Beauchamp Construction Co. v. United States
Opinion of the Court
OPINION
I. Introduction
On July 11, 1985, Beauchamp Construction Company, Inc. (Beauchamp or plaintiff) filed a complaint in this court challenging the contracting officer’s final decision which denied in part Beauchamp’s claim for an equitable adjustment of $55,818.45 under the Differing Site Condition clause of its contract with the Department of Justice, Immigration and Naturalization Service (INS or defendant). In this court, plaintiff now seeks $87,430.31 in damages for an allegeged 137-day delay in contract performance due solely to the defective specifications of INS and an admitted differing site condition. Jurisdiction lies under 28 U.S.C. § 1491 and 41 U.S.C. § 609.
Viewing the submissions in the light most favorable to the non-movant defendant, and after oral argument, we grant plaintiffs motion for the reasons detailed below and find defendant liable for any provable delay damages suffered by Beau-champ. Inasmuch as the liability and damages issues have been bifurcated, the precise amount of such damages shall be determined at a separate trial under RUSCC 42(b).
II. Facts
The following facts are not disputed by the parties, thus, we find accordingly. On September 30, 1983, INS awarded Beau-champ a fixed-price ($2,879,800) contract (DLS-41-83) for construction and renovation of several buildings at Krome North Service Processing Center in Miami, Florida. As noted in the Invitation For Bids (IFB), the contract contained representations of soil conditions. On that same date, plaintiff received formal notice to proceed with contract performance, and under the contract, plaintiff had 365 days in which to complete the contract. Mobilization, for contract performance, began on October 6, 1983. Thereafter, in mid-October 1983, plaintiff discovered “muck” which is a variant soil condition. “Muck” rendered the soil incapable of supporting a building’s foundation, which in turn prevented plaintiff from placing the footings for the medical building (building 10c) and the storage facility (building 12). Also, shortly thereafter, in mid-October 1983, plaintiff advised INS’s contracting officer (CO) that actual soil conditions, at the site, differed materially from the depiction(s) in the contract. INS did not issue a written stop-work order, on such noticed condition, even though Beauchamp could not continue with part of the construction of buildings 10c and 12. Plaintiff, nevertheless, continued to perform other contractual tasks such as site preparation (i.e., clearing, grubbing, and excavating) to the extent that the muck was not an impediment. By October 24, 1983, defendant had given new specifications as well as a request for a cost proposal for demucking to Beauchamp since the original specifications did not contemplate the presence of muck. Defendant unequivocally concedes that the presence of muck
Following the foregoing modification, the contracting officer sent plaintiff a letter on January 17, 1984. In this letter, defendant represented to Beauchamp that it would grant a time extension due to the demucking around building sites 10c and 12 from “the time construction was due to begin ... [to] the date Modification 4 was issued.” Further, defendant acknowledged in that same letter that despite the absence of the stop-work order—
[T]t was obvious that [Beauchamp] could not proceed with the construction of these buildings due to the sub-surface demucking requirement that was not established prior to contract award,
(emphasis added). Finally, defendant also unequivocally admitted therein that—
[C]ontract performance on a part of the work was delayed for an unreasonable period of time and that an equitable adjustment should be made for any increase in the cost of performance of the Contract (excluding profit) necessarily caused by the unreasonable suspension delay and interruption of work.
(emphasis added). At the conclusion of the letter, the contracting officer invited plaintiff to submit a claim for time delay costs including “a separate cost analysis showing the additional project management and superintendence time that will be spent on the project as a result of the delay in issuing Modification No. 4” (emphasis added).
After receipt of Modification No. 4 and during the time that Beauchamp was working to alleviate the muck problem surrounding buildings 10c and 12, so that it could continue with the construction of same, the subcontractor that was hauling the muck, i.e., Florida Engineering, experienced a truckers’ strike for a period of 19 days from January 24, 1984, to February 14, 1984. Additionally, on February 21, 25, and 27, rain delayed the demucking work. But by March 1, 1984, plaintiff had corrected the muck problem and returned to the original contract performance requirements.
