Holloway Construction Co. v. United States

35 Cont. Cas. Fed. 75,732, 18 Cl. Ct. 326, 1989 U.S. Claims LEXIS 201, 1989 WL 119281
CourtUnited States Court of Claims
DecidedOctober 11, 1989
DocketNo. 535-80 C
StatusPublished
Cited by2 cases

This text of 35 Cont. Cas. Fed. 75,732 (Holloway Construction 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
Holloway Construction Co. v. United States, 35 Cont. Cas. Fed. 75,732, 18 Cl. Ct. 326, 1989 U.S. Claims LEXIS 201, 1989 WL 119281 (cc 1989).

Opinion

OPINION

RADER, Judge.

In 1975, plaintiff entered a contract with the United States Corps of Engineers (Corps) to construct a large flood control dam at Bear Creek Lake, Colorado. On August 24, 1978, the Corps ordered plaintiff to suspend work due to exhaustion of funds. The suspension ended on October 27, 1978. Plaintiff resumed work on October 30, 1978. On November 1, 1978, plaintiff submitted a claim for additional costs caused by the suspension.

Upon denial of a portion of its claim, plaintiff filed suit in the United States Court of Claims on September 30, 1980. The successor to the jurisdiction of the Court of Claims, the United States Claims Court, issued two opinions—one in 1984 and another in 1985—narrowing the issues of this case. After receiving the case on October 18, 1988, this court held a trial in June 1989. On the basis of the trial record, this court rules that plaintiff has not shown entitlement to additional compensation for the suspension period in 1978.

BACKGROUND

In 1975, the Corps contracted with plaintiff for construction of a flood control dam in Colorado. In August 1978, the Corps [328]*328ordered plaintiff to suspend work due to exhaustion of funds. In October 1978, plaintiff resumed work and, a short time later, filed a claim for the costs of suspension. Specifically, plaintiff sought pay for equipment ownership expenses—the expense of maintaining trucks, cranes, and other equipment idle at the work site for two months.

The Corps reimbursed plaintiff for equipment ownership expenses according to the formula in Contractors’ Equipment Ownership Expense, Sixth Edition, 1966, published by the Associated General Contractors of America, Inc. (AGC manual or schedule). Transcript of Proceedings, No. 535-80C, filed July 17, 1989 (Tr.), Exhibits (Ex.) D-24; P-24. Plaintiff claimed, however, to have reached an agreement with the Corps, before returning to work in 1978, that provided more pay for equipment ownership expenses than AGC manual rates.

In 1984, the Claims Court issued its first opinion clarifying the legal ramifications of the 1978 suspension order. Holloway Constr. Co. v. United States, 4 Cl.Ct. 779 (1984) (Holloway I). This court adopts as its general statement of facts the findings of the court in Holloway I. Id. at 780-86.1

Holloway I determined that the Corps did not breach the contract by ordering a work suspension on August 24, 1978. The court ruled that the Corps had acted in conformity with the contract’s suspension of work clause. Consequently, plaintiff would receive only those price adjustments covered by the contract’s suspension provisions. Holloway I, 4 Cl.Ct. at 788.

The contract required all price adjustments to conform to the Armed Services Procurement Regulations (ASPR). ASPR Section 15-402.1(c) governs “Construction Plant and Equipment.” This section required use of the AGC manual to determine equipment ownership expenses. Accordingly, Holloway I required plaintiff to establish entitlement to price adjustments by reference to ASPR, which in turn referenced the AGC manual. Holloway I stated:

As defendant has demonstrated in references set forth in its brief, the contracting officer, absent approvals from higher authority, did not have authority to deviate from the applicable contract clauses and regulations such as ASPR 15-402.-Kc).

Id. at 788.

Holloway I denied plaintiff’s claim that it had reached an agreement with the contracting officer in October 1978 before resumption of work. The Holloway I court concluded:

[A]ny compensation agreement reached between plaintiffs and the contracting officer in October 1978 which is not sanctioned by the Bear Creek Lake contract and/or the applicable regulations cannot form a basis for a judgment in this litigation.

Holloway I, 4 Cl.Ct. at 788 (footnote omitted). Thus, the Claims Court determined that plaintiff could not rely on the purported October 1978 agreement to justify a departure from the AGC schedule.

Holloway I suggested, however, that plaintiff might prove entitlement to compensation beyond the AGC manual based on the doctrine of Nolan Bros., Inc. v. United States, 194 Ct.Cl. 1, 437 F.2d 1371 (1971). In Nolan, the Court of Claims held that the AGC manual itself “allows for deviation and adjustment in individual cases.” Nolan, 437 F.2d at 1379. Holloway I concluded:

[I]t may be that plaintiffs could establish (or did establish with the contracting officer) the basis for an enhancement of the A.G.C. schedule rates, within the ambit of ASPR 15-402.1, but this does not appear of record in the submissions to date and the equipment cost matter is simply not ripe for the entry of a summary judgment.

Holloway I, 4 Cl.Ct. at 789.

Later, defendant filed another motion for partial summary judgment. Defendant [329]*329contended that the 1978 suspension did not justify any enhancement of the AGC manual rates under the Nolan doctrine. Holloway Const. Co. v. United States, Unpublished Opinion, No. 535-80C, filed December 27, 1985, at 2 (Holloway II). Defendant maintained that plaintiff had not shown and could not show that their actual costs exceeded the compensation already paid according to the AGC manual.

Plaintiff responded that mounting inflation in 1978 justified enhancement of AGC manual rates under the Nolan standard:

[Pjlaintiffs assert that the special factor or feature which makes it inappropriate or unfair to use average or normal costs (either A.G.C. or contractor’s own) is the escalating cost of equipment ownership during the contract period. The cost was allegedly compounded by the fact that the contractors were using equipment which had been purchased used, the purchase price being the base to which the plaintiffs contend the A.G.C. formula should be applied.

Holloway II, at 6.

The Holloway II court concluded:

To date, the parties have filed no additional submissions which conclusively demonstrate whether plaintiffs could establish or did actually establish with the contracting officer the basis for an appropriate enhancement of the A.G.C. schedule rates. The court is unable to determine whether the Nolan Brothers, id., standard has been met. A substantial issue of fact still exists as to whether plaintiffs have a valid basis for enhancement of A.G.C. schedule rates. As such, it is concluded that a triable issue of material fact is before the court____

Holloway II, at 7.

This court held a trial primarily to determine whether the facts surrounding the suspension period justify payment for plaintiff’s equipment ownership expenses beyond the rates set by the AGC manual. By virtue of the groundwork laid in Holloway I and Holloway II, the Nolan case sets the standard for much of this trial.

Although the primary issue for trial involved the Nolan standard, plaintiff also tried to prove entitlement to additional equipment operation and labor costs.

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Cite This Page — Counsel Stack

Bluebook (online)
35 Cont. Cas. Fed. 75,732, 18 Cl. Ct. 326, 1989 U.S. Claims LEXIS 201, 1989 WL 119281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holloway-construction-co-v-united-states-cc-1989.