Universal Construction, Inc. v. United States

71 Fed. Cl. 179, 2006 U.S. Claims LEXIS 99, 2006 WL 1006638
CourtUnited States Court of Federal Claims
DecidedApril 18, 2006
DocketNos. 03-1502C, 03-2370C
StatusPublished
Cited by1 cases

This text of 71 Fed. Cl. 179 (Universal Construction, 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
Universal Construction, Inc. v. United States, 71 Fed. Cl. 179, 2006 U.S. Claims LEXIS 99, 2006 WL 1006638 (uscfc 2006).

Opinion

OPINION

MARGOLIS, Senior Judge.

This construction contract dispute is before the Court on cross-motions for summary judgment, pursuant to Rule 56 of the Rules of the Court of Federal Claims (“RCFC”). Plaintiff filed complaints alleging a differing site condition, government delay, government directed changes, and improper termination for default. Defendant filed a counterclaim seeking recovery from plaintiff of contract reprocurement costs and liquidated damages. The two complaints were consolidated into one action. Defendant moved for summary judgment, which the plaintiff opposed and moved for partial summary judgment. After careful consideration of both parties’ briefs and oral arguments, defendant’s motion for summary judgment is GRANTED in-part and DENIED ip-part, and plaintiffs motion for partial summary judgment is DENIED.

[181]*181 FACTS

I. The Contract

Plaintiff, Universal Construction, Inc. (“UCI”), an Idaho corporation, entered into contract number DTFH70-01-C-00034 (the “contract”) with defendant, United States, acting through the Federal Highway Administration (“FHA”), Western Federal Lands Highway Division (“FHWA”), on August 21, 2001 to widen an auto-tour route and to construct a parking lot and connecting road at the Camas National Wildlife Refuge (the “refuge”) located near Hamer, Idaho. The contract’s awarded price was $436,282.94. Desert Sage Contractors, Inc. submitted the second low bid of $527,465.30. FHWA’s estimated contract price was $606,523.50. The contract required performance to be completed by December 11, 2001 based on an assumed starting date of September 10, 2001.

To construct the roads and parking lot, the contract required UCI to use soil material at the refuge taken from two “borrow source” locations identified as “borrow source no. 1” and “borrow source no. 2,” and to then construct wetlands in the two former borrow sources. The contract required UCI to submit a preliminary construction schedule, construction schedule, accident prevention plan, and quality control (“QC”) plan to FHWA. The contract required that FHWA approve the preliminary construction schedule and the QC plan before UCI could begin full contract performance. The preliminary construction schedule is a “written narrative with a detailed breakdown of all contract activities for the first 45 days after the notice to proceed is issued.” Def.’s App. at 38. The QC plan includes the work of all subcontractors, personnel qualifications, inspection/control procedures for the preparatory, start-up, and production phases. The contract stated that UCI could “not begin the work until the [QC] plan is accepted,” and that “[acceptance of the [QC] plan will be based on the inclusion of the required information.” Id. at 47.

II. Performance

On August 30, 2001 UCI submitted its preliminary construction schedule to FHWA. On September 5, 2001 UCI and FHWA conducted a pre-construction conference. On September 7, 2001 FHWA issued a notice to proceed effective September 10, 2001. UCI was therefore required to complete its performance, subject to authorized extensions, by December 11, 2001. On September 10, 2001 UCI submitted its QC Plan to FHWA, which FHWA rejected as deficient on September 11, 2001. Also on September 11, 2001, FHWA rejected UCI’s preliminary construction schedule. Although the preliminary schedule had not been approved, FHWA allowed UCI to begin surveying work. On September 13, 2001 UCI submitted by facsimile a revised QC plan, which FHWA marked as “received” on September 17, 2001, and rejected as deficient the same day. On September 18, 2001 UCI submitted a corrected preliminary construction schedule, which FHWA approved the following day. Sometime between September 18 and 27, 2001 UCI submitted a second revised QC plan, which FHWA rejected as deficient on September 27, 2001. On September 28, 2001 UCI submitted a third revised QC plan, which FHWA approved pending minor additions, thus allowing UCI to begin contract performance.

About September 28, 2001 UCI began contract performance by excavating in borrow source no. 1 and placing the material to construct the parking lot and then placing it to widen the auto-tour route. After UCI constructed the parking lot, it began work on widening the auto-tour route. UCI tested the materials it placed for widening the auto-tour route for both compaction and moisture as required by the contract. The tests revealed problems with achieving the required compaction specifications of the materials taken from the borrow source.

By letter dated October 23, 2001 FHWA notified UCI that FHWA was concerned that UCI would not complete the contract work on time. By letter dated October 23, 2001 UCI notified FHWA that UCI had performed a geotechnical investigation of the borrow sources and found “several different soil types” and therefore it would be “impractical to continue use of these sources without a modification to acceptance proce[182]*182dures for density controls.” Def.’s App. at 163. UCI further informed FHWA that UCI intended to request that FHWA pay for its additional costs. Because UCI was having difficulty achieving proper compaction levels of the materials taken from the borrow source, FHWA issued a contract modification on October 29, 2001 that allowed UCI to build the project without meeting the 95 percent compaction requirement. Instead, UCI could compact the soil by performing eight passes over each 200 millimeter layer with a double drum vibratory roller at least 91 centimeters wide. The parties referred to this contract modification as the “method specification.”1

By letter dated November 1, 2001 UCI gave FHWA “formal notice” that UCI considered the borrow source to be a differing site condition because UCI had encountered “[ujnkown physical conditions at the site, of an unusual nature, which differ materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the contract.” Id. at 170. UCI further stated that it would submit a time and cost analysis to FHWA. In a separate letter also dated November 1, 2001 UCI informed FHWA that it would not complete the work on time unless: road closure policies were changed; FHWA accelerated review of submittals; the logic for the construction of certain work was changed; and UCI accelerated its work. UCI projected that the original contract duration of 93 days would need to be extended to 274 days.

By letter dated November 23, 2001 FHWA informed UCI that FHWA considered UCI to be in jeopardy of failing to complete the contract on time. On November 30, 2001 UCI submitted a certified claim to FHWA and notified FHWA that the contract would not be completed by December 11, 2001. In early December UCI ceased contract performance. On June 20, 2002 FHWA denied UCI’s claim and terminated the contract for default. Thereafter, on July 10, 2002 FHWA retained Desert Sage Contractors, Inc. to complete the contract, which it did so on October 17, 2002. On October 8, 2003 FHWA found UCI responsible for $125,120.15 in excess contract reprocurement costs and determined that UCI must also pay $152,000 in liquidated damages ($500 per day measured from the original completion date until the replacement contractor completed the work&emdash;304 days in this case).

DISCUSSION

I. Differing Site Conditions

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Cite This Page — Counsel Stack

Bluebook (online)
71 Fed. Cl. 179, 2006 U.S. Claims LEXIS 99, 2006 WL 1006638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-construction-inc-v-united-states-uscfc-2006.