After completing the demucking work on March 1, 1984, thereafter, on March 29, 1984, Beauchamp, followed the directive of the contracting officer in his January 17th letter and submitted a claim for the 137 days for interruption of work and additional indirect expenses in the amount of $55,-818.45. Plaintiff later certified its claim, at defendant’s request, on May 2, 1984. Notwithstanding the foregoing, on September 24, 1984, INS’s contracting officer denied plaintiffs claim in large part and authorized only a 54-day time extension (from the effective date of Modification No. 4, January 6, 1984, to the date of demucking completion, March 1, 1984) and $16,489.49 for indirect expenses under the differing site condition clause. Neither a time extension nor indirect costs were allowed for the period of 83 days covering the time from when the differing site condition of muck was discovered (i.e., mid-October 1983) to the time that defendant authorized payment to correct the problem (January 5,
III. Contentions of the Parties
A. Plaintiff
Plaintiff maintains that defendant is liable to it for an equitable adjustment to the contract price for the total 137 days of unreasonable delay, comprising the entire period from the notification of the differing site condition in October 1983 to its correction on March 1, 1984. In the motion for partial summary judgment, Beauchamp argues, therefore, that (1) it had a right to complete the contract prior to the date called for by the contract and that defendant is liable for all delay damages resulting from the differing site condition that frustrated early completion; (2) delays to the completion of building 10c necessarily delayed contract performance because building 10c was the project of the longest duration under the contract; and (3) the differing site condition delayed the construction of building 10c by 137 days. Defendant is, therefore, liable, according to plaintiff, for this entire delay period due to its defective specifications and the emergence of the differing site condition.
B. Defendant
Defendant opposes the motion for partial summary judgment seeking to affix liability on it for the alleged 137-day delay by raising four arguments. First, defendant contends that not all the work on building 10c was interrupted due to the muck and that plaintiff was able to continue working on some portion of the building even during the demucking period. Second, even without the 137-day delay, argues defendant, plaintiff would not have completed the contract within the 365 days allowed by the contract, and thus could not have completed the contract early. Third, INS granted Beauchamp a 54-day extension from the authorization of the work on January 6, 1984, to the accomplishment of demucking on or about March 1, 1984. Fourth, INS points to several concurrent delays for which plaintiff must assume the risk and which allegedly delayed the overall contract performance of plaintiff until February 19, 1985.
IV. Issues
Both parties have agreed that the discovery of the muck in the subsurface around buildings 10c and 12 constituted a differing site condition, and plaintiff has received payment of direct costs ($63,-697.44) due to the additional work, a 54-day extension to perform the demucking, and indirect overhead costs ($16,489.49) for the period from January 6, 1984 to March 1, 1984 (i.e., from the date when defendant authorized the actual demucking work to the date when Beauchamp completed the work). The court, therefore, postures the threshold issue underlying plaintiff’s motion to be—whether plaintiff is entitled to recover indirect costs for the 83-day delay that occurred from the time that Beau-champ notified defendant of the differing site condition to the time that INS issued payment authorization for the demucking work (i.e., from mid-October 1983 to January 5, 1984).
V. Discussion
A. Summary Judgment Standard
In ruling on Beauchamp’s partial summary judgment motion, it is axiomatic that the court may grant the motion if there is no genuine issue of material fact and provided further that the moving party is entitled to judgment as a matter of law. RUSGC 56(c). In other words, under this standard, the court’s threshold determination is
[T]he burden is not on the movant to produce evidence showing the absence of a genuine issue of material fact ... “[i]nstead, ... the burden on the moving party may be discharged by ... pointing out ... that there is an absence of evidence to support the nonmoving party’s case.”
Sweats Fashions, 833 F.2d at 1563 (emphasis in original) (citing Celotex, 477 U.S. 317, 106 S.Ct. 2548).
With the burden of each party fixed in mind, and to justify the grant of plaintiffs motion, the court must now assure itself that the record at bar postulates no actual dispute regarding any material fact, and that the movant is entitled to judgment as a matter of law. With respect to the “materiality” of the facts, the court makes that determination against the same legal standard that it will apply in the case. Barmag Barmer, 731 F.2d at 835-36. The court’s analysis will first determine whether an issue of fact exists in the record and, if so, then it will assess the genuineness and materiality of any such factual dispute.
B. Legal Standard For Delay Claims
Plaintiff initially requested partial summary judgment based on its right to complete the contract prior to the required performance date. But in plaintiffs reply memorandum, it apparently abandoned the early completion argument as a basis for defendant’s liability for delay. Therein, plaintiff restated its position more succinctly to the effect that the liability of the defendant arose from the admitted differing site condition that unreasonably delayed contract completion, regardless of whether or not there was a likelihood of early completion. With this clarification, the court will therefore not address the early-completion contention.
