Huffman Construction, LLC ( 2021 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of - )
)
Huffman Construction, LLC ) ASBCA Nos. 62591, 62783
)
Under Contract No. W912EQ-14-C-0028 )
APPEARANCES FOR THE APPELLANT: S. Leo Arnold, Esq.
Matthew W. Willis, Esq.
Ashley & Arnold
Poplar, MO
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq.
Engineer Chief Trial Attorney
Edward J. McNaughton, Esq.
Ann M. Bruck, Esq.
Trial Attorneys
U.S. Army Engineer District, Memphis
OPINION BY ADMINISTRATIVE JUDGE CLARKE ON MOTION FOR PARTIAL
DISMISSAL FOR LACK OF JURISDICTION
The Army Corps of Engineers (COE), Memphis District, contests the Board’s
jurisdiction to adjudicate issues contained in paragraphs 31, 32, 33, 35, 36, and 37 of
Huffman Construction, LLC’s (Huffman) complaint. Huffman contends that these
paragraphs rely on the same operative facts as are stated in its claim and are within the
Board’s jurisdiction. Huffman filed a protective claim embodying these six
paragraphs that has yet to be decided by the contracting officer (CO). We possess
jurisdiction to decide this motion pursuant to the Contract Disputes Act of 1978
(CDA), 41 U.S.C. §§ 7101-7109. After a side-by-side comparison it is apparent that
the facts in the six paragraphs are supported by the “operative facts” in Huffman’s
claim. The new legal theory of “change” is likewise supported by the “operative
facts” of the claim. We deny the AF’s motion.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
Since this is a decision on jurisdiction, we need not spend much time
developing facts other than a brief introduction to the contract. We rely on the COE’s
background facts because Huffman did not dispute them in its opposition.
1. The COE awarded Contract No. W912EQ-14-C-0028 to Huffman on
September 15, 2014, with a contract duration of 1230 days and February 27, 2018,
completion date. (R4, tab 3 at 87) The contract required Huffman to complete
construction of the Grand Prairie Pump Station Superstructure, located near DeValls
Bluff, Arkansas. (R4, tab 3 at 1, 4-6) Subsequent modifications extended the contract
by 656 days with a December 15, 2019 final contract completion date. (R4, tabs 7-8)
Once completed, the operating pump station would serve farming operations in eastern
Arkansas and supply the water for the regionally strategic Grand Prairie irrigation and
ground water preservation project.
2. The COE issued the Notice to Proceed on October 16, 2014. (R4, tab 13)
3. The contract required Huffman to install and make operable six previously
purchased pumps and motors as Government furnished equipment (GFE). (R4, Tab 3
at 1136-39)
4. The contract required Huffman to install and level the pump support plates
and pump assemblies to a maximum tolerance of 0.002 inch per foot in all directions
(R4, tab 5 at 0009, 0012).
5. The CO issued a Notice of Termination for Default, Serial Letter No. C-
0126, on March 31, 2020. (R4, tab 55)
6. Huffman submitted a certified claim on June 25, 2020. (R4, tab 60)
Huffman requested a time extension of 182 days and a price adjustment of
$620,787.39. (id. at 4) In its claim, Huffman asserts: “But for the fabrication errors in
the Government furnished property and the leveling issues with the pumps, all work
would have been substantially complete by December 15, 2020.” (Id.)
7. Huffman appealed the March 31, 2020 Notice of Termination for Default on
June 26, 2020, 87 days after it was issued. (R4, tab 61) On July 1, 2020, the Armed
Services Board of Contract Appeals docketed the appeal as ASBCA No. 62591. The
government denied Huffman’s June 25, 2020 claim on October 27, 2020, and Huffman
appealed that decision on January 11, 2021. We docketed that appeal as ASBCA
No. 62783. The appeals are consolidated and the complaint submitted by Huffman is a
consolidated one, applying to both appeals.
8. On February 19, 2021, Huffman filed its complaint citing ASBCA
Nos. 62591 and 62783.
