PCL Construction Services, Inc. v. United States

47 Fed. Cl. 745, 2000 U.S. Claims LEXIS 198, 2000 WL 1474486
CourtUnited States Court of Federal Claims
DecidedSeptember 20, 2000
DocketNos. 95-666C, 96-442C
StatusPublished
Cited by43 cases

This text of 47 Fed. Cl. 745 (PCL Construction Services, 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
PCL Construction Services, Inc. v. United States, 47 Fed. Cl. 745, 2000 U.S. Claims LEXIS 198, 2000 WL 1474486 (uscfc 2000).

Opinion

OPINION

HORN, Judge.

This case involves a dispute over a government contract for the construction of a Visitor Center and Parking Structure at the Hoover Dam on the Nevada side of the Colorado River. The plaintiff, PCL Construction Services, Inc. (PCL) filed two complaints (Case Nos. 95-666C and 96-442C) against the United States, arising from the alleged actions of the United Stated Bureau of Reclamation (USBR). PCL seeks recovery of over $31 million under “breach of contract” and “illegal contract” theories in Case No. 95-666C, and over $1.3 million under “breach of contract,” “improper termination for default,” and “illegal assessment of liquidated damages” in Case No. 96-442C. On October 4, 1995, PCL filed a “preliminary complaint” premised upon a contracting officer’s final decision denying PCL’s July 27, 1995 certified claim for $31,040,071.00 based upon alleged breach of contract and illegality of contract. This complaint was assigned Case No. 95-666C. This complaint was amended on April 1, 1996, following discovery. The plaintiffs counts in Case No. 95-666C assert breach of contract premised upon fraud in the inducement and misrepresentation by the government (Counts I, II and IV), breach of contract premised upon superior knowledge by the government (Counts III and VI), breach of contract arising from a breach of warranty by the government (Count V), breach of contract stemming from hindrance and delay by the government (Count VII), cardinal change (Count VIII), and illegal contract (Count IX).1 Shortly after the amend[752]*752ed complaint in case no. 95-666C was filed, PCL filed a second complaint on July 23, 1996, which was assigned Case No. 96-442C, and indicated that the complaint was related to the complaint filed in Case No. 95-666C. The complaint in this second action was premised upon (1) a contracting officer’s final decision denying PCL’s November 22, 1995 certified claim for $1,351,838.00 seeking monies retained by USBR, (2) a March 11, 1996 letter from the contracting officer terminating PCL for default based upon an alleged breach of the contract by PCL, and (3) a March 26, 1996 letter from the contracting officer assessing liquidated damages against PCL in the amount of $1,285,000.00.

PCL’s first complaint asserts that the government breached an implied contract of good faith and fair dealing by “inducing” PCL to enter into the contract for construction of the Hoover Dam Visitor Center and Parking Structure. PCL also contends that USBR “breached warranties” and the express contract between the parties by imposing a cardinal change upon PCL, hindering PCL’s efforts and by “maladministration” of the contract. PCL concludes that these purported breaches warrant one or more of the following: breach of contract damages, reformation of PCL’s contract, the award of a quantum meruit/quantum valebant recovery (apparently over and above the $36,564,417.00 that PCL has already been paid.) The plaintiff also complains that USBR’s withholding of the retainage after “substantial completion and acceptance of the contract” was improper and thus the termination for default was improper.

The defendant responds that PCL’s case has no merit. The defendant argues “that PCL’s contract was not ‘severely defective,’ PCL agreed in its contract that it would encounter the very same kinds of events that PCL did, in fact, encounter, and that PCL has not proven any causal relationship between [the] Government’s actions and PCL’s extended contract performance period.” The defendant summarizes its position in this action as follows: We do not dispute that the pre-design subsurface investigation did not permit Reclamation to depict the actual subsurface rock conditions with absolute precision, that the design process was not without error, that the contract drawings were imperfect, that the project involved a number of changes and redesigns during contract performance (captured in 144 contract modifications), that the Government responded to a significant number of RFIs [Requests For Information] during the job, that the Government’s response to RFIs was [not] as fast as PCL requested in every instance, and that PCL’s contract completion was delayed, to some extent, by Government-directed changes. None of these situations, in whole or in part, constitute a “cardinal change” or any other “breach” of PCL’s contract and, in fact, all of these situations are provided for in the terms of the contract. In short, PCL signed a contract that contains a changes clause, and a differing site conditions clause, among others, yet now claims “breach of contract” because a series of differing site conditions and changes occurred — not one of which was extraordinary.

PCL’s second complaint in Case No. 96-442C, filed July 23, 1996, alleges breach of contract, based upon failure to pay and improper assessment of liquidated damages; improper termination for default; the illegal assessment of liquidated damages; and improper retention of funds by the government. It also requests the conversion of the termination for default to a termination for convenience, based upon the improper termination.

PCL contends that “[t]he USBR’s refusal to return the retainage to PCL after issuing a Certificate of Substantial Completion and accepting PCL’s work is contrary to the purpose for retainage, legal authority, and the intent of the parties.” In addition, PCL argues that termination for default was improper because “[t]he USBR not only [753]*753granted substantial completion to PCL on May 11, 1995, but it also began beneficial occupation of the facilities at that time and beneficial occupation continues to this day, establishing that no major deficiencies could exist.” The plaintiff also contends that the contracting officer did not exercise “reasoned and independent discretion when considering and applying the regulatory provisions.” PCL contends that the assessment of liquidated damages against it was improper because the contracting officer “failed to determine responsibility for delays before assessing the liquidated damages” and “failed to issue a final decision when she assessed liquidated damages.”

In response, the government contends that the termination for default was justified because “PCL clearly and unequivocally defaulted upon the contract,” and because the government has the authority to terminate for default upon a contractor’s refusal to complete any separable parts of the contract such as the uncompleted deficiency list and contract completion requirements. In regard to the assessment of liquidated damages, USBR states that it had informed “PCL that continued withholding of funds was necessary for protection of the Governments [sic] interests in accrued liquidated damages, outstanding required submittals, and credits due the Government for changes and/or reductions in the work.” The government argues that PCL is liable for uncompleted contract work which includes the deficiencies that PCL failed to correct when PCL abandoned the project and which account for the retained monies and liquidated damages assessment.

FACTS

The Hoover Dam Visitor Center and Parking Structure are located on the north side of the Colorado River at Black Canyon, immediately west and downstream of the Hoover Dam. The mountain ranges in the damsite area generally trend north-south and are sparsely vegetated and deeply incised by steep ravines and canyons. The rocks in Black Canyon at Hoover Dam have undergone intense structural deformation.

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Cite This Page — Counsel Stack

Bluebook (online)
47 Fed. Cl. 745, 2000 U.S. Claims LEXIS 198, 2000 WL 1474486, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pcl-construction-services-inc-v-united-states-uscfc-2000.