We further note that Beauchamp points to the delay in the construction of building 10c as critical in causing the delay in the overall contract completion. Reasoning therefrom that if the project requiring the greatest amount of time to complete was government delayed, due to a differing site condition, then the overall contract performance was necessarily unreasonably delayed, thus entitling Beauchamp to summary judgment. However, again, the court must determine that it need not address this argument since under the legal standard relevant to delay, discussed infra, an admitted government interruption of any part of contract performance is compensa-ble if the delay is found to be unreasonable.
Here, the record shows that Beauchamp originally brought its complaint in this court under the Differing Site Condition clause of the contract. This clause functions to relieve the contractor from the financial burden of the risk that the site will actually present more onerous working conditions than those detailed in the government’s specifications. Defendant
Since plaintiff has received an adjustment for 54 days out of the 137 days claimed, then what is it that plaintiff now seeks by this action? What Beauchamp now seeks is a ruling holding the government liable for the indirect costs incurred by plaintiff as a result of idleness with regard to being unable to proceed timely with the foundation work surrounding building 10c. This idleness was allegedly directly occasioned by the initial delay of 83 days that defendant took to issue Modification No. 4, which authorized Beauchamp to perform the demucking (mid-October 1983 to January 5, 1984). And, additionally, it seeks indirect costs incurred during the 54-day period over and above the $16,-489.49 previously paid. The basis and standard for determining a contractor’s entitlement to an equitable adjustment for delay in contract performance, due to acts or omissions of the contracting officer, is found in the Suspension of Work clause of subject contract. This clause is a mandatory component of every fixed-price construction contract, and in pertinent part, it provides:
Suspension of Work
(a) The Contracting Officer may order the Contractor in writing to suspend, delay, or interrupt all or any part of the work for such period of time as he may determine to be appropriate for the convenience of the Government.
(b) If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted by an act of the Contracting Officer in the administration of this contract, or by his failure to act within the time specified in this contract (or if no time is specified, within a reasonable time), an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by such unreasonable suspension, delay, or interruption and the contract modified in writing accordingly. However, no adjustment shall be made under this clause for any suspension, delay, or interruption to the extent (1) that performance would have been so suspended, delayed, or interrupted by any other cause, including the fault or negligence of the Contractor or (2) for which an equitable adjustment is provided for or excluded under any other provision of this contract.
(emphasis added).
Inclusion of the word “shall” in the quoted language, supra, compels us to hold that the clause imposes a mandatory obligation upon the government to give the contractor an equitable adjustment for any increase in the cost of performance that arises from either (1) an express written order from the contracting officer suspending, delaying, or interrupting all or any part of the contract work or (2) a constructive suspension resulting from an act or omission by the contracting officer that delays, suspends, or interrupts all or any part of the contract performance for an unreasonable period of time. A constructive suspension, as here, results when performance is effectively suspended or delayed, but the contracting officer has failed or declined to issue a stop-work order. In such case, “the law considers that done which ought to have been done” and deems such delay to constitute a constructive or defacto suspension. Merritt-Chapman & Scott Corp. v. United States, 192 Ct.Cl. 848, 870, 429 F.2d 431, 443 (1970).
Primarily, the function of the Suspension of Work clause is to provide a contractual basis for compensating the contractor for government-caused delays of an unreasonable duration. John A. Johnson & Sons v. United States, 180 Ct.Cl. 969 (1967). An additional reason for the clause is that it clearly supports the policy that the contractor is entitled to other rem
In T.C. Bateson Construction Co. v. United States, 162 Ct.Cl. 145, 187, 319 F.2d 135, 160 (1963), the court similarly held that when the government’s actions caused delay and additional expense to the contractor, the contracting officer should have suspended the work via an express stop-work order. There, the government employed civil service employees with a view towards saving costs on a part of the project, notwithstanding its knowledge that such a choice would precipitate a work stoppage on the entire project due to union demands that only union labor be employed.