9. On April 30, 2021 the COE filed its “Partial Motion to Dismiss” 1 for lack of
jurisdiction challenging paragraphs 31, 32, 33, 35, 36, and 37 of Huffman’s complaint.
1 More accurately stated it is a “motion for partial dismissal.”
2
DECISION
No Affirmative Defenses
The COE refers to “affirmative defense” in its motion and reply. We recently
discussed affirmative defenses in Lockheed Martin Aeronautics Co., ASBCA
No. 62209, 2021 WL 2912095:
2. Affirmative Defenses to a Claim
“Affirmative defenses” can protect a defending party from
the consequences of its actions, even if everything alleged
in the claim is true. This remedy is grounded in the notion
that equity should be available to avoid suit or ensure a fair
result to the one against whom the action was brought,
even if the law might otherwise dictate a different result.
2021 WL 2912095 (footnote omitted)
In plain language, an affirmative defense seeks “avoidance” which is dismissal
without reaching the merits, i.e., “avoiding” the merits. Rule 8 of the Federal Rules of
Procedure lists affirmative defenses:
Rule 8. General Rules of Pleading
,,,,
(c) Affirmative Defenses.
(1) In General. In responding to a pleading, a party must
affirmatively state any avoidance or affirmative defense,
including:
• accord and satisfaction;
• arbitration and award;
• assumption of risk;
• contributory negligence;
• duress;
• estoppel;
• failure of consideration;
• fraud;
• illegality;
• injury by fellow servant;
• laches;
3
• license;
• payment;
• release;
• res judicata;
• statute of frauds;
• statute of limitations; and
• waiver.
Huffman does not assert any of these affirmative defenses. We have no idea why the
COE refers to affirmative defenses but we see no affirmative defenses for the Board to
deal with.
Legal Standard
When addressing an allegation that an appellant introduced a new claim in its
complaint we look to see if the new language in the complaint is based on the same
“operative facts” as in the claim, “Both parties correctly recognize that whether the
complaint asserts a new claim or not depends, in part, on if it relies on the same
‘operative facts’ cited in the claim.” Lee’s Ford Dock, Inc., ASBCA No. 59041,
14- 1 BCA ¶ 35,679 at 174,638. If a new legal theory stated in a complaint is based on
the claim’s operative facts the new theory in not a new claim. Alfajer, Ltd., ASBCA
No. 62125, 20-1 BCA ¶ 37,660 at 182,858-59. If the new language in the complaint
relies upon separate operative facts it will be treated as a separate claim. Gov’t Bus.
Servs. Grp., LLC, ASBCA No. 53920, 03-1 BCA ¶ 32,202 at 159,171.
Operative Facts in Huffman’s Claim
We carefully reviewed Huffman’s June 25, 2020 claim and identified the
following operative facts asserted by Huffman:
Pumps and Motors Maintenance. The COE provided pumps and motors as
Government Furnished Property (GFP). Huffman initially encountered problems
trying to rotate the motors. During eight years of storage the government failed to
properly rotate the pumps and motors every 30 days and otherwise provide proper
maintenance. The contract required Huffman to hire manufacturer’s representatives to
oversee installation and testing of GFP. As a result the manufacturer’s representative
“strongly” recommended that the pumps and motors be inspected and repaired “as
recommended by the equipment manufacturer.” The CO refused. (R4, tab 60 at 1-2)
Levelness of Pumps. A fabrication error in GFE pumps caused a “levelness”
problem. The pump manufacturer’s representative determined it was not Huffman’s
4
fault. The CO failed to comply with the pump manufacturer’s representative’s
recommendations. (R4, tab 60 at 2)
Change in Electric Motors. The original design called for Xylem (formerly ITT
Industries Custom Pump) pumps and motors. Before award the COE changed from
Xylem to Ideal Electric motors that were significantly heavier increasing static load on
the foundation and support floor. No changes were made to the pump station to
accommodate the additional weight. The adaptor plate had changed the alignment and
clearances. This caused delay in installation and “may” have contributed to the
leveling problems. (R4, tab 60 at 4)
Network Analysis System (NAS). COE misinterpreted NAS critical delays.
