PBI Electric Corp. v. United States

35 Cont. Cas. Fed. 75,669, 17 Cl. Ct. 128, 1989 U.S. Claims LEXIS 91, 1989 WL 56634
CourtUnited States Court of Claims
DecidedMay 31, 1989
DocketNo. 385-85C
StatusPublished
Cited by14 cases

This text of 35 Cont. Cas. Fed. 75,669 (PBI Electric Corp. 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
PBI Electric Corp. v. United States, 35 Cont. Cas. Fed. 75,669, 17 Cl. Ct. 128, 1989 U.S. Claims LEXIS 91, 1989 WL 56634 (cc 1989).

Opinion

OPINION

BRUGGINK, Judge.

BACKGROUND

On July 29, 1983, the Veterans Administration issued an Invitation for Bids (“IFB”) to furnish all labor, material, and equipment for a building addition, telephone equipment room, and a conduit system to accommodate a new telephone system. The IFB required construction according to the specifications and drawings provided. The work was to be performed at the VA Medical Center Brecksville Unit in Brecksville, Ohio. A pre-bid site inspection was conducted on August 24, 1983. The site inspection was attended by a number of contractors including plaintiff, PBI Electric Corporation. PBI subsequently submitted a bid of $466,200.

On September 1, 1983, the VA opened the bids and determined that PBI was the low bidder. The VA issued a Notice of Award by letter dated October 13, 1983 and a Notice to Proceed dated October 27,1983. The parties held a preconstruction meeting at the Brecksville Hospital on October 28, 1983.

In early November a dispute arose over the type of conduit appropriate for certain portions of the contract. PBI asserted it correctly based its bid on the use of elec-trometallic tubing (“EMT”) in these areas. The VA contended that rigid galvanized conduit (“RGC”) was clearly required by the specifications. After some correspondence and discussion, PBI proceeded with installation of RGC where required by the VA, however, on December 21, 1983, PBI submitted a certified claim to the VA’s contracting officer (“CO”) for an equitable adjustment of $75,000 and a time extension of sixty days. PBI alleged the rigid conduit requirement was a change in the contract. The CO denied the claim by letter of January 3, 1984. On January 9, 1984, PBI appealed the CO’s decision to the Veterans Administration Board of Contract Appeals.

A second disagreement over the requirements of the contract arose in early February 1984.1 The VA contended that the “solid circle[s]” on the contract drawings represented “wall outlets.” PBI contended that the solid circle (also “dot symbol”) was unspecific and allowed the contractor discretion to simply stub the conduit2 or place a floor or ceiling outlet near that location. As progress on other aspects of the contract continued, the wall outlet dispute intensified. PBI asserted that installation of wall outlets was a change in the contract requiring significant additional compensation as well as additional information. After subsequent discussion and correspondence, the VA still disagreed with plaintiff and on June 26, 1984 issued a letter asking PBI to “show cause” why it should not be terminated for default for failing to perform the contract work. PBI responded on July 2, 1984 stating its desire to proceed with the contract while reiterating its position regarding the wall outlets. The CO terminated PBI for default on July 9,1984.

On September 24, 1984, the VA awarded a reproeurement contract to Eltex Electric Company (“Eltex”) in the amount of $530,-[130]*130536.3 Work on this contract was eventually completed and accepted by the VA.

On April 17, 1985, PBI forwarded to the CO a certified claim for termination costs in the amount of $430,723.69. On June 28, 1985, PBI filed its complaint in this court claiming it had been improperly terminated for default. PBI’s claim on the conduit issue, however, was still before the Board. PBI moved to have the conduit claim transferred here and this court granted its motion by its order of January 30, 1986. On March 17, 1986, the CO issued a final decision denying PBI’s termination for convenience claim and assessing excess repro-curement costs of $451,8304 against PBI. Trial was held in Cleveland, Ohio from January 9 through 13, 1989.

DISCUSSION

I. Termination for Default

Much of the complaint as well as the factual and legal assertions of both parties in this case relate to the determination of whether the VA’s conduit and wall outlet requirements were changes within the meaning of the “Changes” clause in the general provisions of the contract. However, where the contractor has been terminated for default and his claim is for termination for convenience damages on the basis that the default termination was wrongful, this court has held that plaintiffs claims for cost adjustments are mooted by the default and subsumed in the termination for convenience damage claim. Ralcon, Inc. v. United States, 13 Cl.Ct. 294, 296 (1987) (citing Nolan Brothers, Inc. v. United States, 186 Ct.Cl. 602, 609-10, 405 F.2d 1250, 1255 (1969)). Thus the initial issue is the propriety of the VA’s July 9, 1984, termination for default of PBI’s contract.

PBI’s contract contained a standard termination for default clause as part of its general provisions, which reads in part as follows:

5. TERMINATION FOR DEFAULT-DAMAGES FOR DELAY — TIME EXTENSIONS
(a) If the Contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in this contract ... the Government may, by written notice to the Contractor, terminate his right to proceed with the work or such part of the work as to which there has been delay____ Whether or not the Contractor’s right to proceed with the work is terminated, he and his sureties shall be liable for any damage to the Government resulting from his refusal or failure to complete the work within the specified time. ******
(d) The Contractor’s right to proceed shall not be so terminated nor the Contractor charged with resulting damage if:
(1) The delay in the completion of the work arises from unforeseeable causes beyond the control and without the fault or negligence of the Contractor, including but not restricted to ... acts of the Government in either its sovereign or contractual capacity____
******
(e) If, after notice of termination of the Contractor’s right to proceed under the provisions of this clause, it is determined for any reason that the Contractor was not in default under the provisions of this clause, or that the delay was excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains a clause providing for termination for con[131]*131venience of the Government, be the same as if the notice of termination had been issued pursuant to such clause.

PBI offers two theories by which it asserts that, according to provision (d) above, any alleged lack of progress on the project was due to acts of the Government and thus should not have caused PBI’s termination for default. The first is that the VA’s wall outlet requirement was not only a change in the contract but a cardinal change thus releasing PBI from any obligation to proceed.5 Alternatively PBI asserts that the Government’s failure to properly respond to their requests for additional information and clarification regarding the wall outlets prevented PBI from proceeding in a timely manner. See, e.g., Remm Company, ASBCA Nos. 18430, 18545, 74-2 BCA ¶10,876 1974 WL 1794 (1974) (holding default termination wrongful where necessary specification not provided).

A.

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Bluebook (online)
35 Cont. Cas. Fed. 75,669, 17 Cl. Ct. 128, 1989 U.S. Claims LEXIS 91, 1989 WL 56634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pbi-electric-corp-v-united-states-cc-1989.