ACC Construction Co., Inc. ( 2021 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of -- )
)
ACC Construction Co., Inc. ) ASBCA Nos. 62265, 62937
)
Under Contract No. W912QR-17-C-0021 )
APPEARANCES FOR THE APPELLANT: Lochlin B. Samples, Esq.
Jacob W. Scott, Esq.
Mackenzie P. Bell, Esq.
Smith, Currie & Hancock LLP
Atlanta, GA
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq.
Engineer Chief Trial Attorney
R. Lauren Horner, Esq.
Brett R. Howard, Esq.
Engineer Trial Attorneys
U.S. Army Engineer District, Louisville
OPINION BY ADMINISTRATIVE JUDGE MELNICK ON THE GOVERNMENT’S
MOTION TO STRIKE THE FIRST AMENDED COMPLAINT
The government seeks to strike ACC Construction Co., Inc.’s (ACC) July 12,
2021, first amended complaint. The government contends that the amended complaint
alters allegations made in the original complaint without leave to amend and raises a
new issue not advanced in either of the claims submitted to the contracting officer.
The motion is partially granted and partially denied.
ACC’s original claim, dated May 14, 2019, stems from a contract to design and
construct various facilities for the United States Army Reserve in Virginia. It sought
the costs (along with extra time) associated with unexpected storm water drainage
requirements imposed by Virginia, basing the government’s liability upon theories of
defective specifications and constructive change. (R4, tab 3) Upon denial of that
claim, ACC appealed here and that proceeding became ASBCA No. 62265. ACC’s
original complaint added differing site conditions and breach of the implied duty of
good faith and fair dealing to its list of legal theories.
On February 12, 2021, after conducting discovery, ACC submitted another
claim to the contracting officer. The new claim alleged that the government did not
disclose its prior knowledge that the construction project had been classified as an
industrial site. It also alleged that the government failed to disclose it had earlier
dealings with the relevant Virginia agency and “experienced, issues, delays, and
problems.” (R4, tab 42 at 2977, 2986, 2991-93) Accordingly, ACC sought recovery
under the theory of superior knowledge. That matter was also appealed to the Board
upon denial of the claim and assigned ASBCA No. 62937. The appeals were
consolidated and ACC filed an amended complaint on July 12, 2021.
The government maintains that the new complaint alters certain prior allegations
without seeking leave from the Board to do so. It also argues that a newly raised issue
has never been presented to the contracting officer, and is therefore not within the
Board’s jurisdiction to consider. Finally, the government generally complains that,
rather than add its new allegations to the end of the original complaint, ACC revised,
re-phrased, and edited the original in a manner that will unfairly require the government
to draft an entirely new answer.
We turn first to the altered language. The government accurately observes that
the amended answer goes beyond simply adding superior knowledge allegations.
Instead, it rewrites some of the allegations of the original complaint. These
modifications strike us as a refinement by ACC of its case after performing discovery
and further considering the evidence. The government does not argue that any of these
changes unfairly prejudice it by, for instance, retracting key prior admissions that the
government had been led to believe it could rely upon. Though ACC should have
sought leave ahead of time to amend its prior allegations, the absence of demonstrated
prejudice to the government compels the conclusion that such a request would have
been granted. Nor are we persuaded by the government’s suggestion that it is unfair to
expect it to perform the work of drafting an answer to the amended complaint. We are
confident the government is up to the challenge. Accordingly, we will not strike the
complaint because of the changes to the allegations in the first complaint.
Turning to the government’s jurisdictional challenge, the original claim and
complaint contained a category seeking costs arising from Virginia’s delay reviewing
the project, the need for ACC to redesign and resubmit plans to satisfy Virginia, and
time lost because of the postponement of project work into the cold season (R4, tab 3
at 19-20, 25-32; compl. at 2). ACC’s second claim, premised upon a superior
knowledge theory, adds that the government withheld vital information about the site’s
industrial classification, as well as the difficulty of dealing with Virginia, also causing
the review, redesign, and weather related delays (R4, tab 42 at 2986-94). However,
ACC’s amended complaint injects still another factual basis for recovering under its
superior knowledge theory. In addition to its allegations about the industrial site and
difficulties with Virginia, the new complaint also alleges that the government failed to
disclose that it had not followed standard operating procedures requiring coordination
and design development (am. compl. at 3, ¶¶ 26, 50, 78, 127, 179). This is a new,
separate operative factual allegation that has never been presented to the contracting
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officer. ∗ When an amended complaint relies upon different operative facts than what
was previously submitted to the contracting officer, the Board lacks jurisdiction to
decide the un-submitted matter. See Gold Tree Techs., Inc., ASBCA Nos. 54158,
54159, 05-1 BCA ¶ 32,856 at 162,803; see also Lee’s Ford Dock, Inc., ASBCA
No. 59041, 14-1 BCA ¶ 35,679 at 174,638-41 (explaining that whether a superior
knowledge claim is a new claim depends upon whether the operative facts described in
the claim communicated the particular disparity of knowledge between the contractor
and the government before award), aff’d in part and dismissed in part, 865 F.3d 1361(Fed. Cir. 2017). Because the claim related to the government’s failure to follow
standard operating procedures is beyond the Board’s jurisdiction, it must be stricken
from the amended complaint. See Alfajer, Ltd., ASBCA No. 62125, 20-1 BCA
¶ 37,660 at 182,859 (striking allegations over which the Board does not possess
jurisdiction). Accordingly, we grant the government’s motion to the extent that we
strike clause (3) in the first paragraph of page 3 of the amended complaint, as well as
paragraphs 26, 50, 78, 127, and 179.
Dated: September 22, 2021
MARK A. MELNICK
Administrative Judge
Armed Services Board
of Contract Appeals
(Signatures continued)
∗
If ACC had included the allegation that the government had not followed its usual
procedures as part of its explanation of the events leading to the government’s
failure to disclose its superior knowledge about site classification and problems
with Virginia, we would likely have found the allegations permissible and the
sort of information routinely uncovered during discovery that a party could be
forgiven for not including in its claim. Here, though, ACC is alleging that the
failure to disclose that the government did not follow its procedures is, itself, an
instance of superior knowledge. The new allegations, supporting an entirely
different piece of information allegedly withheld from ACC cannot be seen as a
mere refinement of the evidence.
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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
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. 62265, 62937, Appeals of
ACC Construction Co., Inc., rendered in conformance with the Board’s Charter.
Dated: September 23, 2021
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
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