With respect to levelness problems, the delay was on the critical path yet the COE
failed to issue a change order extending the contract for the levelness problem. With
respect to GFP, the delay was on the critical path yet the COE failed to issue a change
order extending the contract. Also, the COE improperly interpreted NAS by not
including the non-critical work with critical work delays. The COE acknowledged
Huffman was “likely entitled” to a critical delay in pump and motor installation, it
claimed that the non-critical work would not be entitled to the same delay as the
critical work. Huffman contends the non-critical work was entitled to the same delay
as the critical work. (R4, tab 60 at 3)
Correspondence. Huffman alleges the COE’s failure to timely respond to its
correspondence caused delays. (R4, tab 60 at 3)
Record High River Stages. Resolved by bilateral modification granting 334
days delay for a completion date of December 15, 2019. (R4, tab 60 at 2)
The Six Challenged Paragraphs in the Complaint
Paragraph 31 reads:
31. The contract required Huffman to install
Government furnished pumps and motors. In this
connection, Huffman was required by the Government to
employ representatives of the manufacturers of the
equipment, and to proceed under their inspection and
guidance. At the time of bidding, Huffman was not aware
that the Government furnished equipment had been
improperly stored by the Government for ten years. Upon
learning of the improper storage, both factory
representatives strongly recommended that the equipment
be sent back to their respective factories for disassembly,
5
inspection and replacement of various components. The
Contracting Officer's refusal to comply with these
recommendations was unreasonable and constitutes a
contract change.
Paragraph 31 restates facts that are the same as stated in the claim. See “Pumps
and Motors Maintenance” above. The common facts are that the pumps and motors
were improperly maintained during storage and the factory representatives
recommended the pumps and motors be inspected and repaired. The CO did not
follow that advice. The COE asserts that each paragraph includes a new theory of
recovery – a change.2 A new legal theory asserted in a complaint but based of existing
operative facts is not a new claim. 3 Alfajer, 20-1 BCA ¶ 37,660 at 182,858-59. The
change theory is supported by the operative facts in the claim. Paragraph 31 does not
present a new claim.
Paragraph 32 reads:
The specifications (paragraph 3.3.1 of Section 11 20
00.00), represented that each complete unit of metal work
and equipment furnished by the Government (i.e., the
pumps and motors), had been completely assembled in the
shop by the Government to determine that all parts fit
accurately and functioned properly. After shop assembly
and tests, units would be match-marked and disassembled
only to the extent necessary for handling and shipping. It
is obvious that no one had ever assembled the equipment
to determine that all parts fit accurately and functioned
properly. Compatibility problems between the Ideal
Electric Motors and the Xylem pumps would have been
discovered had the shop assembly ever occurred. Also,
fabrication issues with the Government furnished pumps
should have been discovered so that even levelness issues
may have been avoided. The failure of the Government to
comply with this requirement constitutes a contract
change.
We do not read Huffman’s complaint to allege entitlement based on the COE’s
failure to preform shop assembly or match marking and disassembly for shipping but
we see that these factual allegations relate to “compatibility problems” between the
2 Reference to use of the changes clause is in the claim. (R4, tab 60 at 2)
3 A change theory is repeated in each of the six paragraphs but we will not repeat the
fact that they are not new claims.
6
Ideal Electric Motors and Xylem pumps that is in Change in Electric Motors and
levelness which is in Levelness of Pumps. That is enough, in our estimation, to
connect the operative facts in the claim and paragraph 32. Paragraph 32 does not
present a new claim.
Paragraph 33 reads:
33. Each critical item of work related to the pumps was
performed under the guidance and inspection of the pump
manufacturer's representative. Xylem’s representative
checked and verified the levelness of the pump soleplates
before they were grouted. Xylem’s representative also
witnessed the grouting of the soleplates and verified that
they remained square and level. The Xylem representative
issued contemporaneous field reports verifying the
levelness of the soleplates. The Government's refusal to
accept the findings made by Xylem’s representative was
unreasonable and constitutes a contract change.
