Contract performance

Army Lawyer, Jan, 2005 by Steven Patoir, Andrew Kanter, Michael Benjamin, James Dorn

PCL substantially completed the project on 12 May 1995, approximately fifteen months after the contract deadline. Alleging USBR caused the delays and increased costs, PCL filed a contract breach claim in July 1995. Between July 1995 and November 1996, USBR denied the claim, PCL stopped work, and USBR assessed liquidated damages and terminated the remaining portions of the contract for default. (1346) The COFC found "USBR had not breached the contract" and "it had properly terminated the contract for default." (1347)

Both parties agreed USBR had provided flawed drawings, that the contract allowed for some errors, and that USBR provided corrected drawings at government expense. (1348) Therefore, the CAFC determined causation was the pivotal issue: "The question is whether the failure to produce accurate drawings in a timely manner caused disruption or delay for which the USBR was responsible." (1349) PCL alleged USBR was responsible for all the delay costs. The CAFC found "not clearly erroneous," the COFC's finding that PCL failed to prove a "cause and effect relationship" between the contract changes and "PCL's increased costs." (1350) The CAFC appeared swayed by USBR's reasonable position, conceding responsibility for some of the delay and allocating costs between USBR and PCL. (1351) Because PCL did not satisfy its burden of proof, the CAFC would not disturb the COFC holding in favor of the government. (1352)

Government Condemned by its Own Documents or Why Didn't we Settle This?

The contractor's victory in AST Anlagen-Und Sanierungstechnik GmbH (1353) left this author wondering, why didn't the government settle this case when it had its chance(s)? The appeal's "long and tortuous history," stretched from 1989 until 2004 and included a dismissal (subject to consummation of an apparent agreement to settle), a separate 2003 opinion regarding whether the case had been settled in 1991, (1354) reinstatement, hearing adjournment, and ultimate decision by the ASBCA. (1355) The case did not involve any novel areas of the law. Further, the board apparently had little trouble sustaining the appeal based almost exclusively on government documents.

AST contracted with the Army to conduct "extensive repair work" on an Army building in Hanau, Germany. (1356) Nearly two years elapsed between contract award and the termination for default. (1357) AST encountered numerous delays and obstacles. Using predominantly Army documents, ASBCA Judge Michael Paul found the government responsible for nearly all these problems. Two main circumstances prevented AST from making timely progress. First, U.S. troops continued to occupy the premises after the notice to proceed had been issued. (1358) Secondly, "another renovation contract" was taking place on the roof of the same building AST was hired to repair (and AST's repair work included replacing "various roof structures"). (1359) Both of these government-caused circumstances delayed AST's progress and caused problems between AST and its subcontractors. (1360) In addition, design flaws in the specifications for the bathroom walls and interior painting caused additional delays, (1361) and Army funding problems delayed payment for certain work. (1362)