McCormick Construction Co. v. United States

35 Cont. Cas. Fed. 75,721, 18 Cl. Ct. 259, 1989 U.S. Claims LEXIS 188, 1989 WL 112237
CourtUnited States Court of Claims
DecidedSeptember 26, 1989
DocketNo. 714-85C
StatusPublished
Cited by16 cases

This text of 35 Cont. Cas. Fed. 75,721 (McCormick 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
McCormick Construction Co. v. United States, 35 Cont. Cas. Fed. 75,721, 18 Cl. Ct. 259, 1989 U.S. Claims LEXIS 188, 1989 WL 112237 (cc 1989).

Opinion

OPINION

MOODY R. TIDWELL, III, Judge:

This government contract dispute is before the Court for post-trial disposition. Plaintiff, McCormick Construction Co., brought this action on behalf of its subcontractor, Western Well & Pump, Inc., for increased costs of performance allegedly incurred by Western while drilling three production water wells. Plaintiff asserted two distinct theories of recovery, a differing site condition claim and a breach of contract claim allegedly due to the withholding of superior knowledge.

FACTS

On February 14, 1984, The United States Army Corps of Engineers, Fort Worth District, awarded McCormick Construction Company a firm, fixed price contract for the construction of three water wells (hereafter referred to as Frenchy 1, Frenchy 2, and Escondido 1), a water storage tank, and related pipelines and roads that would connect with the existing pipeline supplying water to Holloman Air Force Base, New Mexico. The proposed well sites were located in alluvial fans 1 formed by erosion [261]*261and outwashes from the Sacramento Moun- • tains at the mouths of Dog Canyon and Escondido Canyon.

In late 1981, R.L. Guffey, Inc. had drilled exploratory test wells pursuant to a contract with Holloman Air Force Base. Guf-fey maintained and supplied drillers formation logs and geophysical logs2 to the Office of the Directorate of Engineering at the Holloman AFB, in compliance with his contract. The Office of the Directorate of Engineering, retained the logs and Quality Assurance Evaluation (QAE) logs, which chronicled the Guffey drilling depths and identified other relevant data, including problem areas.

Once the plans and specifications for the water well constructions were prepared by the Geotechnical Branch Chief of the Fort Worth District of the Army Corps of Engineering, the Invitation For Bids was circulated requesting that all interested bidders arrange site visits. The IFB “urged and expected offerors or quoters to inspect the site and satisfy themselves as to all the local conditions that may affect the cost of performance of the contract.” Section 2E of the IFB informed bidders that electric logs and geological information were obtainable at the Directorate of Engineering if the contractors desired to procure such documentation.

Western’s president, Mr. Roy Senior, as well as Mr. Dean Mitchell, Western’s “tool pusher,”3 prepared Western’s bid for the subcontract with McCormick after visiting the construction location for a pre-bid investigation. Subsequent to his site visitation with Mr. John Samuel Miller, a Corps of Engineers’ construction representative, Mr. Senior asked where he could obtain supplementary materials on the well sites. Mr. Senior was directed to the civil engineering headquarters but had difficulty in locating the office and finding Mr. Wall, the person Mr. Miller told to him contact there. Once inside what he assumed was the correct building, Mr. Senior asked for the Corps of Engineers office. No one he asked knew where it was. He then entered an unidentified office and spoke with some unidentified person. The most we know is that the office he entered was not that of the Directorate of Engineering and that the person he spoke to was not Mr. Wall. Once inside the office, Mr. Senior requested the electric logs and driller’s logs.4 After obtaining a copy of the logs of R.L. Guffey, Inc.,5 Mr. Senior departed.

On February 14, 1984, defendant awarded McCormick Construction Company, Inc. the construction contract, including the drilling assignment. McCormick, in turn, subcontracted with Western Well & Pump Inc. to drill the wells, pursuant to the conditions of the contract between McCormick and defendant. Western drilled its wells at three of the four sites at which the Guffey exploratory test wells had been drilled, reaming the test holes to the designated diameter. Mr. Senior testified that he reamed the test holes because he believed that the Guffey logs indicated problem-free drilling. Mr. Senior did not perceive boulders as a problem, believed the predominant material was invariably listed first in formation logs, and boulders were never listed primarily in any of the reported findings. Although the logs did specify one [262]*262loss of circulation, Western regarded this as a reassurance of normal conditions and claimed that the mention of this one instance of lost circulation implied no other problems existed. Plaintiffs drilling difficulties were exemplified, however, by twenty-two “twist-offs”6 as well as losses of circulation7 experienced while drilling the three wells. Western anticipated it would take twenty-four days to drill the wells; it actually took seven weeks. Plaintiff contended that it relied entirely upon the logs of R.L. Guffey, Inc. in attempting to analyze subsurface conditions for purposes of drilling. It further declared that these logs were imprecise, deceptive and uninformative. Plaintiff attributed its dependence on the Guffey logs to defendant’s failure to furnish additional information. Plaintiff argued that the government had actively concealed or had knowledge of information that would have alerted plaintiff to the subsurface conditions. Furthermore, Plaintiff maintained that had it been apprised of the unanticipated heavily boul-dered conditions, Western would have adjusted its bid accordingly.

DISCUSSION

The first issue before the court is whether Western encountered conditions that differed materially from those described in the pertinent documents, i.e., a differing site condition. The Government ordinarily relies on the Differing Site Conditions clause of its contracts to defeat unaseertainable risks not atypical of a competitive bidding arrangement, and to procure favorable offers from bidders who need not worry about such caveats. See, e.g., Stock & Grove, Inc. v. United States, 493 F.2d 629, 646 (Ct.Cl.1974). Such a contractual policy permits Government to decrease costs, while simultaneously compensating bidders who encounter subsurface conditions not envisioned when preparing bids and not cognizable from site observation or obtainable data. Id. The pertinent section of the differing-site-conditions provision of the contract in dispute (provision four) is as follows:

DIFFERING SITE CONDITIONS

(a) The Contractor shall promptly, and before such conditions are disturbed, notify the Contracting Officer in writing of: (1) subsurface or latent physical conditions at the site differing materially from those indicated in this contract or (2)‘ unknown physical conditions at the site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in this contract. The Contracting Officer shall promptly investigate the conditions, and if he finds that such conditions do materially so differ and cause an increase or decrease in the Contractor’s cost of, or the time required for, performance of any part of the work under this contract, whether or not changed as a result of such conditions, an equitable adjustment shall be made and the contract modified in writing accordingly.

Plaintiff alleged that it is entitled to an equitable adjustment because it encountered a Type 1 differing site condition when drilling the wells.

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Bluebook (online)
35 Cont. Cas. Fed. 75,721, 18 Cl. Ct. 259, 1989 U.S. Claims LEXIS 188, 1989 WL 112237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormick-construction-co-v-united-states-cc-1989.