Paragraph 33 relates to the levelness of mounting plates (soleplates) for Xylem
pumps as verified by the Xylem representative. As such paragraph 33 is directly
related to Levelness of Pumps in the original claim. Paragraph 33 does not present a
new claim.
Paragraph 35 reads:
35. The Government refused to provide reasonable
directives to Huffman. The Contracting Officer would not
direct Huffman to comply with Xylem’s recommendation
to send the pumps to Xylem’s factory to correct the
fabrication problems. The Contracting Officer would also
not direct Huffman to proceed with installation of the
pumps and motors without complying with Xylem’s
recommendations. The failure to give reasonable direction
constitutes a contract change.
Paragraph 35 relates to Huffman’s desire to comply with the pump
manufacturer’s representative’s recommendation to return the pumps to Xylem for
correction of fabrication problems. As such paragraph 35 is directly related to Pumps
and Motors Maintenance in the original claim. Paragraph 35 does not present a new
claim.
7
Paragraph 36 reads:
The Government furnished pumps from Xylem were not
compatible with the Government furnished motors from
Ideal Electric. Originally, both the motors and pumps were
to be manufactured by Xylem. However, under a prior
contract, the Xylem motors were dropped in lieu of Ideal
Electric motors. When Huffman received installation
instructions from the Government after contract award, the
instructions were still based on motors manufactured by
Xylem rather than the much larger and heavier motors
manufactured by Ideal Electric. The incompatibility of the
Xylem pumps with the Ideal Electric pumps created
problems with alignment and contributed to levelness
issues. This lack of compatibility is a design defect and
constitutes a contract change.
Paragraph 36 relates to the change from Xylem motors to Ideal Electric motors and
resulting increase in weight. As such paragraph 36 is directly related to Change in
Electric Motors in the original claim. Paragraph 36 does not present a new claim.
Paragraph 37 reads:
In addition to fabrication defects in the Government
furnished pumps which caused them to be out of tolerance
for levelness, the design of the substructure/foundation was
not adequate to avoid deflection and maintain the levelness
tolerance of only 0.002 inches per foot. The pumps were
level when first installed, and it is only after the motors are
installed that levelness is not maintained within 0.002
inches per foot. This is a design defect which caused or
contributed to the levelness issues encountered by
Huffman, and constitutes a contract change.
Paragraph 37 relates to the change from Xylem motors to Ideal Electric motors,
resulting in an increase in weight that caused the out-of-tolerance levelness problem.
As such paragraph 37 is directly related to the Change in Electric Motors and
Levelness of Pumps in the original claim. Paragraph 37 does not present a new claim.
To summarize, these six paragraphs each track with the operative facts in
Huffman’s claim and do not constitute new claims. Likewise, the new theory of
change in each paragraph is supported by Huffman’s claim’s operative facts and are
not new claims.
8
The Termination for Default
Let’s not forget the termination for default. This appeal involves both a
contractor claim (money and delay) and a government claim (termination). The COE
has the burden of proof on the termination. In any event, although we need not
address the matter here because we are satisfied that Huffman’s claim embraced all
matters in its complaint, we note that, even if it had not, subject to those limitations
expressed by the Federal Circuit in M. Maropakis Carpentry, Inc. v. United States, 609
F.3d 1323 (Fed. Cir. 2010), and its progeny, a contractor may certainly challenge a
termination for default based upon facts not included in the government’s claim (to
wit, the COFD).
CONCLUSION
In accordance with the above, the AF’s motion is denied.
Dated: August 5, 2021
CRAIG S. CLARKE
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
9
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 62591, 62783, Appeals of
Huffman Construction, LLC, rendered in conformance with the Board’s Charter.
Dated: August 5, 2021
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
10