M.A. Mortenson Co. v. United States

39 Cont. Cas. Fed. 76,555, 29 Fed. Cl. 82, 1993 U.S. Claims LEXIS 122, 1993 WL 313123
CourtUnited States Court of Federal Claims
DecidedAugust 13, 1993
DocketNo. 90-390C
StatusPublished
Cited by5 cases

This text of 39 Cont. Cas. Fed. 76,555 (M.A. Mortenson Co. 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
M.A. Mortenson Co. v. United States, 39 Cont. Cas. Fed. 76,555, 29 Fed. Cl. 82, 1993 U.S. Claims LEXIS 122, 1993 WL 313123 (uscfc 1993).

Opinion

OPINION

HORN, Judge.

BACKGROUND

This case comes before the court following a contracting officer’s final decision dated July 31, 1989, denying plaintiff’s claim in the amount of $48,873.32 for repairs to the 90 Row fuel line of the B-1B support facilities’ hydrant fueling system at issue, included in Count I of the complaint filed in this court, and following a contracting officer’s final decision dated April 9, 1990, denying plaintiff’s claim in the amount of $325,114.00 for repairs to the 70 Row fuel line of the same system, included in Count II of the complaint filed in this court. Plaintiff’s motion to add Bristol Metals, Inc., the manufacturer of the pipe, as a third-party defendant was denied. After a lengthy period of discovery, the defendant filed a motion to dismiss Count II for lack of jurisdiction, alleging that plaintiff’s Contract Disputes Act certification was defective, and a motion for summary judgment on Count I. In the alternative, the defendant requested summary judgment on both Counts I and II. Plaintiff opposed defendant’s motions and filed a cross-motion for summary judgment on both Counts. Oral argument was held on January 8, 1993.

FACTS

Most of the facts in this case are uncon-troverted and set forth in an extensive joint stipulation filed with this court. Nonetheless, as is discussed more fully below, after a careful review of the record in the case, including the joint stipulations, and the extensive appendices filed separately by the parties, the court finds that the defendant’s motion to dismiss should be denied and that there remain material facts in dispute so that summary judgment also should be denied.

On March 19, 1985, the United States Army Corps of Engineers, pursuant to an advertised invitation for bids, awarded a $27,437,200.00 construction contract to M.A. Mortenson Company, a closely held Minnesota corporation (“Mortenson”). The contract required construction of B-1B support facilities at Ellsworth Air Force Base (AFB), South Dakota, and included the installation of a hydrant fueling system, in accordance with specifications pre[86]*86pared by the government. The system was placed into service in the spring of 1987, but, in early May 1988, a leak developed in the stainless steel piping in the 70 Row fuel line between Fuel Pits 707 and 708. In December 1988, a second leak developed in the 90 Row fuel line. At the time the leaks developed, the system already had been accepted and had been in use for more than a year. Moreover, the one-year warranty period, provided in the contract, covering Mortenson’s construction work, had expired.

On May 19, 1988, the contracting officer sent a letter to Mortenson, notifying the company of the pipe failure and claiming that the failure was due to a latent defect. On May 24, 1988, Mortenson responded by letter disputing that the failure was caused by a latent defect. Mortenson and its mechanical subcontractor, Natkin & Company (Natkin), advised that the repairs requested by the government would be undertaken, with the understanding that, in the event that test results did not confirm a latent defect, the government would issue a contract modification to cover all costs. Mor-tenson also enclosed a letter, dated May 23, 1988 from Natkin, asserting that the pipe met A312 specifications, passed all tests required by the ASTM1 for A312 pipe incorporated into the contract, and that the leak was caused by pressure surges and pressure fluctuations.2

On May 31, 1988, the contracting officer’s authorized representative wrote to Mortenson to confirm the company’s agreement to utilize Orr Metallurgical Service, Inc. (Orr), to perform laboratory tests on the allegedly defective pipe. At the same time, the government asserted that the ASTM minimum pipe yield strength requirements had not been met, that the system design was adequate, and that the pipe weld failure was not due to excessive pressure levels in the hydrant fueling system.

Orr tested two sections of fourteen-inch diameter stainless steel pipe from the 70 Row, consisting of one four-foot section with a failure, and its adjacent eight-foot section. The eight-foot section from the 70 Row, which exhibited an apparent crack on the inside seam, met the requirements of a chemical analysis, a transverse tensile test, and a flattening test. On June 27, 1988, Orr issued its report and concluded: “the pipe does meet the requirements of ASTM-312. The fracture surface indicates that the failure was caused by cyclic loading.”3 The report revealed, however, that on the inside portion of the failed seam, the weld had wandered from the seam and had been returned to the seam in an abrupt manner, resulting in only partial fusion on the inside portion of the seam on both ends of the failure. Also, the middle portion of the failure showed no fusion at all. Nevertheless, the Orr report indicated that, although the wall thickness was less than normal, and the weld did have discontinuities, weld discontinuities are to be expected unless some type of Nondestructive Evaluation (NDE), is required on the weld seam. The report added that when 100% fusion and 100% penetration is required, it is normal to specify some type of NDE inspection. The Orr report conclusion, that the pipe supplied by Mortenson met the ASTM A312 requirement, was later confirmed by the report of Knott Laboratories, Inc., dated June 12, 1989, which also concluded that [87]*87the pipe supplied by Mortenson met the requirements of ASTM A312 pipe.

Minimum pipe wall thicknesses and welding requirements were addressed in the contract specifications. Section 15R provides that “stainless steel pipe shall conform to ASTM specification A312, grade 304L,” and ASTM 312 specifies an average wall thickness for a 14", 16" and 18" diameter steel pipe of 0.188", and a minimum wall thickness of no less than 0.164", or 12.5% under the average. However, the minimum wall thickness provisions (of ASTM A312/A530, and thus of the contract) apply only to pipe which has not been placed in service, because pressure, service, denting or working during installation may each affect the wall thickness of pipe, which as manufactured, met the minimum wall requirements. Sections 15R-14 through 15R-16 of the contract govern field joints, and provide that limitations on weld imperfections must comply with the requirements for 100% radiography testing set forth in American National Standards Institute (ANSI) Standard B31.3. Moreover, paragraph 8 of Section 15R-16 states that “all piping shall be tested by pneumatic pressure ... of 200 psi for not less than two hours,” with no loss in pressure, only increases in pressure due to temperature. At no time was final test pressure to be less than 110 percent of maximum system operating pressure. The pressure testing was to be performed only after the welding inspection had been completed and the pipe was in its final position.

On December 22, 1988, the contracting officer’s authorized representative notified Mortenson that a second break was suspected, in the 90 Row fuel line, 445 feet north of the isolation pit to Row 80. By letter, dated March 6, 1989, the contracting officer’s authorized representative informed plaintiff that the government considered the failure to be a latent defect in the factory applied longitudinal weld in the sixteen-inch stainless steel pipe. In response, Mortenson notified the contracting officer that it disagreed and that plaintiff would make no further repairs of the 90 Row pipe.

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Bluebook (online)
39 Cont. Cas. Fed. 76,555, 29 Fed. Cl. 82, 1993 U.S. Claims LEXIS 122, 1993 WL 313123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ma-mortenson-co-v-united-states-uscfc-1993.