In order for a contractor to recover under the constructive suspension provision of the Suspension of Work clause, he must show (1) that the delays or extra expenses were directly caused by the actions of the government; (2) that the delay was for an unreasonable period of time; and (3) that the delay occasioned injury to the contractor in the form of additional expense or loss. Wunderlich Contracting Co. v. United States, 173 Ct.Cl. 180, 351 F.2d 956 (1966). Relative to proving that the delay was directly caused by the government, the contractor must concomitantly show that it was not delayed by any concurrent cause that would have independently generated the delay during the same time period even if it does not predominate over the government’s action as the cause of the delay. John McShain, Inc. v. United States, 188 Ct.Cl. 830, 412 F.2d 1281 (1969); see also Merritt-Chapman & Scott Corp. v. United States, 208 Ct.Cl. 639, 528 F.2d 1392 (1976). In that connection, the Suspension of Work clause states that any concurrent cause that would have equally delayed performance bars recovery under the clause regardless of the government’s actions. Merritt-Chapman, 208 Ct.Cl. at 650, 528 F.2d at 1397-98. Thus, the court in Merritt-Chapman teaches that the contractor would be entitled to an adjustment under said clause “only if the Government’s delay was the sole proximate cause of the contractor’s additional loss and only if the contractor would not have been delayed for any other reason during that period.” Id. (emphasis added).
C. Application Of The Standard Under The Suspension Of Work Clause
Since Beauchamp seeks compensation for a delay in part of the contract performance due to the contracting officer’s failure to authorize the demucking within a reasonable time, the court deems plaintiffs claim to have been brought under the Suspension of Work clause. In meeting its burden of showing a constructive suspension under the Suspension of Work clause, Beauchamp first argues that the 83-day period of delay (mid-October
... it was obvious that you could not proceed with the construction of these buildings due to the sub-surface demuck-ing requirement that was not established prior to contract award.
In that same letter, the contracting officer went on to admit that contract performance on a part of the work was delayed for an unreasonable period of time and that an equitable adjustment should be made for any increased costs caused by the “unreasonable suspension delay and interruption of work.” Plaintiff relies on this admission, and because we find that it is unequivocal and unambiguous, it meets and carries plaintiffs burden of establishing unreasonable delay. Additionally, case law in the predecessor Court of Claims, which is binding here, has held that the entire period of delay resulting from the government’s defective specifications is per se unreasonable. Chaney and James Construction Co. v. United States, 190 Ct.Cl. 699, 421 F.2d 728 (1970). In Chaney, the construction contractor sought delay compensation under the Suspension of Work clause due to defective government specifications. The agency board had denied the contractor’s claim because the changes to the specifications issued by the government to correct the defects did not delay overall performance progress. But the court reversed and held (1) that when delay is caused by defective specifications, the entire period of delay is unreasonable; (2) that the contractor is entitled to recover all provable delay damages that resulted from defective specifications; (3) that the Suspension of Work clause provides an alternative administrative remedy to a breach of contract claim based on the defective specifications; and (4) that the Suspension of Work clause states that delay to any part of the performance is compensable. Consequently, the overall contract performance does not have to be delayed to entitle the contractor to damages. 190 Ct.Cl. at 707, 713, 421 F.2d at 731, 732.
Under Chaney, therefore, if defective specifications are the genesis of the delay, the contractor does not have to affirmatively prove that the time period of the delay was unreasonable since the contract clause serves as an administrative alternative to a breach claim for defective specifications. The court reasoned, in this connection, that if the contractor brought his claim as a breach of contract claim, due to defective specifications, instead of under the Suspension of Work clause, plaintiff would not have to prove that the delay was unreasonable since all delay produced by defective specifications is per se unreasonable and compensable. 190 Ct.Cl. at 707, 421 F.2d at 731. Further, the Chaney court held that “the fact that the claim was brought [instead] under a contract clause does not affect the reasonableness of delay.” Id. Since the delay at the basis of either the breach suit or the claim under the contract clause flowed from erroneous specifications, the court reasoned that its character would not be changed—and it would remain unreasonable under either type of claim. Id.
In La Crosse Garment Mfg. Co., the court restated the rule that the government is liable to compensate the contractor for increased costs due to delay caused by defective specifications as follows:
“The defendant cannot, by errors in the specifications, cause delay in plaintiff’s completion of the work and then compensate plaintiff merely by extending its performance time and by payment of any added direct cost occasioned by changes to correct those errors.”
Id., quoting Laburnum Constr. Corp. v. United States, 163 Ct.Cl. 339, 350, 325 F.2d 451, 457-58 (1963) (emphasis added). Finally, as a measure of the time comprising the delay, the court follows the rule that the delay embraces the period from the discovery of the defect in specifications to the time that the order to proceed with correction was issued. J.A. Ross & Co. v. United States, 126 Ct. Cl. 323, 115 F.Supp. 187 (1953). Given the foregoing, as a matter of law then, Beauchamp has met its burden on showing that the delay occasioned by the defective specifications was directly attributable to defendant and was unreasonable.
