Sergent Mechanical Systems, Inc. v. United States

54 Fed. Cl. 636, 2002 WL 31873390
CourtUnited States Court of Federal Claims
DecidedAugust 30, 2002
DocketNo. 99-19 C
StatusPublished

This text of 54 Fed. Cl. 636 (Sergent Mechanical Systems, 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.

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Sergent Mechanical Systems, Inc. v. United States, 54 Fed. Cl. 636, 2002 WL 31873390 (uscfc 2002).

Opinion

OPINION and ORDER

TURNER, Senior Judge.

Plaintiff and the Department of Veterans' Affairs (VA) entered into a construction contract in June 1995. Sergent asserts that a [637]*637government-directed suspension of work caused it to incur unabsorbed overhead costs under the Eiehleay formula for which it has not been compensated. The case stands on defendant’s motion for summary judgment filed on October 6, 2000.

I

The contract provided that plaintiff would perform certain construction work on the boiler plant at the Veterans Medical Center in Sepulveda, California. Originally, the contract was to be completed within 300 days. By mutual agreement, certain changes were made to the contract, extending the completion date to May 30,1997.

On May 30, 1997, the VA inspected plaintiffs work on the boiler plant and accepted custody of the project. The VA identified a punch list of 81 items remaining for completion of the contract work. Included in this punch list were (1) the calibration of a sensor on the hydronic bridge system in Building Seven and (2) the training of VA employees on how the system worked.1 Plaintiff, through its subcontractor Johnson Controls, identified problems with the pressure in the chilled water system in Building Seven of the project on June 10, 1997. These problems prevented completion of the hydronic bridge work in Building Seven. Plaintiff and defendant each had representatives present at a meeting on July 8, 1997, at which time plaintiff alleges defendant “suspended” the contract pending completion of the work on the chilled water system. July 8, 1997 was the last date that Sergent employees physically remained stationed at work on the project, although Sergent employees returned to the project throughout the delay period to complete other punch list and warranty items.

Between September and December 1997, plaintiff and defendant exchanged correspondence in which plaintiff requested that the contract be closed out, and the VA identified more punch list items and/or warranty items for Sergent to complete. On March 11,1998, the VA informed Sergent that Building Seven work was finished, and, therefore, the hydronic bridge sensor was ready for calibration, and, subsequently, employee training could be performed. Six days later, Sergent informed the VA that it would notify its subcontractor, Johnson Controls, to proceed with the hydronic bridge work and training. For the first time, Sergent also advised the VA it would seek additional compensation for the impact of the delay in completing the contract.

On April 17, 1998, Sergent received notice of the VA’s fina settlement of the contract, which was executed on May 12, 1998. Six thousand, two hundred dollars was withheld from the payment, $4,200 for liquidated damages assessed against Sergent and $2,000 for the outstanding work on the hydronic bridge. On April 22, 1998, Sergent notified the VA that Johnson Controls was unable to complete outstanding work on the hydronic bridge because problems with the chilled water system remained.

There is conflicting evidence over the next course of events, but the parties agree that Johnson Controls returned to the worksite and completed calibration of the hydronic bridge sensor by June 1, 1998. This work took approximately one half-day to complete. Training was performed on June 18, 1998. This required another one half-day for Johnson Controls to complete.

Sergent presented a claim to the contracting Officer for the project on August 10, 1998. The claim was denied Nov. 9, 1998, with the contracting Officer noting that Sergent had not given notice of an intent to file a claim within 30 days of the event giving rise to the claim. The Contracting Officer also indicated that he would consider a request from Johnson Controls, the subcontractor, for additional direct costs involved in the hydronic bridge work. After receiving the denial, Sergent filed the complaint initiating this case on January 12, 1999. Defendant moved for summary judgment on October 6, 2000.

[638]*638II

Summary judgment is appropriate when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Facts are considered material when they might significantly affect the outcome of the case. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The moving party bears the initial burden of demonstrating the absence of any genuine issues of material fact, and may meet its burden by demonstrating that there is an absence of evidence supporting the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Plaintiff and defendant are in general agreement regarding most of the facts surrounding this claim. As is required in reviewing a summary judgment motion, we view any disputed facts in the light most favorable to the non-moving party. Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus., Inc., 145 F.3d 1303, 1307 (Fed.Cir.1998); Transmatic, Inc. v. Gulton Indus., Inc., 53 F.3d 1270, 1274 (Fed.Cir.1995). As there is no significant dispute over any facts that could affect the outcome, this case is ripe for determination pursuant to a summary judgment motion.

III

The Eichleay formula is the means for calculating recovery for unabsorbed home office overhead incurred by a contractor when the government suspends or delays work on a contract. Melka Marine, Inc. v. United States, 187 F.3d 1370, 1375 (Fed.Cir.1999) (citing Eichleay Corp., ASBCA No. 5183, 60-2 B.C.A. (CCH) H2688, 1960 WL 538 (I960)). To show entitlement to damages using the formula, the contractor must first prove there was a government-imposed delay in the contract (Mech-Con Corp. v. West, 61 F.3d 883, 886 (Fed.Cir.1995)) for an uncertain period of time (West v. All State Boiler, Inc., 146 F.3d 1368, 1381 (Fed.Cir.1998)) and that the contractor was on “standby” during this period. Mech-Con, 61 F.3d at 886. Once the contractor has established these two elements, thereby making its prima facie case, the burden shifts to the government to show it was not impractical for the contractor to take on replacement work and thereby avoid the loss. All State Boiler, 146 F.3d at 1381.

Here, plaintiff insists the government suspended its work on the contract pending resolution of the defects in the chilled water system in Building Seven. Defendant does not acknowledge a “suspension” of work, and, indeed, alleges that no delay occurred as the project was “complete” as of May 30, 1997.

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