also states that the FHWA improperly assessed liquidated damages.

On December 4, 2006, Delhur submitted a certified claim under the Contract Disputes Act (“CDA”) to the contracting officer, requesting an equitable adjustment of $2,115,524 for fourteen claim items, and return of liquidated damages. On July 31, 2007, the contracting officer issued a final decision awarding Delhur $38,285, but denying the remainder of the claim. Delhur timely filed a complaint in this Court on July 25, 2008 seeking de novo review of the contracting officer’s final decision. The Court has jurisdiction under the CDA, 41 U.S.C. § 609(a) (2006), and the Tucker Act, 28 U.S.C. § 1491(a) (2006).

Defendant opposes Delhur’s claims based essentially on a failure of proof. Defendant contends that Delhur neglected to review contract documents describing subsurface conditions and the expected excavation prior to bidding, and failed to provide notice of alleged differing site conditions. Defendant argues that Delhur excavated much more rock than required on the project, and thus should look to itself as the principal cause of any excess excavation. Defendant also asserts that Delhur did not develop a reasonable construction schedule for performing its work, did not plan its work efficiently, and failed to begin critical activities on time. Defendant points to an absence of documents or testimony supporting any of Delhur’s claims, and states that Delhur cannot show government causation or the reasonable certainty of any damages.

The Court conducted a five-day trial in Portland, Oregon during May 17-21, 2010 and heard all issues of liability and damages. The parties submitted extensive stipulations of fact in advance of trial, which the Court found quite useful. At trial, Delhur reduced its claim to $1,875,758, adjusting or abandoning certain items previously submitted to the contracting officer. The parties filed post-trial briefs on August 20, 2010, and reply briefs on September 16, 2010. The Court heard closing arguments in Washington, D.C. on October 4, 2010.

In brief summary, the Court concludes that Delhur is not entitled to any recovery on its claims. At trial and in its briefs, Delhur presented high-level conclusory allegations unsupported by any concrete facts. For the excess excavation claim, Delhur did not demonstrate that it reasonably relied on all the contract documents when formulating its bid. The only evidence of Delhur’s bid preparation work consists of fifteen pages of cryptic handwritten notes that were not adequately explained at trial. Further, Delhur did not provide the Court with sufficient evidence to show that its damages were caused by errors in the plans or government direction, and not by Delhur’s own mistakes. For claims unrelated to excess excavation, Delhur did not furnish sufficient evidence of causation or damages. While alleging breach of good faith and government directed constructive changes, Delhur’s case is short on facts supporting its position. Delhur did not present [449]*449any evidence of its actual costs to perform changed work, and the estimates it provided do not pass muster. The Court cannot say with any certainty that the FHWA caused any of Delhur’s increased costs.

Similarly, Delhur is not entitled to recover any field or home office overhead costs because the evidence does not show that the FHWA was solely responsible for any project delay. Delhur did not even present a project schedule analysis to assess which party may have caused delay. Mainly, the evidence shows that Delhur adopted an ambitious and largely unrealistic construction schedule, and it quickly fell behind for reasons of its own making. While the FHWA did not perform perfectly in managing the project, the Court finds that Delhur failed to satisfy its burden of proof as to either liability or damages.

Finally, the Court concludes that Delhur is not entitled to reimbursement of $45,000 in liquidated damages. Delhur has not provided evidence to show that any of its project delays were excusable.

Factual Background1

A. Contract Bidding and Award

On September 2, 2003, the FHWA issued Invitation for Bids No. NM PFH 45-1(5) (the “Solicitation”) requesting bids for the construction of a 12.359 kilometer road in Lincoln National Forest, New Mexico. (Stip. ¶ 14.)2 The road construction project involved a realignment of New Mexico Forest Highway Route 45 (also known as the “Sacramento River Road”) beginning near Tim-beron, New Mexico and continuing northwest toward Sunspot, New Mexico. Id. The Sacramento River Road is a two-lane highway in a mountainous region. Id.

The FHWA provided prospective bidders with a set of plans, drawings, and specifications for use on the project. (Stip. ¶ 15.) The FHWA also notified bidders that all work must be performed in accordance with the Federal Acquisition Regulation (“FAR”), the Standard Specifications for Construction of Roads and Bridges on Federal Highway Projects (“Standard Specifications” or “FP 96”), Special Contract Requirements (“SCR”), the bid schedule, and the provided plans. Id. The Standard Specifications stated that the FAR superseded all other contract documents and that the SCRs modified and governed the Standard Specifications. (JX 1 at 37.) During bidding, Delhur reviewed the Standard Specifications and was aware of the specified coordination of contract documents. (S. Hurworth, Tr. 358-60.)

The contract called for the Sacramento River Road to be built between station 0 + 158 in the south and station 12 + 520 in the north, using metric measurements. (Stip.

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Bluebook (online)
95 Fed. Cl. 446, 2010 U.S. Claims LEXIS 923, 2010 WL 4983593, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delhur-industries-inc-v-united-states-uscfc-2010.