Now, as to damages, the court in La Crosse Garment Mfg. Co., recognizing the entitlement to compensation for partial delay, set the measure of damages as the degree of interference with satisfactory performance. 193 Ct.Cl. at 180, 432 F.2d at 1385. However, in Chaney, the court inferred the existence of delay damages from the extent and nature of the additional work that plaintiff was required to perform as a result of changes to the specifications. Chaney, 190 Ct.Cl. at 711, 421 F.2d at 735. Plaintiff would then have to prove the quantum of damages. Id.
In the case at bar, the parties agree that the original specifications did not include demucking and that the specifications had to be changed to include this additional work. The parties also agree that certain aspects of the construction of buildings 10c and 12 were postponed until the demucking was completed. This postponement of progress under the original contract would necessarily include the time prior to authorization of the demucking work since plaintiff could not proceed until it received the authorization to remove the differing site condition. The court finds, therefore, that on the record before it there is specific evidence of interference with the progress in a part of the contract performance caused by the admitted differing site condition and the resulting and subsequent 83-day delay on defendant’s part in issuing Modification No. 4. The court, on these facts, can and does reasonably infer the existence of compensable delay damages to Beauchamp as a result of the unjustified interruption of performance. With respect to the precise amount of the entitlement, plaintiff will have ample opportunity to quantify its damages by appropriate evidence at a forthcoming trial.
D. Concurrent Delays
As explained above, any concurrent causes for the delay bar plaintiff’s recovery under the Suspension of Work clause. Accordingly, defendant has raised the doctrine of concurrent delays as a material issue of fact that would preclude the granting of plaintiffs motion. The court finds that while concurrent delay may be a relevant issue in light of the requirements of the Suspension of Work clause, in this case and at this posture it is not a genuine issue. Defendant points to no concurrent delays that arose during the 83 days prior to the issuance of the authorization to proceed. Moreover, by paying plaintiff $16,-489.49 in indirect costs for the 54-day peri
VI. Conclusion
As a result of our findings above, the court holds that no genuine issue of material fact presents itself on this record. Since plaintiff has met its burden under the Suspension of Work clause and defendant has conceded delay costs under the Differing Site Condition clause, plaintiff is entitled to judgment on liability as a matter of law. Hence, we grant plaintiff’s motion for partial summary judgment. Because the issues of threshold liability and damages were bifurcated, the court hereby sets the following schedule for the remaining proceedings regarding the quantum of damages in this case:
(1) The parties shall have until April 22, 1988, for concurrent discovery;
(2) Plaintiff’s pretrial submission of a memorandum of law in which it postures the issues and details the applicable law shall be filed on April 25, 1988;
(3) Defendant’s response to plaintiff’s pretrial submission shall be filed on May 9, 1988;
(4) Plaintiff’s reply thereto shall be filed on May 16, 1988;
(5) A pretrial conference shall be held in this court on Wednesday, May 18, 1988, at 10:00 a.m.; and
(6) Unless the parties stipulate to a different situs, trial on the quantum of damages shall commence on Wednesday, June 1, 1988, at 9:30 a.m., in Miami, Florida. The court will inform the parties of the exact location at a later date.
The parties are advised that the court will strictly adhere to the foregoing schedule.
No costs.
IT IS SO ORDERED.
. This court finds jurisdiction under both our general jurisdictional statute, 28 U.S.C. § 1491, and the Contract Disputes Act of 1978, 41 U.S.C. § 601, et seq., specifically § 609. Section 609 provides: “[f|n lieu of appealing the decision of the contracting officer under section 605 of this title to an agency board, a contractor may bring an action directly on die claim in the United States Claims Court....”
. This consisted of removing the muck, peat, and other deleterious materials; disposing of the same; importing fill dirt, spread, and compact same; and performing laboratory and field density testing. A maximum amount of $86,-125.47 was authorized and allocated for this modification.
. Plaintiff also challenges the adequacy of the amount received (i.e., $16,489.49) from INS for indirect costs during the 54-day period when the demucking work was being performed. The reason for such position is that, by such payment, defendant has admitted liability for indirect costs for said 54-day period. Thus, the only issue is the correctness of the rate of payment at which these indirect costs were calculated, and not whether defendant is liable for any such costs due to delay during that 54-day period. Given the foregoing, the quantum issue regarding indirect costs during the 54-day period will be resolved during the trial phase of this case.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.